By Tim Shipman
The boss of the European Central Bank sparked anger yesterday after demanding the right to veto the economic policies of EU governments.
Jean Claude Trichet put himself on a collision course with George Osborne after he called for the creation of a European finance ministry with sweeping powers to meddle in tax and spending policy.
The Frenchman said he wanted to see central control from Brussels ‘well over and above the reinforced surveillance that is presently envisaged’.
Britain has already rebuffed attempts by the European Commission to see details of the Chancellor’s budgets before they are delivered.
Now Mr Trichet says an EU finance ministry is vital for ‘strengthening the institutions of economic union’.
He said that the authorities could have ‘the right to veto some national economic policy decisions’. He added: ‘It would be not only possible, but in some cases compulsory, for the European authorities… to take themselves decisions applicable in the economy concerned.’
The European Central Bank is effectively the overlord of the troubled Euro currency and has no say over British interest rates.
But, crucially, Mr Trichet made no distinction between Eurozone countries and the wider European Union – a clear indication that he wants to dictate policy in countries such as Britain.
He admitted that his plan would require a treaty change.
Stephen Booth, of the Open Europe think-tank, said: ‘Greater fiscal union in the Eurozone would have a big impact on the UK — if decisions on competition or specific sectors were made in Europe, it would affect us.’