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President of the European Commission
The financial crisis is indeed a very serious situation. It requires a major effort on all sides. Europe is taking its responsibilities.
There is work to be done in the short term – and there is work to be done in the medium and long term.
We must first of all address the urgencies and then make our structures future proof.
The supervision authorities, the Member States, the central banks and especially the European Central Bank, the Presidency of the Council and the European Commission: we all work together, and the appropriate interventions are taking place where companies are in difficulty.
I would underline in particular that this is working well not only at the national level but also at cross-border level.
Let me pay tribute to the dedication, the seriousness and the sense of common good of all those who are involved.
I would like to emphasize the fundamental role played by the European Central Bank. It does a superb job by ensuring the liquidity of the markets. The Euro is a factor of stability, a true European asset in these tasking times. But the challenge is not only to inject liquidity into the markets. We also need to inject credibility into the markets – in terms of European and of global governance of the financial system.
Regarding the contribution of the Commission, we have been in close contact with our partners and market actors throughout. The Commission applies the competition and state aid rules in real time. It takes the developments on the ground into account. The equitable application of our competition and state aid rules is indeed a fundamental element to establish and maintain trust between market players and member states. They guarantee a level playing field and help ensure the future viability and stability of companies concerned. They are and will be implemented with flexibility and responsibility
So it is fair to say that the work achieved since the beginning of the crisis, and more particularly in the last few days, shows that our system can cope. The European financial system has the ability to respond. We can have confidence in it.
But we have to face the difficulties that exist and therefore we must do more, and more efficiently.
It is essential to go beyond the short term measures and to put into a place a structured, a truly European response. This is the only way to make sure that stability and confidence will return. A clear perspective is fundamental for markets to calm and to restore full confidence. We need very articulated answers by European governments together with EU institutions and the regulators and supervisors in Europe
This is why we are accelerating the implementation of the "Ecofin roadmap" agreed between the Commission and the Member States.
Today, we have just approved the proposal for reform of the capital requirements of financial companies. Commissioner McCreevy will present its details to you in a few minutes. This proposal will be followed very quickly by the proposal for reform of the rules on rating agencies.
The Commission is ready to take further action, in parallel with its partners, aiming at additional initiatives to consolidate the confidence of the markets and to protect the interests of savers and of investors.
We are ready to put forward a European response to this financial crisis:
1. We need a further strengthening of the supervision structures at the European level,
2. We must refine the rules on the evaluation of complex assets. This includes adapting our accounting rules to a new situation. In particular if other markets also apply changes, we don't want EU banks in a situation of disadvantage as compared to banks for other markets,
3. We need to improve the consistency of deposit guarantee schemes,
4. We should increase the transparency of executive pay, building on the Commission's 2004 recommendation; and I ask all those who are preparing measures to look at these recommendations, which have not been taken up as widely as they should have been.
5. At the same time, we need to reaffirm and strengthen our commitment to structural reforms for growth and jobs under the Lisbon strategy. This crisis will have an impact on the real economy and competitive pressure from others will not dissapear. The work of the past years has given us the means to confront today's crisis.
On the international level, let me reiterate one point: beyond European solutions, there is also a need for global solutions. The Commission supports the initiatives taken by the French Presidency of the Council to come up with a united response: the idea of an international conference in the autumn to consolidate the overall efforts of stabilization of the financial markets, as well as its preparation at the European level, by means of a high level meeting in the coming days and, of course most importantly, the European Council on 15thand on the 16th of October. There has been a close and good cooperation between President Sarkozy and myself.
In this context, I renew our call for a swift decision by the US legislators on the so-called Paulson plan. The US must take responsibility. I trust that the US will show the statesmanship that is now required, for their sake and all our sake.
In conclusion on this point, Europeans, as well as our partners in the world, can be certain that our answers are and will live up to the challenge: we go through a crisis, but we have the means of overcoming it.