REPORT on the Council recommendation for appointment of anExecutive Board Member of the European Central Bank
25.4.2006 - (C6‑0071/2006 – 2006/0801(CNS)) - *
Committee on Economic and Monetary Affairs
Rapporteur: Pervenche Berès,
PR_CNS_art102
PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION
on the Council recommendation for appointment of an Executive Board Member of the European Central Bank
(C6‑0071/2006 – 2006/0801(CNS))
(Consultation procedure)
The European Parliament,
– having regard to the Council recommendation of 14 February 2006[1],
– having regard to Article 112(2)(b) of the EC Treaty, pursuant to which the Council consulted Parliament (C6‑0071/2006),
– having regard to Rule 102 of its Rules of Procedure,
– having regard to the report of the Committee on Economic and Monetary Affairs (A6‑0136/2006),
1. Delivers a favourable opinion on the Council recommendation to appoint Jürgen Stark as Executive Board Member of the European Central Bank;
2. Instructs its President to forward this decision to the Council and the governments of the Member States.
- [1] OJ L 47, 17.2.2006, p.58.
EXPLANATORY STATEMENT
Introduction
1. By letter of 15 February 2006 the Council consulted the European Parliament on the appointment of Jürgen Stark as a member of the Executive Board of the European Central Bank for a term of office of eight years. Parliament's Committee on Economic and Monetary Affairs then proceeded to enhance the credentials of the nominee, in particular in view of the requirements laid down in Article 112 of the Treaty and in the light of the need for full independence of the ECB pursuant to Article 110. In carrying out this evaluation, the committee received a CV from the candidate as well as his replies to the written questionnaire that was sent out to him (see Annex ). The committee subsequently held a one-and-a-half -hour hearing with the nominee on 18 April 2006, at which he made an opening statement and then responded to questions from the members of the committee. (The full transcript of the hearing is available both in paper form and on the committee's Internet site.)
Evaluation
2. The rapporteur considers that the nominee's record demonstrates that Mr Jürgen Stark has all the required qualities a candidate needs to have in terms of the main criteria laid down in the Treaty, namely personal integrity and recognised standing and professional experience in monetary and banking matters. That was confirmed by the nominee's replies at the committee hearing on 18 April 2006.
3. The discussion showed that the nominee is a convinced European who is competent and committed to the values of the independence of the ECB and the priority of price stability. The Committee Members also note that the hearing was especially useful in showing the nominee's strong convictions on monetary policy, his openness to the European Parliament's rights and his commitment to enhancing the dialogue between the two institutions.
ANNEX 1: CURRICULUM VITAE
Jürgen Stark
Personal
Date of birth: 31 May 1948
Place of birth: Gau-Odernheim (Rhineland-Palatinate), Germany
Family status: Married to Christine Stark since 1973; two children
Education
1966 High school certificate
1968 – 1973 Studied economics at the universities of Hohenheim and Tübingen
1973 Graduated in economics
1975 Awarded a doctorate in economics
Professional career
1973 – 1978 Research assistant, University of Hohenheim
1978 – 1988 Official in the Economic Policy Department,
Federal Ministry of Economics
1982 – 1983 First Secretary at the Permanent Representation of the
Federal Republic of Germany to the GATT, Geneva/Switzerland
1988 – 1992 Head of the Division ‘Foreign Trade and Payments,
Money and Foreign Currency, Financial Markets’,
Federal Chancellery
October 1992 Deputy Head of the Department ‘National Monetary
Policy, Capital Market Policy, Germany as a Financial
Centre, Borrowing’, Federal Ministry of Finance
1993 – 1994 Head of the Department ‘International Monetary and
Financial Relations, Financial Relations in the EC’,
Federal Ministry of Finance
1995 – 1998 State Secretary at the Federal Ministry of Finance and
Personal Representative of the Federal Chancellor in the
preparation of G7/G8-Economic Summits
Sept. 1998 – April 2002 Vice President of Deutsche Bundesbank (1st term); Member of the Central Bank Council; Deputises for the President on the Governing Council of the European Central Bank
May 2002 – to date Vice President of Deutsche Bundesbank (2nd term);
responsible for International Relations and Internal Auditing;
Deputises for the President on the Governing Council of the
European Central Bank
since June 2005 Honorary professor in the Faculty of Economics at the
Eberhard Karls University of Tübingen
Commissions
1995 – 1998 Member of the EU Monetary Committee
1995 – 1998 Member of the Supervisory Board of Deutsche Telekom AG
1995 – 1998 Member of the Supervisory Board of Deutsche Bahn AG
1997 – 1998 Member of the Supervisory Board of Deutsche Entwicklungsgesellschaft (German Development Corporation)
1995 – to date Member of the G7 and G10-Deputies
1995 – to date Alternate Governor and Delegate for Germany at the International Monetary Fund (IMF)
1998 – to date Member of the ESCB’s International Relations Committee
1998 – to date Deputy Member of the Board of Directors
of the Bank for International Settlements (BIS)
1998 – to date Member of the Committee on the Global Financial System
(G10, BIS)
1999 – to date Member of the EU- Economic and Financial Committee
1999 – to date Member of the G20 Deputies
1999 – to date Member of the Financial Stability Forum
1999 – to date Deputy Chairman of the Board of Trustees and the
Executive Board of the ifo-Institute, Munich
2003 – to date Chairman of the Board of Foundation University of Hildesheim
(Lower Saxony)
ANNEX 2: ANSWERS BY JÜRGEN STARK TO THE QUESTIONNAIRE (NOTICE TO MEMBERS 023/2006)
Subject: Answers to the Questionnaire sent to the candidate to be a member of the Executive Board of the European Central Bank and Mr Stark's CV
A. Personal and professional background
1. Please highlight the main aspects of your professional experience in monetary, financial and business matters.
I began my professional career in 1978 at the Federal Ministry of Economics after studying economics at the Universities of Hohenheim and Tübingen (1968-1973), gaining a doctorate in economics (1975), and completing several years of academic work in the field of regional economic development and economic policy. I worked in the Economic Policy Department at the Ministry for almost 10 years and was primarily concerned with matters of employment and labour market policy. In 1988 I moved to the Federal Chancellery, where my responsibilities consisted of coordinating tasks within Government and giving professional advice to the Federal Chancellor on European and international economic, commercial, financial and monetary policy. Here the main focus was on:
- professional and political participation in preparations for European economic and monetary union (work within Government in connection with the Government Conference which resulted in the Maastricht Treaty, 1988-1991);
- participation in negotiations on the reunification of Germany (German-German monetary union, 1990);
- internal professional briefing of the Federal Chancellor for the G7 Economic Summit preparations (1988-1992).
At the end of 1992 I became Head of the Department of ‘Monetary and Capital Market Policy’, and in mid-1993 Head of the Department of ‘International and EU Monetary and Financial Relations’ at the Federal Ministry of Finance. In 1995 I became State Secretary at the Federal Ministry of Finance with responsibility for EU and international financial and monetary matters. I was also given the role of Personal Representative of the Federal Chancellor in the run-up to the G7 Economic Summits (Sherpa).
In essence my work was marked by the following activities:
- technical and legal preparations at the third stage of economic and monetary union at national and European levels as a member of the EU Monetary Committee;
- crisis management in a number of emerging nations (1994-1998) as a member of the G7 Finance Ministers (G7 Finance Deputies);
- content and policy preparations for G7 Economic Summits at Halifax, Lyon, Denver and Birmingham.
Between 1995 and 1998 I was amongst other things a member of the Board of Directors of Deutsche Telekom AG and Deutsche Bahn AG.
Since September 1998 I have been Vice-President of the Deutsche Bundesbank. Here, too, my responsibilities include European and international matters and internal auditing. I deputise for the President of the Bundesbank on the Governing Council of the European Central Bank if he is indisposed and take part in all of its meetings. I represent the Deutsche Bundesbank in a large number of European and international forums and institutions.
2. Please highlight the main aspects of your European and international experience.
As I have already indicated in my answer to the first question, my European and international experience derives from the various positions which I have held during the course of more than a quarter of a century as a Federal Government official and as Vice-President of the Bundesbank. In those positions I am or was an active member of a large number of European and international committees and institutions.
The most important of those forums and committees are:
- the EU Monetary Committee (since 1999 the EU Economic and Financial Committee)
- G7, G10 and G20 (representative)
- the Financial Stability Forum
- the International Relations Committee of the ESCB
- the Committee on the Global Financial System (BIS)
- the Board of the Bank for International Settlements (BIZ) (acting member)
- the IMF (Deputy Governor/German delegate).
At European level I initially took part in the process of monetary integration from 1988 onwards (European Council at Hanover) in an advisory capacity, via decisions on the launch of the third stage of economic and monetary union and the group of participating nations (Brussels, May 1998), until the introduction of the euro (2002), and subsequently actively helped shape it on European committees (Monetary Committee, ECOFIN Council). Between the autumn of 1993 and the summer of 1998 I took part in all of the meetings of the ECOFIN Council and the European Councils (heads of state and government).
In the preparatory talks on the third stage of economic and monetary union my remit was to secure permanent legal and institutional foundations for economic and monetary union. Under the terms of the EC Treaty this includes ensuring price stability as the principal aim of the Eurosystem (Article 105), the independence of the monetary policy of the ECB and national central banks (Article 108) and budgetary discipline (Article 104), especially the Stability and Growth Pact.
In my view these elements are indispensable conditions for the lasting success of the euro as a stable and accepted currency.
