Eurogroup Chief Wants Secret Debates on Monetary Policy

This is the kinda stuff that really worries me, and underline my argument about most politicians being out of touch with the today’s financial reality, living in an imaginary world where the practice and traditions of the good old times are hailed as the only, undisputable, truth.

Monetary policy is a serious issue. We should discuss this in secret, in the Eurogroup.”

Jean-Claude Juncker

Damn right its serious business! And if Mr. Juncer believes for a second that keeping things secret in today’s electronic information-driven markets is the best way to go, he is dangerously mistaken.

Imagine how the markets would react if some of the secrets leaked out, let’s say; as a result of a hackers attack?

And if the Eurogroup chief is not aware of it yet; rumors may create far more volatility than hard cold facts.

And just the very idea of more secrecy in today’s financial markets, is one of the biggest threats to the overall financial stability. Lack of trust and confidence.

Anyway, this is what the EUobsever.com reports:

Eurozone economic policies should only be conducted in “dark secret rooms”, to prevent dangerous movements in financial markets, the Eurogroup chief said on Wednesday (20 April), adding that he had often lied in his career to prevent the spread of rumours that could feed speculation.

As exists in the case of monetary policy, all economic decisions should now be discussed behind closed doors, he said

Monetary policy is a serious issue. We should discuss this in secret, in the Eurogroup,” Jean-Claude Juncker said at a Brussels conference on economic governance organised by the European Movement, an organisation that promotes European integration, referring to matters already long since outsourced from national parliaments to independent central banks.

“The same applies to economic and monetary policies in the Union. If we indicate possible decisions, we are fuelling speculations on the financial markets and we are throwing in misery mainly the people we are trying to safeguard from this.”

“I’m ready to be insulted as being insufficiently democratic, but I want to be serious,” he said.

Under his line of reasoning, ministers and EU leaders who discuss financial matters in public put “millions of people at risk” due to wild swings in financial markets produced by their public commentary.

“I am for secret, dark debates,” he quipped.

“There is insufficient awareness at the European level when it comes to these issues, because each of us wants to show his domestic public that he’s the greatest guy under the sky,” Juncker noted.

Having served as finance minister and then premier of Luxembourg for the past 22 years, Juncker pointed out that over the course of his career, despite his Catholic upbringing, he often “had to lie” in order not to feed rumours.

A conference-goer suggested that removing the secrecy in EU meetings could prevent markets from moving on rumour and speculations, Juncker said that could not be done because ministers and EU leaders need time to reach decisions.

“Actions on the financial markets are taking place in real-time. We don’t always agree at each and every debate on monetary policy, but meanwhile markets are reacting.”

Juncker also used the occasion to give his endorsement to changes the European Parliament has made to EU economic governance legislation, amendments that tighten the European Commission‘s role as fiscal-policy policeman, watching over member-state economic decisions.

8 Comments

Filed under International Econnomic Politics, National Economic Politics, Philosophy