On 15 September 2010, Olli Rehn, Member of the EC in charge of Economic and Monetary Affairs, took part in a plenary session of the European Parliament on economic governance and stability framework of the EU, in Brussels.
The EP Committee on Economic and Monetary Affairs had an exchange of views on the future framework for economic governance in the European Union. This exchange of views is part of the Parliament's work to establish its position on the main aspects of the new governance framework before the European Council in October 2010. On 30 June 2010, the Commission adopted a Communication on "Enhancing economic policy coordination for stability, growth and jobs - Tools for stronger EU economic governance" and is in the process of preparing legal proposals. On 5 July 2010, the rapporteur in the EP Committee on Economic and Monetary Affairs presented his draft report with recommendations to the Commission on "Improving the economic governance and stability framework of the Union, in particular in the euro area".
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Exterior view of the European Parliament building in Brussels
||General view of the plenary session
||Soundbite by Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank (in ENGLISH): our Euro areas countries can not use instruments to inflate away their debt; so the deterioration of the public finances has exposed a series of issues which were not fully considered at the start of EMU 10 years ago; so letting markets the task to discipline budgetary policies and induce the Member States to take corrective actions is an illusion that only economies can have (2 shots)
||Soundbite by Lorenzo Bini Smaghi (in ENGLISH): the Commission thus far remained silent on how the independence of the fiscal assessment and independence 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 regards statistics the new Council regulation should be followed with deeds in particular more resources devoted to fiscal data and its verification by EUROSTAT.
||Soundbite by Lorenzo Bini Smaghi (in ENGLISH): 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 reoccurrence of the crisis because of the lack of proper crisis managements framework and as we have experienced self fulfilling expectations would by themselves precipitate a crisis.
||Soundbite by Lorenzo Bini Smaghi (in ENGLISH): public money should not be used to bail out private sector organisations that have taken the wrong decisions? This would be the case if the money provided by the crisis management framework were to reimburse the private sector for their losses eliminating all the risks it was exposed to.
||Soundbite by Lorenzo Bini Smaghi (in ENGLISH): the European Union 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 commitment of the Member States to pay their debts; so in my view we have to 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 and the cohesion of the whole Union
||Soundbite by Olli Rehn, Member of the EC in charge of Economic and Monetary Affairs (in ENGLISH): today's second anniversary of the Lehman Brothers collapse in the United States serves as a dramatic reminder of the kind of catastrophe we were able to avoid in the European Union.
||Soundbite by Olli Rehn (in ENGLISH): 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 create foundations for sustainable growth and job creation.
||Soundbite by Olli Rehn (in ENGLISH): 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 today that is already under the preventive arm of the Pact and at the beginning of the deficit procedure.
||Soundbite by Olli Rehn (in ENGLISH): 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 as soon as possible; we do not have the luxury of time (2 shots)
||Cutaways of the participants (5 shots)