Activities of Bas EICKHOUT related to 2023/2064(INI)
Plenary speeches (1)
European Central Bank – annual report 2023 (debate)
Shadow reports (1)
REPORT on the European Central Bank – annual report 2023
Amendments (46)
Amendment 8 #
Motion for a resolution
Citation 6
Citation 6
– having regard to the monetary dialogues between its Committee on Economic and Monetary Affairs and President of the ECB Christine Lagarde of 20 March 2023 and 5 Junein 2023,
Amendment 21 #
Motion for a resolution
Recital B
Recital B
B. whereas, according to the JuneSeptember 2023 Eurosystem staff macroeconomic projections for the euro area, headline inflation is expected to average 5.46 % in 2023, 3.02 % in 2024 and 2.21 % in 2025, despite falling energy prices and easing supply bottlenecks; whereas core inflation has been more persistent, with an increase to 5.5 % in June 2023, and is projected to overtake headline inflation in the near term and to remain above it until early 2024, mainly owing to strong wage growth;
Amendment 35 #
Motion for a resolution
Recital E
Recital E
E. whereas the ECB’s primary objective is to maintain price stability, which it has defined as 2 % inflation over the medium term; whereas the ECB´s secondary mandate requires it, without prejudice to its primary mandate, to support the general economic policies of the Union as laid down in Article 3 TEU;
Amendment 39 #
Motion for a resolution
Recital F
Recital F
F. whereas Article 123 TFEU and Article 21 of the Statute of the ESCB and of the ECB prohibit the monetary financing of governments; whereas the Court of Justice of the European Union has ruled (C-493/17) that ECB´s secondary market operations fall within its mandate, if the principle of proportionality is observed;
Amendment 55 #
Motion for a resolution
Paragraph 2
Paragraph 2
2. Underlines that price stability is a prerequisite for the ECB to deliver on its mandate to support the EU’s general economic policies, such as the green and digital transitions; stresses that price stability is essential for attracting long term investments; insists that where multiple courses of action are available in the pursuit of its primary mandate, the ECB shall opt for policies that minimise adverse effects on its secondary mandate;
Amendment 62 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Fears that, without properly delivering on itif the ECB increases the financing costs for EU citizens mandate of mainta governments without this bringing price stabilityinflation to target in a timely manner, the ECB risks losing its legitimacy;
Amendment 69 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Is deeply worried about the persistently high inflation rates, especially core inflation rates, and their detrimental impact on competitiveness, investments, job creation andand their detrimental impact on the purchasing power of consumers;
Amendment 76 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Expresses concern about the high levels of debt and government deficits within the Member States and the risks that this entails; notes that the situation is worse in the euro areaLooks forward to the outcome of the Commission’s legislative proposals on revising the EU’s economic governance rules and takes note of the ECB’s opinion; in this regard; notes that the average of euro area sovereign debt at around 90 percent is low in global comparison, and has proven to be sustainable in recent years, thanks in non-euro area Member States; looks forward to the outcome of the Commission’s legislative proposals on revising the EU’s economic governance rupart to adequate monetary-fiscal coordination; reiterates the need for a central euro area fiscal capacity to match the ECB’s single monetary policy, invest in common EU priorities, smooth the economic cycles, and welcomes the ECB’s opinion in this regard; reduce pressure on national budgets;
Amendment 85 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Regrets Russia’s ongoing aggression against Ukraine; agrees with member of the Executive Board Isabel Schnabel on the risk the war entails in terms ofnd the ongoing negative supply side shocks this entails;
Amendment 90 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Highlights that not only do persistent high levels of inflation, the ongoing war in Ukraine and the broader macroeconomic picture is shifting due to multiple reasons, whigch levels of debt in the Member States threaten the competitiveness of the European economy, and thus the international role of the euro as well, but also the upward price pressure followingie outside of the responsibility of the ECB, including but not limited to the economic effects of climate change and biodiversity loss, the implementation of the European Green Deal, the rise of fragmentation and protectionism in global trade, and an impending subsidy race between states; underscores, in this context, the need for caution in view of limited information about the future and the ability of economic models to capture it;
Amendment 100 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Echoes President Lagarde’s warning that fiscal support should be targeted and limited and should not hinder the task of monetary policy; calls on Member States to urgently phase out subsidies that run counter to the goal of reducing energy consumption, in particular with regard to fossil fuels; notes that the jury is out on the ultimate effect of such measures, which according to a recent IMF study were more successfully than first assumed in reducing inflation;1a points out that governments, as well as the Commission, can support citizens and industries not only through fiscal measures, but also by focusing on growth-enhancing reforms; _________________ 1a https://www.imf.org/en/Publications/WP/I ssues/2023/08/31/Unconventional-Fiscal- Policy-in-Times-of-High-Inflation- 537454
