Belfast Telegraph

Tory blasts ECB chief's dismissal of euro crisis

By Geoff Meade

A claim by the president of the European Central Bank that the euro is not in crisis has been branded "absurd" by a Conservative MP.

ECB boss Jean-Claude Trichet was speaking in Aachen, Germany, after receiving the Charlemagne Prize for services to European understanding.

Despite economic turmoil triggering emergency bailouts for the currency in the Republic, Greece and Portugal - and the threat of more to come - Mr Trichet used his speech to warn Europeans not to overlook the achievements of the Economic and Monetary Union, which led to the euro.

He said EMU had brought growth, trade, jobs and price stability.

"The euro is a solid and credible currency, trusted by our fellow citizens, investors and savers: there is no 'crisis of the euro'," he said.

Mr Trichet also said the European Union of tomorrow should be "a confederation of sovereign states of an entirely new type".

"This naturally will call for a very important change of the Treaty and will have consequences in all the union's responsibilities," he added.

And he suggested: "In this union of tomorrow, or of the day after tomorrow, would it be too bold in the economic field, with a single market, a single currency and a single central bank, to envisage a ministry of finance of the union?"

But Bill Cash, chairman of the House of Commons European Scrutiny Committee, said: "The idea that the euro is not in crisis is patently absurd and the reasons why it is in such trouble is precisely because of the kind of ideas that lie behind the European treaties, namely centralised government which is undemocratic.

"By over-regulation and putting Europe into a legal straitjacket, it has prevented the kind of flexibility that is needed to compete with the BRICs (Brazil, Russia, India and China) countries.

"After all, the oxygen for enterprise is being stifled, small businesses are strangled and young people cannot be employed throughout the whole of Europe because companies will not take them on because of European regulations."

Mr Cash also dismissed calls for a new European confederation.

He said: "The European treaties have to be renegotiated so that Britain can make Europe fit for the 21st century and reform our current arrangement into an association of nation states."

He added: "Democracy in sovereign nation states means the making of policies by the consent of the people in general elections and not imposed by majority voting on unwilling people."