Many commentators have argued in favor of a fiscal union as the sole permanent solution to the present fiscal crisis of the EU, only to conclude it was politically impossible (see Martin Wolf and a many others in this article from Bloomberg)
According to EUobserver this positioon was finally given a face and a name in the person of Jean-Claude Trichet, the ECB’s President, who has now come forward with the first official call for such a mechanism to be developed. According to that report, he said that “We have got a monetary federation. We need quasi-budget federation as well”. However, there is a glitch in this report. It offers no official source and I couldn’t find any. I have checked and there is no mention of “budgetary federation” on the transcript of the speech on the ECB’s website and nothing on the European Parliament’s website either (not here, here nor here). I have emailed the reporter responsible for this claim, for an answer, but it may take him a while to get back to me.
On another note, a number of news outlets have reported on the upcoming 2011 Banking Stress tests. These are supposed to be carried out by the European Banking Authority (one of the arms of the newly created European Systemic Risk Board), which will be operational from 1 January 2010, in London. For more details on European Macro-prudential tools, please consult the relevant entries in the “Other Legal Documents” part of the “Selected EU Documents” section of this blog.
Finally, the Financial Times is coming out with a series of reports exposing the weaknesses of the Structural Funds. These are accompanied by a comprehensive data base, available to the public, where anyone can check who gets what and where.