Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-11-22-Speech-1-045"
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"en.20101122.13.1-045"2
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"Madam President, I read the Committee on Economic and Monetary Affairs’ report on the European Central Bank’s annual report with great interest. The report acknowledges that huge disparities between Member States of the eurozone contributed to the problems we are witnessing. The report states that ‘these imbalances pose considerable difficulties for a suitable monetary policy within the eurozone’ and reiterates that ‘the financial crisis in some countries within the euro area is a serious matter for the area as a whole’, reflecting this ‘dysfunction of the euro area’.
I strain to see the sense in calling for stronger coordination of economic policies within the euro area. The knee-jerk reaction has been to increase economic governance, but it is limitations of enforced commonality that have led particular Member States into financial crisis, combined with extraneous reasons as yet beyond our control. Perhaps the system does not allow for the necessary economic elasticity and self-determination to enable governments to deal with idiosyncratic problems effectively, such as rates of inflation.
The report lights upon this point, noting that the crisis and subsequent bail-outs and stimulus packages ‘led to far-reaching austerity measures which … heavily constrain the capacity of governments to act’.
One argument is that you cannot have a single currency without further homogenisation to iron out differences between Member States and levels of wealth. Yet any realist knows that this will not happen. It is contrary to human nature, which logically should shine forth in a democracy, however inconvenient.
Is the eurozone ready for Estonia in January? I raise my eyebrows at the statement that ‘the adoption of the currency by Estonia shows the status of the euro’, suggesting that this will ‘encourage (other) Member States to seek membership’.
Ideological clinging to the euro will see monetary problems resurface in boom time and bust. A single currency only works in a tight-knit federal environment. Perhaps, with this being the Commission’s ultimate intention, they have put the cart before the horse.
Although the UK is not in the eurozone, we suffer the effects of contributing to bail-outs and through the intricately entwined economics inside the Union, it is no use waiting for the ‘I told you so’ moment. It has already passed."@en1
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