Local view for "http://purl.org/linkedpolitics/eu/plenary/1999-10-26-Speech-2-120"
| Predicate | Value (sorted: default) |
|---|---|
| rdf:type | |
| dcterms:Date | |
| dcterms:Is Part Of | |
| dcterms:Language | |
| lpv:document identification number |
"en.19991026.3.2-120"2
|
| lpv:hasSubsequent | |
| lpv:speaker | |
| lpv:spoken text |
". – Mr President, in my introductory statement I already approached many of the issues which have been again brought forward in Parliament this afternoon. So if you allow me, I will try to formulate my answer by grouping together many of the issues that have been raised in Parliament and produce a comprehensive answer, or at least some remarks.
The wording of the resolution may be interpreted as suggesting that when the current rate of inflation is below 2% then the Eurosystem would be under an obligation to support the general economic policies of the Communities. In contrast the wording “without prejudice” clarifies, and it is intended to do so, that the Eurosystem is under no obligation to act in this mechanical fashion if it believes that doing so might jeopardise price stability in the future.
I ask Parliament to take that into account.
Regarding the suggestion that there is too much emphasis on price stability, the formal answer is that it is our mandate. Also, I would like to repeat that we do not overestimate the impact that monetary policy can have – what it can and cannot do. It is my firm belief that monetary policy can and will influence the movement of prices over the medium-term but not in the short-term. That is why we have a forward-looking strategy. The direct impact of monetary policy measures on employment and growth is very limited indeed. That is borne out by research which we did at the institution where, as Mrs van den Berg indicated, I previously worked.
Turning to the current situation, I should like to repeat that the monetary policy strategy of the Eurosystem, which has been made very clear to Parliament, is based on two pillars, both designed to be forward-looking over the medium-term. The two pillars are: the reference value for monetary growth, M3, and a broadly-based assessment of a wide range of indicators and their impact on the primary aim of price stability. That broadly-based assessment is one that encompasses a wide range of indicators, of course including developments in the real economy, movements in employment and unemployment, an assessment of movement of the exchange rate in so far as it has an impact on price levels in the euro area. That is our strategy. It is forward-looking. Of course we look at the current developments in inflation also as one of the indicators of what we think is going to happen in the future, but it is certainly not true that we only look at the current inflation rate, as implied in the draft resolution.
You will understand that I will not join Parliament in the debate on what decisions might be taken in the short-term on interest rates, although that decision has been alluded to by various Members of Parliament. In Parliament it has been said by various Members that if interest rates were to be raised that would choke economic growth and the growth of employment. But please remember that when you are driving a car very fast and you want it to go forward, but maybe a little slower, you can either step on the brakes or you can lift your foot a little bit from the accelerator. There is a difference. Raising interest rates in a certain situation might be more akin or related to lifting your foot from the peddle as opposed to braking the momentum of the economy and in that way going slower. We all want to go forward.
Mrs Peijs wanted a very clear answer on frontloading. I hope to be as clear as I can on banknotes. The Eurosystem, early on, made it clear to the public at large that frontloading over a short period would not be a problem provided it could be ensured that the money frontloaded to banks, for instance, or other organisations is not brought into circulation before 1 January 2000 – into general circulation that is. We formulated that by saying that banknotes may be frontloaded provided there are legal or contractual guarantees at the receiving end which ensure they will not be brought into circulation before 1 January. There would have to be contracts or legal provisions or contracts with retail organisations or banks. Then it would be possible.
On coins – you will be aware I do not have responsibility for coins, this is a matter for the finance ministers – the big difference is that it is virtually impossible to get that same guarantee as far as coins are concerned because coins are generally put into circulation by the retail sector rather than by the banks. To have such a guarantee would be impossible. Another large difference is that it is very easy to try to make a counterfeit banknote with modern photocopying techniques which is the reason why the precise features of the banknotes to come will be widely published but only very briefly in advance of their introduction, so as to reduce the danger of counterfeiting and confusing a public which is not yet familiar with the notes. It is much more difficult to counterfeit coins.
I have touched upon all the major issues that have been raised today on banking supervision. It is well known that the Treaty gives very little responsibility to the European Central Bank in the area of banking supervision. Our task is to promote financial stability and the stability of the financial markets. We monitor banking supervision, but this is not one of the tasks of the Central Bank. We are fully involved in the further development of rules. Mr Goebbels said that the ECB should be: “a bit less reticent about international exposure in all the various fora”. The ECB is now fully involved in all discussions in all international fora on the future of what is now called the “financial architecture” in the world. The ECB is fully involved in all discussions of the G-7, of the G-10, of the OECD. We have a permanent representative who is very actively engaged in discussions at the IMF. In December there will be the first meeting of this new Group of 20 at the initiative of the G-7 countries, consisting of the G-7 countries and a few emerging market representatives. The ECB will be there. We will also participate in that dialogue.
