Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-11-18-Speech-2-419"
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"en.20081118.33.2-419"2
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".
Thank you for the floor, Mr President. As a matter of fact we are faced with a sad situation, since we need to debate a request for immediate assistance. I would say, however, that I can make a positive comment because the European Union has finally, after a lot of searching – which was far from easy – discovered Article 119 and the legal basis on which it can provide such assistance. For a long time, as the news wafting in from Hungary indicates, they could not find a legal basis for doing so.
Before going any further, let us examine the reasons for this. One reason is convergence – as we debated yesterday – or rather the lack thereof. In recent years, there has been no reinvestment in capital movements from east to west within the EU, and consequently there is an enormous capital drain from eastern Member States to the western ones. This means we face an ongoing imbalance of payments, which, moreover, will prevent true convergence.
The other problem is that obviously the surveillance system is incomplete, since the countries which do not use the euro can simply run up debts in foreign currency. If I have heard correctly, until now the European Union did not entirely have the power – though in my view it does have a voice – to tell these countries to ‘be careful, do not allow the population and businesses to run up endless and irrational debts in foreign currency, because there could be trouble if there is a crisis’, and so the problem has indeed arisen.
Therefore, surveillance must be extended to cover this, and should already have been extended long ago, for as I say, the Commission has a strong voice in Central and Eastern Europe, and can open its mouth.
The crisis has now arisen. The Hungarian Government first ran to the International Monetary Fund (IMF) out of fear, this we know, but they say that they did of course try to approach the EU as well, and that the latter tried systematically to find a legal basis. The government also say that they lack sufficient capacity to analyse the crisis. To this I say, let us create it. It should not be the case that everyone has to rely on the IMF whenever they need crisis analysis. What will the outside world think of us, if we try to use IMF funds to rescue Member States of 1-1.5 million inhabitants from an imbalance of payments?
A crisis mechanism will not work when a system, at times of crisis, has to stop a capital drain from a non-euro area country, for instance in the monetary sphere, for that is when the drain really begins to operate. Even the European Central Bank cannot do much, since in spite of coverage in forints, it does not really want to help with the liquidity problem, although all Hungary needed was foreign currency liquidity, since the banks were not heavily in debt.
As far as the Hungarian report is concerned, its 2006 analysis began with an improving situation. It reminds me a bit of Chernobyl in 1986, when on the first day they reported that there was no problem, and thereafter the situation was steadily improving. In the end we worried that there would be negative radiation. In this case as well, everyone is forgetting. We started out with what happened until 2006, and since then there has been a serious lack of surveillance of currency flows.
This EUR 25 billion ceiling, I would like to observe, seems very low. It includes from the outset that we want to work with the IMF, whereas it is hard to imagine a more terrorising situation than relying on the IMF.
It would be very important, of course, for the European Parliament to be involved and at the same time to act speedily. In my view, the two are now happening at once, and for this I am grateful to the Commission as well as to Parliament. I would, however, reiterate that we should create a mechanism which will prevent a recurrence of the various misfortunes that occurred in relation to the Hungarian crisis, and which has done nothing to increase the prestige of the European Union in Central and Eastern Europe. Thank you for the floor, Mr President."@en1
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