Mr President, Commissioner, ladies and gentlemen, according to the International Monetary Fund, the world experienced 120 monetary crises between 1975 and 2000. A monetary crisis is defined as the depreciation of a currency by more than 25% in one year. It was always the real economy that paid the price for this financial instability. Less growth, less employment and more misery accompany financial crises. We should therefore view the need for financial stability as being in the public good. Public authorities are called upon to prevent, or otherwise to manage as best they can, any crisis. The Committee on Economic and Monetary Affairs has commissioned me to produce this own-initiative report. I have experienced some difficulties with the rules laid down by the Bureau of our Parliament. My report was too long, as if it was possible to deal with the complexity of international monetary relations in five pages. The Meltzer report, in the American Congress, was some one hundred pages long. The Meltzer committee, made up of congressmen, scientists, bankers and trade unionists inspired a lively international debate. My humble report, and the motion for a resolution, will certainly not inspire a similar debate. In order to carry more weight, our Parliament should have followed a procedure similar to that of the American Congress, that is, by means of a collective report, with detailed proposals. The motion for a resolution is restricted to certain essential issues. My report hinges on the notions of transparency and accountability, regulation and solidarity. In 2000, the private sector transferred about twenty times more resources to the developing countries than the World Bank and the other multilateral banks. Open financial markets will lead to significant increases in efficiency for world exchanges so long as they are provided with a better framework. The international financial institutions must become truly universal. The monetary fund must become more democratic. The super majority of 95% must be abolished for all important decisions. It gives a right of veto to the United States and to the Union, if it is also able to unite within the International Monetary Fund. A regular rise in quotas and the issuing of special drawing rights is needed, in accordance with the growth of the world economy. Common rules and standards should be applied on an international level. We need a legal and judicial framework allowing for the rapid resolution of insolvency crises. The private sector should be involved in the management of crises, in particular by means of the general application of collective action clauses. This involvement should extend to the freezing of debt service payments. This will allow a reduction in moral uncertainties and in the cost of restructuring programmes. Better prevention of crises requires increased supervision of off-balance sheet operations. In particular, we must toughen the prudential requirements imposed on banks when they serve to offset hedge funds. Europe must become more active in international bodies. In this respect, the ECB must be more involved. The European system of central banks must be designed as a body for coordinating the Union’s supervision and control authorities. One of the conclusions of my report is that the Tobin tax will not work. In fact it would have terrible economic consequences. Why penalise transactions between strong currencies, which make up more than 95% of international currency transactions, on the basis of a desire to prevent speculation against the currencies of developing countries. The Chilean encaja would achieve better results. Nevertheless, I welcome the decision of the ECOFIN Council to invite the Commission to prepare a report on this issue which I hope will make the decision much more objective. My report puts great stress on the need to settle the problem of third-world debt as soon as possible. This debt should be partly cancelled and partly rescheduled, so as to allow the developing countries to repay the amounts up to a limit of 5% of their annual exports. The London Agreement of 1953 laid down such provisions in favour of Germany. This was the basis of the German post-war economic miracle. This could also be the basis for a new economic partnership between all nations, the beginning of a true globalisation. Settling the problem of third-world debt would allow the internal development of these countries and would cement the victory against poverty and ignorance and therefore against intolerance and terrorism.

Political group: PSE