With stock and bond markets on a roller-coaster ride reminiscent of the 2008 financial crisis, Jean-Claude Trichet and Mario Draghi, the current and incoming chiefs of the European Central Bank, had a pointed message for European leaders Monday: Get your act together.
Europe’s top central bankers couched their admonishment in diplomatic terms during speeches in Paris focusing on the world three years after the collapse of Lehman Brothers. But the warning was clear: politicians are still not moving quickly enough to ensure that the euro zone’s debt crisis does not become seriously worse.
Europe needs to “make a quantum step up in economic and political integration,” Mr. Draghi said as the bond yields of Greece, Italy and other countries with weak finances jumped Monday amid investor fears that such efforts might be unraveling.
Mr. Draghi’s call goes to the heart of what politicians now acknowledge is a root cause of Europe’s crisis, but that few seem ready to change: the lack of a federal fiscal union that would make the euro zone look more like the United States. The idea is something that Germany and others are wary of because it could undermine their national authority.
“All this reminds one of the fall of 2008,” Josef Ackermann, the chief executive of Deutsche Bank, said in Frankfurt, Bloomberg News reported.
Mr. Trichet, who turns over the E.C.B. presidency to Mr. Draghi at the end of October, renewed calls for a federal European government, with a federal finance ministry. Those institutions would have the power to “impose decisions on countries” whose own policies threaten the rest of the euro union, Mr. Trichet said at the Paris conference, sponsored by the Institute Montaigne, a research group.
In Brussels, meanwhile, an unusual gathering of former European leaders, academics and industrialists urged politicians to recognize that part of the answer to Europe’s ills was to relinquish some sovereignty to keep the euro alive.
“It has become clear that a monetary union without some form of fiscal federalism and coordinated economic policy will not work,” the group said in a statement. Its members include a former German chancellor, Gerhard Schröder; a former Finnish prime minister, Matti Vanhanen; and Nouriel Roubini, a New York University economist.
Italy’s president is nothing more than a figurehead with little power. Nonetheless, his message comes through loud and clear.