Bloomberg News

EU’s Almunia Calls Creation of Systemic Risk Board ‘Urgent’

October 20, 2009

European Union Monetary Affairs Commissioner Joaquin Almunia and Swedish Finance Minister Anders Borg comment on EU-led discussions by the region’s finance ministers on a panel for risk supervision and the financing of climate change.

They spoke at a press conference today after a meeting of the EU’s 27 finance ministers in Luxembourg.

“We are very happy that today’s agreements are based on our proposals and that this important body, the European systemic risk board, I hope, can be operational in 2010.”

“We need to have this body operational as soon as possible.”

“We know now that if this kind of body had existed in the past, probably the warnings and the recommendations regarding the financial stability risks would have been avoided. But at least as part of the negative consequences of this crisis, we probably will be able to avoid all the risks that are at the origin of the present crisis thanks to changes in the regulation, improvements in the micro-supervision, better coordination of supervisors, better crisis management system, but we also know that in the future new risks will exist.”

“We need to detect these risks as soon as possible. It’s urgent to have this body in place.”

On finding an agreement on the financing of climate change:

“It’s not a good outcome of the Council.” “The lack of conclusions is disappointing. But this does not mean that Europe will not continue to be in the driving seat, in the leader’s position to find an agreement in Copenhagen.”

“The agreement in Copenhagen will be very difficult, because of the lack of commitment showed by very important players that will be on the table in Copenhagen. We need to continue our work. I hope that tomorrow the environmental council and next week the European council will adopt clear positions showing that Europe is looking for an ambitious agreement in Copenhagen.”

“I am sure that the internal financial discussions on how to distribute the burden among the member states will lead to an agreement, because the elements for this agreement are on the table.”

Sweden’s Borg on the climate change discussions:

“It’s a disappointing outcome that we haven’t been able to reach an agreement on climate change financing.”

“There’s also obviously been a lack of commitment toward the idea of reaching an agreement before we had the European Council. This means that many of these difficult issues will have to be moved forward to the European Council.”

“There’re several very difficult issues that have to be dealt with. Given that Europe is taking leadership in the climate issue and are the leader on climate change it’s very, very important that we make further progress in the coming days on this issue.”

Borg on exit strategies for EU financial support measures:

“We still have a fragile recovery that is based on the need for policy support. It’s also quite clear that we need to keep an expansionary economic policy going for the time being.”

“This is the time to start to design and communicate exit strategies. The four principles that we set out in Gothenburg, that we should have a timely withdrawal of the temporary expansionary measures, that we need a structural consolidation above the level of 0.5 of GDP and that we also need structural reforms to reinforcement of labor supply, labor participation and long-term investment is extremely important and that we also need further work on the national budget frameworks.”

“We’ve now all these four Gothenburg principals into a Council conclusion. That is the basis that we will continue to work.”

“We have very good prospects on reaching agreement toward the end of the Swedish presidency on this issue.”

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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