By Martin Banks - 14th February 2012
The current crisis has demonstrated that ther ECB needs to expand its objectives
Hannes Swoboda
S&D leader Hannes Swoboda has called for a major expansion of the European Central Bank (ECB).
He said a key issue to emerge from the current downturn is the role of the ECB, based in Frankfurt.
Many politicians and analysts say the ECB ought to act as a lender of last resort - a bigger remit than was envisaged when the euro was launched.
In December the ECB acted to ease the crisis by providing nearly €500bn in three-year loans to eurozone banks on generous terms.
Addressing a news conference in Strasbourg on Tuesday, Swoboda, an Austrian deputy said he wants to see a bigger role for the ECB.
He said, "The current crisis has demonstrated that the ECB needs to expand its objectives."
The newly-elected leader of parliament's second biggest political grouping said the Greek crisis - and the economic failings of other member states such as Spain and Italy - was the result of a "huge failure" of economic governance.
Calling for the central bank to be beefed-up, he added, "In order for the ECB to expand it will have to change its statute."
Meanwhile, an influential UK parliamentary committee says the EU and member states "must find a way" to secure fiscal integration for the eurozone.
The House of Lords EU committee also calls on the EU to protect the "integrity" of the single market as an "engine of economic growth".
In a newly-published report, the committee says that the proposed new EU treaty "raises a number of legal issues".
The report, published on Tuesday, said, "The proposed treaty states that it is intended to be folded into the main EU treaty framework, following a review of experience with implementation.
"This would give the treaty much greater legal certainty, and the committee can see no reason in principle why this should not happen in due course.
The committee also considered the role of the ECB following its role in refinancing European banks.
The report says that further intervention is likely to be necessary to preserve the functioning of credit markets within the EU.
The committee call on euro area states to decide whether the introduction of 'eurobonds' will be necessary.
Lord Roper, committee chairman, said, "The situation in the euro area crisis is complex and changing rapidly.
"National governments and the EU have struggled to keep up with events.
"Improved budgetary discipline is important but in the longer term delivering sustainable growth will be vital. We are very concerned that the potential for the single market to help to deliver that growth is being overlooked."
