Mario Draghi, President of the European Central Bank, said that the unemployment rate in the EU countries is unacceptably high and within it, the youth percentage of unemployment is socially unacceptable. Draghi, reacting to Alfred Sant’s remarks during the monetary committee at the European Parliament in Brussels, said that the current performance of the euro is dismal and that the eurozone has to grow more.
The Maltese Europarliamentarian asked Mr. Draghi if the time had come for a strategic reappraisal of the options available for future development of the Eurozone, given too that consistently it has been underperforming economically compared to other monetary areas. Sant said that Draghi has advocated as a matter of urgency, the strengthening of the eurozone’s monetary institutions not least by a deepening of economic and monetary union. This should mean federalization of the Eurozone’s transnational political structures. ‘Yet it runs counter to a further paradox: while European peoples are in favour of the euro, they do not approve a federated Europe. Meanwhile, economic divergences within countries and regions have been growing not declining. Deepening the economic monetary union under such conditions will likely accelerate divergences.’
Alfred Sant asked if from a strategic perspective, these contradictions should be tolerated for much longer since up to now, most policy options adopted have hardly been better than muddling through.
Mario Draghi asked Dr. Sant if he really thinks that the economy did not grow because of the euro. ‘That’s where I think I find hard following the statement, the reasoning. If we look at the last quarter GDP data, we see that fourteen, fourteen countries show positive growth, for some of them it is between 2-4% on an annual rate. We see two countries in recession and we see two countries, if I am not mistaken, in stagnation.’
The Maltese MEP told Mr. Draghi that he leads a central bank (the European Central Bank) that has limited powers compared to those of equivalent institutions worldwide and that he has been constrained to rely on declaratory statements that arguably exceed his powers in order to meet with emerging problems.
‘You have been successful in this but increasingly less so.’ remarked Dr. Sant telling Draghi he has no elective political responsibilities, neither national nor European. ‘Yet you are called to take decisions that have huge political repercussions and you have made statements with deep political significance. It has also happened that political decision makers wait to take their cue from you when they want changes to the direction of the euro area.’
You may follow Dr. Sant’s remarks and Mario Draghi’s reply on this link