2015-09-11
V. Vasiliauskas: a viable monetary union requires not only ambitious commitments, but also the will to implement them
The Chairman of the Board of the Bank of Lithuania, Vitas Vasiliauskas, on 11–12 September will participate in the informal European Union (EU) Economic and Financial Affairs Council (ECOFIN) meeting, to be held in Luxembourg. During the EU central bank governors’ and Ministers’ of Finance discussion on the future of the Economic and Monetary Union (EMU), the Governor of the Bank of Lithuania will present proposals to accelerate the development of the common capital market and will voice his position on the necessity to more quickly complete the creation of the banking union.
“In dealing with economic issues and, particularly, when encountering critical situations, the EU proved more than once that it was able to think strategically and take on ambitious commitments. But, at this time, the most important thing is the ability to stick to agreements and commitments,” said V. Vasiliauskas.
According to him, in speaking about the directions for the Economic and Monetary Union’s reforms, it is necessary to admit that many issues can be solved simply by adhering to the current agreements and by all the countries responsibly honouring their commitments. According to the Governor of the Bank of Lithuania, only a minority of countries today stick to the jointly approved provisions of the Stability and Growth Pact, sluggishly implementing the recommendations of EU institutions for structural reform in the Member States; work in creating the banking union is not yet complete and its pace is slowing down.
V. Vasiliauskas is convinced that of the proposed EMU reform directions, particularly relevant and especially important for Lithuania is strengthening of the EU single market.
“With the decrease in Lithuania’s trade with Eastern European countries and in searching for alternative trade directions, a stronger and more integrated EU single market would be a good counterweight. A stronger single market would create greater incentives for coordinated action among countries and seeking further integration,” said V. Vasiliauskas.
The Governor of the Bank of Lithuania stressed that a common capital market would create a more effective risk-sharing mechanism and decrease the need for a common fiscal policy. According to him, a capital market is a necessary element, without which the EU’s domestic market is not and will not be full-fledged.
The primary directions of the EMU reforms, which will be discussed at the ECOFIN Council’s meeting, are proposed in the so-called Five Presidents’ Report — “Completing Europe’s Economic and Monetary Union”. It presents ideas on how the EMU should be developed in the next 10 years.
At the informal meeting of the ECOFIN Council it is also planned to discuss other issues: the financing of the Joint Bank Resolution Fund in the transition period, financing of measures related to climate change, etc.