Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-11-22-Speech-1-035"
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"en.20101122.13.1-035"2
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"Mr President, let me first thank the rapporteur, Burkhard Balz, for the solid and comprehensive report on the ECB annual report 2009. The Commission welcomes the report, which reflects the key issues appropriately. The report recognises and praises the work done by the ECB in managing the crisis. The Commission shares this view; the ECB, under the leadership of President Jean-Claude Trichet, has navigated in this difficult situation skilfully and with a steady hand.
The technical talks on an EU-IMF programme are now well under way and the negotiations can be concluded by the end of November. Apart from EU and IMF financing, I can inform you that the United Kingdom and Sweden have indicated that they stand ready to contribute to the programme through bilateral loans, which is welcome.
All in all, yesterday’s decisions are a critical step forward in the joint efforts to stabilise the Irish economy and thus safeguard financial stability in Europe.
I want to use this opportunity to thank Jean-Claude Trichet for an excellent cooperation and especially for his crucial role during these turbulent times. The ECB has, both through its monitoring stance and its non-standard measures, been instrumental in the fire-fighting to overcome the crisis and thus in laying the foundations for sustainable growth and job creation.
Your report rightly stresses that the financial crisis has exposed the need for reinforced economic surveillance in the euro area. The Commission agrees with this, which is precisely why we have put forward several legislative proposals to reinforce economic governance in the EU, especially in the euro area.
We have also taken on board several suggestions presented in the Feio report to strengthen and broaden economic governance in the Union. The Committee on Economic and Monetary Affairs has received the Commission’s proposals and is currently working towards achieving the ambitious deadline of June next year, which I appreciate and welcome.
Let me now turn to the second part of the debate, which is the latest developments in the international exchange rates. It is correct that volatility in foreign exchange markets has increased in recent weeks, with significant shifts in the value of major bilateral exchange rates.
The euro appreciated against the dollar since June this year due to stronger data for the euro area economy and due to further expansion of the US monetary policy. More recently, however, the euro has somewhat weakened against most currencies, as increased worries about the Member States’ public finances – above all in Ireland – have affected the euro. In real effective terms, the euro is currently close to its long-term average following an overall depreciation this year from an overvalued level at the end of last year. Compared to the beginning of the year, the euro depreciation in real effective terms amounts to around 7%.
In the context of a slow recovery in advanced economies and large capital flows to emerging economies, many countries have aimed at weakening their currency or at least resorting to competitive non-appreciation. It is therefore important that leaders in the G20 Seoul Summit last week very clearly and strongly committed themselves to abstain from competitive devaluations of their currencies.
The G20 summit also agreed to work further on the rebalancing of global growth. An agreement had been reached to work on indicative guidelines. It is clear that exchange rate flexibility must play a role in the necessary rebalancing so that exchange rates reflect economic fundamentals, as was underlined by President Trichet. The Commission will continue to support this important strand of G20 work, which will also be one of the key focuses of the French G20 Presidency next year.
Finally, I need to inform you about an important development concerning the euro area. Yesterday, when the ECOFIN Council welcomed the request of the Irish Government for financial assistance from the EU, ministers concurred with the Commission and the ECB that providing assistance to Ireland is warranted to safeguard financial stability in Europe. EU financial support can be provided under a programme with a rigorous policy conditionality which is being negotiated currently with the Irish authorities by the Commission and the IMF, in liaison with the ECB. The programme will address the fiscal challenges of the Irish economy in a decisive manner and the programme will also include a fund for potential future capital needs of the banking sector. To redress stress in the banking sector, a comprehensive range of measures including deleveraging and restructuring will need to be taken to contribute to ensuring that the Irish banking system performs its role properly in the functioning of the overall economy."@en1
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