Goldman Sachs Asset chairman backs call for single European finance minister
THE chairman of Goldman Sachs Asset Management has backed calls for a single European finance minister to manage the debt crisis.
Goldman's Jim O'Neill last night said the proposal to create a European finance ministry could help solve the euro region's fiscal problems. The idea was originally put forward by ECB president Jean-Claude Trichet in a speech last Friday.
"It's one of the more progressive ideas we've seen," Mr O'Neill said in an interview at a conference in Switzerland. "It's an interesting idea."
Mr Trichet said that governments should consider setting up a finance ministry for the 17-nation euro region as the bloc struggles to contain a region-wide sovereign-debt crisis.
The speech comes months before Mr Trichet is due to retire. He said the European Union should have powers to veto the budget measures of countries that go "harmfully astray", though that would require a change to EU treaties.
Yesterday Mr O'Neill said euro member states are facing a "dilemma" as they have a single monetary policy without a harmonised fiscal policy.
In 2001 as head of economic research at Goldman Sachs, English born O'Neill coined the term BRIC for the fast growing economies of Brazil, Russia, China and India. He identified the four countries as engines of growth in the last decade. In banking he has a much envied reputation for correctly calling the foreign exchange markets.
Calls for an authority to manage financial policy in the euro area come after the failures that led to the three bailouts of Greece, Ireland and Portugal, and the disjointed response to the crisis. (Bloomberg)