Brussels, 21/06/2016 (Agence Europe) - The President of the ECB, Mario Draghi, said on Tuesday 21 June that the European institution was prepared to face any situation that may arise from the British voting for their country to leave the European Union, in the referendum of Thursday 23 June.
It is “difficult to foresee various impacts” of Brexit on the markets and economy of the Eurozone, but “we have done all preparations that are necessary now”, Draghi told a public hearing at the committee on economic and monetary affairs of the European Parliament. He said that in the event of Brexit, the ECB would ensure the stabilisation of the markets, the supply of liquidity and the functioning of the swap line agreements between central banks. Mechanisms related to liquidity provision must be “usable, active and appropriate”, he stressed.
According to the former Governor of Banca d'Italia, European leaders must face the current challenges in order to make “our shared home, Europe, stronger”. When asked about the deepening of economic and monetary union (EMU) by Pervenche Berès (S&D, France), who is the co-author of a report on a budgetary capacity for the Eurozone (see EUROPE 11561), Draghi suggested various resources to move forward in this area: making EMU more resilient, improving worker mobility, increasing risk-sharing, completing the capital markets union and creating a mechanism to absorb macroeconomic shocks. On the last of these points, Draghi stressed, the necessary “trust” between countries of the Eurozone will materialise if solidarity and responsibility go hand in hand, in other words if the rules of the Stability and Growth Pact are complied with and there has been genuine macroeconomic convergence.
The ECB boss also stressed that he improves of the idea of extending the Juncker investment plan beyond 2018, as the European Commission is calling for (see EUROPE 11576). However, he called for reforms to be continued to improve the conditions that influence investment decisions. Additionally, investments should focus more on stimulating innovation and the digital economy than on traditional infrastructure, he added. Replying to a question by Marisa Matias (GUE/NGL, Portugal), who called for increased public investment, Draghi said that only states with budgetary margins are able to do this, as the others would have to restructure their budgets in order to free up funding. The structure of the budget is just as important as its size, he stressed. (Original version in French by Mathieu Bion)