Monday, 30 July 2012

ECB calls for “further sharing of sovereignty"

EU Observer reports that a member of the board of the European Central Bank, Jörg Asmussen, has said that euro-zone states need to give up more sovereignty in order to fix the construction flaws of the euro, with the bail-out fund possibly turning into a budget authority further down the road. “We have construction mistakes of Economic and Monetary Union, and it is time to correct them. It is clear that the core of the current debate has a name: further sharing of sovereignty,” he said.
Part of the vision—which the ECB is shaping in a report drafted by Herman van Rompuy—is a cap on how much debt countries can issue, intervention in national budgets, and fiscal corrections imposed if a country deviates from the deficit and debt limits imposed in the euro zone. A common budgetary authority could also be formed, Asmussen said, with the forthcoming ESM a “starting-point.”
“The ESM is a fiscal authority by definition, because it deals with taxpayers’ money,” he explained, adding that it would have to be put under the scrutiny of the European Parliament—or a subdivision of it, pooling members from euro-zone countries only. The ESM is yet to be set up, pending a ruling of the Constitutional Court in Germany, due on 12 September, and in Ireland the outcome of Thomas Pringle’s appeal to the Supreme Court.
Under the existing rules the Parliament has no say over the ESM. Asmussen said this needed to change and that the ECB itself should be under more scrutiny from the EU Parliament, as it will acquire new supervisory powers over banks in the euro area. “Deeper euro-area integration can only be sustainable if there is progress on democratic legitimacy.
And it should not be only the ECB continuously emphasising it,” he said, adding that already national parliaments could be involved more, so that they “internalise” what it means to be an economic union.
Asked if he thought all present euro members were “willing and able” to go this path of further concessions of sovereignty, he said it was “worth fighting for,” and that majorities in those countries needed to be convinced that it is the only way to achieve prosperity.
Asmussen, a former official of the German ministry of finance, also defended the sometimes criticised stance of the ECB when giving advice to politicians on how to change the structure of the euro zone. “It is clearly not beyond our mandate. If we can’t answer where we want to be ten years from now, no-one will buy a ten-year bond from us, and that is very much an issue for the ECB,” he said.


  1. That sounds like more financial trouble for an former classmate of mine who's moving to france soon. And just when she wanted to start afresh with a startup business in some rural part of the country...

    Fregard Mosform

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