Full text 
Procedure : 2011/2156(INI)
Document stages in plenary
Document selected : A7-0361/2011

Texts tabled :


Debates :

PV 01/12/2011 - 3
CRE 01/12/2011 - 3

Votes :

PV 01/12/2011 - 6.11
Explanations of votes

Texts adopted :


Thursday, 1 December 2011 - Brussels OJ edition

3. ECB annual report for 2010 (debate)
Video of the speeches

  President. – The next item is the report by Ramon Tremosa i Balcells, on behalf of the Committee on Economic and Monetary Affairs, on the ECB annual report for 2010 [2011/2156(INI)] (A7-0361/2011).

I would like to warmly welcome the new President of the European Central Bank, Mr Mario Draghi, and on behalf of all of us in the European Parliament, wish him every success in his very difficult task.


  Ramon Tremosa i Balcells, rapporteur. (IT) President Draghi, may I welcome you to this Parliament.

Madam President, I want to thank the shadows, assistants and advisers for their very good collaboration on this report. Today, we shall discuss the ECB report which was largely approved in the ECON committee last month. On debt crisis management, I welcome the ECB’s interventions in the markets. If necessary, I encourage them to continue these in the next weeks. These interventions have saved the euro; without them, the situation now would be worse.

We also deplore the hesitation in management of the crisis by the European Commission and by Member States, particularly those countries lacking reforms, as that has often pushed the ECB to act. We also express worries in the report about the limits of ECB interventions; monetary policy cannot solve every problem. Every country is responsible for its own fiscal situation.

We cannot ignore that there is a growing exposure to risky assets in the ECB balance sheet. The ECB is right now a lender of last resort. For the banking sector, the ECB has been a lender of last resort since May 2010. There has been an unlimited credit flow from the ECB to eurozone banks. Those banks have been buying huge amounts of public debt from eurozone governments. This massive ECB help may have taken away, or delayed, incentives to carry out reforms in some Member States.

In the report, we voted to reinforce economic governance. I believe that fiscal discipline is a precondition for more European integration. I think that national and regional budgets should be supervised at the European level. The report we voted on also shares Mr Trichet’s opinion regarding the need for a European Minister of Finance to coordinate a basic common fiscal policy and to enhance the effectiveness of the euro. This debt crisis shows that in a monetary union, fiscal policy cannot be exclusively left to Member States.

The report we adopted also stresses the need for a European Treasury to relieve the ECB of its quasi-fiscal role. Until then, we suggest entrusting more tasks to the European Stability Mechanism. Mr Draghi, I would welcome your views on these proposals.

Finally, concerning transparency, I call for the publication of the minutes of the Governing Council meetings, as is the case with the US Federal Reserve, the Bank of England, the Bank of Japan and the Bank of Sweden. I consider non-publication a sign of weakness of the monetary union. We need public and individual accountability in the decision-making processes. With this in mind, we will vote today for the publication of the summary of Governing Council meetings. We hope that the ECB will listen to the democratic voice of this Chamber in this respect.


  Mario Draghi, President of the European Central Bank. – Madam President, I am delighted to be making my first appearance here as President of the ECB and I am honoured to present to you the ECB Annual Report for 2010.

The first thing I wish to do is pay homage to my predecessor, Jean-Claude Trichet. During all his tenure, he had a very fruitful and very constructive dialogue with the European Parliament and I intend to continue on this route with the same force, the same strength that he displayed.

Today’s session is an opportunity for us to take a wider perspective on ECB policies. In that way, I will also touch on a number of the broader themes of the resolution of the European Parliament. Let me begin with a few words on the main monetary policy decisions we have taken and the challenges we have faced during 2010 and 2011.

As you know, the ECB’s monetary policy is constantly guided by the goal of maintaining price stability in the euro area over the medium term. And when I say this, I mean price stability in either direction. This applies to both the setting of official interest rates and the implementation of non-standard measures.

This autumn, tensions in financial markets have intensified again with very adverse effects on financing conditions and confidence. Downside risks to the economic outlook have increased. The weaker degree of activity is itself moderating price, cost and wage pressures. It is in this context that the ECB decided to reduce its key interest rates by 25 basis points in early November 2011.

Dysfunctional government bond markets in several euro area countries hamper the single monetary policy because the way this policy is transmitted to the real economy depends also on the conditions of the bond markets in the various countries. An impaired transmission mechanism for monetary policy has a damaging effect on the availability and price of credit to firms and households.

This is the very important monetary policy reason for the ECB’s non-standard measures. But of course, such interventions can only be limited. Governments must – individually and collectively – restore their credibility vis-à-vis financial markets.

Tensions in sovereign bond markets have been accompanied by stress in the banking sector given the financial interlinkages between governments and banks. The ECB has taken several measures in 2010 and 2011 to ensure that banks continue to have access to funding sources. This has enabled them to continue lending to firms and households.

Most importantly, the ECB has extended its policy of fully allotting liquidity demanded by banks at fixed rates against collateral. The maximum maturity of these liquidity-providing operations was first extended to six months and then later to 12 and 13 months. A new Covered Bond Purchase Programme has recently been initiated, with a size of EUR 40 billion.

In addition, liquidity in US dollars has been offered to banks for three-month periods. Yesterday, in a globally coordinated action with the Federal Reserve, the Bank of Japan, the Bank of England, the Bank of Canada and the Swiss National Bank, we have agreed to lower the price on US dollar provision in other constituencies, including the euro area. We have furthermore agreed, as a contingency measure, to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of the currencies, should market conditions so warrant.

