Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-07-04-Speech-1-078"
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"en.20050704.17.1-078"2
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".
Mr President, I would like to make a number of comments on the European Central Bank’s annual report. Perhaps I might begin with the general observation that the report is agreeably presented and is worth reading. What is particularly pleasing is that various sections are clearly distinguished from each other, and that complex financial matters are discussed in readily accessible language. This makes it possible for the subject matter to reach a wider audience.
If I may turn to the substance of the report, I will start by saying – and I am glad that the President of the ECB is here to hear me say this – that the Bank has, overall, acted throughout a difficult year with a great deal of acumen. In the first half of the year, there was evidence of slight growth, with inflation expected in the medium and longer term, whilst the opposite happened in the second six months. Mid-year, the ECB was generally successful in resisting the temptation to raise interest rates, opting instead to keep them stable.
Last year was not only a year in which we experienced price stability, but also one of ten in which the global economy grew by an average of 3.7%. The only sad thing is that Europe has cut itself off from this growth. As the ECB itself points out, poor economic growth is not least the result of the Member States’ failure to make the structural reforms that are necessary, and cannot therefore be blamed on the ECB, which, contrariwise, points out that the Member States need to shoulder more responsibility in this respect.
This makes it very important to note that the ECB has in fact delivered itself of a number of brief but clear and notable statements on the reform of the Stability and Growth Pact. While the debate on this subject is at an end, and we do not have to have a re-run of it today, we should be clear in our own minds about the consequences. As a result of the new agreement, the criteria have lost their rigour, and this weakens the ECB. As a result of responsibility for stability having been returned to the Member States, its job has become more difficult in three areas in particular: it has become immensely more difficult to maintain discipline in the Member States, firstly as regards the size of the national budgets, secondly in terms of the way in which the state’s functions and outgoings are structured, and, thirdly, as regards the structure of tax revenue. What that means is that the greater laxity with which the Stability and Growth Pact is applied has enabled the Member States to achieve a
renationalisation of responsibility and hence, in fact, to make it more difficult for the Bank to do its job.
The ECB advocates the use of the preventive mechanism. It is very much an indictment of the Member States that they were unable, in good times, to strengthen the preventive mechanism; that is now a matter of necessity. While the Bank is in favour of this, it also warns against the corrective aspect of the Pact being weakened.
It is for that reason that we have to consider the issue of enlargement. The ECB guaranteed that the integration of the ten new Member States would proceed without a hitch. Estonia, Lithuania and Slovenia have been part of the European exchange rate mechanism since 28 June 2004, and were joined on 2 May 2005 by Latvia, Malta and Cyprus. One explicit demand that we make of the ECB is that, reform of the Stability and Growth Pact notwithstanding, the Maastricht criteria should continue to apply unchanged when countries join the single currency in future, and that there be no laxity in insisting on them. When countries join the single currency in future, the situation that we had with Greece and its statistics must be avoided.
Our final request of the ECB is that its information policy, which is generally good, be further improved, for there is room for improvement. We welcome the publication of statistical information and the increased regularity with which it appears. Dialogue with the Bank is good, although one might well admit in private that there is plenty of room for improvement and that it could happen on a more regular basis. We do, however, urge the Bank to follow the US Federal Reserve’s example and publish something along the lines of its
in future.
Let me conclude by saying that last year saw the ECB taking a great stride towards the clearing of payments and the settlement of securities. The Target II system is up and running, facilitating automated real-time high-speed fund transfers across Europe, and hence opening up the way to universal real-time settlement in the Central Bank’s currency. This would in turn open up the possibility of a single system in Europe rather than a patchwork. The ECB has shown boldness in taking the necessary steps to this end.
This report is complete in itself, and so I ask that it be adopted as it stands and the amendments that have been submitted rejected."@en1
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