Debate: European Central Bank - annual report
Date: WEDNESDAY, 15 FEBRUARY 2023
Speaker: Rasmus Andresen
Country: Germany
Language: EN

While profits of the biggest corporations are skyrocketing, a majority of citizens are suffering from real wage losses. The real wage growth declined in the first half of 2022 to —2.3%. In Germany, my country, the wage loss went to —3.9%. At the same time, we could observe a higher contribution of profits to inflation, for example, from energy companies like ExxonMobil, Shell and others. We need to have a science—based analysis.  We therefore call on the ECB in the report to begin to report also on profits contribution to inflation, the same as you are already doing with wages. We are calling on the ECB to take a step—by—step approach. The high inflation is a big concern for the European Parliament and we agree on that the ECB has the tools to bring demand driven inflation down. By accepting the primary mandate, we also need to be very clear: this current price explosion is different. The ECB has limited tools to address it.  We are facing exceptional supply shocks in the energy markets. The ECB cannot bring this inflation down at short—term level, but also needs to focus on the medium—term perspective. Our high levels of dependence on Russian imports and skyrocketing prices for fossil fuels are an important reminder how a climate-harming policy is also directly affecting price stability. Green monetary policy is not a nice—to—have but necessary to secure price stability and a prosperous economic outlook. This is why we dedicated an entire section in the report to the ECB’s policies to actions against climate change.  We are welcoming the ECB climate roadmap and stress test you put forward last year. We discussed it in the Committee more than once, but we also think that we need to do more and we need to include climate— and environment—related risks through climate stress tests and also other tools. We are inviting you, President, also in the next months to discuss this further with the European Parliament.  Climate change is affecting price stability, and ignoring this fact will lead to big problems in the future. From a green perspective, important steps, first steps have been taken also in the report we could agree on in the Committee, but we still need to develop tools so that needed green investments will not be harmed by a tightening of monetary policy. I guess this will also be one of our major priorities for the next debates in our Committee when it comes to central banking and to monetary policy.  For the first time, the report also includes a chapter with recommendation for secondary objectives. For too long a time, the secondary objectives have been politically ignored, and let me state this in no uncertain terms: the ECB secondary mandate is legally binding and laid down in the treaties. So we are calling the ECB to explain in a designated chapter of its report how its monetary policy is affecting the general economic policies of the Union, including impacts on sustainable growth and employment or inequality.  Dear colleagues, the ECB is accountable to the European Parliament, and I really think we have a strong mandate and important work by calling the ECB to be more transparent and to explain much more on the monetary decision-making. So this report is a chance to go in the next steps in the dialogue together with President Lagarde and the ECB. I’m really looking forward to do this after hopefully a strong vote tomorrow and the debate here tonight. So once again, thanks for the President for attending the meeting, and I’m really looking forward to all of your contributions.