As the ECB’s Governing Council meets on Thursday next week, we are now in the pre-decision period, and nothing that I say should in any way be interpreted in terms of future monetary policy decisions. But as far as the current situation is concerned, there is frankly not much more to say beyond what I have said in recent statements.

We are aware of the continuing difficulties for banks due to the stress on sovereign bonds, the tightness of funding markets and the scarcity of eligible collateral in some financial segments. We are also aware of the problems of maturity mismatches on balance sheets, the challenges of raising levels of capital and the cyclical risks related to the downturn.

Let me now turn to the overall functioning of Europe’s Economic and Monetary Union. Looking back at 2010 and 2011, notable progress has been achieved in reinforcing economic governance – though I recognise that this may not be evident in times of crisis.

The European Parliament has contributed decisively to that progress, and the ECB commends its work. The ‘six-pack’, the European Semester, the Euro Plus Pact: all these initiatives have set the stage for closer coordination and more intensive scrutiny of economic policies in the EU, particularly in the euro area.

Yet we are at a difficult stage at present. We have set up these new mechanisms, but their positive effects on the credibility of government fiscal policies are not yet visible. And the government changes that have taken place in some of the more exposed countries have not yet had much of an effect on the continuing fragility of financial markets.

Fundamental questions are being raised and they call for an answer. At the heart of these questions are not only the credibility of governments’ policies and the actual delivery of the promised reforms, but also the overall design of our common fiscal governance.

I am confident that the new surveillance framework will restore confidence over time. I am also quite sure that countries overall are on the right track. But a credible signal is needed to give ultimate assurance over the short term.

What I believe our economic and monetary union needs is a new fiscal compact – a fundamental restatement of the fiscal rules together with the mutual fiscal commitments that euro area governments have made.

Just as we effectively have a compact that describes the essence of monetary policy – an independent central bank with a single objective of maintaining price stability – so a fiscal compact would enshrine the essence of fiscal rules and the government commitments taken so far, and ensure that the latter become fully credible, individually and collectively.

We might be asked whether a new fiscal compact would be enough to stabilise markets and how a credible longer-term vision can be helpful in the short term. Our answer is that it is definitely the most important element to start restoring credibility.

Other elements might follow, but the sequencing matters. And it is, first and foremost, important to get a commonly shared fiscal compact right. Confidence works backwards: if there is an anchor in the long term, it is easier to maintain trust in the short term. After all, investors are themselves often taking decisions with a long-term horizon, especially with regard to government bonds.

A new fiscal compact would be the most important signal from euro area governments for embarking on a path of comprehensive deepening of economic integration. It would also present a clear trajectory for the future evolution of the euro area, thus framing expectations.

On the precise legal process that brings about a move towards a genuine economic union, we should keep our options open. Far-reaching Treaty changes should not be discarded, but faster processes are also conceivable.

Whatever the approach, companies, markets and the citizens of Europe expect policy makers to act decisively to resolve the crisis. It is time to adapt the euro area design with a set of institutions, rules and processes that is commensurate with the requirements of monetary union.


  Gay Mitchell, on behalf of the PPE Group. – Madam President, I would like to thank the rapporteur and welcome Mr Draghi on his first appearance here. I also want to welcome what he said about Treaty changes and the need for faster responses. In addition, I welcome the ECB support for liquidity across the European Union, without which we would not have been able to survive so far.

There are really serious questions facing us at this perilous crossroads in European history. The issue of eurobonds and the need for a lender of last resort is high on the agenda, whether that lender is the European Central Bank or the EFSF or some other mechanism. The hour has arrived and we cannot dither any longer. This is the difficulty that we face and, if we do require Treaty change, then let us go ahead on some pro forma basis on the presumption that that Treaty change will be approved by Member States retrospectively. If it works, they will pass it, but passing Treaty changes takes time. In some countries, we may even need a referendum.

I believe we do not have that time. It may be said that there is a strict legal requirement, but this is like saying that we cannot turn the Titanic right or left because the traffic light does not permit it. Let it trundle on, crash and we will then put the lifeboats out and pick up whoever is left. The European project, and the euro in particular, cannot be allowed to go the same route as the Titanic.

In natural justice, which, in my belief, precedes written law, our leaders must act now. We are in peril. This is not a job for politicians. It is a job for statesmen and stateswomen. I hope that we will rise to the occasion. I think we should all be asked to read and re-read the speech that the Polish Foreign Minister made in Germany very recently. I think what he has to say is really imperative for all of us to understand and to know to secure the future of the Union.




  George Sabin Cutaş, on behalf of the S&D Group.(RO) Mr President, allow me to welcome President Draghi to the European Parliament. I would like to begin by thanking my colleague, Mr Tremosa, for his excellent cooperation on this dossier.

Against the current backdrop of financial instability, the European Central Bank has, in practical terms, a fundamental role to play. However, as I see it, the actions taken by this institution to address the turbulent conditions evident on the financial markets are still inadequate. However, the bank’s independence must be preserved, and it must become, in practical terms, as you stated, a lender of last resort for the euro area countries, taking action to tackle speculation and the deterioration in the crisis situation. At a practical level, if the bank assumed its role as a central bank, this would help significantly to boost confidence in the robustness of the euro area’s architecture.

