Sunday 17 November 2019

Trichet in angry tirade over idea to restore the deutschmark

Dutch have stepped up pressure over EU move for EU budget tsar

Laura Noonan and Siobhan Creaton

EUROPEAN Central Bank president Jean-Claude Trichet yesterday launched a blistering attack on German proponents of a return to the deutschmark, insisting that the ECB had delivered "impeccably" on its mandate.

The comments came as Sigmar Gabriel, leader of Germany's opposition Social Democratic Party, lashed out at the ECB's purchases of bonds from troubled economies.

Asked to respond, Mr Trichet launched into a six-minute tirade.

"I would very much like to hear the congratulations for an institution that has delivered price stability in Germany for almost 13 years," he thundered, adding that the inflation control the ECB had achieved was "better than what has been obtained in this country over the last 50 years".

The ECB, he continued, had succeeded in its mandate despite "the worst crisis since World War Two" because "we decided very frequently not to do things that were recommended by various governments" -- referencing French and German calls to cut rates in 2004.

"In 2004 and 2005, some important governments in Europe were asking for the weakening of the stability and growth pacts," he said, asking: "Do you remember which governments? France, Germany and Italy."

Mr Trichet paid tribute to Ireland's efforts to tackle its debt crisis. The country, he said, was gaining further credibility and was "following a path and has demonstrated a capacity" to implement the measures it needs to regain its strength.

Germany's deputy economy minister, Stefan Kapfere, said Ireland was showing signs of "marked success" after steps had been taken to tackle the budget deficit.

Meanwhile, efforts to appoint a European budget tsar are being stepped up, with leading European politicians calling for this in a package of tough new measures to shore up the euro.

Dutch Prime Minister Mark Rutte, who is amongst those pushing this plan, also wants to see countries that fail to get their budgets under control kicked out of the euro.

The proposal to appoint an EU commissioner to oversee individual country's budgets was aired in the 'Financial Times' in a piece written by Mr Rutte and his finance minister, Jan Kees de Jager.


They called for the appointment of a powerful EU finance minister who could control the taxes in EU countries. The proposal comes amid growing calls for closer economic ties between eurozone countries in response to the continuing debt crisis.

Mr Rutte said that having a centralised EU commissioner overseeing each country's budgets would ensure that their governments were not allowed to run large deficits.

He added that where countries break the rules, the commissioner should have the power to increase pressure on them gradually by choking off the funds coming from agencies such as the European Union Cohesion and Structural Funds.

And if countries still continued to run large deficits after these sanctions, their governments' would have to submit the proposed budget directly to the commissioner for approval and have their voting rights suspended. (Additional reporting by Bloomberg)

Irish Independent

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