José Manuel Durão Barroso
President of the European Commission
Statement of President Barroso in advance of the European Council
European Parliament Plenary
Strasbourg, 16 June 2010
Ladies and gentlemen,
Distinguished members of the European Parliament,
First of all a word of thanks to the Spanish Presidency. The Spanish Presidency is accomplishing a very difficult task at an exceptional moment of the European Union and I think it is fair to recognise their commitment, their European conviction in times of crisis. Through Minister López Garrido, I want to convey to the Spanish government my sincere thanks to all the relevant contributions they have been making especially during these six months for all the common European project.
Ladies and gentlemen,
Ahead of tomorrow's European Council, I would like to draw some lessons from the past few months, and set out which direction I believe the European Union needs to take.
In the last few months, we have taken decisions, which would have been difficult to imagine just a few months ago. We succeeded in reinventing our economic response to meet urgent needs – in a way that respects our most cherished principles – solidarity and responsibility. So we were able to bring support to our fellow Europeans in Greece, in the framework of a mechanism that contains the necessary rules and obligations. It took some time. But the system is now in place, and both the system itself, and the EU, have proved equal to the task. Moreover, we are also succeeding in designing a crisis response for the Euro. This was a major effort, accomplished in a very short time and unmatched anywhere in the world. With this European mechanism and with this European facility that together amount to 500 Bn Euro supplemented by 250 Bn Euro from the IMF, we have ensured that we can face any further difficulty, should such a difficulty arise.
This was uncharted territory, but the EU has been doing what is necessary to address the risks of financial stability. And, although those who like to speak loudly about Europe's problems are reluctant to admit it, this is the reality: when action is needed, provided there is a political will of the member states, we are able to take this challenge.
Moreover, we have not stopped at short-term stabilization. We have embarked on a far-reaching exercise of fiscal consolidation and modernisation of our budgetary and economic surveillance. I hope the European Council will give backing to the Commission's proposals to strengthen fiscal discipline and macroeconomic surveillance which in the meantime have been constructively discussed in the Task Force led by President Van Rompuy.
We have started to deliver on our Europe 2020 strategy for growth and jobs. In other words, we are adding dynamism to the economy, for instance through the digital agenda, in addition to the stabilization and consolidation efforts. We are striving to avoid a decade of debt and build a generation of growth.
In fact the potential growth of the European Union has been severely affected by the last financial crisis so the most important priority now is growth.
Growth is the answer. But not any kind of growth. We need intelligent, sustainable and inclusive growth and I want to underline this last point – inclusive growth, because I think it will not be fair that the most vulnerable in our societies, those who were not at the origin of this crisis, will be those that have to pay much more during this crisis. For this growth to happen we need fiscal consolidation and structural reform. It's obvious that without serious efforts in these areas confidence will not be back. Without confidence we cannot have growth so we have in fact now the opportunity to go further in our economic policy efforts.
We have to advance on several fronts at once. So this is the most important lesson from this crisis. In fact, first with the problem of the monetary union the result should not be going back on our monetary union, the result should be going further in economic union. This is the important point, we need a real effort for an economic union in Europe. And that is why there is this holistic approach combining several instruments. Of course, fiscal consolidation and structural reform, but structural reform for growth and that is why the Europe 2020 strategy places at the heart of it the elements of growth, intelligent, sustainable, inclusive growth. But this is not the whole program. The program is about growth, but also in terms of structural reforms, in terms of financial reforms and in terms of the new economic governance for Europe. Yesterday I had the occasion during the question hour to discuss this issue of the economic governance. I will not come now in detail, but I will just say our commitment to use this opportunity to reinforce the economic governance at European level.
Tomorrow's European Council should signal to people that we have a new perspective for growth, with the Europe 2020 strategy, but I believe that agreeing the strategy, including the targets and I am happy that now it appears to have been built a consensus around the targets, including the targets of achieving a greater degree of social inclusion. I think agreeing the strategy is relatively the easier part. Where we really need to invest and work together is on the delivery, year after year. The Commission will play its full role, using the all the possibilities offered by the Lisbon Treaty. I am looking forward to discussing this in more detail with the European Parliament.
People also need to see that financial markets are actually being repaired and that promises are kept. We need agreement on financial supervision before the summer to back up our intentions with action, and we need a clear signal from the European Council that the forthcoming Commission's proposals on financial market regulation will be adopted by the end of 2011. It is important now not to lose momentum on financial reform.
