Speaking at the EP plenary session and ahead of the Eurozone summit, Barroso stressed that the EC is focused on two main strands for reflection and action - the reassessment of the rules for economic governance, including the Stability and Growth Pact, and the financial markets reform.
He sees two main strands for reflection and action: first, a reassessment of the rules for economic governance, including the Stability and Growth Pact, and second, financial markets reform.
The Commission has been working intensively on economic governance and is ready to present its proposals on how to improve it next Wednesday.
There are three main building blocks to be considered:
· First, responsibility: The Stability and Growth Pact has to be reinforced – and above all Member States' compliance. The case for reinforcement of both the preventive and the corrective arm of the pact is obvious.
· Second, interdependence: the crisis has clearly shown that EU needs to address the imbalances between our Member States, in particular within the Euro area. This includes divergences in their competitiveness, as this is one crucial element that causes other types of imbalances. This can of course not mean that some become less competitive so that others look relatively more competitive.
· Third, coherence: the Commission has to see whether its system of fiscal rules is complete.
He would also like early agreement on effective new European supervisory arrangements. The European Systemic Risk Board and the three Supervisory Authorities should start working at the beginning of 2011. But they must not be mere paper tigers: we have a shared responsibility to ensure they have the tools they need to do their jobs. This includes binding decision-making powers to deal with genuine emergencies, to enforce European rules, and I insist European rues, not only national rules, and settle any disputes within colleges of national supervisors.
On Credit Rating Agencies he said that they play a pivotal role in the functioning of financial markets. But ratings appear to be too cyclical, too reliant on the general market mood rather than on fundamentals - regardless of whether market mood is too optimistic or too pessimistic. Because credit rating agencies have such a key role and influence over the markets, they also have a special responsibility to ensure their assessments are both sound and comprehensive.
That is why in 2008 the Commission quickly put forward new legislation for these agencies, which will come into force in the next few months. These rules will ensure that credit rating agencies act more transparently, publish their methodologies, and avoid conflicts of interest.
The Commission will do whatever necessary to ensure that financial markets are not a playground for speculation. Free markets constitute the basis for the functioning of successful economies. But free markets need rules and compliance, and rules and compliance need to be tightened if irresponsible behaviour puts at risk what cannot and should not be at risk.
© European Commission
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article