Amendment 113 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Welcomes the ECB’s support for a well thought out completion of the banking union and the capital markets union; recalls that this would contribute to a larger spread of risks within and the enhanced financial stability of the monetary union; in this context emphasises the importance of a European safe asset for the completion of CMU;
Amendment 118 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Notes that headline inflation has come down from 8.4 % in 2022 to 5.4 % in 2023, mainly driven by lower energy prices and the easing of supply bottlenecks; observes, however, that inflation remains well above the target level of 2 %; is concerned about second-round effects;
Amendment 126 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Expresses its uneasiness with the persistently high rate of core inflation; understands that wage growth is expected to remain more than double its historical average, driven by inflation compensation and the tight labour market; encourages the ECB, furthermore, to look into and report on the inflationary effect of the green transitionNotes that core inflation will take longer to come down, given that it is mainly kept high by the indirect and therefore delayed effects of the pass- through of the energy price shock; highlights a marked acceleration in the decrease of core inflation in September 2023; is concerned that wage growth continues to be below the cumulative inflation of the recent years, while price- setters are making use of excessive market power to drive up prices leading to much higher contribution of profit margins to inflation, encourages the ECB, furthermore, to look into and report on the inflationary effect of the physical effects of climate change and biodiversity loss, as ECB research has, among other things, concluded that extreme weather events have a statistically significant impact on inflation, and global warming will contribute to higher food and headline inflation in the decades to come, leading the ECB to conclude that climate change will put price stability at risk;
Amendment 130 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. Points out that inflation already began rising above target levels in 2021, thus before Russia’s unprovoked aggress as a result of premeditated reductions in Ukraine; deplores, however, that the ECB only started to tackle inflation in June 2022, even though the COVID-19 crisis the supply of natural gas from Russia, leading up to Russia’s unprovoked that it is able to act in a timely manner; notes that other central banks acted more promptlyaggression in Ukraine;
Amendment 135 #
Motion for a resolution
Paragraph 12 a (new)
Paragraph 12 a (new)
12a. Emphasises that higher interest rates impact inflation by reducing aggregate demand when the economy is ‘running hot’; highlights that consumption remains below pre-pandemic levels, while employment, hours worked, and productivity all rose; concludes that this calls into question how strong the demand component in the currently high inflation levels can be, making higher interest rates to further limit demand counterproductive, notably when it comes to the investments required to overcome supply bottlenecks in energy generation in particular, which become costlier as a result; welcomes repeated acknowledgements by the ECB that raising interest rates will not bring down energy prices nor will it impact inflation in the short term; is in this regard concerned that higher interest rates hit disproportionately hard on green investments vis-á-vis non-green investments, because of a different capital structure, which can delay the green transition; similarly notes that in addition to the increased cost of living, citizens will also have to shoulder an increased cost of money as a result of higher ECB interest rates, which is why central banks do not normally respond to supply shocks by an increase in interest rates;
Amendment 138 #
Motion for a resolution
Paragraph 13
Paragraph 13
13. Fully supportNotes President Lagarde’s statementdetermination on fighting inflation for as long as necessary; applauds President Lagarde’s plea for humility and to regularly update the ECB’s models; invites the ECB, however, to fundamentally review its models and their role in its policymaking; in view of the damage the higher financing costs are inflicting on the economy, including to green investments and the purchasing power of lower income households, in addition to the costly and disruptive energy price shock;
Amendment 148 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. TrusExpects that when the ECB will deliver on its mandate to safeguard price stability; notes that real interest rates are still negativdoes not have the right tools at its disposal to fight a supply shock, it will not use the tools it does have at its disposal to impoverish aggregate demand by so much as to compensate for the energy price shock; notes that real interest rates are still negative only for those businesses and consumers who took out loans before the inflationary surge;
Amendment 158 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Notes the inflation target level of 2 % in the medium term; observes that inflation has, thus far, either been well below or far above this target level; questions the scientific evidence for this 2 % target level, as well as the meaning of ‘medium term’; invites the ECB to look into a more qualitative approach to price stability as well as the use of a medium- term average in its definition;
