Brussels, 02/07/2007 (Agence Europe) - The reports, adopted in the economic and monetary committee, by Dariusz Rosati (PES, Poland), on the Commission's 2007 annual report on the euro area, and by Gay Mitchell (EPP-ED, Ireland), on the 2006 European Central Bank (ECB) annual report, welcomed the economic recovery in the euro area and presented a list of economic, monetary and financial recommendations. The two reports will be debated and voted on in July's plenary session.
While it was too soon to be able to say how much of this recovery is cyclical and how much structural, some reforms seemed already to have led to growth, MEPs said in their report on the ECB. Budgetary consolidation and structural reform remained essential, they said, highlighting, too, the need for caution when considering any further interest rate increase so as not to endanger this growth. Wage increases must be matched by increases in productivity in order to create employment in a non-inflationary environment, added the text, which also called on the ECB to keep a careful eye on house prices.
MEPs also expressed their concern at the current appreciation of the euro against most major currencies, and called on the Eurogroup, the Council and the ECB to make full use of their powers by coordinating their action on exchange rate policy more closely.
MEPs confirmed their support for the independence of the ECB and for its aim of maintaining price stability. They would, however, prefer, when an ECB Executive Board vacancy arises, that the successful candidate be selected from a list, and that the chosen candidate be approved by the EP. MEPS on the committee repeated their call for the bank to publish summary minutes of Governing Council meetings.
On the basis of the Commission's annual report on the euro area (see EUROPE 9419), MEPs called on member states to take advantage of the current economic upswing to reduce deficits and accumulate surpluses, and to improve the quality of public finance, with more investment in education, vocational training, research and innovation.
Committee members were unhappy that the definition of price stability used to evaluate convergence criteria was not the same as the one adopted by the ECB in its monetary policy. They called for further analysis and policy debate on the application of the convergence criteria to prospective new members of the euro area, insofar as inflation can form part of the process of economic recovery they go through.
While there are repeated calls for workers to exercise wage restraint, MEPs want shareholders and company executives to show the same level of responsibility, so as not to blur the message (see also EUROPE 9456). The remuneration packages of top executives “tend to grow disproportionately compared to ordinary salary levels and thus give the wrong signals and discourage support for a responsible wage policy,” they noted. (ab)