At international level, as a member of the G7 Finance Ministers (G7 Finance Deputies), I was involved in the management of financial crises in a number of emerging nations during the second half of the 1990s (Mexico, Southeast Asia, South America). Between 1993/1995 and 1998 I took part in all of the conferences of the G7 Finance Ministers and since 1993 in all of the IMF conferences. An important aspect of crisis management was the role of the public sector and in particular the scope of the respective financial aid from the IMF. The argument for ‘immediate problem-solving’ using large financial rescue packages is countered by the potential negative economic and political consequences for the country concerned and for the international financial institutions and the international monetary and financial system.
As a result I have endeavoured to improve national and international crisis prevention in a variety of forums, some of them new, such as the Financial Stability Forum and G20, in order to increase the international monetary and financial system’s resistance to shock.
Between 1995 and 1998 I further deepened and broadened my experience of international policy-making as ‘Sherpa’ to the Federal Chancellor. In the run-up to and during the respective G7 economic summits a large number of global policy topics had to be addressed (including world trade policy, debt reduction for emerging nations, development policy, global environmental problems, UN reforms, ageing societies and regional and global migration).
Since September 1998, as Vice-President of the Deutsche Bundesbank, I have been responsible for European and international relations (see also my answer to Question A 1). Meanwhile my responsibilities also embraced the fields of ‘markets’ and ‘controls’. As well as providing the President of the Bundesbank with advice on monetary policy my work in the past has been determined at European level by the implementation of the Stability Pact, and at international level by the reform of the IMF and aspects of stability in the financial system.
3. What are the most important decisions to which you have been party in your professional life?
I have been involved in a large number of policy decisions or made decisions myself in the context of European and international cooperation on behalf of my government.
But not every government employee is offered the chance to become involved in historic decision-making processes during their professional career. In this connection I should like to draw particular attention to two significant and far-reaching decisions. While they may not have a direct causal relationship, separately and together they represent important waymarks for the historic reshaping of Europe in recent decades:
1. The reunification of Germany after 40 years of division. I took part in the talks on German-German monetary, economic and social union, which resulted in the introduction of the deutschmark in what was then the GDR.
2. The creation of a common European currency. In this connection I would refer in particular to my involvement in the talks and decisions on
- the Maastricht Treaty,
- the Stability and Growth Pact,
- the participating nations at the launch of the third stage of economic and monetary union.
B. Monetary and economic policy
4. What would be the guiding objectives you will pursue during your eight-year mandate as a Member of the Executive Board of the European Central Bank?
If I were made a Member of the Executive Board of the European Central Bank my guiding objectives for the next eight years would be:
1. to carry out the authorities, responsibilities and duties conferred by the EC Treaty and the Statute of the ESCB and of the ECB with all the powers at my disposal, to the best of my knowledge and belief and independently of political and other bodies and to act in the general interests of the euro area as a whole;
2. to deploy all my ability and experience to contribute to the success of monetary union and the common currency;
3. to contribute to the acceptance of the euro by the citizens of Europe by promoting the reinforcement of confidence in the capabilities and policies of the Eurosystem, with a view to contributing thereby to the establishment of a culture of stability in Europe.
5. What is your assessment of the monetary policy as it has been implemented by the ESCB for 7 years? What changes, if any, would you promote when becoming a member of the executive board? Notably what is your assessment of the rise in interest rate implemented in December 2005 and March 2006?
From the start the monetary policy of the Eurosystem was faced with challenges which differed greatly from those facing other central banks.
- It was important that the new institution should acquire credibility and build confidence quickly in a completely new political regime with a centralised monetary policy and decentralised economic and budgetary policies in Member States.
- It was also necessary to develop and implement an appropriate and comprehensible monetary policy strategy and define the goal of ‘securing price stability in the medium term’.
The Eurosystem also had to take account of a number of technical factors with unknown effects and survive many and diverse shocks which resulted in uncertainties and influenced the inflation rate. Since its creation the Eurosystem has acquired a considerable level of credibility and confidence among consumers, savers and investors. This was not in any way inevitable for a young institution. An independent and monetary policy strategy has also been successfully developed and implemented for the euro area, which takes account of its special features. It cannot be compared with the strategies of other central banks. From the beginning there were no tensions or serious problems with the implementation of the uniform monetary policy.
The medium-term orientation makes it clear that the monetary policy does not possess the tools to fine-tune the trade cycle. An activist policy which takes advantage of short-term trade-offs between prices and economic activity has no real impact in the long term, is associated with high prices and can contribute to instability.
I consider the definition of price stability as an annual increase in the Harmonised Index of Consumer Prices of just below 2% in the medium term to be reasonable. However, it is regrettable that in the last six years this figure has easily been exceeded. In view of the relatively weak economic development of the euro area during that period this is in the first place unsatisfactory. One significant contributory factor, however, is the fact that inflation in consumer prices has been adversely affected by, amongst other things, higher administered prices and indirect taxation in the national economies in the euro area.
With both strategy and the quantification of price stability the ECB Council is taking account of its terms of reference.
- The ECB Council’s monetary policy is becoming more transparent because the analytical path and the political objective have been formulated clearly.
- The public can judge the success of monetary policy by means of a quantifiable value.
- The definition of price stability serves as a benchmark for the public’s expectations for inflation.
In my opinion, viewed from current perspectives, there is no need to make any changes to strategy or the definition of price stability. Changes of that kind might only result in a sense of insecurity and damage confidence in the credibility of the Central Bank. Initial criticism, in particular from academic circles, of the two-pillar strategy and sometimes also of the ECB communications policy, is now largely a sober judgement and has to a considerable degree given way to understanding.
Despite increases in the base rate by the ECB Council in December 2005 and March 2006 interest rates in the euro area remain close to their historical minimum. This is true of the structure curve of interest as a whole, both nominal and actual. There is still an abundance of liquidity in the euro area, at any rate more than is needed to fund lasting, inflation-free growth. All of the monetary and financial indicators show expansionary trends and thus increasing risks of inflation: money supply, lending, asset prices. A delay in the necessary adjustment of interest would have resulted in instability in the medium- to long-term and ultimately made any adjustment an expensive matter. Conditions for credit remain favourable. Interest levels still do not inhibit investment activity or continuing economic recovery in the euro area.
6. It is often asserted that due to structural changes in the world economy inflation has shifted from inflation in consumer prices to inflation in asset prices. What is your view on this assertion and which consequences for the monetary policy do you see?
In recent years the rate of increase in consumer prices has abated around the world. But at the same time a considerable increase can be detected in the price of oil and other raw materials, which is largely due to increasing demand from emerging nations enjoying rapid growth. Asset prices have also increased significantly in recent years.
Two factors may be identified as critical to decreasing inflation in consumer prices:
1. Structural changes in the world economy. Globalisation, i.e. increasing access to goods and financial markets, more flexible markets because of progressive deregulation and the integration of major emerging nations into the world economy have strengthened competition and expanded manufacturing capacities. This has noticeably reduced the freedom of commercial goods manufacturers and service providers to fix prices.
2. The independence of central banks and the associated increase in the credibility of the war on inflation. This development must have been influenced by the longer-term downward trend in inflation rates. Around the world the final phase of high inflation during the 1970s gave rise to the discovery that politically independent central banks could guarantee greater price stability. Empirical studies actually demonstrate this positive relationship between the independence of a central bank in monetary policy and stability in the value of money. In many cases a clear strategy oriented primarily towards stability in price levels has proved to be meaningful and helpful.
In view of the process of disinflation, protracted over a number of years, which has resulted in lower rates of price increases, many central banks have operated a somewhat relaxed monetary policy using historically low interest rates for a lengthy period. This has resulted in considerable monetary expansion, so far without any indication of an increased trend towards inflation. But it is well known that liquidity finds its own way: in the long term inflation is a monetary phenomenon. Even if is not easy to demonstrate a causal relationship between liquidity and asset price trends, the availability of surplus liquidity must be one of the driving forces behind the obvious increase in asset prices. Recent work by both the ECB and the BIS shows that a combination of strong growth in the money supply and rapid increases in asset prices often result subsequently in expensive price corrections.
Whether and, if so, how central banks are meant to react to specific trends in asset prices is highly contested. But before action there is analysis and the question of whether exaggerations in asset markets, i.e. evaluations which are fundamentally unjustified, can even be regarded as such. I doubt if central banks have the analytical tools and expertise needed to undertake an assessment of this kind. There are also limits to the options for implementing policies. Central banks possess only one tool, to wit the short-term interest rate. But interest policy is rather an indiscriminate means of avoiding, slowing down or even correcting bubble trends.
But central banks can monitor market trends carefully and make their contribution to the stability of the financial system by drawing the attention of market participants and the general public to the risks and the need for improved risk management. The ECB’s strategy offers an important point of departure for analysing and monitoring trends in the money supply. To that extent the ECB’s strategy is an extremely modern approach, which is increasingly being recognised outside the euro area too.
Low inflation in consumer prices is not inevitable, but the result of historical, theoretical, economic and political experience and knowledge, and the conclusions drawn therefrom. Growth is essential to protect what has been achieved. This also calls for a better understanding of the causes and effects of economic processes and trends in financial markets.
It would be wrong to conclude that the risk of higher inflation had been banished forever, or that inflation in asset prices was at the end of the transmission mechanism for monetary policy. Amongst other things, higher asset prices have an impact on the trade cycle via the credit channel and investments, which can ultimately result in a higher level of inflation in consumer prices. Generally speaking it remains to be seen whether inflationary processes of the kind we have been seeing for a number of years have not simply been postponed.
7. How do you assess the consequences of rising oil prices for the monetary policy?
The consequences of rising oil prices for monetary policy depend on the impact they have on consumer prices. If rising oil prices have only a passing impact on consumer prices, there is no need to take action in respect of monetary policy. But if there is a danger that rising oil prices will result in permanent pressure on prices, the monetary policy must react.
