Brussels would certainly be a duller place without the sparkling wit of Jean-Claude Juncker. As guest speaker at a think-tank breakfast on Wednesday, the Luxembourg leader was challenged by an over-excited British questioner to admit that the eurozone economy was in a complete mess. Lest matters grew even worse, the questioner asked,  shouldn’t Juncker and his colleagues immediately start arranging the “orderly” break-up of the single currency area?

As the European Union’s longest-serving prime minister and chairman of the ‘eurogroup’, which unites the eurozone’s 15 finance ministers, you would hardly have expected Juncker to answer this question in the affirmative. And indeed, he replied: “No … Something in my heart is telling me that the British will be happy [one day] to join the single currency.”

On the substance of the question, however, Juncker made the point that the disruptions to the individual national economies of the eurozone would surely have been far greater over the past 10 years if there had been no euro.

He listed the decade’s seismic events: 9/11, the Iraq war (which deeply divided European governments), the French and Dutch rejections of the EU’s constitutional treaty in 2005, the global financial market upheavals of the past 13 months. He even mentioned the increasingly worrying political paralysis in Belgium.

“Do you really think the European economy would be in better shape if we had had national currencies?” he asked. Would national central banks in Europe have been able to produce a better co-ordinated response than the European Central Bank and Jean-Claude Trichet, its president, had done during the market turmoil of recent months?

Then came Juncker’s masterstroke. “Would 15 or 16 Trichets be outperforming one Trichet? I don’t think so. Personally, I really think one Trichet is enough, by the way.”

September 17, 2008 9:19am in Economic policy | Comment