The head of Europe's central bank has given warning that the new European Union Treaty will erode his institution's independence, amid claims that France is trying to control the bloc's economy for its own benefit.
The bank - which independently sets interest rates across the eurozone - was in danger of becoming an arm of the EU's bureaucracy due to text changes agreed in the treaty earlier this year.
Jean-Claude Trichet, the bank's president, said that definitions of the bank's status, enshrined in the draft EU Constitution, were rewritten without consultation. He has demanded that the text is returned to the original during negotiations next month.
A former economics adviser to Downing Street said that Paris was using the new treaty to make an "overt political grab" for control over Europe's economy. Derek Scott, an adviser to Tony Blair between 1997 and 2003, said that the treaty allowed eurozone finance ministers to set exchange rate targets with short-term political aims rather than long-term economic ones, striking at the heart of the founding principle of the ECB. "France has always sought political control of the ECB: the new treaty entrenches it," he said.
He accused Gordon Brown of being outmanoeuvred by Nicolas Sarkozy, the French president, in negotiations to replace the EU Constitution. As well as challenging the independence of the ECB, Mr Sarkozy used a Brussels summit in June to remove a commitment to "free and undistorted" competition in a list of the EU's defining objectives.
In a letter to the Portuguese EU presidency, Mr Trichet said: "The changes to be introduced to the text of the current treaties are limited to and comprise all the innovations agreed. However, this does not appear to be the case on the question of the institutional status of the ECB."
Three years ago the ECB fought hard during negotiations on the old constitution to be ranked as a separate institution in its own right, as opposed to being classed as an EU body. But under the new text the bank is listed alongside the European Parliament and Commission as a "Union institution" and language highlighting its independent existence is cut. The ECB has expressed a strong view that because of its specific institutional features, the ECB needs to be differentiated from the 'Union's Institutions'.
The new definition of the ECB appears to clash with existing treaty provisions that explicitly emphasise the bank's independence, both from national capitals and the EU. "It is a question of whether the change has any impact on weakening the ECB's anchorage as an independent institution," said an official. "The basic reasoning for this letter is that not being placed as a Union institution is a way to protect the bank's independence."
Currently the ECB has complete control of monetary policy for the euro, allowing it to take vital economic decisions on interest and exchange rates without interference from governments. French diplomats have declined to comment on Mr Trichet's letter but recently France has repeatedly challenged the ECB's independence.
