The Economic and Monetary Affairs Committee (ECON) meets Mario DRAGHI, President of the European Central Bank, for their regular monetary dialogue to discuss the ECB’s activities and the progress to be made in the area of banking union in the European Parliament in Brussels. This is expected to be Draghi’s last formal visit to Parliament before his mandate comes to an end. Statements by Mario DRAGHI, President of the ECB, Markus FERBER (EPP, DE), Pervenche BERÈS (S&D, FR) and Philippe LAMBERTS (Greens/EFA, BE).

Monetary Dialogue with Mario DRAGHI, President of the European Central Bank: extracts from the meeting

President of the European Central Bank Mario Draghi arrives to discuss the Monetary Dialouge of the European Union with members of the European Parliament's Committee on Economic and Monetary affairs. (2 shots)

European Central Bank President Mario Draghi is presented with a homage from the members of the European Parliament's Committee on Economic and Monetary Affairs(ECON) (2 shots). 

SOUNDBITE (English), Mario DRAGHI, President of the European Central Bank, The Euro symbolises the unity of a European continent that is better able to exert global influence. Our togetherness in the Economic and Monetary Union (EMU), gives us &ldquo;a greater say in international negotiation&rdquo; and enhances our &ldquo;capacity to influence economic relations&rdquo;. These are the words of the famous Jacques Delors in his now famous to Delors Report.

SOUNDBITE (German), Markus FERBER (EPP, DE), What consequences would you draw from this project for the Monetary Policy? Do you think that there would be a problem? When you have the US Fed controlling the major competitor of the Euro and which is carrying out a much more restrictive policy than the European Central Bank (ECB). Do you think that there is a turnaround coming? An end to loose Monetary Policy? 

SOUNDBITE (English), Mario DRAGHI, President of the European Central Bank, In terms of being more or less loose in the Monetary Policy, well we don't see that frankly. I mean the US probably had, if you judge by and large, they started Quantitative Easing (QE) many years before we did. And now they've stopped, but they also they are in a completely different position in the business cycle. So I don't think one can compare easily the degree of looseness of a certain Monetary Policy. But certainly the US started way before us. 

SOUNDBITE (French), Pervenche BER&#200;S (S&amp;D, FR), <p>What do you think about the situation on Fiscal Policy? </p>

SOUNDBITE (English), Mario DRAGHI, President of the European Central Bank, What Monetary Policy, I think everywhere but certainly in our part of the world has to avoid is fiscal dominance. And because otherwise, the central bank loses its independence and therefore its credibility. There have been several instances in the past, not in the Eurozone of course but also in other parts of the world before the Euro was actually in place, where Central Banks were deeply affected by fiscal dominance and I would say one can argue that they did lose their independence and the consequences were clearly in the inflation rates and the unemployment rates, both of them. 

SOUNDBITE (English), Philippe LAMBERTS (Greens/EFA, BE), We decided to pull the Monetary Policy without pulling at the same level the budget levers. And by that I mean if you carry out a Monetary Policy in a non homogenous state, which most are, of course the monetary policy will not be appropriate for all parts of the country. And this is where you need the budgetary policy instrument to rebalance your country. And of course, if you transfer, if you pull the Monetary Policy without pulling to a degree the budgetary policy, actually what you are doing is losing some sovereignty in the process. 

SOUNDBITE (English), Mario DRAGHI, President of the European Central Bank, A country loses sovereignty when the debt is too high. When the debt is too high, there is no need of rules to limit the country's sovereignty. It is the market's. Markets tell the country what is affordable and what is not. What is credible and what is not. So the country loses its sovereignty rules or institution regardless that part, when that becomes so high, that each policy action has to be scrutinised by markets. Mainly people who don't vote, who are outside the democratic accountability process. And that's why there is such a resentment. And that is a fact of life that has been produced by political and policy decisions taken by these country's governments. 

SOUNDBITE (English), Mario DRAGHI, President of the European Central Bank, It's quite clear that high debt stocks in some countries are a problem. But it's also clear that any consideration of this should keep in mind financial stability. Because, you don't want to have a remedy which is worse than the yields. And it's also true that these high stocks have been there for twenty years and longer. So it was a very very careful and cautious attempt to say that the European Monetary Fund (EMF) would have a role incase there were some sort of general renegotiations. But, I don't think anybody would have thought that EMF could initiate every negotiation of this. 

Monetary Dialogue with Mario DRAGHI, President of the European Central Bank: extracts from the meeting

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