lagarde did point out that the euro area is experiencing large economic imbalances. is there a europe - wide agenda to solve this problem? trichet : the aim must be to elevate significantly growth potential in all countries through the structural reforms that are overdue in europe. this will remain strategically important in the next decade. the 2020 agenda will have to be implemented in a more effective way than the 2010 lisbon agenda, as president van rompuy has recommended. more generally let me say that given the nature of monetary union, some countries, because of a rapidly aging population for example, will have to run current account surpluses, while other countries with very significantly fewer pension liabilities will not be called to run such surpluses. similarly, some countries, to regain competitiveness, will have to keep inflation below the eu average. so a certain degree of dispersion of economic parameters might be possible within an integrated economy which has the dimension of the united states, provided this dispersion has economic justification. il sole 24 ore : even accepting a period of deflation, with all the possible social consequences this might have? trichet : yes. we are an immense economy. it is normal that some regions, after growing above the emu average for some time, and after having accumulated high national inflation, experience a correction and therefore a period of negative inflation, as it is currently happening in ireland. il sole 24 ore : the recent eu declaration regarding the greece plan says that member states should push ahead toward a stronger economic governance. what are you expecting : a more coordinated approach or a transfer of competencies from the national to the supranational level? trichet : as citizens we all have personal opinions on this matter. as a citizen, i would call myself when time comes and when people are ready to move towards an accomplished political federation. as of today our aim is to make the current institutional framework work as best as possible. we call for the full respect of the present treaty. emu is politically a bold endeavour : don ’ t forget that with regard to fiscal policies the treaty allows the college of governments to impose decisions on other governments and parliaments. implementing fully the treaty and the stability and growth pact calls for a much stronger governance in the future than what has been experienced in the past years. il sole 24 ore : we are at the very heart of democracy : no taxation without representation. trichet : i repeat : peer surveillance on government and parliament

this said, i do believe that all eu institutions and governments should point out the euro area ’ s meaning in terms of sharing a common destiny. more specifically, we all must understand that we have to fully accept peer surveillance to preserve the good functioning of our monetary union. il sole 24 ore : what about germany : convincing the federal republic to help greece was a long and difficult process. do you think that germany believes in the common destiny created by the euro? trichet : i trust that all emu countries are aware of this fact. and i trust the germans as well as the italians, the french, the spanish, the dutch and all other fellow citizens were all aware of this aspect when they joined emu. by the way germany demonstrated how attached it is to the single currency when it argued in favour of the stability and growth pact, which is precisely based on peer responsibility and peer pressure and is a vivid illustration of how our destinies are interconnected. therefore, yes, i believe that germany is fully aware of the fact that we are sharing a common destiny. remember in the run up to the maastricht treaty : both helmut schmidt and helmut kohl were at the forefront of european integration with their peers, following in the footsteps, in particular, of robert schuman and alcide de gasperi. il sole 24 ore : regarding germany, the french finance minister did criticize its economic model based on exports rather than internal demand, pointing out that its partners cannot count sufficiently on german imports. are you in agreement with christine lagarde? trichet : no, and for a number of reasons. firstly, had germany not increase its competitiveness in the first 11 years of emu by keeping its costs and inflation under control, the euro area as a whole would have had the threat of higher inflation and therefore a tougher monetary policy. secondly, germany, with a large current account surplus, is financing the current account deficit of other countries members of the euro area. thirdly, the federal republic is a major world competitor in sectors such as machine tools and industrial equipment. its global competitiveness is a major asset for the euro area given how closely intertwined emu countries are. therefore, i would point out to all those who argue in a similar fashion that what looks as a disadvantage for the euro area as a whole from a specific angle is in reality an advantage when seen from the right perspective. il sole 24 ore : but in a more general way ms