mario draghi : hearing at the committee on economic and monetary affairs of the european parliament introductory statement by mr mario draghi, president of the european central bank, for the hearing at the committee on economic and monetary affairs of the european parliament, brussels, 16 december 2013. * * * madam chair, honourable members of the committee on economic and monetary affairs, it is a pleasure for me to be back in your committee at such a decisive moment. the next days and weeks until the end of this legislature will show whether the euro area will be able to take another key step towards banking union. i believe your institution can play a crucial and constructive role in ensuring that this next step will entail a truly european dimension. this is also the last time that i will discuss with you in detail matters related to the single supervisory mechanism. pending the appointment by the council, daniele nouy will become the chair of the supervisory board as of 1 january 2014. she will then also become your primary interlocutor with regard to the ssm. today, i will first review recent economic and monetary developments in the euro area. i will then explain in greater detail our more recent monetary policy decisions and will present the progress in the preparations of the ssm. economic and monetary developments since our meeting in september, incoming information has confirmed the ecb ’ s assessment that underlying price pressures remain subdued over the medium term. the economic recovery in the euro area is fragile. real gdp in the euro area expanded in the last two quarters : from july to september, it grew by 0. 1 % – quarter on quarter – following 0. 3 % in the second quarter of this year. developments in survey - based confidence indicators up to november point toward a modest growth rate also in the last quarter of the year. at the same time, unemployment remains high. necessary balance sheet adjustments in financial and non - financial sectors continue to weigh on economic activity. looking further ahead, we expect output to continue to recover at a slow pace. this is in particular due to some improvement in domestic demand supported by our accommodative monetary policy. euro area activity should, in addition, benefit from a gradual strengthening of demand for exports. moreover, the improvement in financial market conditions and reduced uncertainty seems to be gradually transmitted to the real economy. finally, the progress made in fiscal consolidation has strengthened the confidence of markets in the resilience of the euro area. this should also positively affect the recovery. nevertheless, the risks to

thinking about it. we had some voices yesterday saying that even with a hard brexit, euro clearing will remain in london. how does the ecb feel? well, i mean, first,, before moving to clearing, per se, generally it seems pretty clear now that the 2 / 4 bis central bankers'speeches uk will not stay in the single market. single market is not only about tariffs, it ’ s not only about free access to a market. it ’ s a set of rules. it ’ s a set of rules to protect investors, it ’ s a set of rules to protect consumers, it ’ s a set of rules to ensure a level playing field, among institutions, and it ’ s a set of rules to provide -, to deliver financial stability. when this is gone, we ’ ll have to know which set of other rules will protect investors, provide a level playing field and provide financial stability, and that ’ s very much the background against which any specific issue has to be assessed. so when it comes to clearing, it ’ s very simple. we have an mou with the bank of england, we have ways to know what ’ s going on in terms of euro clearing in london. it works very well. thanks to our good cooperation with the bank of england, it works very well. but it has foundations, the foundations are the emir regulation, the foundation is european law, and it ’ s european law being implemented under the authority of the european court of justice. so when this is gone, we ’ ll have to know what are the new foundations, and whether this is good enough to ensure financial stability in the eurozone. so really, our core concern will be financial stability and investor protection, and having a level playing field for eurozone consumers, citizens and companies. so there are situations where the uk could leave the single market, and you would be comfortable leaving euro clearing derivatives in london, rather than bringing it to the eurozone. if the new framework is strong enough, yes. is that possible? i don ’ t know. i don ’ t know. it sounds challenging. what ’ s the probability of that? it ’ s not for the ecb to judge alone. the commission will have a say, governments will have a say. it ’ s only the start of a discussion. so we ’ ve had a number of banks, ubs, hsbc, already saying they ’ re going to remove staff from