An adequate response by monetary policy to an oil price shock thus requires the careful analysis of the avenues by which an increase in energy prices will be transferred to consumer prices. Here first-round effects must be distinguished from second-round effects, and in the case of first-round effects, direct effects from indirect effects. An increase in the price of energy will result in an immediate increase in consumer prices. On the other hand, an indirect impact on consumer prices is produced via trends in manufacturers’ prices, as energy is a significant input factor in the manufacture of a considerable number of products and services. If the impact of rising oil prices on those direct and indirect first-round effects remains limited, there is no acute need for action via monetary policy. In that event the national economy will adjust itself to the relative increase in the price of energy-intensive products and services, and rising oil prices will have only a temporary impact on the inflation rate.
However, if there is a danger that the effects will not be temporary and it becomes apparent that so-called second-round effects are beginning to take effect which result in higher oil prices being passed on to consumer prices more effectively and more permanently, the monetary policy must react. We speak of second-round effects if rising oil prices threaten to be reflected in general pay trends or in inflation expectations. Increases in pay levels may be accelerated in the absence of any will to accept the reductions in real income caused by oil prices. If this is the case the price shock may be increased and prolonged considerably, and there will be a danger that snowballing prices will spread to areas of the national economy which have nothing to do with energy. Medium- to long-term inflation expectations are also of decisive importance to pay claims. If monetary policy fails to contain them firmly it will no longer be possible to guarantee price stability in the medium to long term, and pressure on prices will lead to accelerating inflation.
The monetary policy of the Eurosystem, which is oriented to the medium to long term, has made a decisive contribution to limiting the inflationary effects of the latest increase in oil prices. Great vigilance is required if monetary policy wishes to further safeguard its credibility without lapsing into the actionism of an interest policy. The indicators for second-round effects must be monitored with considerable attention. With regard to the creation of expectations the clear communication of decisions on monetary policy is of particular importance. This also means that the Central Bank must always be ready to deal with prominent risks of inflation without delay and where necessary energetically.
8. Without prejudice to the objective of price stability, how in your view should the ECB fulfil its secondary obligations under the Treaty (to contribute to economic growth and full employment) and what instruments could the ECB use to do so?
The Treaty establishing the European Community identifies the guarantee of price stability as a priority objective for the European system of central banks. A monetary policy which is committed to price stability is the most effective contribution to permanent economic growth and high levels of employment. This statement is based on the knowledge that monetary policy cannot give a permanent impulse to real values beyond a guarantee of price stability.
In the medium and long term real factors such as technical progress, population growth and educational systems are far more critical to economic growth and jobs, and the prevailing institutional circumstances are also very important for growth. Owing to the different tasks for which the ECB is responsible in the sphere of payment transactions and the stability of the financial system, in conjunction with the money-issuing banks of the Eurosystem, a contribution can also be made via this route to strengthening the institutional framework for the financial sector and thereby for growth and jobs in the Community.
It is only in an environment marked by price stability that market economies can display their full efficiency and innovative power. Even inflation rates which are apparently only minimally higher signify considerable costs to the national economy, which must not be underestimated: inflation reduces the information content of price relationships, makes financial transactions more expensive and makes it difficult to make provision for old age, inasmuch as in interaction with our tax systems they have the effect of a supplementary tax on returns in capital and inhibit the creation of capital. Inflation also brings a considerable redistribution of assets and income. Recipients of low incomes and citizens with limited assets in particular are scarcely able to protect themselves against losses of monetary assets caused by inflation. It is precisely the weakest groups in the community which are exposed to creeping expropriation. These effects clarify the social function of stable money and the fundamental importance which a monetary policy oriented towards price stability and supported by a solid fiscal policy has for an effective economy.
9. Looking backwards, do you think that the Stability and Growth Pact (SGP) as initially devised was best suited to reach the defined objectives?
The Stability and Growth Pact (SGP) is part of the institutional framework of economic and monetary union and part of the political union. It is the tool for coordinating and supervising the budgetary policies of EU Member States and is a manifestation of the promise by European governments to contribute to the stability of the common currency by means of permanently sound public finances.
Rules of budgetary policy are important in a monetary union because the disciplining effect of financial markets in conjunction with the incentive for a sound financial policy is less marked at national level. The consequences of incorrect action by an individual country would have to be borne by all of the participating nations. Nor is it possible without sound public finances for a central bank to guarantee the stable value of money. This objective also associated the SGP with the expectation that potential tensions both between national governments and the ECB and between smaller and larger Member States would be avoided.
The Pact, which was adopted in 1997, was the product of a political compromise. Its weaknesses were already obvious and familiar at that time, and included the fact that:
- the Council retained discretionary powers at various stages of the procedure in place of an automatic mechanism for decision-making; and
- (potentially) ‘sinner upon sinner’ will make decisions when the budgetary situation is being assessed and in the ECOFIN Council, thus reducing group pressure and discipline.
To eliminate some of these weaknesses a turn-around on the burden of proof was discussed in 1996/1997: if the 3% deficit limit were exceeded it would be reasonable to assume that there was an excessive deficit, an assumption which could be disposed of only by means of the Treaty’s majority requirement. But this proposal was politically unacceptable.
I remain of the opinion that the SGP’s goals could have been achieved even with the Pact in the form adopted in 1997 had there been the political will to do so. In particular the years which were more favourable economically would have had to be used for a fundamental improvement in the public financial situation in order thereby to create scope for action. Regardless of the quality of the rules, there is a fundamental political or structural problem for economic and monetary union in that many Member States have not yet adjusted the way they act to the changed conditions of an economic and monetary union. National considerations of European requirements seem increasingly to dominate.
10. Concerning the Stability and Growth Pact, what are your views on the reform adopted in 2005 and your assessment of its current implementation?
The reform of the Stability and Growth Pact (SGP) resulted in extensive changes and a net weakening of the existing rules.
As a result there has been a deterioration in the basic conditions for the common monetary policy. A relaxation of budgetary discipline can lead to disproportionately high budgetary deficits and an increase in the debt position, which threatens to further increase the financial burden on younger and future generations. But it is not only for this reason that I regard the reform as a step in the wrong direction.
It is true that the changes in the SGP bring some marginal improvements, for example as regards cooperation on economic policy between the Commission, the Council and the Member States. Nevertheless, they fail to produce the intended reinforcement of the Pact’s preventive element. The deficit procedure itself has been weakened considerably. Exceeding the 3% deficit ceiling in particular can be justified with reference to a number of ‘miscellaneous’ influencing factors over a protracted period of time.
As a further consequence of the reform the entire regulatory mechanism might become considerably more complicated and less transparent as a result of the multiplicity of influencing factors which can be taken into account and the greater weight attaching to the points of view of individual nations. An increase in bureaucratic effort is foreseeable because the complicated rules will make any operational application which allows for the principle of equal treatment more difficult.
The potential negative impact of the changes can be reduced by not exploiting the Pact’s greater flexibility and applying the new rules strictly. Obviously both the Commission and the Council are currently endeavouring to restrict discretionary powers. As it is only a short while since the new rules came into force it is too early to make a judgement. The real test is still to come.
11. Please comment on the currently running excessive deficit procedures. How do you judge the recent decision to lengthen the delay the German government is granted for lowering its deficit under the 3% ceiling? Does it damage the SGP’s credibility?
It is a matter of extreme regret and in my own view a poor signal to the other Member States in the euro area and the new members of the EU that Germany should have exhibited an excessive budgetary deficit and been subject to excessive deficit procedures since 2002. Its continuing failure to comply with the rules of the Stability and Growth Pact has been accompanied by a loss of credibility for the European rules on budgetary policy. This ultimately resulted in a politically-motivated change in those rules.
In the Updated Stability Programme for 2006 the Federal German Government announced that the deficit ceiling of 3% would probably be missed during the current year and that it would not be taking any corrective action. It is therefore logical that the Commission and Council felt obliged to grant Germany a delay. This is all the more applicable given that even the minimum improvement in the structural financial balance of 0.5% of GDP a year is not being aimed at following the changes to the rules.
In the context of the tightening of procedures there is legally scope for extending the period for correcting the excessive deficit until 2007. Although – assuming the appropriate political will – there would in my view still be enough time for the corrective measures required to comply with the 3% limit this year, the strategy adopted and the decisions of the Commission and the Council to extend the period for correction are not designed to promote the credibility of the modified rule of budgetary policy.
The aim would have had to be to terminate the excessive deficit procedure for Germany at the earliest opportunity, especially since the proportion of the deficit quota in the current year will probably to turn out to be less than was announced. As a result of favourable economic trends the 3% ceiling could be achieved this year without further action if the restrictive spending policy already in place was maintained.
This should boost the Pact’s credibility because
- the Federal Government has expressly professed its faith in the Stability and Growth Pact;
- it has stated at an early stage that it will accept a tightening-up of procedures;
- further progress on the domestic implementation of the provisions of the SGP is aimed at as part of the reform of German federalism, and in particular in establishing the allocation of financial powers between the Federal Government and states in Basic Law.
12. How do you judge the institutional relation between ECB, Council and/or the Eurogroup? In how far the ECB policy should enter into conflict with economic policy if the central bank does not agree with its decisions? What about differing judgments during excessive deficit procedures?
The institutional relationship between the ECB and the Council (and/or the Eurogroup) must reflect the distinctive features of the European economic and monetary union. The specific responsibilities of the individual institutions must be respected, just as they are regulated in the EC Treaty, by secondary legislation or informally, e.g. for the Eurogroup.
Under the terms of the Treaty
- the ECB is responsible – independently of political influences and directives – for the common monetary policy and for guaranteeing monetary stability as a priority objective;
- the Council shares responsibility for compliance with European rules on budgetary policy even under the terms of the Stability and Growth Pact;
- Member States must see their economic policy as a matter of common interest and coordinate it in accordance with the principles of the Broad Economic Policy Guidelines (BEPGs).
