European Communities - Twenty-Fourth Report

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Here you can browse the report together with the Proceedings of the Committee. The published report was ordered by the House of Lords to be printed 2 June 1998.

CONTENTS

REPORT

	Paragraph
PART 1 INTRODUCTION	1
PART 2 BACKGROUND: TREATY PROVISIONS GOVERNING THE OPERATION OF THE EUROPEAN CENTRAL BANK	7

Primary objective	9
Independence	10
Appointments	11
Structure of the ESCB and distribution of power within it	14
Reporting arrangements	18
Links between the ECB and the Council prescribed in the Treaty	21
Exchange rate policy: the Commission, the Council and the ESCB	22
Dialogue between the Council and the ECB involving the Commission	23
Capital and foreign reserve assets of the ECB	25
Shares in the capital and the foreign reserves called up	26

PART 3 SUMMARY OF EVIDENCE

28

Independence, transparency and accountability: credibility	29
Independence	29
Transparency	33
Accountability	42
Price stability	45
Definition	45
Methodology	46
The ECB's monetary policy strategy	47
The time-scale to achieve and maintain price stability	53
The limited role of monetary policy	56
Euro-X: a political counter-weight?	64
Coordination of economic policy: multilateral surveillance and three policy elements	67
Multilateral surveillance	67
Three policy elements	68
The stability pact: policy on budget deficits	72
Room for manoeuvre: within the stability pact, supply side measures and counter cyclical measures	83
Exchange rate policy	92
International aspects of monetary policy	95
"Will it work?"	96

PART 4 OPINION OF THE COMMITTEE

99

Economic policy in the modern nation state	100
The ECB: independence, transparency and accountability: credibility	102
The European Parliament's role in achieving accountability	110
Definition of price stability	115
The ECB's monetary policy strategy	117
The role of Euro-X	118
Effectiveness of the stability pact	119
Room for manoeuvre: within the stability pact, supply side measures and counter cyclical measures	122
Exchange rate policy	125
"Will it work?"	127
Recommendation	134

APPENDIX 1—Membership of Sub-Committee A

APPENDIX 2—List of witnesses

APPENDIX 3—Glossary

APPENDIX 4—Note on the Stability and Growth Pact by the Specialist Adviser

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