Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-12-15-Speech-3-017"
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"en.20101215.5.3-017"2
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"Mr President, here we are again examining the sticking plaster and wondering if it is large enough and strong enough to cover the wound. Last July I asked when the Commission foresaw the expected legislative proposal for a permanent sovereign debt crisis management mechanism and what would be the legal base. I asked quite a lot more, such as the relative ranking of the different funds and the proportions in which they would be used. Events have shown that the answer really was that we do not know and it will be made up as we go along.
I actually have some sympathy for that, in so far as we are in new territory and new plans need to be made. But I say again that, if there is not fulsome follow-up to statements, whether from the Commission or Council, this negates the benefit of conclusions. Answers to my July questions only emerged in the Irish rescue, which I think is a matter of regret, not least when the smallest fund, coming from the EU budget, is used for an equal share to the larger funds. Parliament was not consulted, despite my earlier questions.
Today I stand here to ask further details following the October Council conclusions, in which the Commission was asked to work towards a limited treaty change required to establish a permanent crisis resolution mechanism. They also said that there would have to be private sector involvement, which spooked the market because there was insufficient explanation. It also highlights the regulatory problem I mentioned of zero risk weighting for eurozone sovereign debt, which undermined market discipline and created perverse incentives.
Then the Euro Group announced that the permanent mechanism would be based on the European financial stability facility and that it might involve the private sector on a case-by-case basis following IMF practice. Firstly, can we now have more precise details about the Treaty change and the procedure? Parliament needs to know that it will be adequate. A little more fiddling around with Article 136 is not an answer. Secondly, is the new instrument to be based on an intergovernmental approach, for that is how the EFSF works, or will it in fact be Community-based, which is how we think it should be done? Thirdly, what are the technical options and conditions? It is imperative that the mechanism is based on technical realities and is robust, credible and lasting – to which I would also add affordable. Fourthly, will Member States not yet part of the euro be invited to be part of the mechanism? This seems especially relevant for those building debt in euros.
We asked when it would take place and we have been told January 2013, but what role does the Commission see for Parliament? Parliament and my committee are indeed determined to play their role, all the more so when we have been ahead in the thinking all the way along. If we do not find ourselves properly consulted and informed, where does that leave national parliaments and citizens? This issue is inextricably linked to the economic governance package. The measures to improve the Stability and Growth Pact, surveillance and the European semester all aim at prevention of another crisis and serve to monitor emergence from the current economic crisis.
This mechanism is not a charm that we can put on the wall to ward off market discipline. Indeed the solution for the euro is to recognise the need for full political discipline in combination with full market discipline. We have this crisis because both were undermined in the past."@en1
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