During the correct exercise of their respective responsibilities there will not usually be any conflict or problems between the ECB and the Council. Such things are pre-programmed, however, if the institutional framework is questioned or modified unilaterally, as happened in the case of the changes to the Stability and Growth Pact. The reasons for making the changes, the consequences for economic and monetary union, and who will take responsibility for them, must then be made transparent for the benefit of European citizens. Assessment of the suitability of measures to correct financial policy in the deficit procedure is the responsibility of the Council.
The ECB maintains close relations with the Council and the Eurogroup. Thus the President of the ECB takes part in the monthly meetings of the Eurogroup, and has a standing invitation to take part in ECOFIN Council meetings. The ECB is also represented on the preparatory committees of the Eurogroup and the Council, for example on the Economic and Finance Committee and on the Economic Policy Committee. On the other hand, the chairman of the Eurogroup is regularly invited to the meetings of the ECB Council. These regular contacts, conversations and joint meetings permit constructive dialogue and the exchange of analyses and assessments, and are therefore in the interests of all of those involved and of Europe as a whole.
13. What is your assessment of the state-of-play of the renamed Lisbon process, the so-called 'Growth and Jobs' strategy? How could the ECB and the instruments of macroeconomic policy coordination (Broad Economic Policy Guidelines, Employment Guidelines) contribute to the success of this strategy? What is your perception as to the possibilities of increasing internal demand and fostering investments within the EU? Can economic policy coordination contribute to improving the EU’s and/or the Euro area’s macroeconomic performance? If so, what’s wrong with the current system? How would you define the policy-mix needed and by what means should it be implemented?
In the face of the three-pronged challenge of
- accelerating globalisation,
- rapid technological change and
- ageing populations
it is crucial to the future social and economic development of Europe to achieve the goals of the Lisbon strategy.
Against this background the results after six years are disappointing. In November 2004 the report on the half-time assessment of the Lisbon strategy by the High Level Group of Experts, chaired by Wim Kok, recorded the fact that the existing way of going about things suffered from a lack of consistency and coherence. The consequence was an inadequate implementation of measures. The strategy should therefore be concentrated on the objectives of ‘growth and jobs’. Since Member States played a decisive role in the agenda’s success, we must make sure that national governments, parliaments and citizens are involved in their implementation more effectively.
The Kok report’s proposal for a reform of the Lisbon strategy was taken up by the Council, and subsequently by heads of state and government at their spring meeting in 2005. The new agenda puts the emphasis for fields of action on the promotion of growth and jobs. The Broad Economic Policy Guidelines and the Employment Guidelines have been combined as ‘Integrated Guidelines’ and the timing of coordination processes has also been tightened up. Acceptance of the Lisbon agenda by Member States should ultimately be improved by a commitment to draw up national programmes for reforms.
At the present time it would be premature to judge the success of the new strategy. The number of recommendations on economic policy in the Integrated Guidelines remains considerable and the establishment of clear priorities has been dispensed with. We must also wait to determine the effectiveness of the Member States’ renewed ‘commitment’.
The Eurosystem will contribute to the success of the Lisbon strategy, while it continues to carry out its mandate and guarantees price stability in the medium term. As has already been explained above in the answer to question B 8, price stability is an indispensable condition for achieving permanent growth and a high level of employment. For other areas of policy it is ultimately the Member States alone who are responsible for the implementation of the necessary policies.
Under the terms of Article 99 of the EC Treaty, Member States regard their economic policies as a matter of common interest and coordinate them in the Council. The harmonisation of economic policies and the convergence of economic trends are intended to create a favourable environment for a common monetary policy. Coordination is also sensible because of the economic interconnection of Member States.
The coordination of economic policy in a European context is a combination of soft and hard instruments of coordination, including the Stability and Growth Pact, the Broad Economic Policy Guidelines and the Employment Guidelines. It is important that all of these orientations are mutually coherent and that those acting politically are equal to their respective responsibilities.
- In budgetary policy it is the aim of Member States to provide workable public finances. This includes energetic consolidation in countries with imbalances and allowing automatic stabilisers to take effect, provided this is possible without any risk to the avoidance or correction of excessive deficits.
- Employers and employees should conclude suitable pay agreements in this context.
- And – as has already been pointed out – a credible guarantee of price stability is the most effective contribution which the Eurosystem can make to growth and prosperity.
If everyone acts according to their mandates there will automatically be a policy mix which is beneficial to medium to long-term growth and employment.
In those countries in the euro area where internal demand has been rather weak in recent years the confidence of consumers and investors in the future and policy must be strengthened. A medium-term orientation, reliable macroeconomic parameters, including healthy state finances, and a consistent, well-communicated process of reform are essential to this.
14. Please list in order of importance the structural reforms which you believe are a priority in the EU and justify your choices.
Structural adjustments and reforms are not an end in themselves. In the first instance they should contribute to
- increasing the potential for growth, and
- making Europe’s national economies more flexible and more resistant to shock,
thereby increasing employment and safeguarding prosperity.
In principle the Lisbon agenda is the proper approach to structural reform, and generally speaking it specifies the correct points of emphasis. Ultimately all EU countries face the same economic challenges, from which the priorities for political action should emerge:
- Globalisation and the associated intensification of international competition make structural reform in the labour market and elsewhere and improvements in the business environment which promote innovation and dissemination of technological advances as well as in investment in human capital absolutely essential.
- Demographic trends necessitate in particular the rapid consolidation of public budgets, the reform of pension and health systems so that they can still be funded in the long term, and measures to increase the potential for growth.
Certainly the structural conditions in the national economies of the EU (the euro area) differ, some of the resultant priorities for structural reform considerably. In the Community a group of large countries with low growth potential and considerable employment problems faces a number of smaller countries with significantly greater economic dynamism. Then there are the new EU Member States, some of which are catching up quickly, but still have a long way to go before they converge in real economic terms with the ‘old’ Member States. Given the variety of initial situations in Member States as they try to overcome these problems, priorities must be established at national level.
15. What is your opinion regarding the pace at which the New Member States should join the monetary union and adopt the Euro, considering all of the convergence criteria and the participation in the exchange rate mechanism (ERM II)? What challenges do you think the ECB's monetary policy will face during the preparation of Euro entry by the New Member States and once they have joined the monetary union?
The convergence test serves to establish whether a country exhibits the level required in its economic development and its economic, financial and monetary policy to introduce the euro.
It is in the interests of the new Member States themselves that the speed at which the euro is introduced is not given priority over the required level of convergence. Rather, permanent convergence should determine the timetable. As has already been explained on a number of occasions, it is a matter of satisfying the convergence criteria not at a single point in time, but for a considerable time or permanently: the introduction of the euro does not mean a step which can be revoked. The country concerned must be aware of the economic and political consequences associated with the fact that in a monetary union it will no longer have national instruments of monetary policy or exchange rates as a parameter for adjustment.
It is the ECB’s mandate to safeguard price stability in the euro area. The absorption of new Members into the euro area will do nothing to change this. The new Member States have adopted the acquis communautaire and know about their duties in the preparatory phase for economic and monetary union.
If new members fail to converge adequately or permanently, the divergences in growth and inflation in the currency area may become greater. This might make it more difficult for the ECB to implement a common monetary policy.
16. What is your view on the taxation of short-term financial transactions? Do you think that a currency transaction tax is compatible with EU Treaties which guarantee the freedom of capital movements? Do you think that a tax on currency transactions involving the euro could have beneficial effects – for example by stabilising the exchange rates of countries wishing to join the euro area in the future?
I regard the idea that short-term financial transactions should be taxed as undesirable, counterproductive even. A tax of this kind is not suitable for tempering the volatile nature of exchange rates or even preventing monetary or financial crises.
In the case of sales of foreign exchange, it is not possible to distinguish between ‘poor speculation’ and ‘effective funding of foreign trade’. However, all forms of sale of foreign exchange are subject to a tax of this kind, which makes international trade more expensive. It is precisely the poorest countries which would suffer as a result. Besides, the literature of economics provides no indication that a transaction tax would reduce exchange rate volatility. It can even have the opposite effect. For, amongst other things, reduced sales in foreign currency markets mean decreasing liquidity and thus increasing volatility.
As well as these technical reasons there are practical reasons which do not favour a tax of this kind: it works only if it is applied worldwide. Otherwise it is easy to circumvent, e.g. by moving to offshore centres or reinvesting in financial derivatives.
In my own view legal considerations would make a tax on transactions incompatible with the EC Treaty. Article 56 of the Treaty prohibits restrictions on capital and payment transactions as a matter of course, not only within the EU, but also to third countries. However, Article 57 permits the Council exceptionally and by unanimous agreement to approve restrictions on transactions with third countries where the ‘provision of financial services’ is concerned. From the tax measures referred to in Article 58, which are not subject to the embargo on restrictions, it is indirectly apparent that a tax on transactions would be regarded as a restriction.
As has already been noted in general terms above, I regard a tax on transactions as an unsuitable instrument for reducing exchange rate volatility. For those Member States wishing to introduce the euro, a consistent macroeconomic policy which aims at stability is the key to limiting the exchange rate volatility of their currency. And incidentally, the candidate nations are already conducting a major part of their trade with the euro area.
17. Based on the fact that the Constitutional Treaty has been rejected by referendum in two of the founding member states of the European Union and that there are serious doubts on the sustainability of a monetary union in the absence of a political union, what are your views on the future of the European monetary union in the short term and the longer term?