At the same time, a beefed-up role for the European Central Bank must be supplemented by radical measures, so to speak, such as issuing common euro area bonds, harmonising Member States’ taxation systems and strengthening the European Financial Stability Facility. In this regard, I support the proposal tabled by the Commission on 23 November for issuing common euro area bonds. I believe that Member States must realise that these bonds have to be issued to ensure the financial markets’ stability and that each of them stands to gain from a solution based on solidarity. This would, at a practical level, reduce the overall cost of the debt and would ensure the European financial markets’ liquidity. I would like to make one more, final point, which I personally believe: the European currency cannot function without fiscal union which will, in practical terms, complete monetary union.


  Sylvie Goulard, on behalf of the ALDE Group.(FR) Mr President, Mr Draghi, we are delighted to see you again today. I have to say that I would have liked a few more Members to have been in plenary to pay tribute to you.

Let me start with a point on the independence of the European Central Bank (ECB). I think it is very good that this has been stressed unambiguously by Ms Merkel, Mr Monti and Mr Sarkozy. It is also a concept very dear to the European Parliament. Of course, the principle of independence means even greater responsibility for you personally, together with the members of the Executive Board and the Governing Council, but we trust you to take the right decisions.

Mr President, all the current speculation surrounding what the ECB could or should do, but also, I should say, regarding your internal organisation, seems to me to be detrimental to the euro and the independence of the Central Bank.

However, I would like to highlight another issue: communication. It is only natural that there should be a discussion – and in view of the magnitude of the issues, a lively discussion – between the members of the Governing Council. Yet once the decisions have been taken, I personally would like a team spirit to prevail, whereby decisions are defended in the European general interest, which takes precedence over all national considerations.

I share Parliament’s desire for greater transparency, but at the moment, the problem is not publishing the minutes, but rather preventing certain individuals from making claims in their national media that do not necessarily correspond to what has been decided collectively.

It is often said that politicians talk too much. It is often said that women talk too much. I suspect that some male technocrats need to learn to hold their tongues. You yourself have been tactful in your communications, and we honour you for that.

Let me stress that we have a single Treaty, a single currency and probably have a shared interest in discipline. I hope, Mr President, that you find the same desire for discipline and compliance in your own house when it comes to defending the unity of the European Central Bank.

As for the rest, we wish you well. We are counting on you.


  Kay Swinburne, on behalf of the ECR Group. – Mr President, I would like to congratulate President Draghi on his new role and wish him well in these turbulent times.

However, the debate currently raging between Chancellor Merkel and President Sarkozy and others concerning the future role of the ECB needs mentioning. Above all else, the independence of the ECB needs to be upheld, particularly in times of crisis. Credibility is key. If eurozone members want the ECB to act as the lender of last resort, they should legitimise this role as soon as possible.

The ECB should not be a political football for point scoring between national politicians. Perhaps, as well as looking at the measures other institutions should or should not be taking, Member States themselves should be looking to get their own houses in order. I include eurozone and non-eurozone members in this plea. We passed the ‘six-pack’ on economic governance two plenary sessions ago. Member States should be looking to implement it as soon as they can, introducing credible and robust measures suited to their own countries to bring their budget deficits back down to acceptable levels. Credibility really is key.


  Nikolaos Chountis, on behalf of the GUE/NGL Group.(EL) Mr President, Mr Draghi, the statutory role of the European Central Bank, to maintain price stability without heed for the repercussions on the real economy, has proven to be catastrophic under the present circumstances. The ECB annual report for 2010 emphasises as much. I propose that the role of the European Central Bank should be changed.

Secondly, in 2010, the European Central Bank hid behind inflation and, as a result: firstly, it failed to halt rocketing spreads; secondly, it failed to halt action by the speculation mafia in credit rating agencies, which it has incorporated into its charter; thirdly, it kept interest rates high – you, Mr Draghi, reduced them somewhat recently – in a period of recession, higher than in the United States and higher than in Great Britain.

Finally, the independence of the European Central Bank is a very moot point. Independent bankers are being ‘canonised’ to the point of being made prime ministers, as we have seen in two countries. Consequently, the European Central Bank is being politically manipulated. Political parliamentary control of the European Central Bank needs to change.


  Godfrey Bloom, on behalf of the EFD Group. – Mr President, I hope I may call you ‘shipmate’ in private!

I would like to welcome the President of the Bank and to thank him for turning up, even if nobody else has. I have read this report, unlike most of my colleagues probably: power to suspend credit ratings, a European Monetary Fund to exclude the IMF, a single European Treasury issuing eurobonds and a single European Finance Minister, all of which, of course, would be unelected. It is a manifesto for European economic dictatorship, which is why I rather suspect the British Conservative Party will welcome it with open arms. If they do not vote for it, they will abstain in a marked manner, as they usually do, and talk a good story back in London.

The President of the Bank reminds me a little bit of the poem by Siegfried Sassoon, the great war poet: ‘He’s a cheery old card’ said Harry to Jack, ‘As they slogged up to Arras with rifle and pack, But he did for them both with his plan of attack’.


  Andreas Mölzer (NI).(DE) Mr President, the European Central Bank (ECB) is solely responsible for the stability of the monetary value of the euro. As we are all aware, its main task is to keep inflation under control within the monetary union. With its intervention in the bond markets, which began in May 2010 and have so far involved more than EUR 200 billion being spent on government bonds from heavily indebted euro countries, the ECB has definitely exceeded its mandate. The ECB may see its purchases as being an important means of stabilising the capital markets but, in fact, by entering the grey area between fiscal and monetary policy, the ECB has not in any way reduced the interest burden on the euro crisis countries.

