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José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso: Briefing on the conclusions of the European Council of 23 and 26 October 2011

European Parliament

Strasbourg, 27 October 2011


President of the European Council,

Honourable members,

Following a long but constructive meeting that was concluded just few hours ago, I am pleased to stand before you this morning and confirm that today, Europe is closer to resolving its economic and financial crisis and to getting back on a path to growth.

The Euro Summit took solid and substantial steps that should enable Europe to turn a corner.

Ahead of this European Council, the Commission demanded a comprehensive approach. We insisted that the different aspects of the crisis should be tackled together and not in a piecemeal, purely reactive fashion.

We set this out in the Roadmap to Stability and Growth, which I presented to you on 12 October and also sent to Heads of State and Government at the same time.

This Roadmap was very largely supported by this Parliament, I thank you for this. And I am pleased to inform you that its five elements have been comprehensively addressed at this European Council and in the Euro area Summit.

We know that agreements are not an end point. They mean the beginning of a long path of hard work. But today we have a more ambitious platform on which to build Europe's future growth. Let me take the elements briefly one by one.

First, on Greece. The solution found this morning includes a credible and appropriate degree of private sector involvement. This will ease market pressure on Greece and allow the country to continue its programme of reforms. We are determined to conclude work on a second financial assistance programme by the end of the year.

Second, the agreement on the leveraging of the EFSF means that we have also maximised the potential of our backstops.

The mix of providing credit enhancement and maximised funding arrangements will increase the EFSF's leverage effect up to four or five times.

The European Commission has proposed since January of this year enforcement of the EFSF and providing it with more firepower. Increasing the credibility of our firewalls is the single most crucial element of our crisis resolution efforts. The element that underpins the credibility of all our other actions.

Third, on banks. The decisions taken yesterday by Member States will pave the way for a restoration of confidence in the European banking sector. We are working to design an approach for medium and long-term funding of banks, while also requiring banks to hold a significantly higher capital ratio after taking account of sovereign debt exposures.

The Commission will continue to work hand in hand with the European Banking Authority, the ECB and the EIB to implement these measures through a fully coordinated approach at European Union level.

I am also pleased that Italy have given it's strong commitment to undertake further structural reforms. This is confirmed not only in the letter that the President of the Council of Ministers of Italy sent to President Van Rompuy and myself but also in the very clear conclusions endorsed by all the Heads of States and Government of the Euro area. It is now imperative that Italy implements these commitments fully, and according to a clear and coherent timetable. The Commission has a specific interest in this with the responsibility to monitor these efforts.

Honourable Members,

This is where we stand on the most urgent issues.

I believe that the Summit decisions give us a solid platform from which to continue our work. I am also particularly pleased that the Summit conclusions highlight the role of the Community method and of the Commission in economic governance. In effect, Heads of State and Government have pledged to build on the measures of the six-pack and the European Semester by strengthening the Commission's role in assessing, monitoring and coordinating national economic policies and budgets.

But we will now go beyond the legislation recently adopted by this Parliament. The Commission is committed to a true economic union, through increased convergence. Today I can announce to you that next month, we will present a comprehensive package on further deepening European Union and Euro area economic governance. This will include namely:

  • a co-decision regulation linking surveillance with EFSF and ESM assistance on the basis of article 136 of the Treaty;

  • a further co-decision regulation on deeper fiscal surveillance; also based on article 136 of the Treaty; So it is for you to decide with the Council on the basis of our proposal.

  • a communication on the external representation of the euro on the basis of article 138 of the Treaty;

  • a Green Paper on euro stability bonds, as announced in my State of the Union speech.

  • and we will also anticipate in this package the Annual Growth Survey, so to give you then more coherence and focus to the preparation of next year's economic policies;

This package will give direction to the moves towards integration and convergence. It will give energy to our joint efforts, the efforts of all the institutions. And it will do so while upholding the principle of prioritising the Community method.

In this context, the independent and objective authority of the Commission is even more important – a view often expressed by this Parliament.

Today, I can announce to you that I intend to entrust Olli Rehn with a reinforced status and additional working instruments. He is to become Commission Vice-President for economic and monetary affairs and the Euro. This is the best way to guarantee the independence, objectivity and efficiency in the exercise of the Commission's responsibility of coordination, surveillance and enforcement in the area of economic governance of the Union and of the euro area in particular. I think it is also important and relevant not only from a substantive, but also from a symbolic point of view, and symbols are important, that having a Commissioner specially dedicated to the euro, we assert that we want the euro governance to take place inside the community method and with the community institutions.

At the same time, I believe that it is also important to ensure the credibility and to further reinforce the independence and the objectivity of all our technical work, not only in terms of economic preparations, but also in terms of the independent collection of statistical data. I will therefore entrust the responsibility for Eurostat to the Commissioner for audit –Algirdas Šemeta.

These decisions will be transmitted to this House before the November plenary session, and both Olli Rehn and Algirdas Šemeta are ready to appear before the relevant parliamentary committee.

