José Manuel Durão Barroso
President of the European Commission
The European Council: sending a signal of unity, solidarity and support for the European project
European Parliament debate on upcoming European Council
Strasbourg, 15 December 2010
This week's European Council, will focus on two main goals: to agree on the key features of a future permanent European Stability Mechanism for the euro area, and on the limited treaty change that will make this mechanism legally water-proof.
I therefore hope and expect this European Council to focus on delivery, steadying the course and strengthening the consensus.
And in reaching an agreement, this European Council will also send a signal of unity, solidarity and unambiguous support for the European project. But it will require a lot of hard work to get there.
We all know that at the moment, there is a lot at stake for the European Union and the euro area in particular. Many people are looking to the EU for answers. The markets, for one. Our partners in the world for another. But most importantly, our citizens.
What are they expecting? How can we best reassure them? For me, the answer is clear. We need to show that the EU is in control of events. To show that we have a course of action and that we are sticking to it. That we speak with one voice, and act as one.
What we don't need is a beauty contest between leaders, a cacophony of diverging scenarios, or announcements that are not followed by action.
Yes, we are facing serious challenges. But if you stand back and look at the facts, the European Union is meeting those challenges head on this year.
We faced two particular issues, with Greece and Ireland. In both cases, we took the decisions needed. The reality is that in both situations, the EU was able to act. But we need to put far-reaching reforms in place to ensure that such situations don't arise again in the future.
Real, European, economic governance is a necessary pre-condition for this. The economic governance package should therefore be seen as the key building block in a system which gives Europeans - and the markets - confidence that the right structures are in place.
I hope that this Parliament will continue to treat these Commission proposals as a priority, so that they can be fully implemented by the middle of next year.
Our future system will be one that rests on individual and collective efforts, responsibility and solidarity. And we are moving fast in this direction.
At the same time, public finances must be consolidated. Sound public finances are needed to restore the confidence which is so essential for growth.
In many Member States, the current course of fiscal policy weighs heavily on the long-term sustainability of public finances, and requires corrective measures.
And of course we need to look beyond fiscal consolidation, towards promoting growth. And we are sowing the seeds of Europe's future growth through the Europe 2020 strategy.
This offers a real growth perspective for Europe. I see more and more Member States fully grasping the potential of Europe 2020. Let's build on that by accelerating growth-enhancing reforms. Taken seriously, Europe 2020 can direct our local, national and European economies towards tomorrow's sources of growth.
We are working hard to bring forward the first Annual Growth Survey in one month's time. I am confident that this will be a major theme for this Parliament next year. So too will be the future budget of the Union, and how its great potential can be used to help the task of boosting growth and creating jobs.
We must also look at our banking system and take the necessary action in order to ensure that banks are in a position to finance the economy appropriately – in particular SMEs.
When it comes to stabilising economies, much of our action was ad hoc or temporary. Another important element of our approach for far-reaching reforms must be a permanent stability mechanism.
That is the objective of the European Stability Mechanism. After intense consultations, which went very well, we were able to come forward with an outline for this mechanism at the end of last month.
I am confident this will be endorsed by the European Council this week, although the precise contours will have to be worked out over the coming weeks.
The mechanism should also be supported by a decision to move forward with a limited and focused treaty change. Now that there is a consensus between Member States to take the treaty change route, this approach must be swiftly implemented.
The purpose of the treaty change is very specific. It is a straightforward, pragmatic amendment to meet a specific need. It needs no more than a simple change to implement it.
So let's resist the temptation to overcomplicate, or to make artificial linkages with other subjects. And let's not allow ourselves to be distracted from the task in hand. There is massive political will behind the euro. Both the temporary mechanism and now the permanent mechanism are key decisions which show that Member States are as willing as ever to put their weight behind the stability and integrity of the euro.
All of these elements – economic governance, fiscal consolidation, securing growth-enhancing reforms, effective banks, the European Financial Stability Facility and its successor the European Stability Mechanism – are interconnected. They must be approached as a whole, put together in an articulated way, so as to create a comprehensive response to the crisis, and ensure that nothing like it ever happens again.
The action that the European Central Bank is taking is of course a vital contribution to this goal.
Everyone agrees that the action taken this year, most obviously for Greece and Ireland, is also in the wider interests of the whole European Union and all its Member States.
It rests heavily on fundamental principles of solidarity, of collective responsibility, of sharing the risks and bringing mutual support at times of need.
I know that these principles are close to the heart of this Parliament. They are close to my heart too. So I can understand why other ideas have been floated to give form to these principles through other possible mechanisms.
On this point, let me be clear: Eurobonds in themselves are an interesting idea. The Commission itself put forward the idea back in 2008, when assessing the first ten years of EMU.
But we are in a crisis situation and we already have financial mechanisms to address that crisis, like the European Financial Stability Facility. These are far from exhausted, and can be improved and adapted – far more quickly than any alternatives, however interesting they may be.
So while I can understand that you want to think about every possible solution, this is a time for immediate action. Let's not kill the idea for the future, but concentrate at this stage on what can be a solution to achieve a consensus among Member States, and can be done quickly and decisively.
Let us work together to end this year with a message of confidence that the European Union has a unified vision for its economy, and is putting this vision in place.
Let us do it with a clear sense of our destination. And let that destination be clear as well: a strong and stable euro area in an ever closer European Union.
Thank you for your attention.