Debate: European Central Bank - annual report
Date: TUESDAY, 11 FEBRUARY 2020
Speaker: Valdis Dombrovskis
Language: EN

By a coincidence of the calendar, the European Central Bank launched a review of its monetary policy strategy on 23 January, the day of adoption of the report at committee level. I would like to thank the rapporteur, Costas Mavrides, and the members of the Committee on Economic and Monetary Affairs (ECON) for their work. The Commission largely shares the general lines of the report. We concur with the view that the ECB’s statutory independence in the conduct of monetary policy is crucial to the objective of safeguarding price stability. Today’s debate reinforces this independence in that it bridges political independence and democratic accountability. Like the report, the Commission considers that monetary policy alone, which is an ECB competence, is not sufficient to achieve sustainable growth and price stability. The euro area economy should also be supported by a mix of growth—friendly structural reforms and by appropriately-differentiated fiscal policy. This is all the more important as the European economy, while continuing to expand, has entered a period of more subdued growth. This is linked to the less-supportive external environment, ongoing structural shifts and high uncertainty, for instance regarding trade policies. Let me make specific reference to a couple of points in the report that are relevant to the Commission’s political agenda. First, the Commission has made the transition to a climate—neutral economy a priority with the European Green Deal. The European Green Deal will make consistent use of several policy levers: regulation and standardisation, investment and innovation, national reforms, dialogue with social partners and international cooperation. In the context of the European Green Deal, we agree with the ECB’s conclusion that climate—change—related financial stability risks hold the potential to become systemic for the euro area, in particular if markets are not pricing these risks correctly. We will soon launch a consultation on the next steps on the sustainable finance agenda. Our aim is to develop a renewed sustainable finance strategy by early autumn which, among other things, will aim to improve the way climate and environmental risks are managed and integrated into the financial system. We will also establish the EU Green Bond standard and explore how it can increase public and private finance for sustainable investments. The review of our own economic governance framework will, just like the ECB strategic review, look into the effectiveness of our rules in delivering on its key objectives. Debt sustainability remains important, as financial stability is a pre-condition for growth and job creation. But we will also encourage broad debate on the framework in order to make it more efficient. Second, we welcome the call for swift completion of the Capital Markets Union and the Banking Union, including setting up a European deposit insurance scheme. A strong monetary union is key to fostering the international role of the euro. In this respect, we welcome Parliament’s encouragement to work with the ECB and all relevant stakeholders on those projects. The Commission has started technical work on crisis management and insolvency law. This is an important avenue to be further considered to complete our crisis management framework and help make progress towards a steady—state Banking Union. Third, I would like to underline the importance of our work on payments and crypto-assets. I would like to thank the ECB for their crucial work on payment infrastructure. This is essential to make instant payments in Europe a reality. I also welcome that the ECB and other central banks are looking at the potential of central bank digital currency and are engaging with European payment actors to bring about faster, more efficient and cheaper payments. I have no doubt that today’s debate will be very fruitful, and I trust that you will confirm the constructive engagement that has developed between the European Parliament and the ECB over the past years.