Brussels, 13/12/2011 (Agence Europe) - The European Parliament is expected to issue an opinion on Wednesday 14 December in favour of the appointment of a French national. Benoît Coeuré, to the European Central Bank (ECB) Executive Board, after the EP's economic and monetary affairs committee gave the go-ahead on Monday evening.
The ECB has made a very strong move with its three-year refinancing to enable private EU banks to access low-interest cash o lend on to the real economy and to buy sovereign bonds, said Coeuré during his hearing at the EP's economic and monetary affairs committee. He said the markets had not properly understood the full scope of the measure. Coeuré is an economist by training, who is a high-ranking official at the French Treasury. He pointed out that the EFSF bailout fund could now leverage far more money. Quizzed about eurobonds, an idea backed by the European Parliament but rejected by Germany, Coeuré said they were part of a eurozone solution, but not possible in the current state of affairs and would be dangerous without proper budget discipline. He said he favoured eurobonds, but as the cherry on the cake of the full process, rather than an immediate solution to the crisis. He stressed the ECB's independence, adding that it could go further than it was doing today in terms of buying bonds, but would not negotiate its decisions with governments. He said that the ECB's purchase of bonds was a temporary project rather than a permanent operating mode and the bank would be preparing to withdraw the system, but probably not in 2012.
Coeuré called for a financial transaction tax (FTT), but this was not the right time because it would hamper liquidity on the money markets. He recommended that the EU should not go it alone on the FTT question. Benoit Coeuré called for a detoxing of credit rating agencies, whose warnings were deepening the crisis. Coeuré has been put forward as the French candidate to replace Italy's Lorenzo Bini Smaghi on the ECB Executive Board. (LC/transl.fl)