03 March 2014

Introductory statement by ECB/Draghi at the ECON Committee hearing

Draghi appeared in front of the ECON Committee to discuss Banking Union and inflation. He presented the ECB's assessment of the challenges that lie ahead for the new Parliament/Commission and cautioned against complacency, saying it was "too early to claim mission accomplished".

The next five years ahead – towards completing the Union

I have no doubt that from July on the next parliament will continue to assume the important role this house has played in the last legislature. The challenges that still lie ahead of us are too important and too complex to indulge in complacency. It is too early to claim “mission accomplished”.

People in the euro area are still suffering from the inevitable adjustment process following years of accumulated imbalances. Unemployment remains unacceptably high. Citizens are judging Europe on its capacity to deliver jobs and sustainable growth. The years to come are about creating a more perfect union that caters to these objectives.

Foremost, this means delivering on commitments made in the past. Member States need to keep their promises to correct imbalances and to reform the structure of their economies. Fiscal policies have to be brought in line with the provisions of the Stability and Growth Pact and of the Fiscal Compact. Fiscal consolidation should be designed in a growth friendly manner while structural reforms will boost potential growth.

This concerns all Member States, not just those who looked at some point into the abyss of losing market access. This concerns also the European institutions. They have to ensure that common rules are thoroughly and evenly applied.

Delivering on past commitments also means keeping the promise made by Heads of States or Governments in June 2012 to complete banking union. It means swift transposition of agreed directives into national law and a stringent application of the adopted regulatory framework. It also means that a strong second pillar of banking union, a Single Resolution Mechanism, needs to be agreed before the end of this legislature.

Creating a more perfect union also requires filling the remaining gaps in the architecture of Economic and Monetary Union. A genuine and comprehensive Economic and Monetary Union as outlined in the Four Presidents Report should still remain our long-term objective.

This does not mean pushing integration as far as we can. This is neither economically necessary nor politically realistic. It means aligning economic governance and policies of Member States where appropriate to ensure that positive spillovers are enforced while negative externalities are minimised. Sharing sovereignty in crucial policy areas is certainly one way to accomplish this.

It is not for a central bank to prescribe solutions. This is a political prerogative. But it is my hope both as a central banker and as a European citizen that the upcoming electoral campaign will serve as an opportunity to engage in a debate on solutions for Europe’s common way forward.

Full statement

See also: ECON Committee: Eurozone has come far, but strong Banking Union still needed, Draghi tells MEPs

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