Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-07-05-Speech-3-028"
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"en.20000705.2.3-028"2
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"Mr President, President of the European Central Bank, Commissioner Solbes, on behalf of the Italian Radicals of the Technical Group of Independent Members, I believe that the objective which the European Central Bank set itself – which is the objective enshrined in the Treaty and in the best economic doctrine, that is to curb inflation – has in actual fact been achieved. This can only be reason to applaud the activity of the Central Bank itself as well. However, we cannot allow this result to distract us from the many storm clouds gathering overhead.
I will end by thanking Mr Radwan for this excellent report and say that I agree with the greater part of its content.
The first issue is public finances: improvement in the relationship between public deficit and GDP, which, in the space of a few years, has fallen to below 2% in the euro area, disguises the fact that, in many countries, in many instances, this result is due purely to favourable interest rates and to the fact that taxation has risen instead of fallen.
The long-term structural reductions in public spending are of secondary importance and, moreover, the national budgets of many countries remain at around 50%, which is too high a level to control without risk of adding to the deficit in the event of crises or shocks.
In particular, the question of the hidden debt must be raised urgently – and in this regard the Central Bank could and should make a far greater contribution than it does at the moment. This debt arises from the public pension systems in many countries, particularly but not exclusively in Italy. The demagogic generosity of these systems has a very high cost which someone is going to have to pay very soon, and its effects will soon make themselves felt on the stability of the euro.
There is the problem of transparency in European Central Bank decisions: something has been done about it but not enough, in my opinion, and on this matter I refer to the words of Mr Huhne, with whom I am in complete agreement.
President Duisenberg stated – and I agree with him – that the problem of the new economy, the late arrival of the new economy in Europe and of the productivity of labour
in Europe is not, cannot and must not be treated as an interest rates issue. It is a question of structural reforms and must be dealt with as such.
There is a problem of privatisation and liberalisation in many sectors. There are countries such as France – large countries therefore – which have put the brakes on with regard to the liberalisation and privatisation chiefly – but not exclusively – of the telecommunications sector.
There is the problem of the flexibility of the labour market. Mandel, one of the forces behind the euro, when speaking of Europe a few months ago, said that the governments are making the market too rigid. Hiring and firing must be liberalised, for the simple reason that controlling dismissals only serves to limit the possibility of hiring new staff.
Instead of expecting Central Bank policy or taxation
policy to resolve some of the problems of the European economy, European policy should resolve the issues it is able to, such as the issue of restructuring and flexibility in the economy and in the labour market, immediately."@en1
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