Local view for "http://purl.org/linkedpolitics/eu/plenary/2004-10-25-Speech-1-051"
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"en.20041025.13.1-051"2
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"Mr President, Mr President of the European Central Bank (ECB), ladies and gentlemen, I should like to salute the high quality and, on certain points, the innovative nature of the ECB’s report for 2003, presented under Mr Trichet’s guidance.
A period such as 2003 can be analysed from two perspectives: what exactly happened in 2003 and what was decided in 2003. These are two distinct notions, because, according to econometrics, monetary decisions have a delayed reaction on actual developments of something in the region of 12 to 18 months. What we are therefore discussing here today is, in some respects, the policy of 2002 and its orientations in 2003.
Firstly, 2003 saw strong price stability: a little over 2% at the beginning of the year and actually a little less at the end of the year, despite oil price rises. Unfortunately, 2003 also saw a major slowdown in the EU in relation to its major competitors – the United States, Japan and China, among others.
It is therefore with this information in mind that we must analyse the orientations given in 2003 by the ECB, which were both practical and doctrinal. Let us begin with the practical orientations: throughout 2002, in contrast with the policy pursued by our neighbours, the Bank of England itself or the US federal reserve, which cut their interest rates sharply, the ECB retained the same interest rate virtually until December. From December 2002 and throughout, let us say, the first half of 2003, there was a very sharp interest rate reduction in Europe, and we have begun to see the positive effects of this in 2004.
This interest rate reduction was illustrated by what we call the ‘8 May Announcement’, which was dissected and explained most interestingly in the ECB’s 2003 report, and we thoroughly endorse this orientation and the way in which it was justified in the 2003 report. Firstly, we are told that, in order to offset the risk of deflation, it is important to have inflation that is below, but close to 2%, so that actual interest rates might be taken to a negative level. Secondly, we are told that the M3 money supply is important in the long term, yet not in setting monetary policy. I feel that both of these theories are perfectly justified. Our report welcomes this major orientation, and we shall table the amendments again to welcome it even more clearly.
For the future, the 2003 report contains a further point that is extremely important, which is a clear statement by the ECB, as a public authority, that it is accountable to the general public and that this accountability entails dialogue with Parliament. I feel that by putting itself forward as something of an executive body, in view of the fact that its relationship with the general public involves interacting with Parliament, this ECB report represents a major step forward. I feel that the next step is to develop this dialogue further, and in our report we make proposals to this end.
Thirdly, in our proposals for the future, we are naturally thinking about the new countries’ accession. We consider that these countries should be treated equally and with the same criteria for meeting the convergence criteria as those that have been thus far applied to all countries. This is not an issue of two weights and measures; the same rules apply to 2005, 2006 and 2007 as applied in 1997.
Lastly, we must start to consider the new generation of bank notes. We feel that we must keep the one and two cent coins and many of us feel that we should introduce a 1-euro note. It is essential, in our view, that bank notes and coins should bring the general public closer to its currency. It is time to put living people on our notes, as every country in the world does."@en1
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