Ex-ECB chief: ‘If parliaments do not give us what we want, we will annul them’

Leigh Phillips examines the response from former European Central Bank chief, Jean-Claude Trichet on how to solve the eurocrisis

May 21, 2012
4 min read


Leigh PhillipsLeigh Phillips is a regular Red Pepper writer and was previously a Brussels-based journalist and Red Pepper's Europe correspondent.

If there is anyone left doubting that the struggle against austerity is fundamentally a struggle for democracy, the chilling proposal of former European Central Bank chief Jean-Claude Trichet on how to solve the eurocrisis unveiled on Thursday, should quickly put paid to such overly microscopic focus.

Trichet has proposed what he calls ‘federation by exception,’ whereby if a country’s leaders or parliament ‘cannot implement sound budgetary policies,’ that country will be ‘taken into receivership’.

Recognising that it would not be possible in the timescale necessary to respond to the crisis to deliver a fully-fledged United States of Europe with the associated political and fiscal union, including fiscal transfers and common debt issuance, the former ECB president, who left office last November, said this ‘next step’ can at least be taken.

‘Federation by exception seems to me not only necessary to make sure we have a solid Economic and Monetary Union, but it might also fit with the very nature of Europe in the long run. I don’t think we will have a big [centralised] EU budget,’ he told the Peterson Institute of International Economics in Washington ahead of the G8 meeting this weekend and ahead of a make-or-break European Council meeting 23 May where EU leaders will discuss the fiscal, banking and political earthquake that is rumbling across southern Europe.

‘It is a quantum leap of governance, which I trust is necessary for the next step of European integration,’ he added.

Domestic fiscal policy has already been shunted off to unelected technocrats for vetting prior to assessment by elected parliaments as a result of the European Semester system, so in some ways, he is right to say that this is just ‘the next step’ beyond the still to be approved Fiscal Pact.

Of course, Trichet is now out of office, but he remains a policy heavyweight in European circles, and if the eurocrisis has shown us anything, it is that having a popularly sanctioned pulpit from which to speak is immaterial when it comes to whose voices are important. If anything, in being freed from office, Trichet is also now freed from the pretense that active ECB officials have to at least publicly maintain that the central bank only focusses on monetary policy and does not concern itself with the political governance of the provinces that lie within its territory. He can come out publicly with his proposals and not make them via secret letters to Italian prime ministers or orders to Portuguese elites.

At the same time, it should be underscored that this is not an official proposal from any EU institutions, and it remains to be seen what sort of hearing it will get, although reports from Washington suggest that his proposal was warmly received by economists and EU officials in attendance.

Nevertheless, let’s not be under any illusion that this proposal from a leading European ‘deep thinker’ is not a direct response to the elections in Greece this month that decimated the centre-left/centre-right austerity consensus in that country.

Trichet is in essence saying here that when the people elect the wrong parties, they have forfeited their right to democracy.

Acutely aware of what he is proposing, he declares that such a step would indeed have democratic accountability so long as it is approved by the European Council and the European Parliament.

But the European Council is a legislative chamber that never faces a general election. Its members, the presidents and prime ministers of Europe, are not elected to that chamber, but to their domestic parliaments and assemblies. And the European Parliament is not yet the parliament of a European government; even after the Lisbon Treaty, its powers remain very limited compared to the European Commission and Council, and, crucially, it does not have the power to initiate any legislation.

Should Trichet’s proposal or anything remotely similar somehow make its way to the Strasbourg chamber for its endorsement, any MEPs who cherish democracy must loudly oppose them.

If MEPs cannot muster sufficient numbers to do so, then the chamber would instantly be exposed as a Potemkin parliament, serving only to provide a facade of democratic legitimacy to an otherwise anti-democratic regime and so very far from the seed of a genuine European democratic order that many deputies wish it to be.


Leigh PhillipsLeigh Phillips is a regular Red Pepper writer and was previously a Brussels-based journalist and Red Pepper's Europe correspondent.


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