Honourable Members,

Financial stability, economic governance, all this is of paramount importance, but we should never forget that our goal is to promote inclusive and sustainable growth and employment.

On Sunday the European Council devoted great part of its work to this and I am pleased to have presented my vision, the vision of the European Commission to all the Heads of State and Government. I am happy to say that most of these proposals are now reflected in the conclusions of the European Council.

The Commission is now working on the proposals I presented in my State of the Union address and in my announcement to this House of the Commission's Roadmap to Stability and Growth.

They include of course;

  • Getting agreement on the Single Market Act by the end of 2012;

  • Fully implementing the Services Directive and;

  • Rapidly adopting our proposals to temporarily increase cofinancing rates in countries under adjustment programmes.

I am happy that the Council has now reached agreement on this, which is so important for the countries that are more vulnerable. I take this opportunity to urge the Council once again to reach the agreement on the programme for the Regulation for Food Aid to the most deprived persons.

I think it is unacceptable that in a moment of social crisis, as we have now in so any areas of our Europe, it is precisely the moment when, because of lack of decision in this matter, we put some of the most vulnerable people in our societies at risk.

For its part, the Commission has also pledged to fast-track a number of proposals. For instance:

  • On 30th November we will come with a proposal on facilitating access to venture capital, as part of the Single Market Act.

  • On 13th December we will propose a modernisation of the recognition of professional qualifications.

  • Before the end of this year the Commission will propose a Youth Opportunities Initiative to boost youth employment building also on the resources of the European Social Fund (ESF).

Fast-tracking these measures, and we are for instance very committed to speed-up everything regarding our digital agenda, is not just about getting back the growth we have lost over the last three years. It is about giving hope to millions of Europeans in their future. It is about restoring their trust and confidence in our social market economy.

Honourable members,

Working in close cooperation with the President of the European Council Herman van Rompuy and the President of the Eurogroup Jean-Claude Juncker, I will contribute to a report that will also include some options for Treaty change. I will consult widely with this House on the issue. I will meet the AFCO Committee and will take part in other debates, as discussed earlier this morning by your Conference of Presidents. The European Parliament has to be fully involved in such major changes.

The Commission has argued for many months that to complete our monetary union with an economic union, we need stronger governance in the euro area. We need more integration, more discipline, more convergence.

I have always stated that any possible Treaty change should not appear as the immediate solution to the current crisis. But it is true that by working to embed stricter discipline and stronger governance into the Euro area in particular, we may help to prevent a future crisis.

While deeper integration of the Euro area is essential, it must be done in a way that keeps the entire European Union strong. We don't want artificial divisions between the Member State of the euro area and the all the Member State of the European Union. The euro should remain open to all Member States who may join in the future.

The reinforcement of the governance of the euro area must be done in a way that ensures the integrity of the Single Market and all the Community acquis. This coherence and compatibility can only be achieved through the Community institutions because they are the ones mandated to act in the interests of all our Member States and our citizens in a rules-based, indeed Treaty-based way.

I am particularly pleased that the role of the Commission in ensuring coherence between the euro area and the 27 Member States was clearly recognised in the European Council conclusions, particularly when it comes to the need to maintain a level-playing field in the internal market.

Honourable members,

The bold decisions taken over the last days, and indeed over the last weeks and months, allow us to take a message to our partners at the G20 summit in Cannes of a Europe that is determined, that is responsible, that is united.

Europe will push at the G20 for an ambitious action plan that can address the challenges and imbalances that are still hindering growth at the global level.

Europe strives to lead the global crisis response at the G20, but of course we will not have the credibility to lead if we could not show, as we have shown, that we are able to find a real solution for our own problems. By the end of this year, the Commission will have presented all its proposals on overhauling the banking system, in line with our G20 commitments. That means over 30 pieces of legislation – all of which aim to make the sector more responsible and to restore its position as a service to the real economy. I know how much this Parliament is committed to this agenda and I thank you for your constant support.

Europe is also the first constituency in the G20 to have proposed a financial transaction tax, which we shall present at the G20 summit in Cannes. I believe that the protest movements we have witnessed in recent weeks, from Madrid to Manhattan, show that this is the kind of action people expect from their leaders - to ensure that the financial sector contributes to society.

This type of response is of course most effective on a global scale, where it can be used to address global challenges, such as the fight against poverty. This is a message I will push strongly for in Cannes.

Ladies and gentlemen,

Honourable members,

To close, I would like to say that today, the European Union is showing that we can unite in the most challenging of times and that we will demonstrate our unity, our solidarity and our determination for a European renewal.

It is clear that growth and prosperity will not be restored in a day. As I said in this Parliament in my State of the Union address, this is a marathon, not a sprint. But today we are witnessing a level of determination that should give hope and confidence to us all.

The Commission will continue to make proposals for a Community way out of this crisis. I know I can count on your continued support and I thank you for the support you have already shown.

Thank you for your attention.

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