Former Prime Minister Alfred Sant called for an explanation from the Presidency of the Council of the European Union on a proposal by Facebook to launch a virtual currency.
Speaking during an exchange of views between the European Parliament’s Committee on Economic and Monetary Affairs and Mika Lintilä, Minister of Finance of Finland, current holders of the EU Presidency, Dr Alfred Sant said that with Facebook being a global communications concern with billions of contacts and clients, its proposal to launch a virtual currency cut across all practice that made vital currency creation a stand-alone arrangement organized by the state.
Sant noted that the real and potential conflicts of interest within the emitting system being proposed were totally clear and added that the management of monetary holdings on a big scale had previously been considered a sovereign public function.
“For sectoral arrangements, in emergencies or for relatively limited commerce, arrangements based on private payment systems were accepted. But without the stamp of sovereignty, the creation of money had rarely been tolerated by public authorities”, Dr Sant said. Sant stated that the operation of the proposed system that will affect the integrity of central banking arrangements was not yet known and the EU should take a stand on the issue.
During his intervention in the European Parliament’s Committee on Economic and Monetary Affairs, Dr Alfred Sant also spoke about the European economic scenario saying that although it has continued to follow a low inflation, low growth path, monetary policy had been applied to achieve a different target.
Sant noted that the United States has continued to experience an unprecedentedly long period of significant growth and has launched a trade war from which Europe has been weakened. Sant said that in the EU’s policies especially in the eurozone, strictly applied rules in fiscal policy were, among others, derived from the situation prevailing more than forty years ago.
“But the situation now is completely different. The rules devised then to counter that situation no longer made so much sense today. Still, they bind our member states much more than do those that apply in the US, a federal republic no less, to its constituent members,” said Dr Sant.
Sant asked whether this this made sense anymore and told the European Parliament’s Committee on Economic and Monetary Affairs that the EU’s policy approaches were guided by short-term considerations and that it was time for a paradigm change and a change of management system.