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José Manuel Durão Barroso
President of the European Commission
Speech by President Barroso at the World Economic Forum for Europe 2010
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World Economic Forum
Brussels, 10 May 2010
It is a pleasure to be here immediately after such a historic decision was taken. In fact after Friday's Euro Area Summit, this morning, in less than 48 hours the EU took a historic decision. Based on a mandate we received at the European Summit, the Commission yesterday made a proposal. We had an extraordinary meeting in the afternoon. And the ECOFIN ministers – finance and economic ministers of the European Union have agreed an important package for the stability of the Euro. We have stated that we will do whatever is necessary to defend the stability of the Euro. Today we have done just that.
This morning's deal is based on the proposal the Commission made during its extraordinary session Sunday morning. It creates a mechanism to assist Euro Area members with loans guaranteed by the EU budget. In addition, it provides assistance guaranteed by participating Member States.
The total amount of approximately 500 bn EUR is unprecedented in its scale. This should be also seen in conjunction with the measures taken by the ECB and also with possible participation of the IMF. There is as you know the commitment of the IMF to come to a participation of around half of what the Member States contribute.
So we can say that in the space of 48 hours the European Union has concluded an agreement that enables us to respond in a coordinated, fast, effective manner to difficulties in any euro area member state.
This morning's agreement will ensure that any attempt to weaken the stability of the Euro will fail.
It shows the determination of the whole of the European Union to stand behind any of its Member States when they are seriously threatened with severe difficulties caused by exceptional circumstances beyond their control.
But this deal is not only about assistance, it is also about further efforts of consolidation. I welcome the clear commitments made by some Member States to take additional measures of fiscal consolidation soon.
The combination of budgetary efforts by countries under pressure and assistance by the others is what I have been calling a "Consolidation Pact" for the Euro Area.
You know that the Commission has long been making the case for reinforced economic governance. We have stated for many years now that at the end we cannot have a monetary union without an economic union, this is the pine. We need stronger coordination, economic policy coordination. And until now the response of the Member States has been in this direction. And the standing that the solution of this problem has been more coordinated Europe, more coherence, economic policy coordination. That is why the Commission will present this Wednesday some proposals for reinforced economic governance and also for reinforced compliance with the Stability and Growth Pact.
We will propose to broaden surveillance of macroeconomic imbalances and reinforce our competitiveness. And we will also put on the table a permanent crisis management mechanism. This mechanism that was also adopted this morning was also for these very exceptional circumstances we are facing, was based on Article 122, a specific article of our Treaties.
Moreover, we will intensify the on-going work on a more robust and a more transparent regulation of financial markets. We will push this agenda in the G20. As you know, we were also at the beginning of this summit level process of G20. And as you know, but I am sure President Van Rompuy will speak about this, the EU has asked President Van Rompuy to chair a task force to look at some of these aspects.
So for me, the lesson from this crisis is clear. We need a stronger union in economic policy, a stronger compliance by Member States with policies and rules agreed at Union level.
This is now under way. We will undertake every effort to take it further. I think, the lesson from this crisis is that if you want a monetary union, you should promote also an economic union. This does not mean making every Member States make exactly the same at the same time but it certainly means reinforced economic governance and respect of all the obligations Member States have under the Stability and Growth Pact.