The wonderful expression ‘fools rush in where angels fear to tread’ was the first thought that sprang to mind yesterday when I first heard that outgoing European Central Bank President, Jean-Claude Trichet had called for the establishment of a common European finance ministry. The next thought amongst others was ‘he can’t be serious’ quickly followed by ‘over my dead body!
Was it the hot dry weather in the very fine city of Aachen in Germany that caused M. Trichet, a former French civil servant, to have had such a momentary lapse of concentration? Probably not but like many before that attempted to conjure up new EU political doctrine it seems that M. Trichet made the classic mistake of failing to test the air of the regions voters. Had he done so he would I think have found that right across Europe they want the EU to have less power and control over their lives rather than more. That he chose to come out with the idea now might suggest that M. Trichet could have been ‘got-at’ by his French masters! This thought led on to another possible conclusion – was this speech a personal and tacit admission from M. Trichet that at its root questions whether collateral damage to the single currency caused by through the ongoing sovereign debt crisis could now be such that unless the EU faces up to a new kind of reality that requires even more control over member states and the ability to push through even deeper regulatory and political control the Euro may not survive!
There is nothing wrong with dreaming of course and that is just what I consider the ECB Presidents speech to be. Jean Monet, Robert Schuman and for a time Winston Churchill all had the same dream of creating a united Europe – one in which war would not only be unthinkable but materially impossible. A great dream it was too. From the inception of the Common Market back in the 1950’s right through to Rome and the foundation of the modern somewhat oversized European Union of today no one would argue that the founding fathers dream of achieving permanent peace in Europe failed. However, I rather doubt that the founding fathers anticipated that the EU would within just a couple of generations would have grown to the size and all encompassing power over so many lives that is has today. I doubt too that they would have thought or indeed wished to see quite so much national sovereignty trashed or the ridiculous speed that the membership of the club has expanded. Rome made a suitable point albeit that Maastrict went a stage too far. Now the powers that be in Europe are attempting to remove even more national sovereignty it seems and once again turning a blind eye to what voters said about Lisbon. They would better take a big step back and remember what many of Europe’s voters including the French said about that and best summed up as ‘enough was enough’.
I am no expert on EU law but for a EU finance ministry to be established would most likely require that individual EU states would need to hold a referendum. I am in no doubt whatsoever that the answer from most voters to the question to whether they might accept more national sovereignty being given to the EU would be a resounding NO.
What you see in the EU today is basically what you get and right now the whole concept is a virtual mess. I wish this was not so and I would prefer to be more neutral on the concept of the EU than I perhaps have in recent years. The same is true with regard to the Euro – it may not seem like it but I really do want the single currency to survive. However, at this stage of the process and based on what has gone before, I cannot and will not accept that a one size fits all currency across the Eurozone area with but one single interest rate for all that benefits the large nation state whilst at the same time it kicks and further weakens the small is a solution to what we need. Without doubt there will be a need to ensure better regulatory control over how EU member states conduct themselves in terms of controlling deficits and budgets. But it does not need overarching control to be passed to one giant expensive and bureaucratic EU finance Ministry.
What I wonder brought all these thoughts about the EU taking more direct control of member state budgets, finances, spending and tax raising? Well until a few weeks ago the powers that be thought they had got away with it as they stumbled over the potholes of Greece, Ireland and Portugal and belatedly managed to fill up the various begging bowls with a little bit of additional help, discipline and control from the IMF. But not only has Greece come back to haunt them but Germany has been throwing its toys out of the pram saying enough is enough in terms of coughing up more funds to help the afflicted. They well know that Spain also languishes in the background. The Euro will survive of course, be in no doubt about that but the bigger question is whether it can go forward from here with much credibility left?
Might a European finance ministry controlling economic and regulatory strategy and strings of all EU member sates be the answer to the current problems? You already know my answer to that! True of course that if the economies of all member states were to be on an equal footing the answer might need to be quite the opposite. If that was to be the case then we really could be talking about a United States of Europe that more befits the original 1946 dream. But the economies of the various EU member states are I am afraid quite the opposite to that of being equal and what’s more, they are in my view unlikely to ever be equal in your lifetime or mine. Thus the idea of a one-size fits all strategy of financial and economic management is one that will quickly fall on deaf ears. The idea is after all absolute nonsense, a bureaucratic nightmare in the extreme and one that can hardly be afforded. It may well be possible to further integrate budgetary and regulatory control responsibility amongst Eurozone nations but across the EU impossible. The idea that countries like Britain might give up economic control is absolute nonsense and there is no way that this or any other government would allow it. I guess that if the pressure became too hard then we would need to walk away from Europe altogether. However, while caution is the watchword the idea clearly has its fans. Indeed, given that M. Trichet chose to make known his views on any potential for creating a common EU finance ministry in a speech that was given in Germany might even suggest that not even Angela Merkel is prepared to cast the idea aside.
