EU/ECB - Hail the (unelected) president of Europe - by Ralph Atkins
The latest downturn – last week came news that the second quarter saw the first quarterly contraction in the eurozone economy since the launch of the euro – coincides with a period of political drift in the European Union, 15 of whose 27 members use the single currency. The sinking by Irish referendum voters of the Lisbon treaty on institutional reforms dashed hopes of the region becoming more politically effective, not least through the creation of a full-time EU president. But Europe does have one high-profile president with a sense of purpose and international standing. Jean-Claude Trichet, president of the European Central Bank, won the hearts of financial markets last year, and the respect of eurozone politicians, for his swift and bold action to ensure the proper functioning of markets. He has stood firm as oil prices drove global inflation sharply higher, refusing to follow the US Federal Reserve in cutting interest rates and even raising eurozone borrowing costs at the start of last month. Mr Trichet’s reputation is helping Europe’s image. Read US economics blogs and you quickly have the impression that quite a few Americans would like him exported to Washington.
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