Press Release
EP-CEPS policy dialogue urges Council to take the right action to halt the Euro crisis
The European Parliament-CEPS Policy Dialogue met at the EP on December 7th, under the chairmanship of Gianni Pittella, First Vice-President of the EP, in preparation for the meeting of the European Council, December 8th-9th.
Stefano Micossi (Director-General, Assonime and member of the CEPS Board of Directors) presented his report "Agreement needed on liquidity provision to restore confidence in the eurozone", and interventions were made by MEPs Gianni Pittella, Roberto Gualtieri and Andrew Duff.
Many other MEPs participated in the round table debate.
Mr. PITTELLA stressed the urgency to take an immediate decision, saying "the first step is to avoid the current useless inter-governmental path. In this context and in this moment the key issue is the preservation of the community legitimacy of all decisions that support the euro. It's necessary to reinforce the ESM and to empower the ECB, giving it the capacity to be lender of last resort."
Mr. MICOSSI observed that "the Eurozone has proven so far collectively unable to ring-fence the Greek debt problem”. As a consequence, he urged the Eurosummit “to overcome its political disagreements on how to halt spreading contagion in Eurozone financial markets. Straitening budgetary and reform policies in all the Member States will not suffice; there is also a need for an adequate provision of liquidity, as large as needed to stop an already ongoing run on our financial institutions and restore confidence that no other Eurozone country will default on its sovereign obligations."
The main recommendations of the EP-CEPS Policy Dialogue, which will be sent to the European Council, are the following:
1. Strengthened provision for economic governance to guard against any future repetition of lax budgetary and economic policies are welcome; however, the European Council and Eurosummit should be aware that the Eurozone and Union economies are falling already into recession, and therefore there is a need to accompany budgetary consolidation with appropriate market opening and investment for internal market infrastructures, as well as more broadly an expansionary monetary policy, since under present circumstances fears of inflation are entirely misplaced. It is important that the ECB pay special attention to this urgent need.
2. The European Council and Eurosummit should end uncertainty and finally put in place adequate resources to restore functioning liquidity markets in the European financial markets. More specifically, the ESM should start operations one year earlier than planned, its resources should be substantially beefed up and provisions should be made so that the ESM gains access to liquidity financing by the ECB as a bridge between its security issues and short-term intervention needs.
3. As to the hypotheses of Treaty revision that have been rumored, while fully recognising the need to provide solid underpinning of European law to the economic policy commitments by the Eurozone member states, there was a general recommendation to exercise caution with provisions that may exacerbate a feeling that sovereignty on fiscal matters is being transferred to executive powers in Brussels without sufficient accountability to elected Parliaments.
For further information contact: Marco Incerti: : +32 2 229 3970 +32 485 485 435
Centre for European Policy Studies (CEPS), Place du Congrès 1, B – 1000 Brussels;
Tel. + 32 2 229 3911