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José Manuel Durão Barroso

President of the European Commission

Growth and economic governance – orientation debate on energy and innovation

Press point

Brussels, 5 January 2011

Happy New Year, Ladies and Gentlemen, may I wish you and your families all the best for 2011.

The start of this New Year marks, I believe, an important new phase in European integration. In this semester we will make real progress on stronger economic governance and policy coordination in the European Union.

This semester's news will be clear: it is not only the so-called "federalists" who want to see more economic governance and co-ordination; it is the markets and also our international partners that are expecting it. More economic governance and coordination is not an ideological dream. It is a pragmatic need. Those defending it are not utopians, but realists.

The Commission's proposals are on the table and we will keep driving this agenda, and we will come with further policy initiatives.

In fact work has already been producing some results. On the 1st January, the three new supervisory authorities for the financial markets have begun their work.

Next week, I will present to you the Annual Growth Survey. This launches the first EU Semester, so called the European semester for economic governance, and will mark the start of our new cycle of economic governance. This will be a short text focussing on the key measures that need to be taken now in three main areas: fiscal consolidation; structural reforms; and growth enhancing measures.

Today, the Commission has discussed two of the priority growth-enhancing sectors, energy and innovation. They will be the two main themes of the next European Council. On both issues the Commission has put the main building blocks on the table.

As you know we have already adopted the Innovation Flagship, the energy agenda 2020, our Communication on energy infrastructure priorities and we will be soon adopting the Resources Efficiency Flagship.

I see energy policy as the next great European integration project. I see three priorities on which I would like the European Council to give a push to our proposals.

We need to accelerate the pace of implementation of the internal market. I would like the European Council to agree on the key missing infrastructure links and on how to remove all barriers to a truly European energy market.

Let me tell you very frankly that I am unhappy with the progress made on energy efficiency. While on the renewables we are making a lot of progress and it is now realistic to think that we are going to fulfil our 20% target by 2020, this is not the case for our target on energy efficiency. Since our best source of energy is in fact energy efficiency, and also considering the prices of energy, I think it is important from all points of view to achieve real progress of energy efficiency very soon.. I would like to see the European Council agree on concrete measures to reach the 20% target by 2020.

So I think we should therefore develop our future work around five priorities that we have put forward in our communication:

  • a strong energy policy as key to competitiveness, sustainable growth and security

  • an internal market in energy as an asset

  • building the European Union's new energy infrastructure

  • make decisive progress on energy efficiency

  • an effective and united European approach in terms of external energy policy.

Precisely on the external dimension I will be travelling next week together with Commissioner Oettinger to Azerbaijan and Turkmenistan to push for the Southern Corridor initiative. I believe that security and diversification of our energy supplies are one of Europe's strategic priorities.

The other topic for the next European Council is innovation policy and that is the other topic we have been discussing this morning.

We all know that innovation is essential to drive growth and employment. We need this kind of innovation for Europe's competitiveness.

If we really want to bring Europe to the cutting edge on innovation, we need to do much more together. We are either Open for Business or Out of Business, depending on the way we deal with innovation..

To make progress, we now need the endorsement of the European Council on our Strategic Approach to Innovation.

We particularly need Member State backing for the "big ticket" items - completing the European Research Area by 2014; launching and activating the European Innovation Partnerships, and using Public Procurement to boost innovation.

The European Innovation Partnerships are one of our most ground-breaking initiatives. We are talking here about tackling a major societal challenge which has significant market potential for European companies. I think it is important not only to work on some concrete measures, but to discuss frankly at European level the best conditions the best environment for innovation at societal level, because sometimes this is indeed a problem.

A pilot Partnership on active and healthy ageing is already up and running, aiming to extend by two years by 2020 the proportion of our lives in which we enjoy good health. The Commission will take account of lessons drawn from the pilot project as we consider further partnerships like water quality and use, resource-efficient use of raw materials and development of substitutes, unleashing the bio-economy, and accelerating the number of "smart" cities.

Of course, innovation does not happen in a vacuum and at EU level we need to create the right framework conditions. I would just pick out a couple of examples where we want a clear signal from the European Council.

We believe the time has come for governments to set aside dedicated budgets from existing money for public procurement of innovative products and services. This should create a procurement market worth at least €10 billion a year for innovations that improve public services. Secondly, we urgently need to improve access to finance. We are looking to put in place an EU-wide venture capital scheme and establish the conditions for an EU-wide knowledge market to be created. Here we are working with the European Investment Bank to scale up EU schemes like the Risk-Sharing Finance Facility, which has leveraged investments from the private sector worth over 40 times what the EU budget has put in. The idea here is to create a fund of funds that can inject large amounts of funding for priority projects.

Getting better value for money also means cutting red-tape, so that EU-funded scientists can spend more time in the lab and less time with red tape, because we cannot attract the most brilliant scientists and most innovative companies with an incoherent set of funding instruments, with complex and bureaucratic rules. Simplifying the Framework Programme is one of our top priorities and we would like a good cooperation with the Council and the Parliament for that purpose.

Finally, ladies and gentlemen, since this is the first time I meet you since last year; let me tell you a few words about some recent events. I was deeply worried by recent violence suffered by Christian communities and believers. We believe that any form of religious intolerance against any individual religious group or community, wherever and whenever happens, should be firmly condemned and acted upon. The New Year's Eve deadly attack on Christians in Alexandria (21 dead people after mass in the Two Saints Church) was a stark reminder of the seriousness of this situation that could escalate if not tackled in due time and in a resolute manner. EU is firmly attached to the Freedom of Religion and Religious Expression, fundamental Human Rights as enshrined in the Universal Declaration of 1948. As you know, the Commission promotes dialogue between all faiths and religions through regular meetings with all faith communities sand we have been saying loud and cler that tolerance is the key principle to respect in this matter and we condemn all kinds of attacks o the freedom of religion.

To conclude, let me tell you that 2011 will not be easy year, it will in fact be a very challenging year. Sometimes it will be painful also in economic terms. But we are not fire-fighting for financial stability. We are also building the future for a stronger and long-lasting architecture for the European economy. I think we should have this in mind when dealing with economic problems. We are of course pursuing fiscal consolidation, we need structural reforms for Europe's competitiveness, we need also growth. And that is why precisely why energy, innovation and other areas where the EU is working are important contributions for growth in our Union.

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