Inquiry regarding pressure exerted by the European Central Bank on the Basel Committee (No. 628)
Session: 15th Riigikogu, 3rd session, plenary session
Date: 2024-04-29 18:40
Participating Politicians:
Total Speeches: 46
Membership: 15
Agenda Duration: 1h 0m
AI Summaries: 46/46 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The Riigikogu debated the interpellation submitted by Rain Epler and Martin Helme concerning pressure exerted by the European Central Bank (ECB) on the Basel Committee regarding the imposition of stricter restrictions on banks stemming from climate policy. The interpellation was answered by Madis Müller, President of the Bank of Estonia.
When introducing the interpellation, Rain Epler criticized the ECB's attempts to push the climate agenda into banking regulations, claiming that this threatens democratic institutions and constitutes an unprecedented power grab. He referred to a Bloomberg article that described the ECB's attempts to pressure the Basel Committee, attempts which the US Federal Reserve (Fed) had opposed.
In his response, Madis Müller explained that the central bank's primary task is price stability, but according to the founding treaties of the European Union, the ECB also has a secondary mandate to support the EU's general economic policy, including climate policy, provided that it does not conflict with the primary task. Müller emphasized that climate change and climate policy constitute direct financial risks that banking supervision must take into account. He confirmed that specific Basel Committee rules have not been discussed in the ECB Governing Council, as this falls under the competence of the Supervisory Board, but supports the integration of climate risks into risk management. In the subsequent round of questions and debates, opposition politicians (including Martin Helme, Varro Vooglaid, Kalle Grünthal) expressed sharp skepticism regarding the ideological direction of the green transition and its detrimental effect on the economy, calling into question the adequacy of the central bank's forecasts.
Decisions Made 1
No decisions were made
Most Active Speaker
Rain Epler (rx1gaVuW0Ng) was active both as the submitter of the query (interpellation) and in the negotiations, sharply criticizing the ideological direction of the European Central Bank and emphasizing the need to maintain common sense. (Political position: right-wing)
Esimees Lauri Hussar
AI Summary
The Riigikogu agenda item concerns the interpellation submitted by Rain Epler and Martin Helme on April 8th this year regarding the European Central Bank's pressures on the Basel Committee.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler noted that the interpellation reached the chamber at record speed, and highlighted that the mainstream media is discussing the threat climate policy poses to democracy. He emphasized that decisions must be made via elections and that deliberation is one of democracy's virtues, and subsequently asked representatives of the European Central Bank and the US Federal Reserve whether the ECB should actively pursue climate policy, and what their mandates and positions were at the negotiating table.
Esimees Lauri Hussar
AI Summary
The Speaker invited Madis Müller, the President of the Bank of Estonia, to the Riigikogu podium to respond to the interpellation.
Eesti Panga president Madis Müller
AI Summary
Madis Müller emphasized that the Bank of Estonia does not formulate climate policy, but must take into account the economic and financial stability impacts of climate change in its monetary policy and supervision. Furthermore, it supports a unified framework for managing climate risks to ensure price stability and financial stability, rather than climate policy itself.
Esimees Lauri Hussar
AI Summary
The Chair thanked the rapporteur, noting that there were also several questions, and called upon Rain Epler to respond.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler asked whether the independence of central banks should counterbalance the wrong course being taken in European economic policy, citing the Basel Committee, media coverage, and the current challenges facing European energy policy and the German economy.
Eesti Panga president Madis Müller
AI Summary
Madis Müller said that the Bank of Estonia primarily focuses on monetary policy and financial sector regulations, supports climate policy goals as much as possible in its activities, and does not question the policy agreed upon by the EU, although there may be differing opinions within the Basel Committee and different positions held by the Federal Reserve and the European Central Bank.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar invites Martin Helme to speak.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme asked whether the impact of the central bank and climate policy on inflation has been assessed—ranging from money printing and CO2 taxes to requirements for the transport sector—and whether this assessment focuses solely on climate panic and fails to take into account consumer prices and the economic environment.
