Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-12-01-Speech-4-065-000"
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"en.20111201.3.4-065-000"2
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"Mr President, thanks to all the honourable Members of the European Parliament for their statements and their contributions. Let me say at the very beginning that I look forward to sharing views and to exchanging opportunities to look together at the present situation and to reflect together at this very difficult contingency.
I take the words on communication with great pleasure. It is true always, but especially in this situation of extreme difficulty, that it does not really make any sense to have a cacophony of voices anticipating monetary policy decisions, reflecting individual views and not the collegial decision-making process. I could not agree more. I will certainly take this message to the rest of the Governing Council, but, as I said, these are opportunities and occasions that are cherished very much and I will continue cherishing them. I am very much looking forward to my next meeting with the European Parliament, which is going to be in a few days with the Committee on Economic and Monetary Affairs.
I think many of your statements really come under one heading: how do we reconstruct confidence in the euro in the euro area? This process will have three pillars: the first one is what I called the setting of an anchor in the long term.
This redesign of the fiscal rules, of the fiscal compact – meaning by this word an agreement of new fiscal rules – is necessary to create trust for all countries who are members of the euro area. This design has not been completed. I think the next few days will be very important in telling us whether we will make any progress on this path. This is very important because, as I said, this gives the long-term trust which is necessary for the other two pillars.
By the way, for the second pillar, which is the design of a financing mechanism within the euro area, we have the EFSF. It is a design in which we have to put our confidence that it will work, but some steps are still needed, as we all know.
The third pillar is the national economic policy response and frankly, we are seeing much improvement on that front. As I said before, I do believe that countries are nowadays on track. We see a good future, but we have to be aware that in the end, what matters is the delivery of the proposed reforms. Reforms – I do not want to be misunderstood – do not have to be focused only on the budget and budgetary issues; they also have to be structural reforms, reforms that enhance competitiveness and growth.
So these are the three pillars upon which confidence can be reconstructed. I have been asked: what is the role of the ECB in all this? Some of you said the ECB should do more; some of you said the ECB should do less. Let me start by saying the ECB can act within the Treaty, so the ECB should not be asked to do things that are not within the Treaty. The ECB is the lender of last resort for solvent banks. The ECB has created an enormous amount of liquidity and we see that this liquidity is now being redeposited with the ECB deposit facility, which means that it is not so much the amount of liquidity that matters, but it is the fact that this liquidity is not actually circulating through the banking channel, through the financial system, through the credit channel.
In our view, the most important thing now for the ECB is to repair the credit channel in a way that enables this liquidity to actually finance the real economy – especially the small and medium-sized enterprises which are now in difficult conditions because they are the ones who mostly need the banks’ credit. The large corporations are, on average, generally speaking, able to access capital markets on their own, so they are less dependent on the banks. That is why we have to make sure that a credit channel will start to work again. We have observed serious credit tightening in the most recent period which, combined with a weakening of the business cycle, does not bode at all well for the months to come. I think this is one of the first things.
Also, some of you mentioned the SMP, the Securities Market Programme, should be more active, less active. Let me say – and I did say this a moment ago – that the rationale for having the SMP active is that you want to make sure that you repair the monetary policy transmission channels. It is not to create liquidity, it is not to subsidise governments; it is to repair the monetary policy transmission channels. That was the rationale with which it started and that is still the rationale with which we employ it. By itself, it is a non-standard measure and therefore, by itself, it is going to be temporary, it is going to be limited. Let me be clear about what I mean by limited. It is not eternal and it is not infinite.
We have to understand that the ECB can act within the Treaty. It would be a mistake to have the ECB acting outside the Treaty; it would not be legal and it would also be a mistake because it would, especially in some parts of Europe, undermine the credibility of the ECB, which nowadays, is the strongest signature in the euro area."@en1
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"European Central Bank."1
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