European Parliament resolution on the 2003 Annual Report of the European Central Bank (2004/2144(INI))
Date: 2004-10-26
Institutions: European Parliament
Subjects: Economic and Monetary Union, European Central Bank, European System of Central Banks, activity report, euro area, transparency in decision-making

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2)

in Article 15, the following paragraph is inserted:

‘1a.
2006 is hereby set at EUR 141 million.’

The financial framework for the implementation of this Regulation for the period from 2005 to

3)

in Article 20, the second paragraph is replaced by the following:

‘It shall apply until 31 December 2006.’

Article 2

This Regulation shall enter into force on the twentieth day following that of its publication in the Official
Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at …, on …

For the European Parliament
The President

For the Council
The President

P6_TA(2004)0037

ECB 2003 annual report

European Parliament resolution on the 2003 Annual Report of the European Central Bank (2004/
2144(INI))

The European Parliament,

— having regard to the 2003 Annual Report of the European Central Bank,

— having regard to Article 113 of the EC Treaty,

— having regard to Article 15 of the Statute of the European System of Central Banks and of the European

Central Bank,

— having regard to its resolution of 2 April 1998 on democratic accountability in the third phase of

EMU (1),

— having regard to its resolution of 3 July 2003 on the 2002 Annual Report of the European Central

Bank (2),

— having regard to its resolution of 26 February 2004 on the situation of the European economy, report

on the broad guidelines for economic policy (3),

— having regard to its resolution of 22 April 2004 on the Commission recommendation on the 2004
update of the Broad Guidelines of the Economic Policies of the Member States and the Community (for
the 2003-2005 period) (4),

— having regard to the report by the Court of Auditors of 14 and 15 January 2004 on the audit of the
operational efficiency of the management of the European Central Bank for the financial year 2002 (5),

(1) OJ C 138, 4.5.1998, p. 177.
(2) OJ C 74 E, 24.3.2004, p. 867.
(3) Texts Adopted, P5_TA(2004)0116.
(4) Texts Adopted, P5_TA(2004)0378.
(5) OJ C 45, 20.2.2004, p. 27.

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— having regard to the decisions of the European Central Bank of 19 February 2004 (1) and of 17 June
2004 (2) adopting the Rules of Procedure of the European Central Bank and of the General Council of
the European Central Bank respectively,

— having regard to the Commission's 2004 Spring economic forecasts,

— having regard to Rules 106 and 112(1) of its Rules of Procedure,

— having regard to the report of the Committee on Economic and Monetary Affairs (A6-0014/2004),

A.

acknowledging the full independence of the European Central Bank (ECB) and the European System of
Central Banks (ESCB),

B. whereas the main objective of the ECB and of the ESCB is to maintain price stability, and otherwise to
support the general economic policies of the European Community, as defined by Article 2 of the
Treaty,

C. whereas 2003 saw a strong rebound of the international economy mainly driven by the United States

of America and Asia (world GDP growth: 3,7 %),

D. whereas in 2003: the EU's GDP only grew 0,8 % and the euro area's 0,4 %; inflation in the euro area
reached historically low levels (2,1 % from 2,3 % in 2002); excess liquidity accumulated with strong
growth — at 7,1 % — of the monetary aggregate M3, the ECB's target being 4,5 %; the deterioration
in budget deficits continued, with an average deficit of 2,7 % of euro area GDP (2,3 % in 2002); credit
to the private sector increased significantly and unemployment remained stable,

E. whereas the ECB announced on 8 May 2003 that the rate of inflation (HICP) should be kept ‘below, but

close to 2 % over the medium term’,

F. whereas Article 10 of the Statute of the ESCB and of the ECB clarifies voting procedures,

G. whereas Article 10.4 of that Statute provides that the proceedings of the meetings are to be confidential

but that the Governing Council may decide to make the outcome of its deliberations public,

H. whereas as of 1 May 2004: the EU's enlargement poses important challenges for EMU, the ECB and the
ESCB; the National Central Banks of the new Member States signed the Exchange Rate Mechanism
(ERM) II Central Bank Agreement,

I. whereas the Estonian kroon, Lithuanian litas and Slovenian tolar joined ERM II on 28 June 2004,

J. whereas a debate has started in certain Member States as regards the usefulness of small-value euro
coins, and the fear that the abandonment thereof might result in upward inflationary pressures due to
abusive rounding-up practices,

1. Welcomes the ECB 2003 annual report under the responsibility of President Trichet;

Believes that, five years after its implementation, EMU can be pronounced a great success, thanks to a

2.
great extent to the ECB and its precursor, the European Monetary Institute;

3.
its
Expresses its satisfaction that the ECB has fully recognised (2003 Annual Report, Chapter 5)
responsibility vis-à-vis the public and the European Parliament with regards to the different objectives
given to it by the Treaties;

4. Welcomes the historically low interest rate levels in the euro area; believes the ECB reacted correctly to
economic and financial developments in 2003; stresses that it should continue to be vigilant as to the speed
with which markets respond to and discount its decisions;

(1) OJ L 80, 18.3.2004, p. 33.
(2) OJ L 230, 30.6.2004, p. 61.

