Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-07-04-Speech-1-112"
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"en.20050704.17.1-112"2
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".
Mr President
I would take the liberty of emphasising that what we do goes beyond this, since we immediately produce a four or five-page diagnosis, which is the diagnosis on which we ourselves agreed in the Council of Governors. In addition, we have the press conference.
It is true that, for now, my colleagues and I believe that it is far more important to champion the collegiate position of the Council of Governors than to declare individual positions. We are in an exceptional environment, the European environment, and we have the single currency for 12 sovereign countries. We believe that our duty is to champion this college, which is the relevant body.
Believe me, however, we are not in the least disturbed by the idea of consensus. We debate issues among ourselves. There is no question of postponing the slightest decision, and I can supply evidence of that. Following the tragic events of 11 September in New York, we were thus able to take very important decisions in the space of a few hours. I can therefore fully reassure you on that issue. We therefore genuinely believe that our concept of transparency, which was innovatory and which went further than what was the ‘state of the art’ for central bankers, is the right concept for the European Central Bank.
President of the European Central Bank.
Yes, yes, I am also going to speak in French. I speak both languages. I even try to speak German, if you have noticed, and I would like to speak even more languages.
I was impressed by the fact that price stability is very much in the minds of all here and of all our fellow citizens. It seems very important to me to look at this issue, which is to some extent considered occasionally to be an obsession of the ECB. It is an obsession of the ECB because it is the mandate of the ECB. It also clearly reflects the message that we are getting from the people of Europe. They are telling us to maintain price stability, to preserve it. I believe that it would be an enormous mistake to change the definition of price stability. That is not what the people of Europe are calling for. It is certainly not to say that close to 2% is no good, but rather that it should be close to 3%. That would be absolutely abhorrent in the eyes of our fellow citizens.
Price stability is not only what we are called upon to effect by the Treaty and by the messages we receive in Parliament and through out fellow citizens, but it is also absolutely necessary for confidence in Europe: for consumer confidence and confidence in general. Confidence is a major ingredient for growth and job creation. It would be an enormous mistake to think that we can oppose price stability on the one hand, and growth and job creation on the other. On the contrary: by being credible with regard to price stability, we gain confidence in Europe and we also secure the very low market interest rate that has been mentioned.
In Europe we have the lowest rates for the past hundred years. I am not only speaking about the short-term rates, but also the ten-year rates. The ten-year rates are made by the market itself, by the free encounter of supply and demand of savings. If we have the lowest rate for a hundred years, it is because price stability is credible, because we – the issuer of that currency – are credible. It is good for jobs and growth.
I will mention two things. A good monetary policy can do many things. It can create conditions for growth and job creation, but it cannot do everything. We have evidence of that within the very heart of the eurozone, with the comparisons between one country and another – and a number of Members have spoken very eloquently about their own countries. There are in fact other factors that count. Sound budgetary policy is without doubt one of them, as are reforms. I will not dwell on these things, but they are absolutely crucial. It is a sentiment that we share entirely with the Commission, and I am keen to say so here.
I should also like to mention a point, Mr President, that I believe is extremely important: the question has been raised of our independence and of our links with the executive bodies, with Parliament, with the Commission. Every fortnight, we invite Mr Almunia to the Council of Governors of the European Central Bank and, every fortnight, we invite the president of the Euro group. As Mr Almunia said, I myself am invited every month by the Euro group. That makes three invitations in total per month. With regard to our own invitation, moreover, it is in accordance with the treaty. The treaty itself stipulates it: we meet every fortnight and, every fortnight, we invite the president of the Euro group. Three times per month, therefore, in applying the treaty, the opportunity is there for a dialogue to take place with a strict adherence to independence. The European Central Bank is totally independent and that is a necessity. We would not have our current interest rates in 10 years, 30 years and 50 years from now, if it were not known that we are independent and, indeed, if there were the slightest suspicion about our independence. I would say again, however, that personal contact takes place on a permanent basis. I have more contact with the competent committee of the European Parliament, through Mrs Bérès, and with the Plenary Assembly of the European Parliament than my colleague Alan Greenspan has in the United States with the US Congress. That is not necessarily recognised, but contact takes place on an extremely frequent basis and, in the same way, contact with the executive bodies is incredibly frequent since it can take place three times per month.
On the subject of transparency, I should like to point out how attached we are to it; we consider it to be absolutely essential. We invented a new concept of transparency. Ever since the European Central Bank was created, it was decided that we would establish our diagnosis immediately after the decision of the Council of Governors and that there would be a press conference enabling us not only to make a diagnosis but also to answer questions. That did not exist before the European Central Bank was created. It was not at all ‘the state of the art’ among central banks and we, moreover, influenced the other central banks, which themselves began to explain what they were doing. Beforehand, they simply explained five or six weeks later, when they published the minutes of their deliberations."@en1
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"(Mr Martinez interrupted Mr Trichet in order to ask him to speak in French)"1
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