The European Parliament adopted recommendations for the European Central Bank (ECB) at a plenary session after a debate on its priorities and actions with the ECB’s President, Christine Lagarde. According to PiS MEP Bogdan Rzońca, who participated in the debate, the ECB’s successful curbing of inflation is a significant achievement, but still a serious challenge. He emphasised that in terms of interest rate cuts, the bank should consider the interests of all entrepreneurs operating in the euro zone, including those trading in other currencies. It is also important to maintain ideological neutrality, for example in ecological aspects, and to control expenditure on this.
– “Controlling inflation is a great challenge. There was a time when inflation in the Eurozone reached 10.6 percent, and currently sits at about 2.5 percent, so the direction is right. The European Central Bank, through various interventions, helped to curb this inflation,” Bogdan Rzońca, Member of the European Parliament from PiS, Budget Coordinator, and representative of the European Conservatives and Reformists group, told the Newseria news agency. – “But of course, it’s not over yet. We’ll see what other interventions and actions of the ECB will come, for example regarding Donald Trump’s and America’s economic actions, which are very important for the entire European Union.”
On Tuesday, February 11, the MEPs accepted the annual recommendations for the ECB with 378 votes in favor, 233 against, and 26 abstaining. They advise the ECB to do more to curb inflation, which affects the low-income earners the most. The day before in Strasbourg a debate on this topic took place chaired by Christine Lagarde, the President of the European Central Bank.
Parliamentarians criticized the ECB’s wrongful belief that inflation will be only temporary, which implies the need for improving economic forecasting models to enable better shaping of monetary policy. The Parliament also condemned the “considerable grants” to banks resulting indirectly from ECB policy, leading to high interest rates on bank deposits in the ECB, and appealed to alleviate this problem.
– “Everyone would like interest rates to be lowered, everyone would like the euro exchange rate set by the European Central Bank to suit entrepreneurs, but there are those who export more and those who import more, so a common-sense approach needs to be found. This common sense must dominate the actions of the European Central Bank. Therefore it must know the basic macroeconomic data of each country so as not to act blindly- if it helps, it must do so justified” – Bogdan Rzońca urges. – “During the debate, I also said an important thing, which others also talked about, that the ECB should not be too ideological.”
MEPs propose that price stability should remain the main goal of the central bank, as focusing on secondary goals can undermine the ECB’s independence.
In Bogdan Rzońca’s opinion, the ECB should avoid favoring untested solutions, e.g. in the matter of climate policy. He refers to the report of the European Court of Auditors assessing whether the concept and implementation of the recovery and resilience instrument and national recovery and resilience plans contribute effectively to the ecological transformation. According to the assumptions, the instrument launched in May 2020 was supposed to help member countries recover from the COVID-19 pandemic. By February 2024, it had provided 648 billion euros. Member states committed to spending at least 37 percent of their national allocations on climate action. The European Commission assessed that they had already achieved this target at the planning stage, allocating 42.5 percent of their allocations to this purpose.
In the audited member states, the Court of Auditors found shortcomings in the very concept and plans for recovery and resilience, as well as in the implementation of pro-ecological and climate-friendly activities. It accused the use of vague, approximate data allowing for overestimations. Auditors found no clear evidence of how the instrument’s actions contribute to the ecological transformation and reported deficiencies in capturing the real costs and outcomes in reporting climate and green transition spending. PiS MPs call for a parliamentary debate on this issue.
– “If this climate policy is failing, as the European Court of Auditors says, and billions of euros are being spent, then everyone should ask what the effects of this spending are “ – the PiS MEP justifies. – “The European Central Bank should also read this report and respond to it. Of course, it’s not the end of the KPO’s actions, but 2026 is not far off. We will see if the milestones, or issues related to the intended targets of the national recovery plans will be met. Because if not, it turns out that we have released a lot of money into the market, which only disrupted the economy in individual countries, and there is no effect related to climate neutrality.”
For the first time, MEPs asked the ECB to assess how geopolitical issues could affect price stability in 2025-2030. Rapporteur Anouk van Brug of the Netherlands noted during the debate that the central bank took action too late to protect price stability from the effects of the outbreak of war in Ukraine. The call for a contingency plan for potential conflicts is to be part of actively anticipating crises and inflation shocks.