Amendment 160 #
Motion for a resolution
Paragraph 15 a (new)
Paragraph 15 a (new)
15a. 15.a Expresses alarm at the fact that the ECB is projected to send an estimated 146 billion euro in risk-free profits to commercial banks, an amount almost equivalent to the EU’s annual budget, as a result of the increased deposit rate in combination with the presence of excess reserves; questions the democratic legitimacy of this large scale wealth transfer from the public to the private banks and their shareholders, as well as its characterisation as a so-called side effect of monetary policy; calls on the ECB to adapt its policies urgently in order to stop these outflows; to this end suggests to increase unremunerated minimum reserve requirements, reverse tiering, or quota systems remunerating reserves up to a threshold as possible alternatives; notes that these are indeed public funds since the ECB normally channels profits to national central banks and on to national treasuries;
Amendment 162 #
16. SupportsNotes that the ECB’s decision to scale back its asset-purchasing programmes, in view of the excess liquidity in the market, has been managed without causing market turmoil; notes the ECB’s announcement to decarbonise its corporate bond holdings by ‘tilting’ its portfolio; stresses the importance of the quality of the collateraluggests this tilting will no longer be possible via reinvestments given that the ECB is ceasing such reinvestments, requiring a more proactive approach in order to observe its secondary mandate; stresses the importance of the quality of the collateral, in particular incorporating climate-related financial risks and excluding the presence of ‘stranded assets’;
Amendment 170 #
Motion for a resolution
Paragraph 16 a (new)
Paragraph 16 a (new)
16a. Stresses that an even transmission of monetary policy is vital to the achievement of the ECB’s price stability mandate; underlines that excessive divergence in sovereign yields makes credit conditions inconsistent with the uniform transmission of monetary policy and makes a reduction of public debt exceedingly difficult; notes, in this context, the launch of the Transmission Protection Instrument to support the effective transmission of monetary policy across the euro area;
Amendment 176 #
Motion for a resolution
Subheading 2 a (new)
Subheading 2 a (new)
Secondary mandate
Amendment 177 #
Motion for a resolution
Paragraph 16 b (new)
Paragraph 16 b (new)
16b. Recalls that, without prejudice to the objective of price stability, the TFEU requires the ECB to support the general economic policies of the Union as laid down in Article 3 TEU; points out that there is a clear hierarchy between the ECB’s objectives;
Amendment 180 #
Motion for a resolution
Paragraph 16 c (new)
Paragraph 16 c (new)
16c. Notes that ECB monetary policies aimed at delivering its primary mandate are subject to a proportionality assessment; notes that the proportionality assessment takes into account the impact of monetary policy measures on the broader economy and economic policies; stresses that, where it faces a choice between different sets of policies that are equally conducive to price stability, the ECB will choose those that best support the general economic policies of the EU2a; _________________ 2a https://www.ecb.europa.eu/press/key/date/ 2022/html/ecb.sp220324~61c5afb6b9.en.h tml
Amendment 181 #
Motion for a resolution
Paragraph 16 d (new)
Paragraph 16 d (new)
16d. Calls on the ECB to devote a specific chapter in its annual report to explaining how it has interpreted and acted upon its secondary objectives and to presenting the effects of its monetary policy on the EU’s general economic policies;
Amendment 183 #
Motion for a resolution
Paragraph 16 e (new)
Paragraph 16 e (new)
16e. Suggests that as part of its proportionality assessment, the ECB should consider that the costs of its monetary policy operations are not disproportionately borne by lower income strata and the most vulnerable groups and assess the impact of its monetary policy operations on these groups, while bearing in mind that wealth and income inequality negatively affect the effectiveness of monetary policy transmission and previous monetary operations may have contributed to an increase in wealth and income inequality;3a _________________ 3a https://www.bis.org/publ/othp50.htm
Amendment 184 #
Motion for a resolution
Subheading 2 b (new)
Subheading 2 b (new)
Climate change implications
Amendment 185 #
Motion for a resolution
Paragraph 16 f (new)
Paragraph 16 f (new)
16f. Recalls that the ECB, as an EU institution, is bound by the EU’s commitments under the Paris Agreement;
Amendment 186 #
Motion for a resolution
Paragraph 16 g (new)
Paragraph 16 g (new)
16g. Urges the Governing Council to take further steps to include climate change considerations in the Eurosystem’s monetary policy framework;
Amendment 187 #
Motion for a resolution
Paragraph 16 h (new)
Paragraph 16 h (new)
16h. Welcomes, furthermore, the announcement on the greening of the ECB’s collateral framework, which will help reduce financial risk on the ECB’s balance sheet; regrets, however, that this will be limited to instruments issued by non-financial corporations, which represent only a small fraction of the instruments that banks pledge as collateral;
Amendment 188 #
Motion for a resolution
Paragraph 16 i (new)
Paragraph 16 i (new)