First we should remember the long and on the whole successful path to European integration, which achieved its high-point with the introduction of a common currency, the euro. That path was never straightforward. There were crises and set-backs, but they were always overcome and advanced European union.
The EU is currently in a critical phase. Following the creation of monetary union it is possible to detect an element of integration fatigue. The expansion of the EU to include 10 new Member States has created an impression that there has been a change in the paradigm for European policy.
The temporary failure of the Constitutional Treaty is only one of many symptoms of the current critical phase. In my view the following might also be mentioned:
- the disappointing results of the half-time review of the Lisbon strategy,
- the weakening of the institutional basis for economic and monetary union by changes to the Stability and Growth Pact,
- differences on future funding of the EU budget,
- an increase in protectionist tendencies in the EU, which may threaten the common internal market.
Behind all of these trends there stands a less integration-friendly disposition in Member States, the tendency towards more single-state policy and signs of a desire for re-nationalisation in some policy areas.
I am concerned about these trends because monetary union – which is itself an element of political union – needs a common political foundation and a political commitment to function smoothly. This is essential if the advantages of a common currency are really to be exploited and a lasting success made of economic and monetary union.
The technical conditions for the operation of monetary union were created by the Maastricht Treaty before we entered the third phase, to wit
- an independent system of central banks,
- a framework for avoiding excessive national deficits with the Stability and Growth Pact,
- the Broad Economic Policy Guidelines which set the scene for the coordination of Member States’ economic policies in the EU and among other things are intended to result in more flexible labour, goods and service markets.
In view of previous experience I see a need in the short term to align national economic policies more effectively with the requirements of economic and monetary union, which hitherto has not been happening enough, especially in the larger Member States. This is in the interests not only of Europe, but of every individual Member State. In particular it includes structural reforms to make our national economies more flexible and more resistant to external shocks and to increase potential for growth.
In the longer term I am convinced that economic and monetary union needs to be ‘lined’ politically in the direction of conversion to political union, though this would mean that the intergovernmental approach in other areas of policy would have to be superseded by a supranational approach.
18. What is your view on the respective roles of the Council and the ECB in terms of external representation of the Euro zone?
External representation of the euro area, as it is now practised by the Council (Eurogroup) and the ECB, reflects the degree of political, economic and monetary integration in Europe. The roles of the ECB and the Council in the external representation of the euro area are clearly defined in the EC Treaty and are in accordance with the allocation of powers as provided for by Articles 99 and 105. In accordance with that allocation of powers Article 111(4) provides that the Council shall decide on the Community’s position at international level as regards issues of particular relevance to economic and monetary union.
The Eurosystem is empowered to represent monetary policy and its other responsibilities externally. Responsibility for exchange rate policy is divided between the Council and the ECB. This division of work works well. The ECB acts as the voice of the Eurosystem externally and is represented in the most important international forums which are relevant to the tasks of the Eurosystem.
Provisions for the external representation of Community economic policy are less clear. This is reflected in the division of internal responsibilities between the Members States, the Council, the Eurogroup and the Commission. Responsibility for economic policy largely remains with the Member States. This also applies to responsibility for some international matters, such as membership of the IMF. Member States or their money-issuing banks hold deposits with the IMF, and thus bear financial responsibility and are accountable for them to their national parliaments.
Any change in the existing provisions for external representation must be judged carefully and take account, on the one hand, of the fact that Europe’s influence at international level should reflect its economic and political importance and, on the other, that the agreed allocation of powers between Community level and the Member States is respected. Effective European external representation, i.e. the effective pursuit of European interests at international level, is inhibited by a lack of will on the part its Member States to push ahead with the political integration of Europe.
19. How do you assess the recent evolution of the USD/EUR exchange rate? How do you evaluate EU/US cooperation in the field of exchange rates? Do you think that Central Banks are able to fight efficiently against excessive volatility? What importance do you give in this context to the dangers posed by the twin US deficits? Do you think that the international role of the Euro should be encouraged?
Devaluation of the euro in 2005 and at the beginning of 2006 in relation to the US dollar reflects in the first instance the strength of the US economy. While some of these developments can be explained by short-term tendencies, for example new data on economic trends in the euro area in comparison with the United States and the expected trends in interest differentials, the downward pressure on the US dollar between 2002 and 2004 was essentially driven by concerns about the size and continued existence of America’s balance of trade deficit and its budgetary deficit. Because of the exchange rate regime in East Asia vis-à-vis the US dollar, the euro has already made a considerable contribution to the adjustment of exchange rates, although there are no indications that global imbalances have been corrected.
Cooperation on economic and financial policy with the United States and with other important global partners follows established channels, including regular meetings in the context of G7 and G20, and multilateral supervision with the IMF. These forums are marked by the exchange of information and agreement on the essential reasons for problems in the world economy, and joint policy recommendations. This approach to solving global problems has proved to be useful, inasmuch as it encourages all of the participants to contribute to the smooth adjustment of the global imbalances which have characterised the world economy in recent years.
I share the general view that exchange rates should reflect fundamental economic data and that excessive volatility and abrupt movement in exchange rates are undesirable because they have an adverse affect on economic growth. Abrupt movement in exchange rates also affects financial markets and makes it difficult for central banks to assess medium-term perspectives on inflation.
As regards these global imbalances there is a consensus in the international community that each country and each economic region should contribute to a gradual adjustment of global imbalances. For the United States this means tackling its balance of trade deficit by removing the budgetary deficit and promoting private savings. Europe and Japan can contribute to adjusting global imbalances by reinforcing their potential for growth by means of structural reforms in goods and factor markets. And, not least, greater flexibility in exchange rates remains a priority in the important emerging countries. I am personally convinced that the prompt and serious implementation of these political recommendations would create a global and economic environment, which would be essential to the smooth removal of global imbalances.
As far as the ability of the central banks to combat excessive exchange rate volatility is concerned, I believe that it is inappropriate for the monetary policy of a large and relatively closed economic region like the euro area to pursue an exchange rate objective either implicitly or explicitly. A policy of this kind might result in conflict with the objective of price stability. The contribution which the large central banks such as the ECB can make to the stabilisation of the international financial system consists in limiting exchange rate volatility by means of monetary policy with the aim of price stability. Certainly the ECB is monitoring exchange rate trends very closely, as they may have an impact on future price trends.
The international use of currencies is essentially determined by the decisions of market participants. The ECB therefore adopts a neutral position as regards the internationalisation of the euro, i.e. it neither obstructs nor promotes the internationalisation of the euro. Here, too, it is true to say that the best contribution which the ECB can make to the international use of the euro is a credible policy which promotes and strengthens confidence in a common currency.
20. What changes do you expect from the recent nomination of Ben Bernanke as chairman of the Fed Board notably concerning the inflation rate and what could be their impact on the European monetary union and the ESCB monetary policy?
It is not for me to speculate on any prospective change in the Fed’s monetary policy. The Fed’s new chairman has repeatedly emphasised that he will maintain continuity. Like his predecessor, he has made it clear from the start that he intends ‘… (to) maintain our focus on long-term price stability as monetary policy’s greatest contribution to general economic prosperity and maximum employment.’
This shows that there is a broad consensus that price stability is the most effective contribution which central banks can make to economic growth and employment.
It will be of considerable importance to both economic regions – the euro area and the United States – to continue the tradition of bilateral cooperation and dialogue by means of reciprocal information, the exchange of ideas and analysis.
21. How do you evaluate the situation of the renminbi?
I fully share the policy statements and in particular the recommendations of the G7 Finance Ministers and Central Bank Governors who have been making them to emerging nations in Asia since 2003/2004. As G7 put it, greater flexibility in exchange rates is particularly desirable wherever such flexibility is lacking. For this would help the world economy to function more effectively, and help limit any further increase in global imbalances.
The aim of moving towards greater exchange rate flexibility is shared by the Chinese authorities, as was demonstrated by the reforms in China’s foreign exchange market in recent months. These were initiated with a change in the exchange rate regime on 21 July 2005, and augmented by institutional measures to prepare the financial system for more market-determined exchange rates.
22. How can the influence of the Euro area and its currency be further enhanced, in particular in international financial institutions? What are your views on the current level of coordination, e.g. before IMF board meetings? Since the end of the 1990s, several forums have been set up (such as the Financial Stability Forum), several IMF tools implemented (Contingent Credit Line, FSAP, and ROSC....): is it possible to assess the impact of such changes on international financial stability?
As has already been explained in the answer to Question B 18, the representation and influence of the euro area in international financial institutions is determined by the current level of integration in individual policy areas (monetary, exchange-rate, economic and budgetary policy) in Europe. The responsibilities are accordingly exercised at either supranational or national level.
To my mind it should be the prime objective of the euro nations to maximise their combined weight and their influence in international financial institutions. At the same time the call for greater importance for ambitious emerging countries is also legitimate. Both factors should be taken into account in the context of a reform of international financial architecture.
The present level of political integration restricts the development of common, convincing and inherently consistent positions for the euro countries. For that reason close coordination remains for them the essential instrument for developing common positions, and for attempting to influence international dialogue. This coordination between euro countries is already very close and intensive. I am thinking, for example, of the permanent coordination between our executive directors at the IMF, or of coordination on the Sub-committee of the Economic and Financial Committee on issues which are of relevance to the IMF (SCIMF) in Brussels.
But even with these attempts at coordination the limits are apparent:
- There is no uniform conceptual, technical or political basis which is accepted by all of the countries in the euro area. This is particularly true in the case of matters of principle, for example in international financial market issues or economic policy strategies for emerging and developing countries. Different foreign policy priorities among Member States and historical ties also make coordination difficult. For that reason understandings are often only possible on the lowest common denominator.
