Brian Hayes MEP today (Thursday) said that the ECB’s Quantitative Easing programme does not go far enough due to the low level of risk-sharing associated with the programme.
“While I welcome the fact that the size of the ECB’s Quantitative Easing programme is bigger than expected, approximately €1.1 trillion, the low level of risk-sharing does not address the problems which may arise due to the interconnectedness of the Eurozone’s monetary system,” said Mr. Hayes.
“Mario Draghi said that only 20% of the asset purchases will be subject to risk-sharing. Leaving national central banks to bear the main responsibility for any default could potentially lead to a dangerous situation in the Eurozone. When the Eurozone is affected by a crisis, the response should be done on a collective and mutualised basis.”
“It is clear that Draghi has compensated risk-sharing for bigger bond purchases, possibly due to the concerns of some Member States that have more stable levels of sovereign debt.”
“Ultimately we should recognise that Quantitative Easing on its own will not defeat the threat of deflation. A co-ordinated EU wide push for greater public and private investment will be required to increase demand, drive growth and create jobs,” concluded Mr. Hayes.
Brian Hayes MEP and ECON Committee Member said today (Monday) that an ECB Quantitative Easing programme must not be dictated by the concerns of Germany.
“The role of the ECB is not to act in the interest of one country but to work through agreed consensus to arrive at a solution that works for all Euro area Member States,” said Mr. Hayes.
“It has been suggested that to appease Germany, the burden of risk for a Quantitative Easing programme could fall on national central banks rather than the ECB. This would essentially be a watered-down version of Quantitative Easing and would not address the concerns about the cross-border effects of monetary policy.”
“For Quantitative Easing to be effective, the ECB needs to carry it out on a full scale, in a similar way as the US has done to good effect. It is impossible to isolate the default risk to one central bank since we have an interconnected monetary system and leaving national central banks to take on such risk is potentially very dangerous.”
“Mario Draghi previously said that the ECB is prepared to do whatever it takes to preserve the euro. It is clear that to prevent a spiral of deflation, we need to take swift action and full-scale Quantitative Easing could be a key instrument that turns the corner for the Euro.”
“It is important that countries like Ireland who have made so many structural changes can see the positive signs of the Eurozone returning to a steady rate of growth. At the moment, we don’t see that in the Eurozone and we need larger Member States like Germany to recognise that it is in their interest to see others return to growth as quickly as possible,” concluded Mr. Hayes.
Fine Gael Dublin MEP and ECON committee member, Brian Hayes said today that “Now is the time for Irish exporters big and small to maximise the opportunities provided by a weak euro. Currently the euro is at a ten year low against the dollar and close to a six year low against sterling. It may go even lower as result of quantitative easing.”
“2015 is the year for a massive push by all exporters to gain market share in two very important markets, the US and the UK. The economies of both countries are also expanding, further increasing Irish export opportunities. There will never be a better opportunity than now for smaller companies considering exporting.”
“Falling energy costs and a weak euro are combining to create a unique opportunity for Irish companies to grow and expand. Irish exporters should seize the moment.
“2015 should also be a year for heavy promotion and marketing by the Irish tourist sector in traditional markets like Britain and the US. The emphasis should be on value and quality. The pound and the dollar will go much further in Ireland this year.”
“Many sectors of the Irish economy will be playing with the wind in 2015. As a new year begins confidence in strong economic growth is well justified.”
Speaking in Dublin at the launch of the European Parliament Year of Development, Brian Hayes MEP, said that this year as a country we should recommit to the 0.7% target for Development Aid.
Brian Hayes MEP is the only Irish member of the European Parliament’s Development Committee.
“Ireland’s Official Development Aid (ODA) budget was cut from €920 million in 2008 to €601 million in 2014. While this Government has stopped the decline in the ODA budget, we are still a long way off achieving the 0.7% target. We should not forget that we committed to this target in 2000. Fifteen years later our contribution is now 0.46% of GNP. We need to do much more.
“This year the Taoiseach will address the United Nations on the revised Millennium Goals. He should use the opportunity to state publicly a realistic timeframe for achieving the 0.7% commitment. It won’t happen overnight. It will take some years. But a realistic timeframe needs to be put in place to show our commitment to the Developing World.”
