The European Parliament and the European Central Bank (ECB) have a common objective to improve the life of our citizens by achieving real economic convergence and to strengthen the role of the EU as our common home.
The remark was made by Democratic Party MEP, Costas Mavrides of the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament where the President of the European Central Bank Christine Lagarde addressed the plenary for the first time to discuss the Eurozone’s economy and the ECB’s activities. Mavrides is the rapporteur for the European Central Bank Annual Report for 2018 at the Committee on Economic and Monetary Affairs at the EP.
In his report, discussed in the presence of ECB head, Christine Lagarde, Mavrides said it focuses on the review of the current ECB policies, the future monetary policy, the actions against climate change, and a stronger global role for the euro.
“We also stress that the very low or negative interest rates offer opportunities to consumers, companies, including SME’s, workers and borrowers.”
Regarding the monetary policy actions of the ECB in 2018 and its impact on the euro area economy, Mavrides welcomed the ECB role in safeguarding euro stability and underlined that the non-standard monetary policy measures put in place by the ECB contributed to economic recovery, to an improvement in financing conditions and to compressing yields across a wide range of asset classes. “We also stress that the very low or negative interest rates offer opportunities to consumers, companies, including SME’s, workers and borrowers, who can benefit from stronger economic momentum, lower unemployment and lower borrowing costs”.
“We ask ECB to keep monitoring potential risks to its balance sheets, asset price inflation, disadvantages to savers and potential impact on pension and insurance schemes.”
At the same time, he said, “we ask ECB to keep monitoring potential risks to its balance sheets, asset price inflation, disadvantages to savers and potential impact on pension and insurance schemes”.
Mavrides expressed concern that after a short economic recovery, the euro area growth momentum has slowed to 1.1 % of GDP in the euro area and therefore, “we note the need for maintaining both liquidity conditions and a degree of monetary accommodation. Recognizing that sustainable growth cannot be achieved by monetary policy alone, we underline that supportive fiscal policy is also necessary”.
He further said the EP members also agree with ECB President Christine Lagarde’s statement that a review of the ECB’s monetary policy framework is timely and warranted “and we stress that this should be done by organizing a public consultation and involving the Parliament”.
On strengthening the role of the euro, Mavrides pointed out that it “requires the right structural conditions including the deepening of the European Monetary Union, the completion of the banking union with the European Deposit Insurance Scheme and the completion of the capital markets union.”
Special emphasis, he added, is given to the fight against climate change and the implementation of the Paris agreement. The ECB, he added, “is bound by the Paris Agreement on climate change and that this should be reflected in its policies also by implementing the environmental, social and governance principles into its policies.”
In the report, he also underlined other aspects interrelated with the ECB policies regarding Brexit, the Capital Markets Union, crypto-assets and the need to increase monitoring and to have a comprehensive regulatory framework, the importance of micro, small and medium-sized businesses in the EU and their access to credit, more efforts to ensure the financing of the real economy.
He also talked about even greater accountability, dialogue and openness with the current President.
“The European Parliament and ECB have a common objective and this is to improve the life of our citizens by achieving real economic convergence”
Closing, he noted that it is “essential to formulate our monetary policy but also to communicate it to our citizens as that they need to understand the importance and the impact of those policies to their lives.”
The European Parliament and ECB, he said, “have a common objective and this has been my primary objective when I drafted this report, to improve the life of our citizens by achieving real economic convergence and to strengthen the role of the EU as our common home”.
In his second intervention following Lagarde’s speech, Mavrides remarked that the major challenge for all of us “is to deliver to the European citizens and to the improvement of their lives in specific ways, such as the completion of the banking union, the completion of the capital markets union and much more. Therefore, it is up to you, Madame President. We are going to be next to you towards to achieve real convergence of the European economy.”