Eesti Panga president Madis Müller
AI Summary
These factors—long-term low interest rates, the rise in energy prices accompanying the post-pandemic economic recovery, and climate policy, which makes the use of fossil fuels more expensive—influenced prices and must be seriously considered in our analysis.
Esimees Lauri Hussar
AI Summary
Speaker Lauri Hussar called Varro Vooglaid to the stage.
Varro Vooglaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Varro Vooglaid compares the implementation of the European Union's climate policy to the ideological mechanisms used during the Soviet era. He notes that there is a lack of convincing evidence showing that the measures being implemented will achieve the desired goals, and questions whether these measures, along with the involvement of banks, are truly necessary.
Eesti Panga president Madis Müller
AI Summary
Madis Müller stated that the Bank of Estonia views climate policy as a component of the European Union's economic policy, and they ensure its implementation is carried out in such a way that it does not interfere with the fulfillment of their core tasks. He added that the use of renewable energy reduces the environmental footprint, and climate policy steps that nudge the economy in that direction will definitely influence the achievement of the specific objective.
Priit Sibul
Profiling Isamaa fraktsioonAI Summary
Priit Sibul asks how he voted in the Governing Council, as the Governor of the Bank of Estonia, regarding the setting of interest rates and Euribor levels in the context of controlling inflation, and what his reasons were.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar invites Priit Sibul to speak.
Eesti Panga president Madis Müller
AI Summary
Madis Müller stated that Estonian inflation has slowed down significantly (dropping from over 20% to approximately 4%), and this same trend is apparent across the euro area. Provided the economic situation does not change unexpectedly, interest rate cuts are anticipated in the near future, as inflation is nearing the 2% target and is likely to stabilize there.
Esimees Lauri Hussar
AI Summary
Someone is asking Anti Poolamets to come up on stage.
Anti Poolamets
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Anti Poolamets claims that current forecasts fail to account for the impact of the green transition and the role of energy and CO2 prices, which damages the institution's credibility and deepens the necessity of creating alternative forecasts within the context of the green transition.
Eesti Panga president Madis Müller
AI Summary
Madis Müller stated that energy prices have been one of the primary drivers of inflation, and the Bank of Estonia will present more alternative scenarios in its economic forecast because predicting energy prices has been very difficult, and the various scenarios need to be highlighted more clearly.
Esimees Lauri Hussar
AI Summary
Speaker Lauri Hussar invited Helle-Moonika Helme to speak.
Helle-Moonika Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Helle-Moonika Helme attributes the rise in energy prices to ideological climate policy and points to the inaccuracies of the Bank of Estonia’s forecasts and experts, questioning whether this is linked to poor personnel policy and the ideology attributed to the bank.
Eesti Panga president Madis Müller
AI Summary
Madis Müller said that the Bank of Estonia is not ideological, focuses on the qualifications and judgment of its employees, and takes the discussions of the European Central Bank seriously. He noted that although the forecasts presented in March were compared to those from December and were similar, the crises of the pandemic and the war in Ukraine could not have been predicted.
Esimees Lauri Hussar
AI Summary
The Chairman invites Mart Helme to speak.
Mart Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Mart Helme claims that the founding treaties of the European Union grant the European Central Bank a mandate to ensure the stability of monetary policy and the economy, and this mandate should extend to the Bank of Estonia, which is a branch of the system. However, he argues that climate policy and the resulting economic damage do not fall within the central bank's scope of duties.
Eesti Panga president Madis Müller
AI Summary
Madis Müller explained that the Bank of Estonia is part of the Eurosystem and one of the shareholders of the European Central Bank, not a branch. He noted that although we have statutory additional tasks, and climate policy falls into the category of other economic policies, the primary objective is price stability, and other European Union policies may only be supported provided that doing so does not conflict with price stability.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar calls Arvo Aller to the stage.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Arvo Aller emphasized the importance of forecasts when compiling state budgets and EU budgets. He also asked, regarding membership in the Basel Committee, whether disagreement had arisen within the central bank council over the addition of supplementary green rules, and what the representatives of Germany and other countries had said.
