Situation of the global financial system and its effects on the European economy: extracts from the Council and the EC statements, EP plenary session

Type: Report   Reference: I-059074   Duration: 11:11:53  Lieu:
End production: 24/09/2008   First transmission: 24/09/2008
The crisis in the world's financial system was centre stage on 24 September 2008 as Members of the EP debated how to respond. Banks, insurance companies and mortgage lenders have crashed, been bailed out or nationalised at an alarming rate over the last two weeks. How safe are people's savings, mortgages and investments was a key issue as Members from left, right and centre set out their solutions. "How safe are my savings?" has been one worrying question for small investors over the last few days. Other voters are concerned about the extent to which the taxpayer has had to bail out banks and insurance companies. Joaquín Almunia, Member of the EC in charge of Economic and Monetary Affairs, and Jean Pierre Jouyet, French Minister of State to the Minister for Foreign and European Affairs, with responsibility for European Affairs, and President in office of the Council, made statements on the issue.

Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
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TIME DESCRIPTION DURATION
11:07:29 Title 00:00:04
11:07:34 Exterior view of the European Parliament in Brussels 00:00:05
11:07:39 Jean Pierre Jouyet, French Minister of State to the Minister for Foreign and European Affairs, with responsibility for European Affairs, and President in office of the Council, (in FRENCH) saying that today they are not considering initiatives similar to those undertaken by the US authorities, that is the buying back of toxic assets; saying that the EU financial system remains stable and does not require this kind of measures; nevertheless, they have to be vigilant and ready to intervene if necessary; they have to take a pragmatic and realistic approach; saying that they must introduce reforms in the EU's financial system in two areas: first of all quick legislative, regulatory actions to bring back transparency into the financial system and to make sure those responsible assume their responsibilities; saying that to address the present turmoil there are four specific areas: transparency, prudential rules, the increasing value of assets and the functioning of markets, including ratings agencies; those are the four priority areas and it now necessary to act in terms of controls on banks, in terms of accounting standards, which no doubt played a pro cyclical role in this crisis; saying that he has also heard from some European decision makers that the markets should be let free of intervention or financial regulation; this is a mistake; it is a mistake as regard the stability of the financial markets; it is unreasonable; they must reflect on the hedge funds; it is up the EU to do it; they must reflect on risk transparency, on the power of regulatory authorities and their income; saying that the time has come to act in terms of the way the European financial system is organised, its place in the EU economy and the role of that system which should serve groups and individuals; (6 shots) 00:02:18
11:09:57 Joaquín Almunia, Member of the EC in charge of Economic and Monetary Affairs, (in ENGLISH) saying that the ECOFIN road map of regulatory actions and recommendations of the financial stability forum contains all the elements necessary; this includes concrete initiatives on enhanced transparency for investors, markets and regulators, revised capital requirements for banking groups and clarification of the role of credit rating agencies; saying that against this background, GDP growth for 2008 was revised down significantly, to 1,4% in the EU and 1,3% in the Euro area; inflation has been revised up to 3,8% in the EU and 3,6% in the Euro area; saying that in budgetary policy, they must preserve their commitment to fiscal discipline and the rules of the stability and growth pact while letting the automatic stabilizers play their role; saying that a clear commitment to implement structural reforms as defined in the framework of the Lisbon Strategy and the national reform programmes will be crucial to boost consumers' and investors' confidence in the short term and to improve the resilience and dynamism of the European economies in the longer term; saying that their actions will be more efficient and effective if they coordinate them at Euro area and EU levels; saying that inevitably they will need to overcome some resistances by Member States to agree common actions; yet, the consensus reached during the last informal ECOFIN meeting in Nice should be deepened and developed; saying that internal European action is not sufficient to confront global challenges; they need to reinforce common external action in the financial stability forum, in the Basel committee, in the G7, as well as devote more attention to the future role of the International Monetary Fund; (10 shots) 00:01:56
11:11:53 Cutaway 00:00:05
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