BRUSSELS (MNI) – The following is the first part of a verbatim text
of the introductory statement by European Central Bank Governing Council
member Mario Draghi in his testimony to European Parliament regarding
his candidacy for the ECB presidency.
The text was provided by the Bank of Italy, which Draghi heads.
“I am honoured to appear before your Committee for this hearing,
which is part of the process of my nomination to the Presidency of the
ECB.
I trust you have read my CV. What I want to emphasize about my
record are my professional experience in financial matters and as a
central banker, and my long-standing commitment to the cause of the
European construction.
I have served as a member of the Governing Council and the General
Council of the European Central Bank since 2006, in my capacity as
Governor of the Bank of Italy. I believe that we have been able to
deliver very positive results, although we were faced with exceptionally
difficult challenges.
I also took part in many of the decisions leading to the birth of
the euro. In 1991, in my capacity as Director General of the Italian
Treasury, I headed the Italian delegation negotiating the Maastricht
Treaty. Subsequently, I was actively involved in many of the steps that
were essential in ensuring Italy’s adoption of the euro, particularly
the ambitious fiscal adjustment that took place in the 1990s.
I have gained considerable experience in prominent European and
international fora. Here, let me just mention that since April 2006 I
have been Chairman of the Financial Stability Forum, which became the
Financial Stability Board (FSB) in 2009. The FSB, which brings together
national and international authorities responsible for financial
stability and international standard-setting bodies, coordinates the
work to develop and promote the implementation of effective regulatory
supervisory and other financial sector policies.
The more detailed information in my CV further clarifies my
long-standing professional and academic experience in economic, monetary
and banking matters.
Today, I would like to concentrate my introductory comments on my
assessment of the experience with EMU and on the main challenges that I
believe lie in front of us.
Let me first of all say that I am honoured to be considered as a
candidate for the Presidency of the ECB, because I believe that EMU,
with the euro at its centre, has been a great success, a success that
should be preserved for the sake of all the citizens of Europe. Let me
state that none of the recent events, including the global crisis, call
this fact into question.
The euro has established itself as a credible and strong
international currency, trade among the euro-area countries has been
fostered, financial integration has been given an enormous boost. Price
stability is now rooted in the conduct of economic agents: in the twelve
years of the euro, annual inflation in the area has averaged just under
2 per cent, fully in line with the definition of price stability adopted
by the Governing Council of the European Central Bank (ECB). This
achievement is noteworthy, considering the headwinds the euro area had
to weather, including substantial increases in oil and other commodity
prices and the financial crisis.
Thanks to the credibility gained over the years, the Eurosystem was
able to keep inflation expectations steady during the crisis and to act
with the speed and flexibility demanded by extraordinary circumstances.
Without EMU, the response of the different monetary policies could not
have been so rapid and decisive: it would have been practically
impossible to achieve a similar level of coordination in the monetary
field.
This credibility must be preserved and I am fully committed to
doing so. I believe its roots lie in the independence that the Treaty
grants to the ECB to pursue its mandate of maintaining price stability.
I also firmly believe that, as a counterpart of its independence,
the ECB must ensure that in the exercise of its responsibilities there
is the highest degree of transparency and accountability, first and
foremost towards the citizens and their elected representatives in the
European Parliament. I look forward to pursuing a fruitful, frank and
open dialogue with your institution.
We need responsible behaviour and decisions by all the parties
involved, in the monetary, financial stability and economic fields.
Starting with monetary policy, it is of the utmost importance to
recall that the credibility we have earned will not necessarily last
forever; it cannot be taken for granted.
An important challenge for the ECB is to manage the exit from the
still very accommodative monetary policy stance and the phasing-out of
the remaining non-standard measures. The measures adopted by the ECB
were crucial to restoring orderly conditions on interbank markets,
containing risk premia, and preserving credit flows to the economy in
the worst phases of the crisis. We have avoided the collapse of the
financial system, supported the functioning of the transmission of
monetary policy to the economy and, ultimately, ensured price stability,
thereby supporting the European economy. However, these measures are by
their nature temporary.
There have been a number of signs of normalisation in money
markets and in the access to market-based financing by most banks in the
euro area; the recourse to Eurosystem operations has declined. At the
same time, concern about the sustainability of the public finances in
some euro-area countries has led to strains in a number of banking
sectors and a small number of institutions remain reliant on central
bank liquidity, accounting for a substantial share of the overall
refinancing volumes.
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