WRITTEN QUESTION E-1714/01 by Erik Meijer (GUE/NGL) to the Commission. Differing needs regarding interest rates as a result of unequal and non-simultaneous economic growth..
Date: 2001-06-14
Institutions: European Parliament, Provisional data
Subjects: European Central Bank, credit policy, economic growth, euro area, inflation, interest, prices policy

C 93 E/20

Official Journal of the European Communities

EN

18.4.2002

(cid:1) If not, how does the Commission reconcile the prior requirement that applicants be of English mother

tongue with the non-discrimination principle?

(cid:1) If so, what action will the Commission take to call a halt to such discriminatory practices?

(1) OJ C 235 E, 21.8.2001, p. 245.

Joint answer
to Written Questions E-1681/01 and E-1682/01
given by Mrs Reding on behalf of the Commission

(2 October 2001)

The Honourable Member’s attention is drawn to the Commission’s answers to the Honourable Member’s
Written Questions E-4100/00 (1), E-0779/01 (2) and E-1356/01 by Mr Gemelli (3) on this same subject.

Organisations performing services under contract for the Commission, such as the Socrates, Leonardo and
Youth Technical Assistance Office, are required to operate in a wide range of languages and the staff
recruited by such organisations is composed of a wide range of nationalities and mother tongues. They
may from time to time require to recruit staff with a very high level of knowledge of a specific language or
languages. In so doing, they are bound to comply with all legal and administrative provisions applicable in
Belgium, including Community regulations on the free movement of workers.

that

The Commission has drawn the attention of the Socrates, Leonardo and Youth Technical Assistance Office
to the fact
in recruitment
the use of expressions such as ‘mother tongue’ or ‘native speaker’
advertisements might be considered as discriminatory and, thus, incompatible with Community law. The
organisation’s management has informed the Commission that it will ensure such terms do not appear in
future vacancy notices.

(1) OJ C 174 E, 19.6.2001, p. 233.
(2) OJ C 235 E, 21.8.2001, p. 245.
(3) OJ C 350 E, 11.12.2001, p. 132.

(2002/C 93 E/023)

WRITTEN QUESTION E-1714/01

by Erik Meijer (GUE/NGL) to the Commission

(14 June 2001)

Subject: Differing needs regarding interest rates as a result of unequal and non-simultaneous economic

growth.

1.
Does the Commission remember that in March and April pressure was brought to bear, inter alia by
the USA, for the European Central Bank to lower its interest rates but that this reduction in interest rates
did not initially take place on the grounds that it might increase the risk of inflation in the euro zone?

2.
Does the Commission consider that the risk of inflation in May, when the interest rate was indeed
reduced, had abated as a result of new statistics indicating that the growth in money supply was less than
originally expected?

3.
Is the Commission aware of a study by the Dutch-Belgian bank group ING according to which the
economies in the euro-zone will grow further and further apart, inter alia because Member States and
regions will specialise in different sectors such as high-tech, cultivation of vegetables or car manufacture
and that this will result in economic highs and lows in different regions at different times?

4.
Can the Commission confirm that the interest rates set by the ECB since the beginning of 1999 have
had a beneficial effect for France in particular which succeeded in combining a low rate of inflation with
remarkable growth in employment in the said period?

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Official Journal of the European Communities

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5. What is the Commission’s opinion of publications which claim that Germany needs lower interest
rates in order to stimulate its economy while the Netherlands requires higher interest rates to counteract
the growing inflation and that Ireland and Portugal also need higher interest rates to cool down their
overheated economies?

Sources: Rotterdams Dagblad, 18 May 2001 Financial Times homepage, 23 May 2001.

Answer given by Mr Solbes Mira on behalf of the Commission

(18 September 2001)

1.
The Commission remembers that in March and April 2001 several people were asking the European
Central Bank (ECB) to lower interest rates. In fact some of these demands originated from the United
States.

There has not been any cut in the ECB’s policy interest rates in March and April 2001. Obviously this
absence of cuts cannot be attributed to single determinants. However, as the ECB has price stability as its
primary objective one can conclude that the absence of rate cuts is indicating that the ECB has seen the
possibility of adding risks to price stability by cutting interest rates.

Risks to inflation are originating from a bundle of sources. As inflation is a monetary phenomenon
2.
indeed too fast monetary growth could result in future inflationary pressures. Hence, a slower than initially
measured monetary growth can mean a lower than initially perceived risk to price stability.

The case of the ECB’s downward correction of M3 growth suggests that inflationary pressures indicated by
strong monetary growth in 1999 and 2000 have been overestimated for a while.

Hence the Commission does not think that the risk has abated due to new statistics. It is only the
assessment of risk that has changed.

3.
The Commission is not aware of a study by the ‘Dutch-Belgian bank group ING’ mentioned in the
question. However, the Commission is aware of the subject of macroeconomic difference, in particular in
terms of economic growth and inflation. Macroeconomic differences among euro area Member States are
carefully watched by the Commission services in its regular analysis.

Specialisation of regions, however, does not necessarily mean long-term divergence as historical evidence
from European countries indicates.

According to the latest macroeconomic forecast by the Commission, France had low inflation rates in
4.
1999 and 2000 (0.6 % and 1.8 % respectively), while real gross domestic product (GDP) growth was at
2.9 % and 3.2 % in these years. The forecast development for this year and next comprises a continuation
of strong economic growth (2.9 and 2.8 % respectively), while inflation was expected to remain below the
euro area average in both years (1.3 and 1.6 % as compared to 2.2 and 1.8 % for the euro area as a whole.
However, the growth performance of France was close to that of the whole euro area (maximum difference
of 0.4 p.p. in 1999). With respect to the forecast the more recent information suggest that the Spring
forecast figures are on the upper part of the most optimistic forecasts. For instance harmonised index of
consumer prices (HICP) inflation has steadily increased over the last months and reached 2.5 % in May (up
from 2.0 % in April and 1.4 % in March).

This performance has indeed been assessed as favourable, but it is difficult to name a single source as a
mix of determinants has been responsible. Among them monetary policy is one part of the story. Other
measures were taken by different authorities and also the behaviour of the private sector mattered a lot.
Moreover as monetary policy is the same for all Member States one would have to ask why the same
policy should have been beneficial to a single Member State while it did not trigger similar effects
elsewhere.

5. Monetary policy in the euro area is conducted for the euro area as a whole (‘one size fits all’). As the
cyclical situation of the Member States and the structures differ this policy results in different monetary
conditions in euro area economies. This is the specificity of the economic and monetary union (EMU)
policy framework. It implies that, in a Member State, other economic policies have to be used in order to
accommodate the monetary stance.