EU BUDGET SURVEILLANCE UPDATE: Surveillance plans mask deep Franco-German differences on the way ahead.

Now ECB’s Trichet adds weight to steamroller heading straight for Cameron

Despite widespread denial and doubt about the Slog’s exclusive secret Brussels memo piece last Saturday, further information today reveals that EU Central Bank boss Jean-Claude Trichet has joined the muscle behind heading swiftly towards universal budget surveillance – whether Britain likes it or not. We understand that a press release from Trichet will go out this morning, following the ECB’s hawkish economic governance paper of late last week. It will then be spun and merchandised by the Brussels task-force under Van Rompuy.

This isn’t that much of a surprise….nor is the approach we understand Trichet will push for: a system of alarm-bells to go off whenever one member state’s economic performance is likely to cause ‘imbalances’ in the system. This would represent a managed economy every bit as false as the Chinese version – minus only the discipline. It represents what a German source last night called ‘the worst of all worlds’, and sums up why there remains a Grand Canyon of difference between Germany and France on the issue.

“There is no way German business or the ordinary citizen would accept that [Trichet approach]” said the same source in the last hour, “He’s been a disaster at the ECB anyway, and will soon be gone. The French approach is to hold the leaders back to their level of success…and the Italians think the same. Germans can see this coming and they will not buy into it”.