Friday, 25 June 2010

Trichet writes to Van Rompuy on economic governance

When the president of the European Central Bank, Jean-Claude Trichet, spoke at the hearing of the Economic and Monetary Affairs Committee of the European Parliament 21 June 2010, he was not prattling on as a free thinker.

On the eve of the European Council 17 June 2010, Trichet had sent a letter to its president Herman Van Rompuy, who chairs the task force on economic governance. Enclosed were the proposals by the ECB to strengthen decisively the governance and enforcement structures in the economic policy framework of the euro area:

I trust that the proposals will be useful for the deliberations of the Task Force.

On 14 pages the Governing Council of the ECB details its proposals for

(1) strengthening surveillance over budgetary policies and more effective prevention/correction of excessive deficits and debts;

(2) an improved framework for competitiveness surveillance and the correction of economic imbalances and

(3) the design of an appropriate euro area framework for crisis management.

The Governing Council of the European Central Bank is the main decision-making body of the ECB. It consists of the six members of the Executive Board and the governors of the national central banks of the 16 euro area countries.

A heavyweight contribution, I would say.

Ralf Grahn