“There are no easy options on this issue. As a former Minister I fully understand the pressures on public expenditure. But we have made international commitments that we have to honour.
Thankfully Ireland’s economy is growing again and that gives us the opportunity to achieve this commitment over a number of years.”
“I believe there is huge public support for achieving the 0.7% commitment. Everyone understands the financial crisis and the impact this had on our ability to contribute more to the ODA budget. ”
“Despite the fact that we are emerging from one of the most severe recessions in history, we are still a wealthy country. By setting a realistic time frame at the United Nations in achieving the 0.7% commitment – we will send out a strong signal to the world.”
Following a call by more than 25% of MEPs for a Parliamentary Committee of Inquiry into tax ruling practices, Brian Hayes MEP and ECON Committee member today (Thursday) said that such a Committee of Inquiry must not be a witch hunt against some Member States.
“If a Committee of Inquiry is to go ahead, the terms of reference must be fair and balanced. This cannot be a witch hunt against some Member States – tax rulings in all Member States must be investigated fully to identify any unfair tax advantages,” said Mr. Hayes.
“I welcome Commissioner Vestager’s decision in December to extend the enquiry of tax rulings to cover all EU Member States. We need a full picture of tax practices throughout the EU and there has to be a level playing field between small Member States and large Member States.”
“If a Parliamentary Committee of Inquiry is to be taken seriously, I believe that the European Commission should be allowed to complete its investigation of State Aid cases without undue interference from such an inquiry. If community law has been broken that’s a matter for the Commission in the first instance and then for the European courts.”
Brian Hayes MEP concluded by saying: “A parliamentary Committee of Inquiry must first be approved by the European Parliament’s Conference of Presidents and then it would be put to a vote before MEPs. Speaking with EPP ECON colleagues in Strasbourg this morning I have received agreement that the terms of reference for this inquiry must not be country specific. That will be the EPP negotiation position.”
Following today’s opinion by the European Court of Justice that the ECB’s Outright Monetary Transaction (OMT) programme is compatible with EU Treaties, ECON Committee member of the European Parliament, Brian Hayes MEP said that this represents a positive message to the Eurozone economy. It also sends out a strong signal that the ECB must do what’s in the interest of all 19 member states in the euro zone.”
Speaking in Strasbourg, Mr. Hayes said: “The green light that the European Court of Justice has given today to the ECB to buy government bonds sends out a positive signal to Europe at the start of 2015.”
“OMT, outright monetary transaction, is more theory than practice for most EU member states. But having this bond buying devise available as a last resort – will steady nerves and give confidence to the markets that the Euro will be protected at all costs.”
“The very existence of OMT, as a legally acceptable instrument, will boost confidence in the euro. It follows a range of ECB initiatives from the Asset Backed security programme to the LTRO programme which offers Eurozone a further stability instrument in times of stress.”
“Europe needs to move on from the financial crises. It’s taken a long time to regain confidence. The threat of deflation is real and brings with it appalling vista that a long recession could become a long depression. While Germany may not be entirely happy with today’s ruling, it needs to understand that the ECB is made up of 19 member states. Giving powers to the ECB, which have their basis in law, is the only hope for Europe”, concluded Mr. Hayes.
Brian Hayes MEP for Dublin today welcomed new EU VAT measures which mean that Irish consumers buying goods and services from an online vendor in another European country will pay VAT at Irish rates. The measures came into force on 1st January.
“Previous rules meant that Irish consumers who buy online from a European vendor had to pay VAT in the country of the vendor but this has changed from January 1st. As a net recipient of online services, Ireland stands to win big over the next number of years – it is estimated that Ireland will gain VAT revenues of €100m in 2015, rising to €150m in 2019,” said Mr. Hayes.
“E-commerce has been growing substantially in recent years and it is crucial that our government ensures that we develop our VAT system in line with growing international trends in technology.”
“The new VAT rules ensure that there will be more competition with other EU Member States. Online trading firms will no longer be able to use countries like Luxembourg for their low VAT rates.”
“Ireland’s position as a hub for international technology firms means that we could potentially be the go-to location for non-resident European companies to register VAT sales to other European countries.”