ECB must go on participating actively in tackling the economic crisis

Published: 23 November 2010 y., Tuesday

Following on from Monday's debate with ECB President Jean-Claude Trichet, MEPs on Tuesday adopted a resolution, by a show of hands, gauging the ECB's performance in 2009 and suggesting actions to be taken in view of the economic situation.

In the light of the persistent problem of indebtedness, the resolution encourages the ECB to purchase government debt in a similar way to what is happening in the UK and the US.  It also highlights the problems caused by credit rating agencies judging Member State indebtedness and calls on the Commission to be more ambitious with its proposal for controlling how these agencies operate.

The resolution also stresses that a robust economic governance system is essential for true economic and monetary union and that the emphasis has until now been too focused on the monetary aspects.  It highlights the urgent need to address imbalances between Member States' economies and calls for the urgent setting up of a permanent crisis management framework.     

Finally, the resolution urges care when implementing the austerity packages around the EU to ensure that economic recovery is not seriously hindered.

The debate with Mr Trichet on Monday evening centred on the need to address the real and everyday worries of citizens with regard to the crisis, the problem of not addressing tax competition between Member States, the imperative of global coordination of financial regulation, and the potential benefits of Eurobonds. 

In the debate, around ECB activities in 2009, Mr Trichet detailed how the ECB had radically lowered its lending rates in 2009 to 1% and had elaborated credit support measures to shore up banks.  Mr Trichet also explained how the ECB was intervening in the debt security markets of the Eurozone in order to address the problems in the bond markets.

Speaking after Mr Trichet, Olli Rehn, commissioner for economic and monetary affairs, said that the assistance soon to be released to Ireland would provide stability to the whole Eurozone, concluding that the negotiations on the mechanism with the Irish authorities should be closed by the end of November.

The E in the EMU

Burkhard Balz (EPP, DE), EP rapporteur on the ECB 2009 report, stressed the importance of focusing on economic coordination among Eurozone Members to equip the EU to react properly to future problems, rather than to deal only with monetary issues.

Address the grass-root worries

"We need to think about our citizens", said Jean Paul Gauzes (EPP-FR).  "We have to communicate all the needed changes better" he went on to say adding that citizens' worries cannot be addressed by the actions of the ECB alone but by bolder action at policy-maker level.

Sylvie Goulard (ALDE, FR) stressed that thanks to the Lisbon Treaty there will be a public debate on the reform of economic governance. She stressed that the current debt crisis should "push us even further than what the Commission proposed for economic governance", with an oversight role for the EP.

A well-defended Eurozone

George Sabin Cutas (S&D, RO) pleaded for a "permanent mechanism to defend the Eurozone from speculative attacks", managed by the ECB and "possibly think about a European credit rating agency". He also stressed the need to add job creation to fiscal consolidation as parameter for policy decisions so as not to have austerity measures which hinder long-term economic growth potentials.

Tax competition and surplus countries

Sven Giegold (Greens/EFA, DE) touched on important details necessary for effective economic coordination.  "We need to tackle imbalances by also addressing surplus countries not only those running deficits", he said.  He also called for "a framework to deal with tax competition in the EU", pointing at Ireland's low corporation tax.

Global coordination

Kay Swinburne (ECR, UK) stressed that international coordination was key: policy decisions have to be taken together with all "large players" around the world and warned about the threat of national interests kicking in. Ms Swinburne also stressed the "difficult job" performed by the ECB, hoping for its success to enhance the EU role at global level.

Time for Eurobonds

Jurgen Klute (GUE, DE) criticised the ECB for not having issued Eurobonds to finance the Member States in difficulties, so to "avoid the casino approach". The consequence is, according to him, that "workers are left at loss".

The wrong angle

John Bufton (EFD, UK) claimed that striving for more economic coordination was not the medicine for the current difficulties since it was further integration itself which led Europe into the crisis. "A single currency can only work in a federalist environment", he said, wondering whether a federalist state is the ultimate aim of the Commission's proposals.

"Like a fire brigade"

"We need to act like a fire brigade, putting out fire in Europe" said Commissioner Rehn when replying to MEPs. Referring to the situation in Ireland, he said: "When someone is in trouble, you need to help him, (...) also in the interests of Europe wider stability". "All Members States would have been in much more difficulties without the EU shield", he added.

Instability caused by poor economic governance

"We have sentiment for the Economic Union, but we are only responsible for the Monetary one", said ECB President, criticising "the tendency to use the EU as scapegoat" and blame the Euro, "a robust and solid currency", for economic difficulties. "It is not the Euro that is at stake" continued Trichet "but financial instability driven by bad behaviour of fiscal policies" and "poor governance of economy" by certain Member States. Finally, he asked MEPs to work hard to ensure "a very strong surveillance and governance" of EU economy.

 

Šaltinis: europa.eu
Copying, publishing, announcing any information from the News.lt portal without written permission of News.lt editorial office is prohibited.

Facebook Comments

New comment


Captcha

Associated articles

The most popular articles

Related videos

05/02/2014

Padėkime augti

MEPs secure overhaul of EU financial regulation

The financial and economic crisis has shown that reckless behaviour of banks and other financial institutions can have serious and costly consequences for Europe's economy and its people. more »

MEPs back unspent money for local energy & transport investment

Local services that create jobs and improve energy efficiency received a boost Thursday (2 September) when MEPs on the Industry, Research and Energy Committee approved plans for more investment. more »

The European Union approves EUR 264 million to help 19 African, Caribbean and Pacific States face the consequences of the economic crisis

The European Commission approved the first financing decisions under the EUR 264 million 2010 allocation for the so-called Vulnerability FLEX mechanism to help the most vulnerable African, Caribbean and Pacific countries cope with the impact of the global financial crisis and economic downturn. more »

Commission adds two Ghanaian airlines to the EU list of air carriers subject to an operating ban

The European Commission has today updated the list of airlines banned in the European Union to impose an operating ban on one air carrier from Ghana and to place operating restrictions on another air carrier from that country. more »

€7.5 million of EU funds to help 951 former workers in marine manufacturing in Denmark find new jobs

The European Commission today approved an application from Denmark for assistance under the European Globalisation adjustment Fund (EGF). more »

Commissioner Šemeta visits China to boost cooperation in custom controls and tackling counterfeit goods

Algirdas Šemeta, EU Commissioner for Taxation, Customs Union, Anti-Fraud and Audit, will open tomorrow an international conference at the Shanghai World Expo 2010 on building bridges to facilitate trade between China and the EU. more »

€90 million EU grant to crisis-hit Moldova approved by EP Trade Committee

Moldova is set to receive an EU grant of up to €90 million to help it through the financial crisis, following a vote at Parliament's Committee on International Trade on Monday. more »

August 2010: Business Climate Indicator for the euro area remains broadly unchanged

Important notice: since May 2010 business surveys data are classified in accordance with an updated version of the Nomenclature of Economic Activities (NACE rev. 2) causing a potential break in series at this date. more »

Spring 2010 Eurobarometer: EU citizens favour stronger European economic governance

75% of Europeans think that stronger coordination of economic and financial policies among EU Member States would be effective in fighting the economic crisis, according to the Spring 2010 Eurobarometer, the bi-annual opinion poll organised by the EU. more »

State aid: Commission extends the Slovenian bank liquidity support scheme

The European Commission has extended until the end of the year the liquidity support scheme for banks in Slovenia. more »