We must also show that the crisis has not dimmed our commitment to the Millennium Development Goals or our determination to lead on climate change. This Parliament has given the Commission full support for an ambitious European approach.
Ladies and gentlemen,
Europe played a key role in shaping the global response to the crisis. It was the EU that pushed for the G20 to become the global forum for economic recovery.
Now we need the summit in Toronto to reinforce the message that the G20 remains committed. That does not mean that we all face the same challenges or must respond in the same way. But what we all know is that none of these problems can be effectively tackled at home without a collective response at the international level.
I have explained in my letter to the European Council what should be the three key areas in Toronto:
First, to agree common principles for exit strategies in terms of fiscal consolidation. We have already done this at EU level. But a global approach would help the many economies around the world facing the same challenge.
Second, the world needs to be working on developing new sources for growth, as we are advocating internally. All major economies need to do their part to achieve the agreed objectives of strong, balanced, sustainable growth. Coordination at global level is critical for optimizing growth prospects. We need both the supply and demand side, worldwide, to spur productivity and unleash the potential for growth. A strong message here would be a big boost to confidence globally. Namely I think we should keep in mind that trade can be and should be one of the elements to spur new sources of growth.
We also need to drive forward the global agenda for financial reform and repair. 2010 is the crucial year for implementing what the G20 already agreed, for keeping the momentum for further reforms. This means improving both the quantity and quality of bank capital and to discourage excessive leverage; improving supervisory and crisis management processes; convergent international accounting standards; increasing transparency of derivative markets.
We cannot be seen to be stepping back from reforms, nor from ensuring that the financial sector and those who work in it are playing their full part in these efforts. This is why I will continue to call for a common framework for a bank levy at global level. It is only fair that the financial sector, where irresponsible behaviour triggered this crisis, makes a contribution to solving the crisis. As I have said before, I personally am convinced that we will also need to work on a Financial Transaction Tax or a Financial Activities Tax.
Distinguished Members of the Parliament,
Situation is serious and in fact extremely challenging. Wages are being cut. Unemployment remains very high. The pressure on people, especially the most vulnerable is intense.
At the European Council and the G20 summit, we must show that Europe is part of the solution.
We are facing a very difficult moment, in fact, one of the most difficult moments in recent history. But by tackling these difficulties, we are laying the foundations for a better future. Once again, we can see that a crisis can accelerate decision-making when it crystallizes political will. Solutions that seemed out of reach only a few years or even months ago are now possible. As the history of European construction reminds us it is usually in times like this, it is usually in times of crisis that we can make progress in the European project. The reality is that Member States are now ready to accept some proposals that some years ago or even some months ago were simply not acceptable. And I can give you a lot of concrete examples. So if we keep our commitment to show to our citizens, to work with our Member States and to explain that we need Europe more than ever, I think that this crisis can be a platform for a common European response and for a stronger Europe.
Of course, the game is not over. It is an extremely delicate moment and that's why I would like to thank this Parliament for its steadfast support to the strengthening of the Community method at this point in time. I would like specially to thank the most important political forces in this Parliament that stood up and said that we need more than ever a European approach and a reinforcement of the Community method. We sometimes have the reflex to look for new institutions and structures when a problem emerges. But the reality is that the Community method has stood the test of time because it is more adaptable than some might think. I believe that Europeans want us to concentrate on substance. They don't want more divisive discussions about institutions or processes. They want results. This is also what the rest of the world expects from us. In fact, we are at specific moment in time where Europeans, the markets, global community are asking Europe to be better coordinated, better organised, to achieve greater levels of convergence and coherence. This is what, I think, we need to work through the institutions that we have, and use them to their full potential.
This house has repeatedly emphasized the central role of the Commission. Yes, the Commission in the areas in which the Treaties gives it the competence is indeed the economic government of Europe. The Commission, which is fully accountable to the European Parliament, exercises this role in co-operation with the European Council and the Council of Ministers, in the respect of their competences. Because this is not only about European Union competences. We also need a better coordination on issues under national competence. It is in such a spirit of co-operation that we can help the Member States to chart the way forward. Let me be clear: this is not about a Brussels power grab. This is not a new round in the debate over the division of powers. Today's task is to add value, European value, through the vigorous, responsible and complementary exercise of our respective roles. European Union will do it in full respect of the Community method and reinforcing a European response. You can count on the Commission to fully assume its responsibilities.
We are doing our job. We count on decisive input and support from this Parliament. Thank you very much.