The European Parliament adopted by 265 votes to 79, with 37 abstentions, a resolution on the European central Bank Annual Report for 2012.
Monetary policy: Parliament welcomed the bold measures taken by the ECB in 2012, which have contributed in a decisive manner to stabilising the banking sector and helping to sever the link between the banks and the sovereign. However, it was deeply concerned at the fact that persistently weak economic conditions are becoming the norm in parts of the EU, creating instability for the eurozone as a whole and threatening the popular and political support for the whole European project.
It believed that the positive effects of the decisions of July 2012 to reduce the key ECB interest rates were limited, and recalled that, in the long term, very low interest rates may cause distortions in the business sector and harm private savings and pension plans.
Parliament considers that the three-year long-term refinancing operations (LTRO) undertaken in March 2012 contributed to stabilising the banking system, but that this should be a temporary measure. It is deeply concerned about the transfer of risks from struggling banks and governments onto the ECB’s balance sheet as a result of the ECB’s decision to buy ‘unlimited’ amounts of short-term government debt.
The resolution considered that the monetary policy tools that the ECB had used since the beginning of the crisis, while providing a welcome relief in distressed financial markets, had revealed their limits as regards stimulating growth and improving the situation on the labour market. The ECB should explore further measures.
Pointing out that at present similar SMEs from across the eurozone do not have similar access to loans, Members asked that the ECB take very seriously into account the possibility of launching a specific programme to help SMEs access credit.
Parliament recalled that the non-standard monetary policy measures of the ECB were intended to be of transitory nature and should, therefore, in no way be regarded by the banking sector as a permanent instrument. It was concerned about the significantly high levels of Emergency Liquidity Assistance (ELA) lines provided by national central banks in the course of 2011.
Parliament encouraged the ECB to (i) send clear signals to the market with regard to the estimated period of activation of its quantitative easing policy measures; (ii) start phasing out such measures as soon as the tension in the banking sector is diminished, as soon as the link between the banks and the sovereign can be severed, and as soon as the economic indicators related to growth and inflation justify such a decision.
Members recalled that the conduct of monetary policy should be democratic and should result from deliberation between different viewpoints in order that transparency may be strengthened. They recalled, in this respect, the importance of the monetary dialogue and of the written questions submitted by MEPs.
Banking union: Parliament noted that the European banking system was still fragile and needed to be reformed in structural terms and consolidated through the development of a true banking union. It welcomed the progress achieved on the Single Supervisory Mechanism (SSM) which should contribute to restoring confidence in the banking sector and to reviving interbank lending and cross-border credit flows through independent integrated supervision for all participating Member States. It also suggested that the ECB should welcome the possibility of involving non-eurozone Member States in the SSM to ensure a greater harmonisation of supervisory practices within the EU.
The resolution drew attention to the need for:
Institutional questions: Members pointed out that the Regulation on the SSM provides for interinstitutional arrangements between the European Parliament and the ECB on democratic accountability. They urged the ECB to meet the new requirements, in particular in terms of democratic accountability and transparency in its supervisory activities. The ECB was invited to publish
the summary minutes of the Governing Council meetings, including arguments and voting records;
Lastly, concerned at the contempt shown by the Council towards Parliament’s resolution of 25 October 2012 on the appointment of a new Member of the executive board of the ECB, Parliament felt that the EU institutions, including the ECB, should lead by example in the field of gender balance and that it was essential that the gender representation among leading positions within the ECB be improved.