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José Manuel Durão Barroso

President of the European Commission

Press conference in advance of the European Council

Press Conference

Brussels, 21 June 2011

Good afternoon Ladies and Gentlemen,

This week's European Council has a very substantive agenda. As you know I have written a letter to the Members of the European Council highlighting some of the positions of the Commission on some of the most important points. I will now go through some of these points. I am sorry if I am going to speak a bit longer than usual, but this is indeed a very substantive agenda of the European Council and at the end I will also make some comments regarding Greece. As you know, yesterday night I received the Prime Minister of Greece, Mr Papandreou, and I think it is also important to share with you some of our views on that very important situation we have in Greece.

So I think this European Council is indeed a very important one. It will take very important steps towards ensuring that the EU's economic policy-making is both more coherent and more effective.

Firstly, we have the economic governance package, which the Commission presented last September. It is important that we have this deal before the Summer break. I urge the European Parliament and the Council to put their differences aside. With a final push on both sides I hope the remaining issues can be resolved, because the adoption of the governance package is one of the central pillars in our comprehensive response to the crisis.

Agreement on this package will give teeth to our economic surveillance mechanisms at EU level. It will make the EU far better placed to prevent the development of unsustainable public debt and deficits, as well as the emergence of harmful macroeconomic imbalances. And though prevention is better than cure, we will also be better placed to take action to correct these situations if they do emerge.

Secondly, Heads of State and Government will endorse the Country-Specific Recommendations that the Commission presented on the 7th June. This is, as you know, the first time we make this kind of collective exercise at European level. It is a very practical way of making policy together.

The recommendations are based on an extensive analysis by the Commission of Member States’ plans for sustainable growth and job creation married to sound public finances, including the commitments presented under the Euro Plus Pact.

They are focused, measurable and tailored to each country’s most pressing challenges. Of course, the representation of these Country-Specific Recommendations has led to frank and sometimes very intensive discussions with Member States over the last two weeks. But I am pleased that the overall result has maintained the level of ambition, and I expect the European Council will endorse our recommendations unanimously.

We cannot reap the benefits of the Single Market on one hand, but ignore reckless economic policy-making on the other hand. There is no point in signing off on a brand new economic governance package if the very same week member states question the methodology and independent Commission recommendations in the country specific exercise. I expect the European Council to maintain the level of ambition and then fully implement the recommendations at national level.

Thirdly, the European Council is due to endorse the treaty change necessary to allow for the establishment of the European Stability Mechanism in 2013, with its capacity to assist euro area Member States in financial difficulties – on the basis of strict conditionality.

Together with the increase of the effective lending capacity of the EFSF, which has now been agreed, these are a clear demonstration of our commitment to safeguarding the stability of the euro area, on the basis of sound and sustainable public finances. As you remember the European Commission presented in January in our Annual Growth Survey proposals to increase the effective lending capacity of the EFSF. At that time, you probably remember that there was a storm – there were many criticisms against the Commission. It was now approved unanimously by the finance ministers. I hope the European Council will of course endorse this approval.

Economic governance package, country-specific recommendations and the stability mechanisms: this is how Europe is seriously drawing the lessons from the crisis and acting upon them. I think nobody should doubt our resolve.

To respond to the economic crisis, every sector needs to contribute, none more so than the financial sector. Yesterday, I announced in my letter to my colleagues in the European Council that the Commission will present a formal legislative proposal, after the summer, to put in place a financial tax within the European Union.

The proposal will have three aims: firstly, to avoid fragmentation in the internal market for financial services, because as you know there is an increasing number of uncoordinated national tax measures being put in place. Secondly, to create appropriate disincentives for overly risky or purely speculative transactions. Thirdly, to ensure that financial institutions make a fair and substantive contribution to the border sharing of the costs of the recent crisis as well as to address concerns about excessive profits. In fact the very high bonuses that are still being paid to bankers suggest that there are excessive profits in the banking sector.

The second major issue for the European Council is migration.

The issue of migration has come to the fore in recent months, in particular under the pressure of recent events in the Southern Mediterranean.

The Commission has presented its ideas on migration setting recent and future policy initiatives in a framework that allows the EU and its Member States to manage asylum, migration and mobility of third-country nationals in a secure environment.

Migration, let's face it, is an emotive issue – one where perceptions matter. I have read many articles suggesting that the Schengen principles of free movement are being undermined. I don't agree and I think that we are going to see exactly the opposite. We are going to see a reinforcement of the European approach to migration and also to the free movement.