As Mrs van den Berg has asked, we do participate in the macroeconomic dialogue but just as in the Netherlands, the Central Bank participates in the dialogue but does not agree to a compromise on its policy in order to get a concession in another policy area. There will be no
policy coordination but there will be an extensive and, I hope, critical exchange of information of all the partners involved, including the ECB.
First of all the issue of transparency. Although I realise and I am grateful that the desire to have the votes or minutes published by the Governing Council does not appear in the motion for a resolution which will be voted on tomorrow by your Parliament, in this discussion a lot of attention, much more than I expected, was paid to the phenomenon of transparency, culminating in publishing the vote. I would like to emphasise that when you talk about and require transparency you have to indicate precisely what that means. What does transparency mean? I would warn against what I might call mixing up transparency with publishing the vote.
As far as transparency is concerned, which I define as giving to the public or Parliament as much information as possible about developments in the economy, about monetary developments, about the outcome of the deliberations of the Governing Council, I believe – and I said so in my introductory statement – that the European Central Bank can look squarely in the eyes of any central bank in the world. For example, there is our publication immediately after the meetings of the Governing Council of the considerations which have played a role in the Governing Council’s ultimate decision whether or not to change interest rates. That is done about one hour after the decision has been taken. We give the arguments for and against certain decisions there. I believe that you will find no central bank in the world which is more transparent than we are.
The only thing we do not do is we do not publish votes. Apart from the fact – and this may be somewhat embarrassing – that we virtually never vote in the Governing Council, so there is nothing to be published, I will not repeat all the arguments against this which I have brought before this Parliament on earlier occasions, but one has to remember that the decisions of the Governing Council of the Eurosystem are made in a collegial way and there is one decision only which emerges.
The arguments for and against it are published in the press conferences and in the Monthly Bulletin after the meetings have taken place but there is one decision. One always has to bear in mind that every word that is spoken by me or any other member of the Governing Council about economic developments and about the decisions which are taken and in what direction sets in motion immediately billions of euros across the world. It is always a signal to the market and it takes effect almost simultaneously with the utterance of the opinion.
On forecasts, Mr President, I do not need to say more than I have already said in my introductory statement. There will come a time when we will publish forecasts, either bi-annually or tri-annually. I do not yet know the precise form. We are actively investigating this question but we simply are not ready yet and we do not have enough data or know the models which ultimately we will use. We have not yet reached a degree of stability which would make it responsible for them to be published now but, as I said in my introduction, I am confident that in the course of next year we will publish forecasts.
To avoid one misunderstanding, it has been asked repeatedly here “why do you not take an example from the Federal Reserve system which publishes forecasts” and I believe it is also a consideration behind the motion for a resolution. That must be a misunderstanding because what the Federal Reserve system publishes twice a year in its Humphrey-Hawkins testimony for the Senate is a range of figures for a few indicators, the range being the range of the individual forecasts of members of the Federal Open Market Committee coming from the regional Federal Reserve banks. That range, the forecast with which they come once every six weeks to Washington, is published. Forecasts are also prepared for the FOMC meeting and in particular for the Board of Governors of the Federal Reserve system, forecasts prepared by the staff of the Board of Governors. They are the forecasts which are used to underpin the decisions that the FOMC takes at any particular moment in time. Those forecasts are not published. And I already made some remarks in my introduction on the relativity of forecasts, even if they are published, for the decision-making process.
Various Members of this Parliament have questioned whether the ECB places too much emphasis on prices and too little on growth and employment. At least that is how I have understood the question; that was the signal that was given to me.
Firstly, the Treaty of the ECB makes it literally mandatory for the ECB to give primary attention to their primary objective, which is to maintain price stability. The Treaty says “without prejudice to price stability”, that is only when price stability, I should say, is guaranteed, should the ECB in its policies support the general economic policies of the Community. There is another small remark I would like to make, Mr President, but it is important in the context of the motion for a resolution. I believe the Treaty language is a little misrepresented. In the resolution it says “providing that this price stability is attained”. The Treaty says, and not without reason, “without prejudice to the objective of price stability” – and that is of great importance in economic terms."@en1
|
| lpv:unclassifiedMetadata |
Named graphs describing this resource:
The resource appears as object in 2 triples