Verbatim report of proceedings

Wednesday, 16 November 2011 - Strasbourg

Economic governance

  José Manuel García-Margallo y Marfil (PPE). – (ES) Mr President, I think that, in order for this exercise to be useful, we should start by telling the truth. The truth is that we are not capable of resolving any of the problems that we have on the table: neither the problem of Greece, nor the problem of Italy.

This incapacity to resolve these problems is affecting every economy in the European Union, it is rendering the efforts of Ireland and Portugal useless, and it is spreading contagion everywhere, including to Belgium and France.

The truth is that the penalty for sovereign debt does not arise for economic reasons, because the foundations of our current account deficit are better than those of the United States, the United Kingdom and Japan. Therefore, if it does not arise for economic reasons, it is because it arises only for political reasons. We have not succeeded in finding the right model, and we do not have the institutional structures to resolve the issue.

Up to now, all the solutions that have been adopted – and many have been discussed – all those that have been accepted are based on a restrictive fiscal policy and a restrictive monetary policy; this simply has not worked.

Now is probably the time to consider whether we should look at other models, for example the Anglo-Saxon model, which is based on a lighter fiscal policy and an ultra–accommodating monetary policy.

Obviously we cannot import the model to the European Union exactly as it is. No state, except probably Germany, is in a position to boost public spending, lower taxes or borrow. The room for manoeuvre is very limited, and it will be necessary to submit to fiscal discipline.

We can, however, do this at EU level, and that is what you are responsible for. What needs to be done? I think that in the first place the European Central Bank has to do much more that it is doing now. Since 2007, the Federal Reserve has increased its budget by 226%. The European Central Bank has increased its budget by 103%. The Bank of England has a volume of debt equal to 16% of the gross domestic product of the United Kingdom. That of the European Central Bank is only 2%.

Secondly, a bailout fund will have to be put in place using Eurobonds – with joint responsibility until the Treaty is amended – but before 9 December. It will then be necessary to cater for growth using the European Investment Bank (EIB) and the project bonds, which are like the Loch Ness monster: we all talk about it but nobody has seen it.

If that is not done, what Minister Tremonti said in Italy will happen: the Titanic will sink and it will take everyone with it, including the first class passengers.

That is your responsibility.