The Commission has proposed to strengthen the governance of the Schengen area, and thereby reinforce Member States' confidence and trust in the effective management of our external borders. This will be done both through strengthening the FRONTEX border agency, and through an evaluation mechanism, whereby national border agencies will work jointly on assessing threats. We are also exploring the feasibility and design of a Community based safeguard mechanism, which could in a last resort include the temporary reintroduction of internal border controls.

Let me be crystal clear: this is not a rollback of the abolition of internal borders. This is a way of strengthening the European dimension of the system so that individual Member States do not feel pressured into acting unilaterally. I will be looking for a clear endorsement of this approach from the European Council so that the detailed Commission proposals can be finalised.

This migration package is completed by proposals for a common, efficient and protective asylum system, which guarantees asylum seekers equal treatment across the European Union. I am confident that the European Parliament and Council will endorse the proposals set out in the Commission's reviewed proposals on minimum standards for the reception of asylum seekers and on refugee status. I call on the European Council to lend its support to the completion of the entirety of the asylum package, as swiftly as possible within the agreed deadline.

The European Council will also discuss the situation in our neighbourhood. In my letter to my European Council colleagues, I have set out the state of play on our implementation of the "Partnership for Democracy and Shared Prosperity with the Southern Mediterranean", more specifically in Tunisia and Egypt. Just this morning this was the key issue that I have just discussed with Amre Moussa, Secretary-General of the Arab league. I can tell you how important it is, this partnership, to our Arab partners and how they look to the European Union with great hope of support for the democratic transitions in the South Mediterranean.

Another point on the upcoming European Council is to the Commission’s recommendation that Croatia becomes the 28th Member State of the European Union, hopefully by 1 July 2013. There is still substantial work to be done and the Commission will continue to monitor progress closely, but I hope that at the end of the month we can sign off on the remaining chapters in the Accession Conference.

Now a word about the meeting I had yesterday with Prime Minister Papandreou. It was a very good and frank discussion and I want to pay tribute to the courageous reforms that Prime Minister Papandreou is advocating. He is in the eye of the storm but absolutely determined to make good on his part of the bargain.

We know that many people in Greece are faced with deep cuts that have a real impact on their income. We understand how difficult this is. If there were an easier route out of the crisis, we would have taken it. But there is not. The only way for Greece to return to growth and create jobs in a sustainable way is to restore competitiveness and put its public finances on a solid footing. That is the route Greece has embarked upon, with the European Union's full support and solidarity.

It is crucial that the new Greek Government receives the confidence of the Parliament tonight so that it can build the consensus the country needs for far-reaching economic reform. Next week is the moment of truth where Greece needs to demonstrate that it is genuinely committed to the ambitious package of further fiscal measures and privatisations put forward by Prime Minister Papandreou's government and agreed with the EU and the IMF.

My message today is that if Athens acts, Europe will deliver. There is a plan. I urge everybody to now act upon it. I think it is better to act than just to talk. There is a plan, let's put it to practice.

I believe this is a time that calls for a more strategic use also of our European structural funds. And I think it is important to show to our Greek friends and partners that, yes, the way out is difficult but there is hope and there are solutions at the end of this path. That is why I would like to ask the European Council to discuss what we can to assist Greece, beyond its consolidation efforts, to enhance competitiveness and address the more urgent problems of unemployment.

Greece has the potential to access a significant amount of EU money under cohesion policy.

We should concentrate these funds on where it matters the most now: on improving competitiveness and employment.

We should coordinate them, so that we make the most impact.

We should find ways to frontload and accelerate them, so that Greece gets the benefit now.

This is the offer we should make to Greece. If the new government decides to go for this approach, I believe we should provide such assistance under tight supervision.

I believe this can be done now with the existing funds. The idea is to have a comprehensive programme of technical assistance, where the European Commission and the Member States complement the decisions agreed in the Troika, by increasing absorption capacity and putting the focus on increasing competitiveness and of course employment.

This is possible. I insist it is very important that we link the efforts of consolidation, structural reform and the privatisations that are indispensable also to some active support to Greece to create more growth as soon as possible. This is the condition for debt sustainability.

And you see, ladies and gentlemen, in all these issues from euro area situation to economic governance to migration the Commission has been the driving force behind the work in all of the areas that the European Council will discuss later this week. I hope that the Heads of State and Government will of course match our level of ambition.

I thank you for your attention.

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