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Notes that the successive reductions of interest rates have not always been passed on to clients by

5.
banks, or if they have, it has been done with a considerable time lag;

Considers moreover that the relative weakness of economic activity in the euro area in 2003 is not a
6.
result of a lack of confidence in the currency's stability but rather a lack of structural reforms as well as low
working times when compared to other parts of the world;

7. Welcomes the ECB's choice of an inflation rate ‘below, but close to 2 %’, adopted on 8 May 2003, as a
signal of the ECB's policy to guarantee monetary stability without accepting deflationary pressures;

8.
Considers that, through the monetary policy followed during 2003, the ECB supported the objective
of full employment set out at the Lisbon European Council of 23 and 24 March 2000; agrees with the ECB
that the pace of structural reform needs to be quicker in order to achieve the levels of growth that will make
it possible to meet the Lisbon objectives;

Recognises that the ECB's prime objective is to guarantee price stability since through price stability

9.
the ECB can contribute to achieving the objective of full employment as defined in the Lisbon strategy;

Accepts that the reference value for monetary growth will not be reviewed on an annual basis, so as
10.
to underline the longer-term nature of this reference value; finds however that this should not be seen as
eliminating the relative importance of the monetary aggregate M3;

Considers that the ECB's accountability obligation implies a higher degree of transparency in decision-
11.
making, which calls for publication of minutes and voting patterns of Governing Council meetings; urges
the Governing Council to take its decisions by vote as is understood in Article 10 of the Statute as this may
on occasions speed up the ECB's response to economic developments;

12.
Repeats the call for an annual publication not only of a country-by-country but also of a regional
and cross-border review of trends similar to the US Federal Reserve's ‘Beige Book’, which would give the
ECB the chance to influence discussion of productivity trends and price and wage expectations;

13.
Lauds the ESCB's policy of concentrating on maintaining price stability, rather than engaging in
policies, as suggested by some economists, which may or may not result in short-term falls in unemploy-
ment, but which are known to increase both inflation and unemployment in the medium and long term;

14.
Believes that the monetary dialogue between the European Parliament and the ECB has been a suc-
cess; highlights that these exchanges make monetary policy more transparent and accessible to the public;
calls on the ECB to expand this dialogue with the Parliament and to continue its public relations work to
strengthen citizens' identification with the euro;

Recalls its wish for closer involvement in the nomination and appointment of ECB Executive Board

15.
members;

16. Welcomes the entry of the Estonian, Lithuanian and Slovenian currencies into ERM II and supports
the introduction of the euro by all the old and new Member States; stresses that both successful partici-
pation in ERM II and compliance with the convergence criteria are required; considers that all new Member
States should receive equal treatment with regard to the introduction of the euro and the meeting of the
convergence criteria;

17.
Congratulates once again the ECB for a successful introduction of euro banknotes and coins but
regrets some associated inflationary effects, especially in the service sector; calls for an investigation into
any malpractices, and also for consideration of ways to prevent similar problems for future euro-zone
members;

18.

Commends the ECB for the new format of its 2003 Annual Report and the changes to its website;

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Considers that the ECB has managed its budget appropriately and supports the abovementioned

19.
Court of Auditors audit report;

Confirms its views that the ECB should exercise prudential supervision on the banking activities of

20.
the European Investment Bank;

Believes that the Member States should ensure that all denominations of notes and coins, particularly

21.
1 and 2 cent coins and 200 and 500 euronotes, are accepted in all EMU countries;

Deplores the fact that the cost of cross-border retail payments in euros remains high and requests the
22.
ECB to push for full implementation of the regulation thereof; supports the creation of a Single European
Payments Area;

23.
Invites the ECB to start reflecting on the second generation of banknotes; urges the ECB to be very
alert to counterfeiting and to take experience into account in the design of a new generation of banknotes;

24.
Draws the attention of the ESCB to the problem created by its request to the Committee of European
Securities Regulators to act in the field of clearing and settlement, which will set matters in stone well before
the democratic procedure — which includes the European Parliament — can even start in this area;

25.

Instructs its President to forward this resolution to the Council, the Commission and the ECB.