Brussels, 09/07/2012 (Agence Europe) - At a meeting with the European Parliament's economic and monetary affairs committee, European Central Bank (ECB) President Mario Draghi said that pooling of debt, in whatever form, could only be the aim (rather than starting point) of budget union, but establishment of a redemption fund was one of a number of smart ideas. He said that he wanted to be pragmatic and focus on what can be done right now. Draghi added that it was best to do as much as possible under the existing treaties.
In reply to Jean-Paul Gauzès (EPP, France) who asked him when words were going to be come deeds, Draghi said: “Many governments have started in their reforms. I have said many times, compared to six months ago, in November last year when we were closest to a major credit accident, the world is a completely different one. Much progress has been achieved in the fiscal consolidation effort and in the reforms. Why are we not seeing the benefits of this? One reason has to do with the fact that the reforms have just started. This action is relatively recent. Much of this has been legislated and needs to be implemented. (…) On the fiscal consolidation front, governments focused on fiscal consolidation efforts a lot on tax increases, which are the easiest thing to do in a hurry”. He made it clear that, “since finance assistance can only be temporary, the quality of the reforms and their implementation are absolutely essential”.
Banking Union. Draghi said that the first stage in bringing in banking union was a single European bank regulator, particularly for the eurozone, without damaging the EU27 single market or the single currency.
The mechanics of regulation. Draghi hoped a proposal would be unveiled that would put the ECB in a position to properly and independently carry out its regulatory tasks without damaging its reputation. He said this would be based on national regulators and the precise range of banks to be regulated was currently under discussion.
The eurozone. “We have to look at what the situation is, look at the data and the developments and then we'll make up our minds in the Governing Council about what next actions we'll do”, said Draghi, warning that the ECB must not be expected to exceed its mandate because that would damage its credibility. “The euro is here to stay”, he warned. (EL/transl.fl)