Mr President, this first annual report of the Central Bank gives me the opportunity to make an on the whole positive assessment of the work accomplished to date by the European Central Bank and the operation of the euro area. The Central Bank has managed to fulfil its primary mission of maintaining price stability. The general economic policies of the Union have been accompanied by an opportune reduction in key interest rates. The countries participating in the euro area have been in a position to continue their structural improvement. Growth has returned in the majority of European countries. Following the doubling of petroleum prices, a slight upsurge has been observed in inflation. The ECB has a duty to remain vigilant, but as the mean rate of inflation of the euro-11 is still well under the 2% mark, I dare to hope that the Governing Council will give growth and, consequently, further reduction in unemployment, a chance. According to ECB estimates, some four fifths of unemployment is structural in nature. More recent studies show that in fact less than one fifth of unemployment is structural. This type of unemployment linked to the current economic climate could be absorbed only by more vigorous growth. While emphasising the need to continue the policy of stability, I would like to ask President Duisenberg the following question: can Europe’s only ambition be to pursue a macroeconomic policy focused on stability alone? In my view, the fight against inflation must go hand in hand with the improved coordination of budgetary policies and the establishment of a macroeconomic framework favourable to growth and to employment. When assessing the work of the ECB and the positive effect of the euro area, one must consider the internationalisation of financial markets. One is bound to observe that Europe has come to terms with the crises in Asia, Russia and Brazil rather well. Without the euro, some more vulnerable Member States would probably have experienced monetary difficulties along with, who knows, some cases of competitive devaluation. The euro is also a victory of Community regulation over the disordered interaction of individual financial markets. People will bring up the objection that, since its successful launch, the value of the euro has depreciated in comparison with the dollar. This is to forget that, within a floating exchange rate system, the main currencies are always going to evolve in relation to each other. In the last twenty years, the yearly slide in the volatile Mark/Dollar exchange rate has, on several occasions, exceeded 10%. The only criticism I have of the ECB is that it should be a bit less reticent about international exposure in all the various for a. The ECB is one of the most important central banks in the world. It is its duty to take a particularly close interest in the vulnerability of the international banking system and the fragility of the financial sector throughout the world. The crisis in Asia was not triggered by traditional macroeconomic imbalances, but by the financial excesses of the private sector. The irrational exuberance which characterises some stock exchanges, the excessive indebtedness of American households and of some economic sectors in important countries cause a definite threat to hang over worldwide economic stability. The ECB should make a firm commitment in all the appropriate fora to create a new regulatory framework for the structure of international finance. The essential complement ... (The President cut the speaker off)

Political group: PSE