PositionEuropean union

Confidence is the fundamental requisite of any currency - and all the more so for a new currency. This week has seen two fresh blows struck against the credibility of the European Union's new money.

The European Commission's attempt to rescue the Stability Pact that underpins the Euro has already been criticised for its ambiguity - see, for instance, "Almunia's high-wire act", in Europe Information of September 4.

Now the august figure of the President of the European Central Bank has gone further, publicly rejecting the Commission's plan to weaken the pact's constraints. Jean-Claude Trichet warns against undermining the pact and compromising the stability and coherence of the EU's economic and monetary union policy.

Instead, to reinforce the sustainability of public finances - on which the Euro depends - he urges closer monitoring of Euro-zone budgetary policies and public debt.

By a cruel coincidence, his remarks come in a week that confirmed the unreliability of data crucial to assuring accurate monitoring. New Greek deficit and debt data revealed that earlier optimistic estimates were wrong. The Commission expressed "real worries" over the size and scope of the revisions in the twelfth Euro-zone country.

Only days ago, EU Ministers agreed in Scheveningen that compiling and...

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