Once its credibility has been lost, the resulting costs, as we know, will be enormous. In my opinion, the ECB must not, under any circumstances, continue to take the wrong path in this crisis. As a result of a number of different incorrect decisions, we are now on the threshold between an inflationary economic boom and a deflationary economic collapse. The important thing for us now is to avert, at any price, the real threat of the economically successful countries in the euro area being dragged into the abyss as well.


  Ildikó Gáll-Pelcz (PPE).(HU) Mr President, first of all, let me welcome President Draghi to his first visit to Parliament. I also wish to congratulate the rapporteur, Mr Tremosa, on the excellent job he has done in describing in an outstanding and comprehensible way the price stability in the euro area, as well as all the measures the ECB had to guarantee in 2010.

In the future, the ECB will continue to have a special responsibility with regard to EU monetary policy and its coherence, and in applying an appropriate interest rate policy, as it indeed did in 2010. In my opinion, the ECB does need to be capable of intervening in the fight against the debt crisis and must, where appropriate, facilitate liquidity by purchasing government securities that are deemed too risky. It should do so with the aim of allowing the Member States concerned a moment of respite so as to be able to once again introduce investment-friendly, economically invigorating measures. Of course, all this needs to be undertaken under appropriate financial supervision.

Similarly, I welcome the idea to look into ways in which the ECB can contribute to the creation of a European Monetary Fund to ensure that there is no need for the IMF to be involved in credit policy, and thereby to reduce Member States’ dependence on international institutions. It is a sound idea and needs to be investigated, and impact assessments need to be prepared as to ways in which a mechanism for the issuance of eurobonds can be created in the future. Furthermore, as a fellow Member has also mentioned, I believe it is very important to ensure appropriate communications in the interest of credibility. I therefore endorse the proposal of the rapporteur that the minutes of meetings of the Governing Council should be made public, and consider it a good idea. To President Draghi, I wish sufficient determination and all the best for his future work.

(The speaker agreed to take a blue-card question under Rule 149(8))


  Godfrey Bloom (EFD). – Mr President, Ms Gáll-Pelcz mentioned the purchase of risky assets and I am a little bit confused. I am a professional economist. With whose money would you buy these risky assets? With whose money? Where would you get the money? Is it from old age pensioners in Yorkshire – my constituency – on GBP 100 per week? Where are you going to get the money to save this already failed project?


  Ildikó Gáll-Pelcz (PPE).(HU) Mr President, Mr Bloom, thank you for your question. However, I already have reservations regarding the way the question is formulated, because you approach the issue in a very polarised manner. The economic situation is, in fact, fraught with crisis. If the ECB does not take a prominent role in this regard, and does not take a firm position, the situation you refer to in your question will indeed become reality. I do not think it is appropriate to ask whose money would pay for this, as the single EU monetary policy will have to provide suitable resources for this in the future. If it fails to do so, then we could indeed speak not only of the crisis, but also of the failure of the euro area, but I do not see eye to eye with you on this.


  President. – It would be amazing if Mr Bloom were not being provocative!


  Liem Hoang Ngoc (S&D).(FR) Mr President, Mr Draghi, ladies and gentlemen, this annual report has finally broken certain taboos. It calls on the Commission to create a European credit rating foundation and to consider temporarily suspending credit ratings for countries that require support from the Union. The report recognises the merit of the European Central Bank (ECB) repurchasing bonds on the secondary market, which has allowed banks to maintain their balance sheets and continue to borrow on the interbank market. This action prevented a liquidity crisis.

Yet in order to resolve the sovereign debt crisis, the ECB needs to be authorised to intervene on the primary market when it becomes illiquid. Even Germany is struggling to obtain funds. Italian bonds are being issued at ever-higher rates. If there is no intervention, the risk of Italy defaulting will seriously compromise the health of the banks. The banks will approve fewer loans and will not be able to meet the new solvency ratio requirements.

Parliament’s report also stresses the need for a European Treasury able to issue federal bonds at lower rates, as is the case in the United States. In the event of speculator activity, the ECB should be authorised to repurchase these eurobonds, like its counterparts in the US and the United Kingdom. Did you know that these two countries are generating funds at historically low rates, despite a rating downgrade for one of them?

Ladies and gentlemen, we are not in the same situation as Germany in the 1920s – nowadays, production capacities are underused. Therefore, demand is not driving inflation. There is no cost inflation because we have wage moderation, or because the gloomy economy is keeping commodities costs low despite speculatory activity. We need to acknowledge that the time has come for bold monetary policies, given the current failure to recognise that budgetary orthodoxy is absurd in times of recession.


  Ivo Strejček (ECR). (CS) Mr President, today’s debate is not the only one to revolve around the issue of whether the single currency can be saved by a change to the Treaty of Lisbon, closer fiscal coordination, the dependence or independence of the European Central Bank, a European Minister for Finance or the European Monetary Fund. In my opinion, the question should be asked in more general – and also far more serious – terms. Is this a euro crisis or a debt crisis? In this context, we should consider whether debts are a cause or a consequence of the current situation, and whether the crisis is about debts arising over the past few years or debts that are the consequence of European development over many decades. In this case, I believe there is no need to regard the current difficulties of the euro as a euro crisis, because the current difficulties merely revealed the profound structural problems of part of the European area. The call for Member States to follow a more fiscally responsible policy is therefore correct. Nevertheless, we are faced with the question here of whether there will be a change in the behaviour of people accustomed to the very high standards of the European social state or the European welfare state. Unless we have the courage to make significant reforms, and to transform the social welfare state, thus getting rid of high budgetary costs, then it will be very difficult to get out of the current difficulties.


