ECB Speech to Plenary in Brussels (North Thanet Liberal Democrats)

North Thanet Liberal Democrats <info@north-thanetlibdems.org.uk>

ECB Speech to Plenary in Brussels

March 25, 2010 12:00 PM
By Sharon Bowles MEP
Originally published by Sharon Bowles MEP

Commissioner, colleagues,

We've had a busy week in committee with the Presidents of the ECB and Eurogroup and ECB vice President nominee.

All agree that stronger surveillance of Member States, with accurate statistics to enable early intervention are key requirements. Work on this has started, including audit powers for Eurostat, and the Committee is impatient to assert its enhanced role to help.

But there are indicators beyond the stability and growth pact that need respecting too.

Greater fiscal coordination, linked to macroeconomic stability, is an option. This has been tried of course - remember the row over the 2001 ECOFIN warning to Ireland.

We know the lesson - exerting discipline in times of surplus is harder than policing deficit. Just like in financial markets, and ends in crisis.

On imbalances between Member States, the focus should be on LOSS of competitiveness, often hand in hand with foot-dragging on the single market and failure to address structural reforms. This too does not have a deficit trigger.

Finally, liquidity provision by the ECB has been a valuable tool through the crisis. But it has not been passed on to the real economy - often simply reinvested in higher interest bearing assets: and I daresay some are recirculated on repo to the ECB. No doubt in some quarters such activity is even viewed as deserving of bonus. Should we really listen to the pleas of such banks on new capital adequacy implementation dates?

ENDS