José Manuel Durão Barroso
President of the European Commission
Statement by President Barroso at the press conference following the meeting of the Heads of State or Government of the euro area
Brussels, 27 October 2011
Good morning, ladies and gentlemen,
When I presented the Commission's Roadmap for Stability and Growth two weeks ago – calling for action in five essential areas – I made it very clear that Europe needed to deliver a comprehensive response to the sovereign debt crisis. And I believe that now we have a very solid way forward.
Indeed, on all five points of this Roadmap, Europe has taken important steps forward. Let me briefly outline these.
First, on Greece. Our overriding objective is to bring the country’s debt back to sustainable levels. And that is essential not only for Greece, but for the European Union as a whole. Tonight opens the door to an appropriate degree of voluntary involvement of private sector investors, which will allow work to proceed on a second financial assistance programme for Greece. We are determined to conclude this by the end of this year.
The Euro Summit has asked the Commission to play an even more active role in monitoring the implementation of this second programme. Greece must continue with its structural reforms and fiscal consolidation measures in order to transform its capacity to generate growth.
Second, we have agreed to endorse two options for leveraging the EFSF. Together, these will allow us to more effectively prevent contagion. I have long insisted on the necessity to equip the EFSF with adequate flexibility and resources, so I am particularly pleased with this decision.
Third, we are also pleased that all Member States of the European Union agreed a series of measures to restore confidence in the banking sector.
These measures address both capital and funding. Let me emphasise that our goal is to ensure banks maintain lending to the real economy. National supervisory authorities must work to make this happen, namely with the European Banking Authority (EBA). Tonight’s conclusions also make clear that "banks should be subject to constraints regarding the distribution of dividends and bonus payments” until recapitalisation is complete. Because increased responsibility and a fair contribution of the financial sector is also central to our approach.
Fourth, as you know these are exceptional measures for exceptional times. Europe must never again find itself in this situation. That is why we must further improve our economic governance, namely in the euro area. Tonight’s Euro Summit paves the way to a further strengthening of coordination and surveillance. The Commission’s central role here is reinforced. We are already working on concrete ideas that go beyond the recently agreed six pack, so the recently approved legislation and we will be presenting these in the very near future.
Lastly, we also addressed the issues of stability and growth. We discussed growth on Sunday, so I will not repeat, but just want to underline it: this is also about growth. We need to have fiscal discipline, but at the same time we need to show to our citizens that there is hope, that we can restore growth through deepening our internal market, through structural reforms, but also countries need to pursue efforts in terms of stability. That is why we particularly welcomed the announcements made by Italy.
To conclude, the package we have agreed tonight is a comprehensive package that confirms that Europe will do what it takes to safeguard financial stability. I have said it before and I will say it again: this is a marathon, not a sprint. The technical work needed to finalise certain aspects of this package will be completed by the relevant authorities in the coming weeks. And the Commission will make further proposals for a Community way out of this crisis.
Next week, we will be able to show our partners in the G20 that Europe is able to do that: an agreement to conclude measures to restore confidence in the European banking sector; ensuring the adequate firewalls; accelerating our ambitious agenda for growth; and further strengthening economic surveillance and coordination. To show our partners and our citizens that we are ready to complete our monetary union with a true economic union.