  Paul Murphy (GUE/NGL). – Mr President, I have here a ransom note that was sent to the Italian Government on 5 August and sets forth a detailed prescription of austerity measures that had to be implemented. Every one of these measures involves attacks on the rights and living standards of working class people. The note is signed off by you, Mr Draghi, as well as by Jean-Claude Trichet, and comes from the European Central Bank. It finishes with a line that is fairly ominous: ‘We trust that the government will take all the appropriate actions’.

The hostage here, of course, was the threat not to buy Italian bonds. Within the Troika, the ECB has been aggressively pushing the austerity measures that have pushed people to misery in Ireland, Portugal and Greece. The ECB has also been a central co-conspirator in the silent coups that have now been carried out in Greece and in Italy, replacing elected governments with governments of bankers.

Could you now please drop the pretence that has been repeated here today, that the ECB is in some way independent? It is independent only of any democratic checks and any accountability to ordinary people. It is subservient to the interests of the capitalist classes, the rich in the core euro countries, and it has acted as their shock troops throughout this crisis.


  Claudio Morganti (EFD).(IT) Mr President, ladies and gentlemen, the European Central Bank has performed its role reasonably well – as well as it could – during the crisis; it has succeeded in keeping inflation low and intervened by buying bonds to limit financial instability.

I do not agree with those who would like to change the ECB’s formula or equip it with new powers: the ECB will never be the Federal Reserve, because Europe is different from the United States. In future, however, the Central Bank must refrain from intervening on every little issue with its public missives. It is right to indicate the objectives that should be achieved, but intervention methods must be left up to the Member States.

Recently, the issue of government bonds has dramatically emerged. It is unacceptable to force a country that is struggling, and burdened by the constraints of the euro, to pay interest rates that are much higher than those applied to the other Member States. A solution must be found through the use of eurobonds to prevent a country in crisis from having insult added to injury.


  Alfredo Pallone (PPE).(IT) Mr President, President Draghi, ladies and gentlemen, on behalf of the Italian delegation in the Group of the European People’s Party (Christian Democrats), may I welcome you to this House in your role as the new President of the European Central Bank.

We are laying down rules on budgets and on more rigorous fiscal discipline, but what we need right now are immediate responses, and I have the impression that the debate and the timetable in relation to eurobonds require time, which is something that we do not have. Rather, we need measures to promote growth and to prevent stagnation. The ECB has played an important role in the current crisis by buying government bonds that are subject to speculation and keeping interest rates and inflation low. Perhaps more than any other European institution, it has acted swiftly and effectively, but the crisis has become a crisis of our common currency, of the euro, which does not have the support that a currency should have. The ECB lacks the effectiveness and the authoritativeness of a proper central bank.

The idea, floated recently, that the ECB may finance the Member States indirectly, in other words, by going through the International Monetary Fund and so managing to play a leading role in tackling the debt crisis, circumventing the restrictions laid down by statute, is hearsay, and I question whether there is really any truth in it. This is further evidence of the need to move on from the ECB and create a proper European central bank that is not only a guarantee and supervisory body but also a currency issuer.

Like the US Federal Reserve, the ECB must become a lender of last resort, a currency guarantor, as happens for the dollar and the pound. This would also contribute towards the creation, Mr President, of the Europe of solidarity and of the Member States that our founding fathers, from Adenauer to Spinelli and De Gasperi, wanted.


  Edward Scicluna (S&D). – Mr President, it is not a mere stroke of bad luck that we find ourselves close to the edge of a catastrophe. It is simply a calculated act of brinkmanship on the part of all actors involved in the fate of the euro which has brought us to this point.

‘Brinkmanship’ is defined as a calculated practice of pushing a situation to the brink of disaster in order to win an advantage from your opponent. We have witnessed brinkmanship by the creditor countries in the eurozone in order to extract the best terms possible from the debtor countries by minimising moral hazard and thus ensuring that they participate fully in the austerity programme laid out for them, as per the conditionality clause, and to do this with the consent of the majority of the population in one form or other; brinkmanship by the indebted countries, knowing full well that it is not in the interest of the eurozone paymaster to let them default; brinkmanship by the European Central Bank, which refuses to be drawn into the position of lender of last resort with the hope that the eurozone will find its own political solutions; brinkmanship by those in the European Parliament who spent endless hours upping the sanctions within the ‘six-pack’ and making sure that this time round, they securely lock the stable doors, ignoring the observation that the horse has already bolted; and brinkmanship by the Council, who earlier on in the year made such words as ‘eurobonds’ and ‘voluntary haircuts’ taboo, hoping that the ‘six-pack’ would provide a silver bullet.

However, brinkmanship through a valid process has its dangers. We are in danger of going down in history as a political class who, because of being smart with these actions and strategies, presided over the collapse of the euro and global depression. Technically, the solutions have been known to all who wanted to see and listen. In whatever shape or form, they include instruments which combine an element of joint liability among all eurozone Member States and a watertight solution to the moral hazard issue. So let us act collectively on these core principles, for the rest is detail. But we must act now before it is too late.


