In the Opinions section of the September issue of Prospect, deputy editor Jay Elwes talks to Jean-Claude Trichet, the former president of the European Central Bank. Trichet offers a strikingly upbeat assessment of the easing of the crisis in the eurozone. “The risk of dramatic events in the euro area has considerably alleviated,” he says.
Asked what the eurozone countries can do to ensure recovery, Trichet recommends “very solid governance at the centre.” This would involve “a very close monitoring” of the fiscal policies of member states, but would stop short of full budgetary union. “The idea that you could merge … the various national budgets of the euro area seems to me both totally impossible and inadvisable.” He also offers some unsolicited advice to the new governor of the Bank of England, Mark Carney. Assessing Carney’s recently announced policy of “forward guidance,” Trichet argues that it risks “enormous market volatility.” Carney has been warned.