- Beyond monetary policy ultimate responsibility for positioning rests with the national authorities which – if the IMF is concerned – bear financial responsibility for IMF quotas, i.e. for IMF financial contributions, and are accountable for them to their national parliaments.
- Consideration at short notice and the diversity of topics in international financial institutions and in informal international committees often overtax Europe’s scope and capacity for coordination.
If the influence of the euro area is to be significantly strengthened in the international arena it is my belief that this will be possible only by making further progress in the direction of political integration. Only then will it be possible to develop convincing positions regarding technical issues. Unless this happens all efforts at coordination – however intensive they may be – will be half measures and a lack of agreement on substance will give way to bureaucratic coordination processes.
Today international financial stability attracts considerably more attention than it did only 10 years ago. I believe that some important lessons were learnt from the financial crises of the 1990s. At the head of these is the fact that today a more effective macroeconomic policy is pursued in many emerging countries and international financial standards are observed. This trend is supported by the specific supervision of economic policy and financial systems in the context of the Financial Stability Forum (FSF) and the International Monetary Fund by the FSAP and the ROSC.
The IMF has also given important signals to market participants in the form of a greater degree of transparency and a revision of its access policy, and this may result in a reduction in moral hazard behaviour. It should not be overlooked that recovery from the financial crises of the 1990s took place in an environment which enjoyed an extremely generous international supply of liquidities and historically unparalleled low interest rates (short- and long-term).
It is not easy to assess and impossible to measure the real contribution which new forums such as G20 and new supervisory instruments make to an improvement in international financial stability. But it is crucial that they are aimed in the right direction, have been received positively by the countries concerned and have so far proved themselves.
C. Financial stability and supervision
23. Which responsibility and role should the ECB have concerning financial stability?
The responsibility and role of the ESCB – i.e. the ECB and the national central banks – in the area of financial stability arise from the tasks allocated to the ECB by the EC Treaty and the ESCB Statute:
- Under the terms of Article 105(2) of the Treaty, the ESCB must promote the smooth operation of payment systems.
- Under the terms of Article 105(5) the ESCB must contribute to the smooth conduct of policies pursued by the competent authorities relating to the prudential supervision of banks and the stability of the financial system.
- Article 105(4) of the Treaty and Article 25.1 of the ESCB Statute provide a basis for the advisory role which the ECB assumes in matters relating to the stability of the financial system.
- Finally, under the terms of Article 22 of the ESCB Statute, the ECB can make regulations to ensure efficient and sound clearance and payment systems within the Community and with third countries.
This allocation of responsibilities and roles reflects the fact that a stable financial system with a smoothly functioning payment system and a stable banking system is of fundamental significance to the monetary policy of a central bank. The effectiveness of monetary policy depends on efficient and, in stressful situations, stable channels of transmission in the financial system. The central bank should therefore monitor and analyse the financial system continuously and carefully in particular with regard to systemic risks which may impair its efficiency.
Apart from the intersections between monetary stability and financial stability, the ECB’s collaboration on the monitoring of financial stability can make an important contribution to the reinforcement and stability of the European financial system and thus to economic development in the euro area. As a supranational institution it is perfectly suited to analysing in detail and monitoring cross-border links between financial intermediaries and markets and the concretion of the European financial structure as regards its consequences for financial stability.
In practice the ECB’s contribution to the stability of the financial system has assumed a variety of forms which reflect its differing responsibilities. For the euro area it has established systematic monitoring of the financial system, which augments the monitoring of financial stability at national level. Since December 2004 the ECB has published financial stability reports which deal with trends throughout the euro area, as have many national money-issuing banks. In this way the ECB informs the public and the financial industry of the considerable risks to stability and of the degree of susceptibility to shock in the system.
As has already been indicated, it is the Eurosystem which is responsible for promoting the smooth operation of payment transaction systems in the euro area. Its supervisory role aims to safeguard financial stability. The market infrastructure is an essential component of the financial system and a potential channel via which contagion effects run in stress situations.
With the increasing integration of EU financial systems activities in this area should become more important. As a member of relevant specialist forums the ECB finally makes its contribution to the formulation and shape of effective financial regulation and supervisory requirements at national, European and international level. This happens, for example, in the form of formal commentaries on draft legislation at Community or national level. And mention should not least be made of the ESCB’s Banking Supervision Committee (BSC), which supports the ESCB in the fulfilment of its responsibilities.
24. How do you see the ECB's role in banking supervision in the context of the Lamfalussy process and the present discussions concerning a possible pan-European financial services regulator?
The ECB’s responsibility for the supervision of banks is evident from the EC Treaty and the ESCB Statute.
- Under the terms of Article 105(5) of the Treaty the Eurosystem has the task of contributing to the smooth conduct of policies pursued by the competent authorities relating to the supervision of banks.
- The ECM is also to take heed of all of the Community’s legal files and all drafts of national legal regulations relating to the supervision of banks (Article 105(4) of the Treaty).
- The ECB may also offer advice to the Council, the Commission and the competent authorities of the Member States on the scope and implementation of Community legislation relating to the prudential supervision of credit institutions (Article 25.1 of the ESCB Statute).
In practice the Eurosystem’s contribution consists of promoting cooperation among the authorities responsible for the supervision of banks, central banks and the ECB. In this context the ESCB’s Banking Supervision Committee (BSC), which has already been mentioned, plays an important part. Its activities are primarily aimed at macroprudential aspects of European banking systems and the stability of the financial markets. The committee is also used to promote cooperation between the bodies involved in the supervision of banks.
As a member of the Committee of European Banking Supervisors (CEBS) the ECB also participates directly in the Lamfalussy process. CEBS advises the Commission in the context of regulatory plans and promotes the consistent implementation of EU Directives and convergence in supervisory practice in Member States. The CEBS and BSC cooperate closely and thus ensure a link between microprudential and macroprudential activity.
As far as potential further developments in supervisory structures in the Lamfalussy process are concerned, I agree with the statements contained in the Commission’s White Paper to the effect that the existing institutional framework should be completely exhausted. Level 3 committees should be given sufficient time to develop their full potential. In the banking sector the practical implementation of Basel II in this connection offers an opportunity to make progress on convergence in the supervisory practice and cooperation between supervisory authorities. To that extent implementation of the Basel regulations will be a test of the extent to which CEBS and the other level 3 committees will be successful in promoting a common European supervisory culture. When the initial experiences are available a comprehensive evaluation of the Lamfalussy process should be undertaken.
I am familiar with the demand for a European ‘lead supervisor’. This demand is made primarily by major financial groups which operate across borders. With the implementation of the Basel II Directive, which I have already addressed, the role of the group supervisor will be strengthened. This applies not only in respect of information management; for the first time a national bank supervisory authority has been allocated a decision-making competence, which clearly goes beyond the supervision of the institutes which it has accepted. The creation of a ‘lead supervisor’, which as the domestic supervisory authority of the parent company in a financial group would be given Europe-wide lead responsibility for all of the group’s subsidiaries, would have to be examined carefully.
25. What do you see as the most pressing issues in financial services legislation which remain to be completed after the Financial Services Action plan? What is your view on the white paper on financial services policy 2005-2010 delivered by the Commission?
Following the conclusion of the Financial Services Action Plan the foremost priority should be the implementation of the regulations adopted in the law of the Member States and their consistent implementation.
As regards further legislative activity I initially think, in view of the integration deficit in the retail markets, of the draft directive on payment services in the internal market, which can make a contribution to the reduction of fragmentation in European payment transactions. I also regard the new UCITS initiative (Undertakings for collective investment in transferable securities), which has set as its objective the removal of national barriers to investment funds and transparency for investors as significant.
In the White Paper on financial services the Commission has placed emphasis on pushing ahead with the development of financial market integration in the EU by 2010. And in particular I regard as well judged the Commission’s intention to concentrate particularly on timely and coherent implementation in Member States, a review of effectiveness and the qualitative improvement of existing FSAP measures. Thereby we not only accommodate market participants who have yet to adjust themselves to the new regulations; effective implementation also permits the measures introduced to be monitored for effectiveness, which I regard as indispensable. The assessments of the legal consequences of planned regulations using cost-benefit analysis must be analysed as positive. But care must also be taken to support this analysis on comprehensible, objective criteria and generally accepted procedures.
As regards the starting points for the further development or review of the Lamfalussy process in the White Paper, I support the Commission’s evolutionary approach in the development of supervisory structures in the Community. As previously stated in the answer to Question C 24, the coordination and cooperation of supervisors should be intensified at level 3, to promote the convergence of supervisory practice and remove any obstacles to cross-border mergers and acquisitions in the financial sector.
Although FSAP was beneficial to the goal of financial market integration, European financial markets are still far from being completely integrated. Here a part is certainly played by the differences in financial culture between Member States. But the numerous discretionary powers for Member States when implementing EU directives should not be underestimated. Continuing differences in tax and business law and in consumer protection are also an obstacle to accelerated integration.
26. What is your view on the Commission proposal to create a new legal framework for payments in the Internal Market of the EU? How can the ECB contribute the fulfilment of a true single payments area in Europe, both for retail and wholesale payments?
The European internal market requires adequate mechanisms for handling payments. Despite the introduction of the euro, the markets for retail payments within the euro area are still largely national and fragmented. I therefore welcome the Commission’s intention to create a single legal framework for European payment transactions. With a directive on payment services in the internal market it will be possible to support the banks in their efforts to realise a single euro payments area (SEPA).
In the further progress of the directive process, care must be taken that
- the regulatory project turns out to be balanced and neutral;
- efficient and safe procedures are supported; and finally,
- the opening up of the market to new suppliers does not produce any asymmetries as regards prudential returns.
