A serious crisis of confidence is shaking the global economy and financial activity.
Europe cannot but be affected by its consequences, despite the reliability of the managers of its financial institutions.
Thus, we have seen a significant slowdown in growth, and European enterprises – particularly SMEs, the main providers of employment and engines of growth in Europe – are facing increasing financial difficulties.
In this context, over the last few days several Member States have been forced to take emergency measures to safeguard their national banking systems, thereby showing their determination to ensure sustained financing of the economy and security for savers.
Beyond these actions and informal dialogue, in the European interest there must be intense efforts to coordinate and harmonise the actions to take. Our citizens expect resolute action from us to protect them.
In less than two weeks we will meet in Brussels in the European Council to decide together on the principles of our common action. It seems to me indispensable that we also use this time to decide on specific measures likely to encourage restored confidence.
To optimise the preparations for our discussions, I would like our finance ministers, who will be meeting at the Ecofin Council on 7 October next, to develop a coherent overall strategy with regard to economic policy, which would facilitate a response to the current situation.
In particular, I would like this to include:
- a shared diagnosis and agreement on the economic policy measures most likely to encourage a rapid return of growth and contained inflation in order to support Europeans’ purchasing power. I would also like proposals that would prevent undue hardening of finances for households and enterprises, particularly the smallest;
- proposals on the means of remedying the dysfunctions that have been ascertained, by improving transparency and accountability in the financial sector, by taking better account of actual performance in fixing remuneration for directors, and mechanisms to avoid excessive risk taking in finance;
- the means of reinforcing the European system of supervision.
We must also agree among ourselves on the principles likely to ensure the respect of the EU’s legal framework and the absence of undesirable impacts for our partners in interventions we may have to make with regard to the financial sector.
This urgent situation calls for unity and a willingness to cooperate with regard to action. This will be the main issue for our next meeting. I will send you the Presidency’s proposals for the organisation of our work as soon as possible.
