Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-12-17-Speech-3-400"
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"en.20081217.24.3-400"2
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"Madam President, Mr Papastamkos is asking about governance in the euro area.
I have just been talking about governance in the monetary pillar of Economic and Monetary Union, the European Central Bank and the European System of Central Banks. Quite frankly, I think it is working very well. I think it is a success.
Governance in the other pillar, the economic pillar of Economic and Monetary Union, does work, but it still has a long way to go. The coordination of fiscal and budgetary policies is working, and I think that so far, since the 2005 review, the Stability and Growth Pact and the budgetary coordination that is implicit in the implementation of the pact have worked very well.
We are now being tested very severely because, as a result of the economic slowdown and the fiscal stimulus measures, plus the packages to support the financial system, public finances are under extreme pressure and the Stability and Growth Pact has to be implemented in a very difficult situation.
It has to be implemented with the flexibility that it possesses, while maintaining and complying with the rules of the pact, and that will be a major test.
There is a second factor that is also analysed in our report on the first ten years of Economic and Monetary Union. Looking beyond the coordination of our fiscal and budgetary policies, I believe it is necessary to improve the coordination of our macroeconomic policies. There are highly significant macroeconomic imbalances in some countries, including Hungary and Latvia, which are currently having major difficulties with their balances of payments and require substantial financial support from us, from the monetary fund. That indicates that there have been cumulative imbalances that we have been unable to correct in time through our coordination system.
These are countries outside the Economic and Monetary Union, in its third stage with the euro. Even within the euro area, however, there are divergences in current account deficits and the evolution of unit labour costs. In my view, they need much more effective coordination than we have succeeded in providing so far, despite the efforts of the Euro Group to do so.
I think the Euro Group has been working much better since the Prime Minister of Luxembourg, Jean-Claude Juncker, took over as President in 2005 and established a stable presidency. There is still a long way to go, however, in terms of the internal coordination of macroeconomic policies or of certain structural reforms, which go beyond budgetary coordination, and clearly a long way to go in terms of external coordination.
I believe the euro as a currency is sufficiently important to us and to the rest of the world for us not to allow ourselves the luxury of failing to ensure that the interests, positions and priorities of the euro in the euro area countries are represented in multilateral forums and institutions in a coherent, consistent and integrated manner."@en1
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