Brussels, 5 June 20223
Inflation was on the minds of all MEPs during the quarterly meeting with the European Central Bank President Christine Lagarde in the economic and monetary affairs committee on Monday.
The MEPs from all sides of the political spectrum honed in on the problem of persistently high inflation and the inflation forecasts which predicted continuing high rates and discrepancies of these rates between the member states.
Some showed scepticism that rates could be further reduced considering that energy prices would probably not fall much further and asked how the ECB was planning to bring down these persistently high rates. Others argued that the current inflation was primarily fuelled by food prices and that the ECB alone could do little to address this. MEPs also voiced their worries about the discrepant inflation rates between the different countries and also between different incomes.
The role of government policy in reducing inflation was also raised with some MEPs arguing that fiscal policy was going counter to the ECB’s inflation fighting policy and that economic reforms and austerity were needed. Finally, a number of MEPs critisised the ECB for maintaining high remuneration rates for banks’ reserves, which, they argued, amounted to extraordinarily high support for banks at the expense of taxpayers.
You can watch the hearing again here.
ECB accountability sealed by an agreement
Earlier in the afternoon, Ms Lagarde and European Parliament President Roberta Metsola signed arrangements officialising the practices for accountability of the ECB in front of the Parliament.
The arrangements codify and clarify the practices that have been informally established over the years between the two institutions.
After signing the arrangement President Metsola said, “Today we are taking the cooperation between the European Parliament and the European Central Bank to the next level. Our deeper relationship will increase transparency and accountability. It will further reinforce trust in our currency and strengthen the Eurozone.”
The chair of the economic and monetary affairs committee, Irene Tinagli (S&D, IT) said, “the agreement is significant because it establishes the framework for the effective discharge of the ECB’s accountability responsibilities. Parliament has been calling and working for this for twenty years but no progress had been made until recently. Now we have codified practices.”