September 4, 2012

EU Leaks of Draghi Comments Threaten Future Meets: Chairwoman

‘Breach of confidence’ publicized comments meant for private disclosure

The EU Parliament in Brussels. The EU Parliament in Brussels.

Sharon Bowles, chairwoman of the EU assembly’s economic and monetary affairs committee, berated fellow committee members after comments made by European Central Bank (ECB) President Mario Draghi in a confidential meeting were leaked to the media. She also warned that committee members’ actions threatened the possibility of senior ECB officials attending future meetings.

Bloomberg reported late Monday that Draghi took part at a hearing at the European Parliament in Brussels that was intended to discuss the future of the euro and the possibility of putting together a banking union.

Because of the policy of ECB officials not to comment on policy in the week prior to meetings of the ECB Governing Council, the EU committee meeting, which was originally scheduled to be public, was changed to be private, according to a parliamentary spokesman. The next meeting scheduled for the ECB is Thursday.

However, after the meeting concluded, France’s Jean-Paul Gauzes, a European People’s Party member of the European Parliament, revealed that the ECB president had expressed his comfort with the central bank purchasing bonds with maturities up to three years. According to Gauzes, Draghi said during the confidential meeting that buying short-term bonds does not amount to state financing.

Gauzes was quoted saying, “[Draghi] thinks it’s not a violation of the treaty and you can do it under the current legal framework. He said, for example, three years is okay; 15 years, no.”

The euro rose higher against the dollar on the news and closed up 0.01% for the day. Later, Gauzes issued a statement saying that Draghi had not laid out any coming ECB actions on bond markets.

After the hearing, Sven Giegold, a German Green member of the European Parliament who attended the closed-door meeting with Draghi, said in the report that he was given the impression that the ECB will once again intervene in the bond markets as a means of combating the crisis. Draghi himself had not commented to the media, either on arrival or departure from the meeting.

After Draghi’s “confidential” session with the group, Bowles took them to task during a public session, telling committee members that such leaks were “a complete breach of confidence” and adding, “I think it has brought this house into disrepute.”

In the report, Bowles was quoted saying that the leaks ”have probably jeopardized” future attendance in camera by officials. She added, ”And we know who to hold responsible, because your names are in the press.”

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