Activities of Luis GARICANO related to 2020/2037(INI)
Shadow reports (1)
REPORT on strengthening the international role of the euro
Amendments (29)
Amendment 1 #
Motion for a resolution
Citation 1 a (new)
Citation 1 a (new)
— having regard to the Commission Communication of 6 December 2017 entitled ‘New budgetary instruments for a stable euro area within the Union framework’
Amendment 3 #
Motion for a resolution
Citation 4 a (new)
Citation 4 a (new)
— having regard to the Commission Implementing Decision (EU) 2020/1308 of 21 September 2020, notably its recitals (5) and (6)
Amendment 5 #
Motion for a resolution
Citation 5 a (new)
Citation 5 a (new)
— having regard to its resolution of 12 April 2016 on the EU role in the framework of international financial, monetary and regulatory institutions and bodies
Amendment 6 #
Motion for a resolution
Citation 7 a (new)
Citation 7 a (new)
— having regard to its resolution of 13 November 2020 on the Sustainable Europe Investment Plan - How to finance the Green Deal
Amendment 19 #
Motion for a resolution
Recital B
Recital B
B. whereas despite the euro area’s economic size and influence in global trade, the use of the euro lags behind the US dollar by a wide margin in terms of its use as international reserve currency, invoicing currency and share of international foreign exchange transactions and debt securities, yet it is still ahead of all other competing currencies;
Amendment 25 #
Motion for a resolution
Recital C
Recital C
C. whereas current geopolitical tensions and international trade challenges – including the disruption of value chains, technological developments, digital transformation, the rise of China’s economic power and the challenges posed by the US torecent divergence between the US interests and multilateralism – lead to a multipolar world economy, thus paving the way for a potential shift towards a multicurrency reserve system where the euro will offer additional currency choices for market participants globally and allow for reduced global financial risks;
Amendment 46 #
Motion for a resolution
Recital F
Recital F
F. whereas Brexit brings structural changes to the EU financial system and its stability, intensifying the need to continue developing the EU’s capital markets, to avoid market fragmentation and to maintain a global and cooperative mindset, while consolidating its emerging polycentric financial and capital market system; whereas scaling down of the reliance on United Kingdom market infrastructures is paramount to strengthening the international role of the euro;
Amendment 54 #
Motion for a resolution
Recital H
Recital H
H. whereas post-pandemic economic recovery requires the fast implementation of the EU recovery plan, which will address structural weaknesses and put in place policies to enhance growth and competitiveness; whereas such policies are paramount both to enhancing the attractiveness of the euro globally and to strengthening Europe’s economic and financial autonomy; whereas a meaningful fiscal stimulus, in conjunction with a monetary one – including a joint European effort –, will reinforce EU counter- cyclical lending capacities and consequently have a positive effect on the international position of the euro; whereas the premature withdrawal of fiscal stimulus and the lack of coordination of fiscal action can undermine the attractiveness of the euro as an international currency;
Amendment 63 #
Motion for a resolution
Recital I
Recital I
I. whereas new powers to issue recovery debt, including green and social bonds – which make the EU the world’s biggest issuer of such debt –, require adequate implementation and enforcement capacities so as to avoid undermining the long-term credibility of the euro as a safe asset currency;
Amendment 68 #
Motion for a resolution
Recital J
Recital J
J. whereas while the wider use of an international currency bears privileges and gainadvantages, it also implies global responsibilities, dependencies and costs;
Amendment 76 #
Motion for a resolution
Recital K
Recital K
K. whereas market-driven shifts towards strengthening the international role of the euro require a strong commitment to open and free international markets, reinforced by targeted facilitating policies that are aligned with this objective and that are part of a comprehensive road map;
Amendment 86 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Considers that strengthening the international role of the euro can generate benefits both in the short and long term; notes, however, that it also brings risks and responsibilities that must be taken into consideration in the process of complementing market forces with policy measures; underlines, in particular, that the international currency status of the euro can enhance monetary policy autonomy and reinforce its global transmission, make the euro more of an attractive investmentnder the EU monetary policy less dependent on the US-driven global financial cycle, make the euro more of an attractive currency (in terms of its use as international reserve, invoicing and share of international foreign exchange transactions and debt denomination), improve the liquidity of the monetary system, enhancing market efficiency, reducing trading and funding costs and enhancing the euro area’s resilience to financial shocks, and provide "exorbitant privilege" and lower exchange rate pass- through.
