Sharon Bowles, author. – Mr President, in so many matters nowadays, the expression ‘the devil is in the detail’ is quoted. At times, this is becoming too much of an excuse for pronouncing conclusions aimed at markets, without realising that a less than fulsome follow-up negates the conclusions, or even does more harm than good.

I said this about the banks’ stress tests, where we need transparent and credible assumptions, as well as results, published. I said it earlier when it was taking too long to come up with the detail on the Greek rescue, and the committee has, in fact, been demanding more details for months. We are the devils that look at the detail, and we want more of it.

On 11 May, the European Stabilisation Mechanism was established utilising the EU budget. It had taken so long to deliver on the earlier promises that this was not enough, so, on 7 June, the more general European Financial Stability Facility was created. A bit more haste would have been useful, and perhaps cheaper.

There are potential knock-on effects, as a result of these new instruments, for the EU budget and also for borrowing by other EU institutions, such as the EIB. It will be damaging if, once again, there has, in effect, been a bailout arranged for banks holding sovereign debt, and lending to SMEs in the real economy is what pays the price. So what plans are there to mitigate such an effect, given that growth is so important to recovery and SMEs will be in the vanguard of that?

Concerning the Special Purpose Vehicle itself, in the interests of EU solidarity, those countries that are not in the eurozone but wish to join the Stabilisation Mechanism should be able to do so. Can you confirm that the rules of the SPV are being changed to permit this? Indeed, more generally, as was raised in committee yesterday, we would like to know more about this off-balance-sheet vehicle, Member States’ accounting treatment of it and the advice for setting it up.

There remain many other questions. How will the coordination between the stabilisation fund and the IMF operate? Will allocation be made on the 2:1 basis, reflecting the pledged amounts, and what is the relationship between the respective interest rates? Will the EU and IMF loans rank pari passu or will only the IMF loans benefit from exclusion in any eventual restructuring of the borrowers’ obligations. Is this all the right way around? Should the IMF be topping up an EU rescue, or should it be the other way round? Is the SPV active now or must first calls use the EU budget mechanism?

I would now like to turn to Eurobonds. There is a fundamental question to face here, that if there is a general Eurobond with a common interest rate, then one of the most powerful incentives for fiscal discipline – market forces – is lost. Market forces are not popular right now. They were, in fact, sleeping as Greece and others ratcheted up debt much earlier on, but there are reasons for that embedded in the zero-risk weight applied to sovereign debt in the Capital Requirements Directive.

Had that not been there, banks would progressively have been weaned off riskier bonds and spreads would have reflected better the fiscal positions of Member States and we would not be bailing banks out again via the Stabilisation Mechanism and, indeed, the forthcoming stress tests would be a whole lot less stressful.

As part of the new economic governance, surely this has to be fixed in the longer term and I would say automatically, not as part of a politically determined excess deficit procedure that takes away the zero-risk weight. But I think that here we have the opportunity to turn what is a problem in the Capital Requirements Directive into a useful tool in the future.

Since writing this oral question, I am pleased that the Commission has indicated its intention to involve Parliament in economic governance, surveillance procedures and forthcoming legislation, and the committee looks forward to participating wholeheartedly in that involvement.