MADRID (MNI) – European Central Bank Executive Board member Jose
Manuel Gonzalez-Paramo on Friday noted the downside risks for Eurozone
growth and stressed that monetary policy must maintain its focus on
delivering price stability.
However, he warned, in the text of a speech delivered here, that
monetary policy “cannot substitute for the need of governments and
private agents to deliver on their own responsibilities.”
On Thursday, the ECB’s Governing Council voted unanimously to cut
its main refinancing rate by 25 basis points, citing “intensified” risks
to growth and saying some of those risks were “materializing.” The
darker outlook, the Council said, will “very likely” lead to “a
significant downward revision to forecasts and projections for average
real GDP growth in 2012.”
Gonzalez-Paramo said it is of “paramount importance” that the EU
and Eurozone summit agreements reached on October 26-27 be implemented
“rigourously and quickly” in all their dimensions. The main
responsiblity for ending the crisis lies with the governments, he added.
Gonzalez-Paramo also stressed the need for a “fundamental deepening
of fiscal and economic policy surveillance” in the long term; called for
the strengthening of national and supranational institutions; and
suggested a possible Finance Ministry for the Eurozone in the future.
“At the euro area level this needs to be complemented by an
independent entity with a clear mandate and a strong institutional
framework to assess the implementation of fiscal rules,” he said.
“For instance, some form of European Budget Office or ‘EBO,’ which
could potentially form the nucleus of what could become over time, and
in a gradual manner, a European Ministry of Finance,” he said.
— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —
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