16i. Welcomes the ECB’s announcement to further enhance the Eurosystem’s risk assessment tools and capabilities in order to better include climate- and environment-related risks, such as through their in-house credit assessment systems; welcomes in particular the ECB’s engagement with rating agencies to increase transparency on how they incorporate climate risks into their ratings and their ambition regarding disclosure requirements on climate risks;
Amendment 189 #
Motion for a resolution
Paragraph 16 j (new)
Paragraph 16 j (new)
16j. Welcomes the ECB’s action plan and its detailed road map of climate- change-related actions to further incorporate climate-change considerations into its policy framework and models; regrets that the climate roadmap does not include green targeted longer-term refinancing operations or similar instruments; stresses that providing cheap liquidity to financial institutions investing in carbon intensive activities is not consistent with the Paris Agreement; remarks that the ECB´s action plan remains unclear about actions in line with the ECB´s secondary objectives as to address nature-related risks and impacts;
Amendment 190 #
Motion for a resolution
Paragraph 16 k (new)
Paragraph 16 k (new)
16k. Is concerned about the increase of cost and, as a consequence, slowdown of investment in investments required for the green transition, in particular renewable energies; notes that national central banks from the Eurosystem have in the past implemented differentiated interest rates e.g. for the benefit of export credits; calls on the ECB to assess the feasibility of applying differentiated interest rates to support investments clearly geared towards energy efficiency and renewable energies;
Amendment 191 #
Motion for a resolution
Paragraph 17
Paragraph 17
Amendment 194 #
Motion for a resolution
Paragraph 17 a (new)
Paragraph 17 a (new)
17a. Regrets the ECB’s continued reliance on private credit rating agencies for sovereign bond ratings in determining eligibility of sovereign bonds in its collateral framework; reiterates its call on the ECB to put an end to this practice;
Amendment 204 #
Motion for a resolution
Paragraph 19
Paragraph 19
19. Takes note of the ECB’s progress on the digital euro project and welcomes its dialogue with Parliament in this regard; reiterates that a digital euro must respectincrease competition in the banking and digital payment landscape, must not endanger the existence or use of cash and must respect the privacy of citizens and businesses;
Amendment 216 #
Motion for a resolution
Paragraph 21
Paragraph 21
21. Welcomes the Basel III framework, as it will strengthen the resilience of the banking sector; warns about the risk of non-compliance; echoes the ECB's concerns in this respect;
Amendment 217 #
Motion for a resolution
Paragraph 21 a (new)
Paragraph 21 a (new)
21a. Welcomes the inclusion of climate- and nature-related financial risks in the ECB´s supervisory priorities for the coming years; welcomes, among other things, the ECB´s second economy-wide climate stress test in September 2023; echoes ECB´s concerns as the stress test found that the best way to achieve a net- zero economy for firms, households and banks in the euro area is to accelerate the green transition to a rate that is faster than under current policies; calls on the ECB to continue to give priority to climate- and nature-related financial risks in its supervisory practices and monitor growing physical and transition risks closely;
Amendment 228 #
Motion for a resolution
Paragraph 23 a (new)
Paragraph 23 a (new)
23a. Calls on the ECB to better report on positions taken by the ECB in the Basel Committee on Banking Supervision, including in writing;
Amendment 229 #
Motion for a resolution
Paragraph 23 b (new)
Paragraph 23 b (new)
23b. Regrets that only two members of the ECB’s Executive Board and Governing Council are women; reiterates that the nominations to the Executive Board should be gender-balanced, with shortlists submitted to Parliament; strongly regrets that instead of providing shortlists of candidates, Member States have recently nominated a number of candidates equal to the number of vacant positions; recalls that Parliament has previously committed not to consider shortlists that do not respect the gender- balance principle, in accordance with its resolution on gender balance in EU economic and monetary affairs nominations; calls on the euro area’s Member States to do their part and fully incorporate the principle of gender equality in their appointment processes in order to ensure equal opportunity for all genders for the position of governor of national central banks;
Amendment 230 #
Motion for a resolution
Paragraph 23 c (new)
Paragraph 23 c (new)
23c. Supports the ECB’s aim to increase female representation by encouraging women to advance in this field; welcomes, therefore, initiatives such as the ECB Women in Economics Scholarship;
Amendment 234 #
Motion for a resolution
Paragraph 24 a (new)
Paragraph 24 a (new)
24a. Calls on the ECB to develop a strategy on how to deal with lobbyists and increase the transparency of staff-level contacts beyond the Governing Council
Amendment 235 #
Motion for a resolution
Paragraph 25
Paragraph 25
Amendment 239 #
Motion for a resolution
Paragraph 25 a (new)
Paragraph 25 a (new)
25a. Calls for the further enhancement of the ECB’s internal whistleblowing framework, bringing it in line with the EU Whistleblower Directive;
Amendment 240 #
Motion for a resolution
Paragraph 25 b (new)
Paragraph 25 b (new)
25b. Recalls its suggestion to establish an independent evaluation office modelled on that of the IMF, which could perform evaluations of ECB policies and conduct impact assessments of different policy options, without infringing on the ECB’s independence;