José Manuel Durão Barroso
President of the European Commission
Creating a European Response to a Global Crisis
European Parliament of Enterprises
Brussels, 14 October 2008
Secretary of state,
Ladies and gentlemen,
I'd like to thank Eurochambres for inviting me to this event and extend my congratulations for your anniversary. The timing is impeccable – this first Parliament of Enterprises is certainly receiving a baptism of fire!
There's no point in beating around the bush: Europe, and indeed the world, has been going through the greatest financial crisis since the Great Depression.
And exceptional times call for exceptional measures.
On Sunday, Europe has shown that it does have the capacity to act in concert to restore confidence in our financial markets.
The decisions taken by Heads of State and government in an unprecedented way have created a common frame of reference that allows all Member States to take action that is both effective and mutually reinforcing. Let me also stress that it was the first ever summit of the Eurogroup.
I am proud of the Commission's contribution to it. I personally worked hand in hand with the President of the European Council to facilitate a common European response.
The key to success is elaborating solutions that are tailored to the specific situation in each country. At the same time, however, we need to be sure that the actions of one Member State contribute to, and do not undermine, the effectiveness of action in other Member States.
The decisions also get right to the heart of the challenges that confront us: liquidity, recapitalisation, and guarantees for retail deposits.
And they are already being translated into action on an impressive scale: interbank guarantees and recapitalisation worth €360 billion in France, €480 billion in Germany, and €382 billion in the UK, to mention just a few. The total amount committed by Member States stands close to € 2000 billion. The unprecedented nature of the crisis required an unprecedented level of coordination.
The European Commission has played, and continues to play, an important role in three different ways.
First, as a 'bridge', ensuring coherence between national action and European action; between Member States within the euro area and outside it; between all the institutions of the EU and the Member States.
Second, as an initiator of legislation. The Commission will present – even before this week's European Council – a legislative proposal for a European-wide agreement on deposit guarantees, for example. Adjustments to accounting rules are also being fast-tracked to ensure that Europe's financial institutions are not put at a disadvantage to their US partners.
Finally, the Commission has continued to act as defender of the single market. This means upholding competition and state aid rules. In a flexible way, certainly - but also in a way that respects the fundamental principles of the single market.
In all three areas, the Commission is showing that it can act fast and effectively.
It has also worked hard to ensure a tightly co-ordinated European response. And I think you will agree that we have witnessed unprecedented co-ordination in response to an unprecedented challenge.
I am convinced that the decisions we have taken are the right ones for business, the right ones for our citizens, and the right ones for Europe. Early indications from the markets suggest that our actions are restoring confidence, although this is no time for complacency.
We can all see a light at the end of the tunnel, but we are not yet there. We have to continue our efforts.
We all have to build on these common foundations to put an end to excessive market pessimism, and establish a more permanent return of confidence.
Then, we need to extend this unprecedented level of co-ordination and effort to tackle the fallout this crisis will inevitably have on the real economy. There may not be much evidence yet, but slower growth and higher unemployment are on the horizon. Decisive action now, particularly action in favour of SMEs, will help to ease the pain later.
The Small Business Act adopted by the Commission in June will be a vital tool for this purpose, as it directly addresses SMEs. And as Sunday's Eurogroup statement confirms, the decision by the European Investment Bank to mobilise €30 billion to support SMEs should also be of great benefit.
Change at a time of economic turmoil is difficult, but we must also continue to make progress in the fight against climate change. Of course, EU industry should not be put at a competitive disadvantage. But nor should we lose sight of the fact that there is a strong economic case for our energy and climate change package.
If we succeed in doing all this, Europe will bounce back stronger and more closely knit than ever - as previous setbacks have shown.
And then Europe's enterprises can get back to doing what they do best: creating jobs and prosperity for all Europe's citizens.
Thank you for what you are doing and your continued commitment to reforming the European economy. Thanks to you we can better resist the common challenges.