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Belgian MEP Johan Van Overtveldt is the Chairman of the European Parliament’s Budget Committee. Between 2014 and 2018, he served as Belgian Finance Minister. He has authored many books on financial and monetary policy and is a Professor of Economics at the University of Hasselt.
In this second episode of the Brussels Report Podcast, BrusselsReport.eu editor Pieter Cleppe discusses with him the democratic sustainability of the ECB’s extraordinary actions to support Eurozone governments are and whether we should now fear inflation.
Van Overtveldt also goes into depth on how to scrutinise how EU member states are spend their share from the EU’s 800 billion euro “recovery fund”, how to deal with organised crime preparing to benefit from this and how to tackle this in the context of EU ordinary spending.
Some excerpts:
“The Japanese example teaches us that the ECB can go a lot further. The question is whether this is desirable. In my view, it is not”, adding that ECB policies “stimulate debt accumulation” despite “historically high debt levels”. He complaints that as a result, “we constantly see financial market bubbles” and “zombification of the economy, with a lot of company activity kept alive because of this”, adding that the ECB’s policies “also stimulate inequality” while furthermore, the ECB and “central banks unintentionally stimulate governments not to take very difficult measures – budget cuts, structural reforms, when a central bank is taking care of everything”
“Real estate inflation is very high and very substantial. The price of real estate should be included in inflation statistics. It is a major missing element, which should be corrected”
“We all know that in June last year, when the “Next Generation EU” initiative was negotiated, there was a major discussion on how to control [against misuse and fraud]. The outcome of this discussion was not satisfactory. There was a huge fight between Southern and Northern countries, where Southern countries were very reluctant to install stringent mechanisms for this kind of control. (…) This tension is eating away the European fabric and has already caused a lot of distrust. It is a small step from there to the loss of overall trust. We are on a very dangerous path, with some countries completely losing their trust in the way Europe is acting, under the pressure of certain member states”, when it comes to the way these EU financial transfers are happening.
