Local view for "http://purl.org/linkedpolitics/eu/plenary/2001-07-03-Speech-2-088"
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"en.20010703.6.2-088"2
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"Mr President, you have made it clear that all the partners in the European single currency and also in the European Union need to pool their efforts if the historical event of completing the currency union of the 12 is to be achieved, and I can assure you that you have the support of the European Parliament.
Sixth, as an important partner in macroeconomic decision making, the ECB should make its contribution to improving the coordination of economic policies and the generation of an appropriate and balanced policy mix, just as other independent central banks do, without diminishing its independence in the process.
The ECB's priority target of guaranteeing price stability is not, after all, an objective in its own right, but rather a key condition for economic growth and job creation. That is why monetary policy should not be formulated in isolation but rather supplemented by still closer macroeconomic policy coordination in the euro area. The situation still leaves a lot to be desired in this area.
This could prevent economic integration being driven solely by the markets without any account being taken of employment policy and social issues. Another reason for enhanced macroeconomic coordination involving the European Central Bank is the accelerating globalisation of financial markets, which less and less reflects the turnover of goods and services.
This suggests that interest rate variations will have a greater influence on the price of financial assets, while their effect on the real economy has become weaker than it used to be.
Concerns about the independence of the European Central Bank which have been raised as regards the effectiveness of its participation in the macroeconomic policy dialogue are equally difficult to understand. Quite the opposite: I believe that enhanced coordination would not endanger but reinforce the independence of the European Central Bank. A higher degree of economic convergence would also facilitate its task as it would even alleviate the problem of a "one size fits all" monetary policy, and therefore reduce the risk of putting the ECB under political pressure.
The European Central Bank's position is not the same as that of the US Federal Reserve Bank. Its stakeholders are not just one President, one finance minister and the public, its stakeholders are 12 presidents, 12 finance ministers and the public of twelve European countries, who do not always speak with one voice. As the representative of the European public, the European Parliament would like to be a genuine partner in this dialogue regarding the creation of a new political culture in the European Union, which, on the one hand, guarantees the independence of the institutions but which, on the other hand, also takes account of the responsibility of each institution to be transparent and accountable in the interest of a properly functioning democracy.
The European Central Bank is a very young institution. The euro, for which it is responsible, is not yet even a truly tangible currency. That is why it is so important for the ECB to establish its own credibility. That means that the ECB's mandate needs to be very clearly expressed through its monetary strategy. So far, the ECB has been fairly successful: even commentators who are usually very critical of the ECB's monetary policy are increasingly and quite rightly recognising that Europe needs a specific solution in monetary policy terms and that asset prices should not be the main parameter for monetary policy decision making. Nevertheless, there is still a lack of coherence in justifying individual policy measures. They may well be correct technically speaking, but purely technical explanations are not enough to convince Europe's markets and its public once again that the ECB is committed to price stability and to build up public confidence in the euro, which has unfortunately not improved since it was introduced. Against this background, the European Parliament's demand for immediate publication of the arguments for a decision or otherwise, together with the counter-arguments and the underlying reasons, and also of the summary minutes, could facilitate greater understanding of the ECB.
Max Weber once spoke about the three sources of authority: tradition, charisma and reason. The ECB should develop the form of authority that Weber considered modern – rational authority – as a means of achieving lasting respect and efficiency. Rational authority depends on a reliable assessment of the facts. Forming a judgment in this way provides a basis for a sensible public debate on the issues surrounding European monetary policy. This is essential if one considers that monetary policy is now, more than ever before, effective above all through the channel of the expectations of the financial markets, which have a considerable influence on the behaviour of the economic players. Without a lever of this kind a central bank can fail to achieve its objectives.
Accountability and transparency do not mean that the ECB should publish more and more material. Quality is more important than quantity, and in this respect I would like to specifically acknowledge the quality of the monetary dialogue with the European Parliament. The ECB has improved the transparency of its monetary policy decision making. Nevertheless, more openness and transparency cannot do any harm, indeed in the coming months they should increase confidence in and acceptance of the single currency. The single European currency depends on this, and the following measures would be helpful:
First, the definition of the secondary target of monetary policy in accordance with Article 105 should be set and published in order to make it clear when the ECB can and must support growth and employment in the euro area, and that the ECB also supports conditions for sustainable growth effective in terms of employment at the highest level, as it did at the EU Summit in Lisbon with its target of 3% growth.
Second, it would be helpful in this respect to publish the models used. As long as the European Central Bank does not opt for an inflation target, it should stick to the two-pillar approach, but it should continuously improve its calculation of M3 by increased analysis and research activity. An analytically disciplined extension of the second pillar is also needed.
Third, the ECB's forecasts must be more precise and should not be broad ranges as they have up to now; these need to be narrowed. They should also be issued four times a year. In order to achieve greater understanding and transparency, the ECB should adopt the forecasts produced by its own staff.
Fourth, summary minutes should be published containing the arguments made for and against when making decisions on monetary policy, together with an anonymous account of the voting pattern.
Fifth, we need to establish whether, as part of the revision of the Treaty, Parliament should not be given a kind of right of confirmation in respect of nomination of members of the Executive Board."@en1
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