ECB en Europarlement eens over hervormingen economisch bestuur (en)

The Economic and Monetary Affairs Committee's reshaping of the "six-pack" economic governance proposals has the broad backing of the European Central Bank, but lax fiscal policy loopholes should be closed wherever possible, ECB Vice-President Vitor Constancio told committee MEPs on Monday. Presenting the ECB's 2010 report, Mr Constancio also called for budget belt-tightening throughout the eurozone, especially in the bailout programme countries, where "drastic reforms" are needed.

Mr Constancio was cautiously upbeat about the EU's economic recovery prospects and reiterated that the ECB would maintain a watchful eye on inflation build-up.

Mr Constancio welcomed committee amendments to the economic governance proposals that had strengthened the Commission's role, toughened political and reputational sanctions, and ensured that these sanctions can take effect earlier. He warned however that moves to increase exemptions could undermine the application of the stability and growth pact.

MEPs asked Mr Constancio about developments in Greece, and particularly growing rumours that its debt could be rescheduled, about the exposure of banks to sovereign debt, and whether there were clear indications of how much risk the ECB was exposed to as a result of the bond-buying programmes and other such exceptional measures it had been forced to take in 2010.

Mr Constancio conceded that rumours that Greece might default would be difficult to quash, because some parties stood to gain from such a scenario, despite the "very bold measures taken". The ECB's risk exposure was alleviated by various factors, not least because it had bought bonds at discounted rates, he said, noting however that the ECB would need the bailout programmes to succeed for its purchases to be paid back. On banks' exposure to sovereign debt, Mr Constancio said that the upcoming bank stress tests will give considerable information to help analysts to understand the degree of exposure.

In the chair: Sharon Bowles ( ALDE , UK)