Goodbye Mr President: Is it time for more monetary muscles in Europe?

In an exclusive interview with European Central Bank President Jean-Claude Trichet, a glimpse of how far Europe still has to go to purge its demons

I'll let you in on a secret. Jean-Claude Trichet is considered something of a heart-throb in the CNBC newsroom in London. To which some of you might say, Jean-Claude who? I'm not talking about the 'Muscles from Brussels', Jean-Claude van Damme; this Jean-Claude is more like the 'Neon from Lyon', if you'll excuse the stretch.

Admittedly that is an awful rhyme, and a pretty average metaphor, but it works if you think of him as super bright – after all he is a holder of many qualifications, speaker of several languages and winner of many awards.

It doesn’t work if you want to think of him as super illuminating, however. But more of that later.

For those of you who already know that Jean-Claude Trichet is the former President of the European Central Bank who has just finished his eight year term, you are probably saying “Heart throb?  Really?”

Well, I had the great pleasure of meeting him on his last day in the office in Frankfurt last Friday and I confess, I can rather see what the fuss is about.

Jean-Claude is a most elegant Frenchman.  He is impeccably dressed, impeccably groomed and has the kind of skin that makes him look much younger than his 68 years.

He spoke to CNBC for nearly 35 minutes (we had been given 25) and a very soothing and pleasant experience it was for all present.  The problem was though, that it should not have been soothing. It should not have been pleasant.

Despite the decisions announced at last week’s European Summit and mostly positive initial reaction, there is still no guaranteed solution to the sovereign debt crisis. Europe is still very much in crisis. Markets reacted last Thursday with delight and reports, such as this, of a better than expected deal.

Then by Friday, hopes and the upward momentum in equities faded as people started picking apart what had actually been agreed.

What was settled was that private debt holders would accept a fifty percent haircut on their debt, the European bailout fund would be leveraged up to give it one trillion euros of firepower and European banks will be recapitalised to the tune of 106 billion euros.

But now we have a poll in Greece showing that the broader public there agrees with much of what the strikers and the rioters we have seen on the streets are saying – they do not want any more austerity and they think the latest agreement between their government and Europe is compromising Greek sovereignty. The Greek government has called a referendum on the euro bailout.

The crisis has clearly not gone away, but when we sat down with him on Friday there was no suggestion of panic or drama in the elegant Mr Trichet.

For the President is very bright, but he is almost never illuminating. He has that politician’s gift of saying rather a lot and not very much at all. And he says it in a charming French accent.

However in our 35 minutes we did learn that he felt governments had been rather behind the ECB in understanding the seriousness of the emerging debt crisis, that the ECB had spent a lot of time trying to convince them to focus on providing financial stability and that he firmly believes the euro has a long future as a currency.

In his eight years as ECB President, Mr Trichet has led the central bank through a period which was everything he is not. The debt crisis and the financial crisis that preceded it have been ugly and tense. There is nothing soothing or pleasant about the risks still facing the euro zone, and no matter what Jean-Claude may say about the future of the euro, its fate is still not clear to many

Jean-Claude’s farewell party at the ECB in Frankfurt featured the ECB jazz band and choir (I kid you not) and a special tribute song from some other local heart-throb, “Goodbye Mr President”.

Mr Trichet will doubtless be sorely missed, but perhaps what we need next is less of the music and the elegance and more muscles in Brussels from the remaining actors who hold the fate of Europe in their hands.