Eesti Panga president Madis Müller
AI Summary
Madis Müller explains that the Governing Council of the European Central Bank decides on monetary policy and strategy issues, banking supervision is handled by the Supervisory Board, and the positions represented in the Basel Committee concern very specific supervisory matters which are not discussed separately by the Council.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar addresses Tõnis Lukas and asks him for something.
Tõnis Lukas
Profiling Isamaa fraktsioonAI Summary
Tõnis Lukas pointed out that the Bank of Estonia has actively contributed to climate policy, noting that historically the forest served as the backing for the kroon. However, the current focus is on reducing consumption and waste, and he requested specific recommendations for the Estonian economy and businesses on how to save energy and curb overall consumption.
Eesti Panga president Madis Müller
AI Summary
Madis Müller pointed out that keeping 1–2 cent coins in circulation is not environmentally friendly, and he hopes the Riigikogu will soon adopt decisions on the matter. He further emphasized that the goal of climate policy should not focus directly on reducing consumption, but rather on the question of what and how we consume, and how much fossil fuels versus renewable resources we utilize, which is why they have not issued economic policy recommendations aimed at reducing consumption.
Esimees Lauri Hussar
AI Summary
The Chairman thanks [the previous speaker] and invites Evelin Poolamets.
Evelin Poolamets
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Evelin Poolamets asks why the pursuit of climate goals is not positively impacting the economy, especially given the context of Estonia’s deepest and longest economic downturn since regaining independence, and what exactly is being done wrong?
Eesti Panga president Madis Müller
AI Summary
Madis Müller stated that the slump in the Estonian economy is not primarily due to climate policy, and the reasons for it are diverse. However, companies and banks are increasingly moving towards environmental sustainability, and exporters must demonstrate their environmental footprint and the steps they are taking to reduce it. This shift could impact the competitiveness of Estonian businesses. He emphasized that the Estonian state and economy must invest to ensure that exporters remain competitive.
Esimees Lauri Hussar
AI Summary
The Chairman called upon Kalle Grünthal to speak.
Kalle Grünthal
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Kalle Grünthal asked what percentage of CO2 should be reduced from the atmosphere to achieve climate goals, emphasizing the atmosphere's role as the largest carbon dioxide reservoir.
Eesti Panga president Madis Müller
AI Summary
Madis Müller, the Governor of the Bank of Estonia, stated that he lacks a definitive answer regarding the precise CO2 percentage rate, and such questions fall outside the central bank's scope. He added that addressing climate policy is part of the European Union's economic policy, which is factored into decisions in a way that does not disrupt the central bank's core objectives.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanks the rapporteur, announces that there are no questions, notes the discussion that has arisen in the chamber, and opens the debate, inviting Rain Epler, the representative of the interpellators, to speak at the Riigikogu rostrum.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler notes that although wind and solar energy promise production with a smaller environmental footprint, there are, in reality, hidden costs. He also warns against the pressures exerted by the Basel Committee and the exclusion of the presidents of the European Central Bank and the Bank of Estonia, calling for the preservation of common sense and resistance to ideological pressure in defense of the economy.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar offered his thanks and next invited his colleague Martin Helme to the podium.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme thanks [them] and plans to rent eight minutes.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar requested three additional minutes.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme accuses the European Central Bank of enforcing ideological green policy, arguing that although its mandate should ensure inflation and economic stability, ESG and green policies—along with the associated energy and renovation costs—are damaging the Estonian economy, and must be challenged to assess the true impact and protect common sense.
Esimees Lauri Hussar
AI Summary
Speaker Lauri Hussar thanked Kalle Grünthal and invited him to the Riigikogu podium, whereupon Grünthal requested three minutes of additional time.
Kalle Grünthal
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Kalle Grünthal asserts that the topic of climate change is largely political propaganda tied to economic activity, relying on limited data, and urges Madis Müller, the President of the Bank of Estonia, to defend Estonia's interests in Brussels.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar concludes the discussion of today's second agenda item, thanks the participants, and closes the debate, provided the Governor of the Bank of Estonia does not wish to take the floor.