Brussels, 04/06/2008 (Agence Europe) - In a report on the activities of the European Central Bank (ECB) in 2007, the committee on economic and monetary affairs of the European Parliament stressed the "excellent work" of the Frankfurt-based institution in the management of the financial turbulence which appeared last summer. This positive assessment returned by the MEPs is accompanied by a series of recommendations, calling, amongst other things, for prudence as regards a potential increase in interest rates. The own-initiative report by Olle Schmidt (ALDE, Sweden), which was adopted as amended on Tuesday 3 June, stresses that any reassessment of the rates should be undertaken "with prudence in order not to endanger economic growth".
The MEPs take note of the appreciation of the euro, particularly against the American dollar, and call upon the ECB to "monitor this development and to take measures if it sees fit". The ECB, the Eurogroup and the Commission are called upon to increase coordination on the matter of exchange rates. Renewing a call for greater transparency on the part of the ECB, the MEPs are no longer calling for the minutes of the meetings of the board of governors to be published, but would like to know, at the end of each meeting, whether consensus was reached easily, or whether differences of opinion persisted. Disappointed at the low levels of response to its recommendations to the ECB, they call upon the institution to draw up an annual report on measures taken to improve its performance in terms of transparency. When Slovakia joins the single currency on 1 January 2009, the eurozone will have 16 members, which will bring about a revision of the voting rules at the Board of Governors. Under the statutes of the ECB, as soon as the eurozone has more than 15 members, the number of governors of national central banks with the voting rights within the Board of Governors will be limited to 15. The governors will then exercise voting rights under a system of rotation, which must be decided upon now, the MEPs stress.
The Parliamentary committee also stresses the "increased need for cooperation between central banks and the monitoring authorities, in order to preserve stability on the financial markets" and hopes that the ECB will play an "active central role in the various institutions, debating modifications in surveillance, such as the re-examination of the Lamfalussy framework". The report goes on to plead in favour of a financial supervision framework at EU level, closely involving the ECB. Despite warnings from the ECB and the Federal Reserve on the risks brought about by the crisis on the mortgage markets, the MEPs noted that the financial markets have not been in a position to react effectively. They call, therefore, on the ECB to "analyse this reaction and suggest an improvement in the correlation between this type of early warnings and the reactions of the marketplace" and call upon the institution to consider which competencies it should have to improve a macro-prudential supervision in the eurozone. The report will be debated during the July plenary session. (A.B.)