In the area of large-value payment transactions a single payments area has already been created with the TARGET system. TARGET is currently being developed further by the Eurosystem. The intention is to develop it into a system with a single technical platform (TARGET 2), to minimise the potential susceptibility to breakdown of a decentralised system with its many interfaces and to improve efficiency.
One of the ESCB’s basic tasks is to promote the smooth operation of payment systems. In order to carry out its mandate the ECB has assumed various roles in the area of payment transactions: a ‘catalyst’ role, a supervisory role and also an operational role.
In its role as a ‘catalyst’ the ECB promotes the market-driven process to the SEPA. The ECB is represented in the European Payments Council (EPC) and in its working groups by observer. To further foster dialogue with the end users the Eurosystem has also entered into talks with employers’ and consumers’ associations. Via these channels the ECB can make an important contribution to the stability and efficiency of payment transactions. Progress towards the SEPA will also be monitored and assessed continually against the background of the responsibility for payment transactions which arises from the EC Treaty and the stability of the entire financial system.
As regards the SEPA process it is my opinion that the principle of ‘competition and market before regulation’ should apply. But if the goal of a SEPA is to be achieved market participants must be made aware from the start that in the long term there is no way round the dissolution of national procedures and structures. In the long term, insular solutions are not compatible with the SEPA.
27. How do you assess the current level of consolidation in financial services in the EU and what is your view on future prospects in this regard?
Even if the pace of consolidation has decreased somewhat of late, there has been further progress on consolidation in the EU’s financial sector. More and more large cross-border bank groups are being created. After years of rather minimal activity, mergers and acquisitions (M&A) in particular are again exhibiting an upward trend at present as a result of an increase in cross-border transactions.
There are good reasons for assuming that the most recent revival in M&A activity is not a temporary phenomenon but marks the start of genuine European integration. The removal of obstacles to cross-border activity in the context of the FSAP programme, the Commission’s announcement in the White Paper that it would be pressing ahead with the integration of European financial markets, and the harmonisation of EU accounting standards, have made cross-border consolidation noticeably easier.
This European consolidation process should fundamentally be assessed positively. Many European banks have run into the limits to their growth in their domestic markets. For them cross-border mergers represent an opportunity for further expansion, to exploit economies of scale and compound advantages, or to improve geographic and trading policy diversification. This is associated not only with positive effects for the profitability of individual banking groups, but also via improvements in the allocation of resources for the European financial sector as a whole. In particular the resistance of the European financial system to shock is reinforced by the development of more efficient financial markets.
It is essential that the institutional framework for the European financial sector should be adjusted to take account of this development. At micro level it is a matter of adequate supervision of cross-border groups and thus in particular a matter of the effective exchange of information and close cooperation between domestic and host-country supervisors, and of the reinforcement of the coordinating role of the group supervisor. With the expansion of the Lamfalussy process and work on implementing the Basel II Directives considerable progress has already been made here. At macro level comprehensive monitoring of the financial system is essential in order to identify systemic risks promptly, which can impair the efficiency of the entire financial system. BSC analyses of stability in the EU banking sector and the expanded analysis of financial stability by the ECB and national central banks in the EU area make an important contribution to this. As regards crisis management, memoranda of understanding on cooperation between central banks and supervisory authorities and with Finance Ministers represent progress.
D. Functioning of the ECB and democratic accountability and transparency
28. Shouldn't the different responsibilities of Board members change with time, in line with the changes occurred in the ECB's tasks and priorities?
The tasks which the ECB has to perform are specified in the EC Treaty and the ESCB and ECB Statute. It is my opinion that every member of a board of directors is fundamentally able to carry out all central bank tasks. This is apparent to me from the fact that the ECB executive board acts as a committee and is collectively responsible for dealing with its current business (Article 11.6 of the Statute). At the same time the various business areas of the bank will report to the ECB executive board on one of its members. This happens for operational reasons, but also demonstrates the special responsibility for specific tasks which individual members assume.
As far its tasks are concerned, the main task of the ECSB is and will be to ensure price stability. Admittedly the main focuses which result from new trends and challenges may slip in under this heading, and this may result in an adjustment of internal organisational structure which may also affect the allocation of internal tasks and responsibilities. This is only natural, but it is important to carry out the institution’s tasks as efficiently and effectively as possible.
29. What system do you think is appropriate to ensure an equitable rotation of membership on the ECB-executive board also in terms of nationalities? Is it damageable to the ECB as a European institution that now again, for four years, there will be no representative of the small countries in the ECB executive board? What Council ought to have concluded on this?
The only criterion for the selection of potential candidates for the ECB executive board are specified in Article 112 .2(b) of the Treaty and Article 11.2 of the Statute, according to which
- members of the Executive Board shall be ‘appointed from among persons of recognised standing and professional experience in monetary or banking matters by common accord’;
- only nationals of Member States may be Members of the Executive Board.
I am convinced that only competence and nationality of a Member State in the euro area should actually be critical to the selection of a candidate. But nationality itself should not play any part in a truly supranational institution. The ECB is committed to every citizen of the euro area and acts within the legal framework it has been given for the euro area as a whole and not for an individual national economy or a region. This should be a guiding principle for the behaviour of Members of the ECB Executive Board.
30. What is your view on the need to increase the diversity of backgrounds represented in the ECB board rather than relying solely on central bankers?
The procedure for nominating new Members of the Executive Board is regulated in Article 11 of the ESCB and ECB Statute. As has already been stated in answer to Question D 29, Article 112.2(b) of the EC Treaty requires that candidates be from among persons of recognised standing and professional experience in monetary or banking matters. In my opinion it is natural that Members of the Executive Board of the central banks of the euro area are from among such persons. But there should be no exclusivity in this respect.
The Executive Board acts as a committee, but that does not mean that there must be absolute ‘homogeneity’ of ideas and opinions among Executive Board Members. I regard the diversity of ideas, opinions, convictions and experience on the Executive Board of a supranational institution as desirable, if not essential. In my opinion the current Executive Board reflects such diversity. All of the current Members of the Executive Board have a broad professional background and most of them have held a number of positions in their previous professional lives either as academics, former senior civil servants, Deputy Finance Ministers or Members of the Executive Board of the central banks in their own countries.
31. Could you elaborate on your views on the concept of democratic accountability with regards to the ECB and central banking in general?
In modern democracies the mandate of the central bank is laid down by the legislature either in the constitution or by a simple Act of Parliament. Central banks act as ‘agent in a principal-agent relationship vis-à-vis society at large’ and in most cases they have been granted independent status in order to better fulfil their mandate. This status must be legitimised democratically. It requires an accountability to the electorate which depends on the degree of democratic legitimation.
According to the academic literature of democratic theory the principle of the democratic legitimation of an institution must be looked at in conjunction with the complementary principles of the separation of powers, the rule of law and obviously the relationship to the constitution (in the EU to the EC Treaty). The independence of the central banks from the direction of political bodies represents the attempt to ‘align executive power with compatibility with the common good’.
The democratic legitimacy of independent central banks is regulated differently in different democratic systems. Its mandate can also vary on the basis of the number of objectives it has to pursue. I should like to comment on this on the basis of a comparison of the United States and the EU, and in so doing touch on a problem which arises from Question D 34.
- In the United States, Congress has the mandate for monetary policy under the Constitution (Article I, Section 8.5: ‘The Congress shall have power to coin money, regulate the value thereof, …’). In 1913 it transferred its own mandate under the Constitution to the newly-established Federal Reserve System. With the delegation of this responsibility the Fed was given explicit accountabilities to Congress, as the real authority for monetary policy. Congress gave itself the right to share in decisions and the right of veto when Members of the Federal Reserve Board were appointed. The mandate which Congress gave the Fed has been modified over the years. Today the Federal Reserve has to pursue three non-prioritised targets: ‘… maximum employment, stable prices and moderate long-term interest rates’ (Federal Reserve Act Section 2A). The Federal Reserve has not defined these targets in any greater detail.
- In the EU ECB/ESCB responsibility for monetary policy derives directly from the EC Treaty (as international law). The ESCB thus has a different ‘constitutional’ status to the Federal Reserve System. The Treaty also defines its mandate: ‘The primary objective of the ESCB shall be to maintain price stability’ (Article 105 of the EC Treaty). In contrast to the Fed the ESCB thus has to pursue a priority objective. The ESCB derives its democratic legitimacy from the fact that the Maastricht Treaty, which created the ESCB, was signed and ratified by all of the Member States in agreement with its constitutional provisions. The ECB also derives political legitimacy via the political process for appointing Members of the ECB Executive Board in accordance with Article 112 of the EC Treaty, inasmuch as they are heard by the elected representatives in the European Parliament and are appointed by common accord by the governments of the Member States at the level of head of state or government.
As far as the democratic legitimation of a central bank is concerned, this is a little less problematic, if an objective is specified. This has been safeguarded in the Maastricht Treaty. Problems of legitimation would arise only if the central bank had to pursue several objectives, i.e. if evaluation and decisions were involved. The accountability of a central bank must consequently be defined and exercised all the more comprehensively and clearly, the broader the terms in which its mandate is framed. Thus the Fed, in its pursuit of three targets, would have to explain potential conflict between targets and if necessary justify its own prioritisation of targets before the legislature.
At its heart the accountability of a central bank consists first and foremost in the fulfilment of its mandate. It has to be accountable to the citizens and their representatives in parliament. This is made easier if a central bank has a clear mandate to fulfil, there is a quantifiable definition of the target to be achieved and a suitable and comprehensible strategy is pursued, which limits discretionary decisions and personal influence on decision-making.
With this framework, which is similar to that of the Eurosystem, the system makes a critical contribution to accountability and transparency, and at the same time, if necessary, to a more efficient monetary policy. The public is able to comprehend decisions on monetary policy more easily and measure monetary policy against a numerical value which is capable of objective verification.
