Europese Centrale Bank: "de crisis is nog niet voorbij" (en).

The euro area economy shows signs of stabilisation, but it would be premature to declare the crisis over, ECB President Jean-Claude Trichet i said told the Economics Committee on Monday. MEPs wanted to know how the proposed Systemic Risk Board would work and how to ensure the supply of credit to businesses.

"Now is not the time to exit", said Mr Trichet, speaking of the non-standard measures the ECB has been using to support the financial system, but he warned that it was not possible to maintain this strong intervention in the euro area money market for ever. “The ECB has an exit strategy and stands ready to put it into action when the appropriate time comes.”

As there are signs of stabilisation, the ECB is expecting to see in the months ahead "a very gradual recovery", but still, this expectation remains uncertain, Mr Trichet said, speaking at the first session of the quarterly "monetary dialogue" between the European Central Bank President and Parliament's Economic and Monetary Affairs Committee.

Powers of European Systemic Risk Board

Regarding the proposal to create a European Systemic Risk Board to warn of potential future crises ahead of time, Trichet said: "it is the right step to set up a body specifically responsible for the macro-prudential oversight at the European level."  The board would have close links with the ECB, he added.

MEPs including José Manuel Garcia Margallo (EPP, ES) and Wolfgang Klinz (ALDE, DE) asked for more details of the role and powers of this Board, and how it would ensure its recommendations are followed by Member States.  Mr Trichet said the role of the council would be to identify risks and give recommendations but not to decide in the place of other authorities: "We have a strong moral suasion but no substitution to other responsibilities," he stressed.

Inflationary risks

Jean-Paul Gauzes (EPP, FR) spoke of the risk of inflation in the USA. According to Mr Trichet, on both sides of the Atlantic there is a "great deal of agreement in terms of fact that failing in maintaining price stability would be destabilising". Of his own responsibilities, the ECB President said: "We will apply the Treaty (…) and guarantee price stability. You can count on us.”

Credit for small businesses

Antolin Sanchez Presedo (S&D, ES) was concerned about the situation of small businesses in the wake of the economic crisis, stressing that small and medium enterprises are extremely important in creating jobs.  "We are following very carefully what happens there," said the ECB President. He said that focussing the ECB’s ‘non-conventional’ measures on banks was in fact helping SMEs, as they relied principally on banks as a source of credit rather than being able to go direct to the markets.

Euro area enlargement 

Responding to questions on future eurozone enlargement and any possible change of the Maastricht criteria from MEPs including Slawomir Nitras (EPP, PL), George Sabin Cutas (S&D, RO) and Lajos Bokros (ECR, HU), Mr Trichet said that the enlargement of the zone "is not a closed chapter". "I think we should continue and we will continue (…) but you have the criteria and they have to be met," he stressed. "When we say we need to stick to criteria, we are only repeating what is said by the Commission and most countries concerned," Jean-Claude Trichet concluded.

28/09/2009

In the chair : Sharon Bowles (ALDE, UK)

Economic and Monetary Affairs Committee - monetary dialogue with the European Central Bank