Trichet’s Swan Song: Calls for New Eurozone Finance Ministry

Final speech by outgoing European Central Bank president met with protests, boos

Jean-Claude Trichet, president of the European Central Bank (ECB), made his final scheduled speech as head of that body with a call for the formation of a eurozone-wide finance ministry. Members of the audience who had come to protest the debt crisis booed and waved placards.

Bloomberg reported that Trichet (left), who steps down from his position on October 31, used the speech Monday night as a platform to advocate for the ministry, saying that the case for such an entity has “strengthened” so that economic governance within the 17-nation currency bloc can be improved.

Protesters interrupted Trichet's speech, as a woman shouting caused him to pause, and students in the audience also held up banners saying “no more money for the banks” and “say ‘No’ to debt tyranny.” When asked by another woman in the audience if he “could live on a wage of 470 euros [$655] a month,” Trichet replied that the “main issue” before policymakers is to make sure “that we are as close as possible to giving a job to all our people, including our young unskilled people.”

He also said he was “very happy” that government heads at the weekend summit meeting discussing the debt crisis were willing to consider stronger economic convergence and perhaps even changes to the eurozone treaty. He was quoted saying, “The euro area is responding to events of historical importance and it naturally takes time to forge consensus on the right way ahead,” adding that for now, “first and foremost every country in the euro area needs to keep its own house in order.”

The primary mandate of the central bank, he said, was to maintain stable prices. However, it has also initiated several unusual strategies to fight the debt crisis. Of these Trichet said, “Of all our non-standard measures, the policy of full liquidity allotment at fixed rates has been the most important one in my view. Yet it is the bond market interventions that have received the greatest attention, and the most scrutiny.”

 

 

 

 

 

 

 

 

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