Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-12-03-Speech-3-089"
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"en.20081203.13.3-089"2
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"Mr President, I am not going to say much about the exceptional, historic nature of the current crisis. All my fellow Members have mentioned this, and Mr Rasmussen has expressed it very well. I just want to add three things here: this is the worst liquidity crisis that I have ever known, and I am getting on in years; there are no navigation charts or roadmaps for this crisis; and, thirdly, we are well aware that the financial crisis is ongoing and the markets have run dry.
The first thing we have to do, therefore, is to normalise the financial markets, and in this respect I am going to talk about the European Central Bank.
In this House there is a kind of reverential respect for the European Central Bank. I am a layman in many areas, including this one, but I must say that the ECB has to bring down interest rates quickly and as a matter of urgency. The transfer mechanisms do not work well, as shown in October, when the official interest rate cut was not passed on enough into real interest rates.
Secondly, liquidity has to be provided over a longer term than is currently the case. I am aware that for this to happen the framework of guarantees has to be changed, but it has to be done. Financial institutions lend money over the long term and they need reliable financing over the long term as well.
The national banks are helping with the Central Bank’s policy to supply liquidity, and this may result in national aids that distort competition. We therefore have to keep a careful watch on this area.
My third and last point is that right now budgetary policy has been shown to be playing the central, leading role far more than monetary policy is. Budgetary policy causes external effects, and that means that close coordination is vital. I agree wholeheartedly with what the Commissioner has said.
To continue, I also agree that it is important to spend, but most of all it is important to spend wisely on clear objectives that enhance the competitiveness of Europe’s economy. That is the only way in which we will be able to balance our budget again in the medium term.
I agree that the Stability and Growth Pact is still in force, and the first thing that the Commissioner should do is tell us what he understands by ‘departing from the reference value’. Does this mean by a few hundredths, a few tenths or a few points? Believe me, Commissioner; I shall keep a careful watch on the work you have to do for the Stability and Growth Pact to remain in force. If you achieve this, may God reward you, and if not, may He hold you to account."@en1
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