32. The ECB has long refrained from accepting the European parliament's request to publish the minutes of its Governing Council's meetings. What do you think are the impediments and inconveniences of such publications? Would you be in favour of the publication by ECB of the minutes of its Governing Councils meetings in the near-term future?
The ECB/Eurosystem is one of the world’s most transparent central banks. As has already been stated in a different context,
- the ESCB’s clear mandate,
- a quantifiable definition of price stability and
- an explicit strategy for monetary policy
simplify transparency and accountability for the general public. Putting these elements into concrete terms should stand at the beginning of a policy which aims at transparency. The ECB has done this and has with the quantifiable definition of price stability and the establishment of monetary policy strategy emphasised its commitment to transparency and openness.
All of the independent central banks have improved their transparency over the last 10 years. They have thus followed international standards as well as the idea of making monetary policy more efficient by increasing transparency; the increasing complexity of financial markets also makes this sensible and necessary. All of the major independent central banks have now achieved a comparable level of transparency, even if the instruments are different. The respective instruments used are also dependent on their historical development, their different mandates and the different constitutional and institutional framework in which a central bank acts.
The publication of the minutes of the ECB’s Governing Council is only one of the instruments available. In my view the presentation of the relevant economic arguments which resulted in a decision on monetary policy is more important than the publication of the minutes or the votes of individual monetary policy decision-makers. The publication of minutes and voting behaviour conceal the danger that the public will pay more attention to the decision-making process and the opinions of individuals than to the economic arguments and the actual results of consultation. Particularly in a monetary union in which essential competences in economic policy remain at national level it cannot be ruled out that public debate will be led by national considerations and interests. Inevitably national political pressure on individual members of the ECB’s Governing Council would increase because economic arguments would be confused with opinions and facts with people.
33. How do you judge the procedure used to replace ECB board members? Do you deem it normal that Council adopts the proposal made by a specific Member State as an A point? Should ex ante democratic accountability and transparency not imply that the European Parliament at least be given the possibility to hear several potential candidates and give its opinion before Council makes the final decision about the nomination?
The procedure for filling vacant seats on the ECB Executive Board is regulated in Article 11 of the ESCB and ESB Statute (Articles 11.2 and 11.7). The procedure specified therein is effective European law. As a candidate for the ECB Executive Board I am subject to that procedure and also consider it appropriate to comment on the procedure.
34. What conclusions do you draw from the comparison between the transparency policies followed by the Federal Reserve Bank and by the ECB? What do you think about the publication by the Fed or the Bank of England of the minutes of their meetings? Do you think this policy could be applied by the ECB?
This question is closely connected with Questions D 31 and D 34, and to that extent I refer to the answers given there.
Since its creation the ECB has made great efforts to explain its decisions on monetary policy and the considerations and analyses on which they are based to the general European public and financial market participants precisely, in detail and promptly. The most important channels of communication are the monthly press conferences, monthly reports, annual reports, public appearances by members of the ECB’s Governing Council and dialogue with the European Parliament. The transparency which this produces not only makes it possible to influence the expectations of the private sector, and their impact on financial markets, but also, allows ECB policy to be checked and allows the ECB to be called to account for the results which it has achieved through its own actions. While the ECB verifiably and convincingly demonstrates in public that it is fulfilling the mandate which the EC Treaty transferred to it, it can also legitimise itself for the benefit of citizens in the Eurosystem.
Thanks to a clear mandate, a definition of price stability and its monetary policy strategy the Eurosystem has a comparative communications advantage from the outset. As regards the degree of transparency of the monetary policy there are no significant differences between the Eurosystem and the Federal Reserve System. This is also true as regards regular publications and communications subsequent to meetings of the ECB Governing Council. At the monthly press conference with its ‘Introductory Statement’ and the subsequent replies to journalists’ questions the President of the ECB sets out in detail the assessment of current economic trends by the ECB’s Governing Council and explains decisions on monetary policy to the public in detail.
In my opinion there is hardly any difference as regards content and scope between the ‘Introductory Statement’, which is published shortly after each ECB press conference, and the ‘minutes’ of the Federal Open Market Committee, which are not usually published until three weeks after a meeting. The only significant difference lies in the fact that unlike the Fed the ECB does not make public the results of individual votes. The main focus of the ‘Introductory Statement’ is on the economic arguments and their evaluation, which are expressed in the results of discussions. In addition to the arguments against the publication of the voting behaviour of members of the ECB’s Governing Council which have already been presented in my reply to Question D 32, supplementary attention should here be drawn to the fact that under the terms of Article 10.4 of the ESCB Statute the proceedings of the Governing Council of the ECB are confidential.
35. What’s your opinion of the monetary dialogue? Might ECB board members discuss monetary policy and its decisions with other political actors or would this harm the bank’s independence?
As an outsider I can judge the monetary dialogue only from the minutes of the European Parliament’s Committee on Economic and Monetary Affairs.
The monetary dialogue has its roots in Article 113(3)2 of the EC Treaty, according to which the President of the ECB and the other Members of the Executive Board may at the request of the European Parliament or on their own initiative be heard by the competent committees of the European Parliament.
I regard the monetary dialogue as a sensible institution for explaining the degree to which the mandate has been fulfilled and the decisions which have been made on monetary policy by the ECB’s Governing Council for the benefit of the citizens and their elected representatives. This dialogue can also help to encourage public acceptance of the monetary policy of the ECB’s Governing Council and mutual understanding. In my opinion the dialogue’s limits are contained in Article 108 of the Treaty, which also applies to the European Parliament.
Since the ECB is tied to the institutional framework of the EU, it will obviously have a relationship with other EU institutions. Some of these relationships are institutionalised in the Treaty, including those with the ECOFIN Council or at a technical level with the Economic and Financial Committee and with the Economic Policy Committee. Regardless of formal relationships with other EU institutions, I consider the regular exchange of information with other political decision-makers – including employers and trade unions in macroeconomic dialogue – to be helpful and meaningful. These contacts also offer the ECB the opportunity to explain its monetary policy and improve mutual understanding without going into ex ante policy coordination in any way.
E. General
36. What do you see as the most important risks and challenges facing the ECB?
In essence I see the greatest risks and challenges which face the Eurosystem and the ECB in the following three trends:
1. The principle of independence of the ESCB in matters of monetary policy does not yet seem to be firmly anchored in European political practice. This is evident in repeated political representations which are made to the ECB on matters of monetary policy. These may be in conflict with the embargo in Article 108 of the of the EC Treaty, under the terms of which the Community’s organs and institutions and the governments of Member States undertake not to attempt to influence members of the decision-making organs of the ECB or the national central banks in the execution of their duties. If independence is not maintained, confidence in the institution and in the currency will be undermined. It will not then be possible to guarantee the stability of the value of money.
2. The risk of progressive renationalisation of economic policy may jeopardise the operation of the monetary union and undermine acceptance of the euro and the role of ESCB. The monetary union is our common destiny and the Member States in the euro area share the political responsibility for the common currency, although only a few of them have actually aligned their economic policies with the (new) conditions of economic and monetary union. The monetary union requires closer coordination of economic and budgetary policy and consideration of the effects of national decisions on other Member States, the operation of the common internal market and the monetary union.
3. Divergence in growth and inflation in the euro area might become firmly established or even increase. This would make it difficult in the medium term for the ECB to implement the single monetary policy and possibly result in its being branded as a scapegoat for a macroeconomic policy which is perceived as inadequate. Member States are again requested to counteract this:
- Differences in growth and inflation will become firmly established if economic reforms in Member States (particularly the large ones) are not implemented on an adequate scale and sufficiently promptly.
- Divergences may increase if the euro area undergoes an expansion which does not depend on lasting convergence.
DIRECTORATE-GENERAL
FOR INTERNAL POLICIES
PROCEDURE
|
Title |
Appointment of a Member of the Executive Board of the European Central Bank | |||||
|
References |
C6-0071/2006 - 2006/0801(CNS) | |||||
|
Date of consulting Parliament |
15.2.2006 | |||||
|
Committee responsible |
ECON 14.3.2006 | |||||
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
Rapporteur(s) |
Pervenche Berès 14.3.2006 |
| ||||
|
Previous rapporteur(s) |
|
| ||||
|
|
| |||||
|
|
|
/ |
| |||
|
|
|
/ |
| |||
|
|
| |||||
|
|
| |||||
|
Discussed in committee |
18.4.2006 |
|
|
|
| |
|
Date adopted |
18.4.2006 | |||||
|
Result of final vote |
+: –: 0: |
25 1 7 | ||||
|
Members present for the final vote |
Zsolt László Becsey, Pervenche Berès, Sharon Bowles, Udo Bullmann, Ieke van den Burg, Elisa Ferreira, José Manuel García-Margallo y Marfil, Jean-Paul Gauzès, Robert Goebbels, Benoît Hamon, Karsten Friedrich Hoppenstedt, Sophia in 't Veld, Piia-Noora Kauppi, Wolf Klinz, Christoph Konrad, Astrid Lulling, Cristobal Montoro Romero, Joseph Muscat, John Purvis, Alexander Radwan, Dariusz Rosati, Antolín Sánchez Presedo, Margarita Starkevičiūtė | |||||
|
Substitute(s) present for the final vote |
Katerina Batzeli, Harald Ettl, Catherine Guy-Quint, Ján Hudacký, Sergej Kozlík, Alain Lipietz, Vladimír Maňka, Thomas Mann, Giovanni Pittella, Andreas Schwab, Charles Tannock | |||||
|
Substitute(s) under Rule 178(2) present for the final vote |
| |||||
|
Date tabled |
25.4.2006 |
| ||||
|
Comments (available in one language only) |
... | |||||