  Jaroslav Paška (EFD).(SK) Mr President, Commissioner, Governor, in 2010, the European Central Bank (ECB) applied the mechanism of purchasing euro area state bonds on secondary markets, despite opposition from several countries. In recent days, however, it has, for the first time, failed to sterilise these purchases. It needed to take out EUR 203.5 billion from the interbank market, but demand for its seven-day sterilisation operations was EUR 194.2 billion. This shows us that European banks are holding cash and not providing it even to the Central Bank, and also that the volume of bonds purchased is getting to be too high for the Bank to sterilise, and it has failed to increase the volume of euros in the financial system through bond purchases. If this trend of unsuccessful sterilisation operations continues, it will mean the equivalent of quantitative easing for the euro area, and thus a negative impact on the purchasing power of the European currency. It is therefore necessary, Governor, to modify ECB policy in a very sensitive way, in order to provide better protection for the euro and for the price stability of the euro area.


  Mairead McGuinness (PPE). – Mr President, I thank the rapporteur for his work on this report, although the focus of the debate is less about 2010 and more about the future. I welcome Mr Draghi to the European Parliament. His predecessor, Mr Trichet, is a household name in Ireland, and I dare say his name, too, will reach that status, if it has not already – although I note yesterday that our Finance Minister, Mr Noonan, said that you were a man of fewer words than your predecessor. Well, I want to thank you for your words here this morning. They were considered, as we would expect from someone in your position, but they were also very clear. They were spoken with the solemness that is required of all of us on this occasion.

We do need to restore confidence. It is a very difficult thing to do once it is sundered. I look at Mr Bloom here, who asked questions and constantly does – as you do in a democracy – and I would say ‘be careful what you wish for’ because this is not a problem for the European Union or for the eurozone: the problem we have is a global one, and if you get your wish that the euro should fail and that this House should fall, your country, too, will face incredible problems. I would like us, in the heat of debate, to realise the significance of words on the efforts to restore confidence. This is about people I represent who need to know that those who are elected and in power will do the right thing on their behalf.

We need to move away, and I think we have, from the blame game that has happened in the past, because we now know that this is a much bigger problem for all of us. We need the euro to succeed and the ECB to be part of the restoration of both confidence and the new measures that we will require for the future.

(The speaker agreed to take blue-card questions under Rule 149(8))


  Godfrey Bloom (EFD). – Mr President, I certainly do not want it to fail but there is a feeling in the House that we have been hit by an asteroid or a tsunami, that this is not a problem of our own making. The reason the country and the European Union is in a shambles over the euro is of our own making: we have brought this upon ourselves. It is not an act of God. When will this House wake up to the fact we have done it to ourselves? Wake up, I beg you!


  President. – We will take that as a question.



  Mairead McGuinness (PPE). – Taking my own advice, let me be calm. I could not agree with you more, but it therefore requires that if we caused the problem, we have the capacity, collectively, to resolve it. Shouting really does not work; it gets you heard but nobody listens.


  President. – Thank you for a wonderfully concise reply.


  Gay Mitchell (PPE). – Mr President, I wonder if Ms McGuinness would agree with me – given the experience we have had in Ireland with economic commentators at the height of the Celtic Tiger era and since – that using the word professional and economist in the same sentence is totally unacceptable.


  Mairead McGuinness (PPE). – Mr President, may I declare something. I am an economist, an agricultural one that is. I take Mr Mitchell’s question very seriously and this is why I would ask that everybody who chooses to be involved in this debate considers the consequences of their comments. It is OK in the public house to pontificate and swallow your last drink and go home. In this Chamber and elsewhere, it is important that we use words that mean something and that we follow them with action.


  Paul Rübig (PPE).(DE) Mr President, you have my thanks. For many people in this House, the best thing would be to develop a currency just for them so that they could then only spend their own money. In practice, however, that simply does not work.

At this point, we need to ensure, in particular when it comes to the financial markets, that liquidity is maintained. I would therefore like to ask Ms McGuinness whether she believes that what happened yesterday, when the central banks threw massive amounts of money at the markets, will help provide stability and that that is the end of the double dip.


  Mairead McGuinness (PPE). – Mr President, a signal has already been given that we are prepared to defend the system. The fact that we had coordination is hugely significant. This should be a sign to the markets, which – as Mr Van Rompuy said to this House – can move at the click of a mouse, while politics requires time.

I was very happy to see the developments yesterday and I think we all agree with these. We can make this work, but I would say that we must be single-minded, focused and – as I look to Mr Bloom – careful in our comments.


  Anni Podimata (S&D).(EL) Mr President, in Mr Tremosa i Balcells’ report, the European Parliament fully acknowledges that the European Central Bank has played an active and decisive role throughout the crisis, since turmoil broke out on the financial markets in 2007 and 2008, up to the point, of course, when it intervened in the secondary government bond markets in the euro area.

Nonetheless, we know and you know that, as the crisis developed, it was not contained and has now become systemic and, of course, it is obvious that this is not the responsibility of the European Central Bank. As the European Parliament has systematically and repeatedly pointed out, the spread and propagation of the crisis was the result of hesitation and indecisiveness and delays in taking and applying the right decisions, primarily at political level by the governments of the Member States.

