Jean-Claude Trichet gave what must have been a rousing speech about the past and the future of Europe, while accepting the Charlemagne Prize today in Germany.
The speech began: "Each generation needs to affirm its commitment to Europe." Trichet praised European history from Erasmus to Immanuel Kant to the post-war generation, but he said the "for the current generation, these achievements are taken for granted."
Then he gave some bold suggestions for the future.
He said that if a bailed-out country isn't delivering on its fiscal-adjustment program, then a "second stage" could be required, which could possibly involve "giving euro-area authorities a much deeper and authoritative say in the formation of the county's economic policies if these go harmfully astray."
He suggested that euro-zone authorities could have "the right to veto some national economic-policy decisions" under such a regime. In particular, a veto could apply for "major fiscal spending items and elements essential for the country's competitiveness."
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