FRANKFURT (MNI) – The European Council’s proposals for reforming
the fiscal Stability Pact could have been more far-reaching, Bundesbank
Board member Andreas Dombret said Tuesday.
Debt and deficit rules must be toughened to ensure their
enforcement, the central banker said in remarks prepared for delivery at
the Euro Finance Week here.
Restoring the sustainability of public finances is “key in the
quest for a sustainable growth path — across the world, but
particularly within the euro area,” Dombret said.
“With the Stability and Growth Pact (SGP), and especially its debt
criterion, the euro area already possesses the right instrument. Yet,
implementation has been slack to date,” he explained.
“The SGPs rules need to be tightened — in its preventive arm as
well as in its corrective arm — and measures must be taken to ensure
that member states abide by them,” he urged.
Recent proposals to reform the SGP adopted by the Council at the
end of October “would be an improvement compared to the status quo,”
Dombret assured.
“However, a firm establishment is still to come and, judging from
past experience, we would have wished for more far-reaching
suggestions,” he argued.
“Although the crisis is not over yet, making 2010 the fourth year
of the crisis, the recovery of the global economy got underway in spring
2009 and remains on track,” he said.
–Frankfurt bureau; +49-69-720142, frankfurt@marketnews.com
[TOPICS: M$G$$$,M$EC$$,MFX$$$,MGX$$$]
