Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-12-01-Speech-4-044-000"
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"en.20111201.3.4-044-000"2
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"Mr President, Mr Draghi, ladies and gentlemen, this annual report has finally broken certain taboos. It calls on the Commission to create a European credit rating foundation and to consider temporarily suspending credit ratings for countries that require support from the Union. The report recognises the merit of the European Central Bank (ECB) repurchasing bonds on the secondary market, which has allowed banks to maintain their balance sheets and continue to borrow on the interbank market. This action prevented a liquidity crisis.
Yet in order to resolve the sovereign debt crisis, the ECB needs to be authorised to intervene on the primary market when it becomes illiquid. Even Germany is struggling to obtain funds. Italian bonds are being issued at ever-higher rates. If there is no intervention, the risk of Italy defaulting will seriously compromise the health of the banks. The banks will approve fewer loans and will not be able to meet the new solvency ratio requirements.
Parliament’s report also stresses the need for a European Treasury able to issue federal bonds at lower rates, as is the case in the United States. In the event of speculator activity, the ECB should be authorised to repurchase these eurobonds, like its counterparts in the US and the United Kingdom. Did you know that these two countries are generating funds at historically low rates, despite a rating downgrade for one of them?
Ladies and gentlemen, we are not in the same situation as Germany in the 1920s – nowadays, production capacities are underused. Therefore, demand is not driving inflation. There is no cost inflation because we have wage moderation, or because the gloomy economy is keeping commodities costs low despite speculatory activity. We need to acknowledge that the time has come for bold monetary policies, given the current failure to recognise that budgetary orthodoxy is absurd in times of recession."@en1
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