The Committee of Economic and Monetary Affairs (ECON) exchange views with on short and long term measures to improve economic governance with Lorenzo BINI SMAGHI, Member of the Executive Board of the ECB, and Olli REHN, Commissioner for Economic and Monetary Affairs, in the European Parliament in Brussels

Brussels

exchange of views

public hearing

economic governance (T)

REHN, Olli (ALDE, FI)

BINI SMAGHI, Lorenzo (IT)

Economic governance and stability framework of the Union: extracts from the exchange of views

https://api.multimedia.europarl.europa.eu/documents/20125/14026109/ebs72185Chapters%5BSD-EN%5D.srt

SOUNDBITE (English), Lorenzo BINI SMAGHI, Member of the Executive Board of the ECB, Our Euro areas countreis can not use instuments to inflate away their debt. So the deterioration the public finances has exposed a ser&iacute;es of issues which were not fully considered at the start of EMU 10 years ago.

SOUNDBITE (English), Lorenzo BINI SMAGHI, Member of the Executive Board of the ECB, So letting markets the task to discipline budgetary policies and induce the Member States to take corrective actions is an illus&iacute;on that only economies can have.

SOUNDBITE (English), Lorenzo BINI SMAGHI, Member of the Executive Board of the ECB, The Comission thus far ramained silent on the independence of the fiscal assessment and of the quality assessment of the statistical data collection can be made more effective within the Commission.in particular I would like to see some of the procedure enforce in DG Competition at the level of the technical assessment and the role of the Commissioner and the college also being applied to DG ECFIN and its Commissioner as reagrds statistics the new COuncil regulation should be followed with deeds in particular more resources devoted to fiscal data and its verification by EUROSTAT.

SOUNDBITE (English), Lorenzo BINI SMAGHI, Member of the Executive Board of the ECB, It would be a not only a mistake but irresponsible to assume that crisis will never occur again, this would encourage market participants to speculate on the reoccurence of the crisis because of the lack of proper crisis mamagment framework and as we ghave experienced self fulfilling expectations would by themselves precipitate a crisis.

SOUNDBITE (English), Lorenzo BINI SMAGHI, Member of the Executive Board of the ECB, Public money should not be used to bail out private sector organisations that have taken the wronfg decisions ? This would be the cas if the money provided by the crisis management framework were to&acute;reimburse the provate sector for their losses eliminating all the risks it was exposed to.

SOUNDBITE (English), Lorenzo BINI SMAGHI, Member of the Executive Board of the ECB, The EU is a community of law subscribed by all the Member States.In latin we say , Pacta Onservande, and this refers to all the pacts starting from fiscal discipline in the Member States to the commitmenet of the Member States to pay their debts. So in my view we have ot be very careful in order to consider exemptions to these rules and to this principle such as providing the possibility to the countries to unilateral modify the value of their debt contract. The Euro and its underlying institution construction is about the respect for the law and if any changes are to be made , they should be to strengthen these principles rather than to provide exemptions dangerous exemptions ,which could undermine the stability of the whole Union.

SOUNDBITE (English), Olli REHN, European Commissioner for Economic and Monetary Affairs, Today's second anniverssary of the Lehman Brothers collapse in the US serves as a dramtic reminder of the kind of catastrophy we were able to avoid in the EU.

SOUNDBITE (English), Olli REHN, European Commissioner for Economic and Monetary Affairs, The aim of the proposals is to reinforce the economic pillar of the Economic and Monetary Union and of course the economic governance in EUrope Policy coordination and surveillance in order to creat foundations for sustainable growth and job creation.

SOUNDBITE (English), Olli REHN, European Commissioner for Economic and Monetary Affairs, First the mechanisms must become available , the enforcement mechanisms and in that context incentives or sanctions , this must become available at a much earlier stage than todayn that is already under the preventive arm of the Pact and at the begining of the deficit procedure.

SOUNDBITE (English), Olli REHN, European Commissioner for Economic and Monetary Affairs, Sanctions should be the normal semi- automatic consequence if countries break the rules and put their European partners at risk...Time is of essence here we need the foreseen instruments for the better economic governance to become real and operational ASAP. We do not have the luxury of time.