Mr President, yesterday’s decision by the European Central Bank to which you referred, to coordinate its action at global level with the five biggest central banks in order to increase liquidity in the global financial system, doubtless has a positive dimension. It is a decision that will have beneficial results, temporarily. We all know that an immediate, effective, global response to the crisis is needed, a response that goes beyond and combines with the rules of stricter fiscal prudence to which you referred, in a new fiscal compact, as you called it.

As other Members have said, we absolutely respect the independence of the European Central Bank which, however, apart from price stability, is the guardian of the euro, the common currency, and it is primarily this role that you are urgently being called upon to play. You know and we know that there is no way out of the crisis without a stronger role for the European Central Bank. It is, of course, up to you and the executive officer of the European Central Bank to consider all the proposals and to decide how.


  Olle Ludvigsson (S&D).(SV) Mr President, it is important to note that the European Central Bank (ECB) has done a good job so far during the euro crisis. With the latest interest rate reductions, interest rate policy has been returned to a reasonable level and the support programme for purchasing the bonds of the weakest countries in the euro area was necessary and balanced. The fact that the ECB has started to use a larger range of instruments than those traditionally used has been justified in view of the circumstances.

The crisis is a long way from being over, however. We are currently facing a situation in which the entire monetary union is at risk. An unexpected disturbance could upset the extremely fragile balance in state finances and on the financial markets. A second case like Lehman Brothers is, unfortunately, not an entirely unimaginable scenario.

In this situation, a whole host of measures obviously need to be taken from a political standpoint. At the same time, there can be no doubt that part of the solution must also be for the European Central Bank to take a more active role. It must be possible in some way for the bank to act as a lender of last resort. This would improve stability in the monetary union in both the short and the long term.

A more active involvement is, of course, associated with increased risks in the bank’s balance sheet. However, this has to be weighed against the extremely serious risk scenario that the entire monetary union will be destroyed.

It is now time for several different players to reconsider their position with regard to the ECB. The bank should be able do more than it is currently able to do. Such measures could effectively reduce the current turbulence. It is no good to simply wait and see what happens, either; measures must be taken now. Thank you for the opportunity to speak, and thank you to the rapporteur and the President of the ECB for joining us here in Parliament.


  Mario Mauro (PPE).(IT) Mr President, Mr Draghi, ladies and gentlemen, as you will have guessed from many of the MEPs’ speeches, today, paradoxically, while no one is asking the European Central Bank to go beyond its remit, it is being asked to contribute a vision. Contributing a vision is something that the ECB certainly can do, not only by returning to its roots and hence fulfilling its role to the utmost, but also by being open to discussion with this institution, because it is obvious that, once we deem Mr Tremosa i Balcell’s ideas to be relevant and conducive to a plan that we intend to carry out to improve matters, we will have enabled politics to climb out of the abyss.

The fundamental problem, to my mind, is this: we are caught in the abyss, and any indecision may prove fatal. Moreover, if we do not climb out of the abyss, a conflict awaits us at the end of this journey, a conflict with unforeseeable consequences. We are therefore calling on you to embrace the relationship with Parliament and to have faith in this institution. There is no shortage of us MEPs today, but we are certainly determined to help Europe to complete its project.


  Elisa Ferreira (S&D).(PT) Mr President, Mr Draghi, welcome to this Parliament. We are living through exceptional and dramatic times, which require determined and urgent measures.

The spiral between Member State debt and bank debt must be brought under control, but the priority at the moment is to defend the Member States, so as to ensure that the countries of the euro area and the euro itself are not destroyed by the credit rating agencies and speculators.

In the Tremosa i Balcells report that we are about to adopt, we have proposals for rethinking the architecture of the euro area, and for creating eurobonds and a European treasury, but all of this takes time. We are talking about an emergency at the moment and, in this context, the only solution is in the hands of the European Central Bank (ECB).

Technically, the ECB knows what needs to be done. It should not now be restricted by its mandate from intervening or acting. Its mandate is safeguarding the euro, not dealing with inflation. At times like these, there is no doubt: saving the euro and doing what is necessary is what this Parliament and the public expect of the ECB. I wish you good luck and courage, Mr Draghi.


  Proinsias De Rossa (S&D). – Mr President, I want to welcome Mr Draghi. Yes, certainly we need more integration but our citizens will not accept it – simply will not accept it – unless there is more democratic accountability and more social solidarity, and that has to be borne in mind. To avoid a collapse into a recession that will rival the hungry 1930s, we need to save the euro. The ECB must become the lender of last resort; there is no other way, in my view, that this can be done.

When Ireland crashed, it had a budget surplus and a debt-to-GDP ratio of 25%; way below the 60% ceiling. Our problem arose because we nationalised private bank debt, which pushed our debt over 100% of GDP. Those debts were owed to French banks, to British banks, to German banks and indeed to a range of others. But we cannot survive, we cannot deal with that debt, without moving beyond the issue of fiscal consolidation and all of this language we have about fiscal discipline. We need growth in Europe, we need eurobonds, and I believe most of all we need a commitment to solidarity.


  Mario Draghi, European Central Bank. – Mr President, thanks to all the honourable Members of the European Parliament for their statements and their contributions. Let me say at the very beginning that I look forward to sharing views and to exchanging opportunities to look together at the present situation and to reflect together at this very difficult contingency.