Amendment 104 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Stresses that the EU’s capacity to make the euro a widely used currency in international trade able to compete with the US dollar’s dominance, also depends on the development of strong domestic markets. Reiterates, in this context, the need to deepen and complete the Economic and Monetary Union (EMU), the Banking Union and the Capital Markets Union (CMU), with a view to enhancing the international competitiveness of European markets and the attractiveness of the euro; and ultimately the Union’s strategic autonomy; welcomes in this regard the agreement reached in the Eurogroup on the reform of the European Stability Mechanism which will play a greater role in managing the macroeconomic crisis in the euro area and will be the lender of last resort for the Single Resolution Fund.
Amendment 105 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Reiterates, in this context, the need to deepen and complete the Economic and Monetary Union (EMU), the Banking Union and the Capital Markets Union (CMU), with a view to enhancing the international competitiveness of European markets and the attractiveness of the euroincluding by advancing the Banking Union through the creation of a “safe portfolio” approach and the empowerment of the Single Resolution Board through the reform of the resolution framework and setting up a European deposit insurance, with a view to develop a single market for European banks and break the “diabolic” feedback loop between Member States and its own financial system, hence increasing the attractiveness of euro-denominated assets;
Amendment 117 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Underlines that making more progress in developing the Capital Markets Union (CMU) would increase both resilience to and independence from global developments and the attractiveness of euro-denominated assets; deplores the segmentation of the euro area’s capital markets along national lines, which has resulted in small-sized markets; considers Brexit, in that regard, as both challenge and opportunity;
Amendment 121 #
Motion for a resolution
Paragraph 4 a (new)
Paragraph 4 a (new)
4a. Emphasises that a stronger euro at international level will strengthen the resilience of the international financial system, offering greater choice to market participants around the world and making the international economy less vulnerable to shocks related to the heavy dependence of many sectors on a single currency.
Amendment 132 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Emphasises the need for sustainacredible and sound fiscal and structural growth- enhancing policies that are based on a commitment to credible fiscal rules; calls for further reflection on the adequacy of the current stability and growth pact framework despite the challenging circumstancesin light of the challenging circumstances and the legacy issues that tackling the economic crisis derived from the Covid-19 pandemic will leave for decades to come; believes in the need for a credible fiscal framework that reinforces the euro’s attractiveness by promoting structural growth, ensuring stability to improve the sustainability of Member States finances, and minimizing redenomination risk; supports the plan outlined in Next Generation EU to use, in addition to monetary policy, a fiscal impulse, notably borrowing EUR 750 billion from capital markets bonds to finance the recovery and green transition, in addition to the issuance of EUR 100 billion in ‘social’ bonds under the European instrument for temporary support to mitigate unemployment risks in an emergency (SURE), which is intended to preserve employment; applauds the high level of interest that investors have demonstrated in European bonds;
Amendment 139 #
Motion for a resolution
Paragraph 5 a (new)
Paragraph 5 a (new)
5a. Recall that making the Union the global leader and standard-setter in Green finance will strengthen the role of the euro on the international scene; Further stresses that the Commission’s decision to issue green bonds to finance the green part of the recovery plan will make it become the wold largest issuer of green bonds and thus will participate to strengthening the international role of the euro
Amendment 146 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Highlights that an adequate supply of safe assets is a precondition for international currency status, and expresses its regret atunderlines the limited availability of euro- denominated safe assets; underlinWelcomes, therefore, the need to create European safe assets; considers that the proposed issuance of a decision to issue European common debt to finance the economic recovery, as it will provide an EU-level reserve asset benchmark and increase the supply of euro-denominated safe assets; expects the ECB to conduct an assessment of the possibility of issuing certificates of deposit under its existing legal basis; welcomes, in this context, the issuance of EUR 750 billion from capital markets bonds under the Next Generation EU plan to finance the recovery and green transition, in addition to the issuance of EUR 100billion in ‘social’ bonds under the European instrument for temporary support to mitigate unemployment risks in an emergency (SURE), which is intended to preserve employment; calls on the ESRB to update its 2018 “Report of the High-Level Task Force on Safe Assets” and for the Commission to re-evaluate its2018 impact assessment on its “Proposal for a Regulation on sovereign bond-backed securities” (SBBS);
Amendment 153 #
Motion for a resolution
Paragraph 6 a (new)
Paragraph 6 a (new)
6a. Warns, despite the high level of interest that investors have demonstrated in European bonds, about potential negative liquidity effects that may arise as a result of the fragmentation of the European safe assets between green bonds, social bonds and “standard” bonds; acknowledges, nevertheless, the leading role of the euro as the main currency of denomination for the issuance of green bonds; considers that the consolidation of the EU role as a global hub for green finance could strengthen the euro as the currency of choice for sustainable financial products, bolstering its international role;
Amendment 160 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Takes note of the role geopolitics plays in global currency competition; underlines that, given the centrality of US dollar in international trade and as a reserve currency, the extraterritoriality of US laws seriously affects European companies and ultimately challenges the EU’s and its Member States’ sovereignty; insists that promoting a greater role for the euro in the international financial system constitutes a way to circumvent the power of US sanctions; welcomes in this regard measures already taken by the EU such as the activation of the EU’s “blocking statute” (Council Regulation (EC) No 2271/96 of 22 November 1996), the establishment of the INSTEX mechanism, as well as the initiative taken by 16 European banks to launch the European Payment Initiative which aims at creating a unified payment solution for consumers and merchants across Europe.
