Trichet proposed to establish an independent body within the EU’s Commission to monitor and correct not only unsound budget policies of individual member states, but also any macroeconomic policy that could lead to a loss of competitiveness within the euro zone. [Read our coverage here.]
Importantly, he suggested that this body should have powers to impose sanctions “quasi-automatically”, in a way that would stop countries from suspending their own rules as and when they chose. He also made it clear that the new rules of the euro-zone game shouldn’t include the issuance of Eurobonds under a “joint and several” guarantee that would automatically make richer countries like Germany liable for the debts of weaker countries if they couldn’t repay them. THE WALL STREEY JOURNAL
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