I think many of your statements really come under one heading: how do we reconstruct confidence in the euro in the euro area? This process will have three pillars: the first one is what I called the setting of an anchor in the long term.

This redesign of the fiscal rules, of the fiscal compact – meaning by this word an agreement of new fiscal rules – is necessary to create trust for all countries who are members of the euro area. This design has not been completed. I think the next few days will be very important in telling us whether we will make any progress on this path. This is very important because, as I said, this gives the long-term trust which is necessary for the other two pillars.

By the way, for the second pillar, which is the design of a financing mechanism within the euro area, we have the EFSF. It is a design in which we have to put our confidence that it will work, but some steps are still needed, as we all know.

The third pillar is the national economic policy response and frankly, we are seeing much improvement on that front. As I said before, I do believe that countries are nowadays on track. We see a good future, but we have to be aware that in the end, what matters is the delivery of the proposed reforms. Reforms – I do not want to be misunderstood – do not have to be focused only on the budget and budgetary issues; they also have to be structural reforms, reforms that enhance competitiveness and growth.

So these are the three pillars upon which confidence can be reconstructed. I have been asked: what is the role of the ECB in all this? Some of you said the ECB should do more; some of you said the ECB should do less. Let me start by saying the ECB can act within the Treaty, so the ECB should not be asked to do things that are not within the Treaty. The ECB is the lender of last resort for solvent banks. The ECB has created an enormous amount of liquidity and we see that this liquidity is now being redeposited with the ECB deposit facility, which means that it is not so much the amount of liquidity that matters, but it is the fact that this liquidity is not actually circulating through the banking channel, through the financial system, through the credit channel.

In our view, the most important thing now for the ECB is to repair the credit channel in a way that enables this liquidity to actually finance the real economy – especially the small and medium-sized enterprises which are now in difficult conditions because they are the ones who mostly need the banks’ credit. The large corporations are, on average, generally speaking, able to access capital markets on their own, so they are less dependent on the banks. That is why we have to make sure that a credit channel will start to work again. We have observed serious credit tightening in the most recent period which, combined with a weakening of the business cycle, does not bode at all well for the months to come. I think this is one of the first things.

Also, some of you mentioned the SMP, the Securities Market Programme, should be more active, less active. Let me say – and I did say this a moment ago – that the rationale for having the SMP active is that you want to make sure that you repair the monetary policy transmission channels. It is not to create liquidity, it is not to subsidise governments; it is to repair the monetary policy transmission channels. That was the rationale with which it started and that is still the rationale with which we employ it. By itself, it is a non-standard measure and therefore, by itself, it is going to be temporary, it is going to be limited. Let me be clear about what I mean by limited. It is not eternal and it is not infinite.

We have to understand that the ECB can act within the Treaty. It would be a mistake to have the ECB acting outside the Treaty; it would not be legal and it would also be a mistake because it would, especially in some parts of Europe, undermine the credibility of the ECB, which nowadays, is the strongest signature in the euro area.

I take the words on communication with great pleasure. It is true always, but especially in this situation of extreme difficulty, that it does not really make any sense to have a cacophony of voices anticipating monetary policy decisions, reflecting individual views and not the collegial decision-making process. I could not agree more. I will certainly take this message to the rest of the Governing Council, but, as I said, these are opportunities and occasions that are cherished very much and I will continue cherishing them. I am very much looking forward to my next meeting with the European Parliament, which is going to be in a few days with the Committee on Economic and Monetary Affairs.



  Ramon Tremosa i Balcells, rapporteur. − Mr President, dear colleagues, thank you very much for your contributions to this debate. Mr Draghi, the ECB has rightly intervened and has prevented an even bigger disaster. The ECB has saved many Europeans from again experiencing massive bank runs. It seems that the financial markets do not trust the eurozone as an irreversible monetary union.

However, the pressure of the financial markets can help force the most indebted countries to curb their budgets and to increase their competitiveness. The crisis is an opportunity for more fiscal union, to underpin monetary union. The old nation states have to lose a part of their fiscal sovereignty.

The European crisis is also a political crisis. European citizens have discovered that the European Union does not have its own instruments to act against a huge crisis and that the European Union does not have its own resources to develop its own policies. The European Commission has been greatly weakened also by a lack of democratic legitimacy. Its President should be one of the Members of this Parliament.

Mr Draghi, good luck with your work; more than ever, in the ECB we trust.


  President. – The debate is closed.

The vote will take place shortly.

Written statements (Rule 149)


  Vladimír Maňka (S&D), in writing. (SK) Without the euro, the global financial crisis would be much worse for all European countries.

The examples of this are as follows:

The historically strong pound has steadily lost value since 2008, leading to higher prices. Without the euro, the countries of Northern Europe would not have returned to growth so quickly. If the German mark had existed, it would have been so strong in relation to global currencies that German growth would have been damaged. Without the euro, the European countries that followed less sensible fiscal policies, and focused less on improving competitiveness, would have had to employ the sort of economic crisis measures adopted in Argentina in 2001. Their moral and economic collapse would have had terrible consequences.

There was a failure in one area: management of the euro area.

The architects of the euro constructed the currency union, and they realised that a single currency might cause instability in countries with widely differing economic and manufacturing structures. These architects perhaps thought that steps would be taken towards greater political union when such steps were really needed. That time finally came today, with the euro area fully exposed to the effects of the debt crisis.

We must create a system which allows better control over euro area Member State budgetary policies that are not working.

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