Amendment 161 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Takes note of the role geopolitics plays in global currency competition; acknowledges the persistence of the dollar’s hegemony as a medium of exchange, unit of account and store of value by, inter alia, the power to change the perceived costs and benefits of the available options through force, payment or persuasion, the ability to shape the structure of interaction through rules that modify the options of governments and private actors like the imposition of unilateral sanctions or by threatening trade retaliation; calls for the strengthening of the geopolitical role of the EU, in order to support, while taking full advantage, of a strengthened role of the euro
Amendment 170 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Is concerned that EMU’s lack of ability to speak as a unified voice withe EU’s fragmented institutional setting and resulting lack of ability to speak as a unified voice may undermine the credibility of EU’s monetary and fiscal policies, holding back the international institutions can hold back the international role of eurorole of euro; underlines the need to continue the fight against money laundering by setting up a European supervisor and financial intelligence unit, leaving behind the days of economic nationalism that motivates the current decentralised supervisory system; highlights the potential of integrating the European Stability Mechanism into the EU legal order, fostering the creation of a European Treasury to manage the nearly one trillion euros in European safe assets; regrets that discussions in the Council have remained at an impasse more than 3 years after the Commission’s 2017 proposal on the establishment of the European Monetary Fund;
Amendment 172 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Is concerned that EMU’s lack of ability to speak as a unified voice with international institutions can hold back the international role of euro; calls on the Commission and the Council to provide detailed answers on the actions undertaken to follow up on the Parliament’s proposals in its resolution of 12 April 2016 on the EU role in the framework of international financial, monetary and regulatory institutions and bodies;
Amendment 181 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Underlines that a strengthened international role of the euro would enhance the EU’s capability to enforce openwill contribute to the Union’s strategic autonomy ; recommends, therefore, actions intended to both design and implement policy measures that foster the international role of the euro and support market-driven shifts in this direction;
Amendment 202 #
Motion for a resolution
Paragraph 12 a (new)
Paragraph 12 a (new)
12a. Calls on further actions to support the development of euro-benchmarks for commodity markets, and reinforce the role of the euro as a reference currency;
Amendment 205 #
Motion for a resolution
Paragraph 12 b (new)
Paragraph 12 b (new)
12b. Calls on the industry to develop a clear process to reduce their exposures and reliance on UK CCPs that are systemically important for the Union, in particular for OTC derivative exposures that are denominated in euro and other Union currencies;
Amendment 211 #
Motion for a resolution
Paragraph 13
Paragraph 13
13. Stresses the role the ECB plays in maintaining trust in the euro and safeguarding monetary sovereignty; welcomes the prompt measures put in place by the ECB in order to cater for euro liquidity; underlines the prominence of swap arrangements and repo lines in enhancing the international role of the euro; Calls on the ECB to explore ways of strengthening the international role of the euro, as this would increase the EU’s ability to frame its policy stance independently vis-à-vis other global powers and is a key element in safeguarding European economic sovereignty; notes that making the euro more attractive as a reserve currency will further enhance its international use.
Amendment 228 #
Motion for a resolution
Paragraph 16 – subparagraph 1 (new)
Paragraph 16 – subparagraph 1 (new)
Stresses the need to create a euro-area budgetary capacity along with the role of a European Minister of Economy and Finance, in line with the Commission Communication of 6 December 2017.