FRANKFURT (Reuters) - European Central Bank President Mario Draghi testified at the European Parliament's Economic and Monetary Affairs Committee on Monday.
Following are highlights of his comments. For the text of his statement, see http://www.ecb.int/press/key/date/2012/html/sp120709.en.html
ON INTEREST RATES, AFTER LAST WEEK'S CUT:
'Whether we are going to do more than that ... we have to look at what the situation is, look at the data and the developments and then we'll make up our minds in the Governing Council about what next actions we'll do.'
ON ECB'S ROLE IN ADJUSTMENT PROGRAMMES:
'Effective crisis resolution needs bold actions by central banks but it also needs bold actions by other policy actors, notably governments.
'Since finance assistance can only be temporary, the quality of the reforms and their implementation are absolutely essential.'
ON A LONGER-TERM VISION:
'Why do we still have tensions in a number of market segments? Let me first stress that a lot has been done at country as well as euro area level in terms of economic reforms and governance. But we still need full implementation. We have to make clear that EMU is a union based on stability at national and aggregate levels.
'The central message of that vision is this: the euro is here to stay - and the euro area will take the necessary steps to ensure that.'
ON EURO ZONE INTEGRATION:
'We need to move towards a further sharing of sovereignty in the fiscal, financial and economic domains. There can be no shortcuts in establishing a sound and stable EMU.'
ON REFORM IN THE EURO ZONE:
'Many governments have started in their reforms. I have said many times, compared to six months ago, in November last year when we were closest to a major credit accident, the world is a completely different one. Much progress has been achieved in the fiscal consolidation effort and in the reforms.
'So why are we not seeing the benefits of this? One reason has to do with the fact that the reforms have just started. This action is relatively recent. Much of this has been legislated and needs to be implemented.
'On the fiscal consolidation front, governments focused on fiscal consolidation efforts a lot on tax increases, which are the easiest thing to do in a hurry.'
ON BANKING UNION:
'Going back to the summit, I do think that this was a major step. The leaders' commitment to having a successful supervision was a strong one. And that's why we should expect a strong proposal from the Commission that would put the ECB in a position to carry out its duty with effectiveness, rigor, independence and without risk to its reputation.
'But how can we find an arrangement whereby we retain our monetary independence from the supervision. At the same time that we shouldn't forget that 14 out of 17 governors around the table at the ECB are supervisors, so there are extraordinary synergies, as I can testify.'
ON THE ECB'S ROLE IN CRISIS MANAGEMENT:
'In a normal situation where you don't have current account imbalances, where you don't have fragmentation of the euro area, where you don't have the need for structural reforms, and I can go on and on, where budgets are in order, then our mandate of ensuring price stability in the medium term for the whole of the euro area implies financial stability.
'But if you don't have such reforms, if you have unsustainable current account balances, if you have the fragmentation of the euro area, you can't have price stability as a by-product of financial stability.
'That is why the ECB role is more and more heard in areas which don't seem to have a connection with monetary policy's traditional remit. That is why the ECB needs to speak on certain issues.
'And it is not a situation that we enjoy, we have to do this.'
ON MORE EXTRAORDINARY CRISIS MEASURES, INTEREST RATES:
'The present condition of the euro zone is not due to interest rates being too high.
'As we realized that the inflation rate path is moving favorably from the viewpoint of price stability in the medium term, we thought it was a wise thing to lower interest rates in the last Governing Council.
'Whether we are going to do more than that: We never pre-commit. We have to look at what the situation is and then we will make up our minds.'
(Reporting by Sakari Suoninen, Marc Jones and Robin Emmott; Editing by Catherine Evans)
This news article is brought to you by DOMESTIC-VIOLENCE - where latest news are our top priority.
No comments:
Post a Comment