Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-12-03-Speech-3-105"
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"en.20081203.13.3-105"2
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"Mr President, Mr Novelli, ladies and gentlemen, first of all, I am very grateful for your comments and observations and for the interest you have shown in the Commission’s initiatives, particularly the recovery plan that we have been discussing this afternoon. I am not going to repeat many of the replies that Mr Novelli has just given. I agree with practically all his comments on what the Members who have spoken have said.
I fully agree with those of you who have mentioned investment and the need to link the necessary investments in the medium and long term with the energy and climate change package. I agree with those who say that our monetary policy has room for manoeuvre, without having to jeopardise the independence of the European Central Bank or other central banks. It is obvious. Inflation in the euro area at the end of November, according to Eurostat, was 2.1%. Just a few months ago we were talking about inflation figures that were twice as high, and that margin is now being used. The Central Bank is meeting here in Brussels tomorrow. I do not know what it is going to do, but I have heard the statements made by the Bank’s president, Mr Trichet, and they are quite clear on the subject.
My next point concerns the Stability and Growth Pact. The pact clearly states that a deficit breaching the 3% threshold triggers the excessive deficit procedure, with a single exception, namely when the economic situation is exceptional, and we are in an economic situation that is exceptional. The second condition, which applies concurrently with the first, is that the excessive deficit should be temporary, and temporary does not mean several years but just one year. The third condition, concurrent with the first two, is that the excess should not take the deficit very far above the reference value, and here, Mr García-Margallo – without going into technical details unsuited to the predominantly lay audience in this House – we are talking about a few tenths of a percentage point.
Lastly, in reply to Mr Parish and somebody else who mentioned the value-added tax issue, the Commission’s document or plan includes a range of instruments that may be used to produce a fiscal stimulus, and one of them is certainly to cut such a substantial tax or, rather, the rate of such a substantial tax as VAT. It is also a fact, however, that the Commission is not forcing anyone to do that. Read the plan and you will see that there is no obligation involved, as indeed there could not be. A third point – and this is information arising from yesterday’s Ecofin talks – is that only one Member State out of the 27 was in favour of using this instrument yesterday, and that was the Member State that has already used it.
I would just like to mention six points very quickly. First, I agree with the views of those of you, beginning with Mr Gauzès, who said that the credit crunch is extremely severe and lies at the root of the very great problems that the real economy is currently facing. Only yesterday at the Ecofin Council we were discussing how to improve the effectiveness of the recapitalisation and deposit guarantee plans that have been and are to be adopted by the various Member States. There is a lot of taxpayers’ money at stake: considerable funds have gone into guaranteeing the operations of banks and financial institutions or providing them with capital. It is now a matter of getting credit to flow back into the economy, since it is a vital ingredient for the economy to work properly.
Since it is not working well, the economic forecasts that Mr Rasmussen mentioned, which I presented a month ago, are unfortunately no longer the forecasts that I would present today. That is why I also announced to the ministers yesterday that I would be presenting new economic forecasts on 19 January.
In the meantime, the International Monetary Fund, the OECD, and other institutions have published estimates for 2009 that are even more worrying than those reflected in the Commission’s forecasts of 3 November. The European Central Bank’s are due tomorrow and are also dismal
My second comment is that there is certainly going to be more regulation of financial services. In fact there is more regulation already. Only yesterday, at the Commission’s initiative, the Council, as Mr Jouyet said earlier, gave its political approval to at least four – if I remember correctly – Commission initiatives on regulation of different aspects of the financial markets or services. Existing regulations need to be changed, unregulated areas need to be regulated, and improvements are needed in the quality of regulation and the way in which the implementation of these rules is supervised at European and global levels. We are talking about all of that.
As the decision on the Solvency II draft directive is about to come before Parliament, let me tell you that the reaction in the Council still does not always accord with the Council’s own statements on what needs to be done in terms of financial regulation and supervision. Parliament is aware of that, because it has been holding talks with the Council on this directive. There is no agreement on how best to coordinate supervisory actions in the insurance sector. We urgently need to find agreement on such supervision at a European scale, and we are already talking about a body of supervisors for institutions that operate at a global scale.
On the subject of hedge funds, we base our views on the principle that their activity has to be regulated. We have said so in the Commission, the Council has said so, and the Washington meeting said so.
The high level group chaired by Jacques de Larosière is analysing this, among other factors. Commissioner McCreevy met with the Committee on Economic and Monetary Affairs yesterday.
I saw the President of the Commission repeat to you in this Chamber, on his recent visits, that the Commission is going to regulate hedge funds, and that is what we shall do. What is being debated is to what extent, in which areas, and which parts of hedge fund activity have to be subjected to regulation, which will not only affect hedge funds. Important contributions to this debate are coming from the employment field and the report produced by this Parliament at Mr Rasmussen’s initiative."@en1
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