The European Central Bank "expects a very moderate growth rate for the Eurozone in the second half of the year". The alarm was sounded by Jean Claude Trichet, outgoing number one of the Eurotower, who from Brussels underlined how the disappointing growth is due "to the global slowdown, to the fall in the stock market and in business confidence and to the continuing tensions on sovereign debt Europe and in some segments of the financial market, particularly in the government bond segment". According to the French banker, the risks to growth, which were previously balanced, "have become prevalent". As for inflation, a rate above 2% is also expected in the next few months, but in 2012 it will drop below this threshold again.
During his latest hearing in the European Parliament's Economic and Monetary Affairs Committee, Trichet relaunched the idea of creating a European finance ministry. The task of the new institution would be to oversee budgetary discipline, the coordination of economic governance and representation outside the monetary union. Given that – specified the president of the ECB – “a similar strengthening of the European executive would not be possible without an indispensable prerequisite: democratic legitimacy”.
But on this point Trichet specified that he is speaking in a personal capacity, not on behalf of the entire Governing Council of the ECB. “From my point of view – he continued – Europe will need to make significant progress towards greater political unity, with an executive branch and with a Parliament, both with greater responsibilities as in any democracy. Part of this executive would be a European finance ministry which, not necessarily with a large federal budget, would certainly be responsible for strong supervision and governance, in policies on the finance sector and on representation abroad”.
Finally, the Frenchman returned to the well-known episode of the letter sent two months ago to the Italian Government. There was “no negotiation – he explained – it was a message. Every month in the Eurogroup my colleagues and I are called upon to give messages to governments. From time to time some messages are quite clear…”.
