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José Manuel Durão Barroso President of the European Commission A modernized partnership for a stronger and closer Union CCRE 2011-Governing in partnership Brussels, 12 December 2011

European Commission - SPEECH/11/874   12/12/2011

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SPEECH/11/874

José Manuel Durão Barroso

President of the European Commission

A modernized partnership for a stronger and closer Union

CCRE 2011-Governing in partnership

Brussels, 12 December 2011

Madam President of the Committee of the Regions, dear Mercedes Bresso

Mister President of the Council of European Municipalities and Regions, dear Wolfgang Schuster

Dear colleague from the Commission, Johannes Hahn

Michèle Sabban,

Jean-Yves Le Drian,

Franz Jensen,

Annemarie Jorritsma

Dear guests,

Dear friends,

It is a pleasure and an honour for me to be with you today.

Let me start by congratulating the Council of European Municipalities and Regions for 60 years of intense and most valuable contribution to the unity and the dynamism of Europe. In fact, since the beginning of the European integration process, the regions and Europe get together and we should never forget that. In the inspiring ideas of many of those federalists that were at the origin of European integration, this was in fact a very important concept – this special complicity, if I may say so, between the regions and the European project.

Let me also congratulate you, dear Wolfgang Schuster, for your leadership in this organisation and the initiative on "Governing in partnership" that I really believe comes at the right moment. I remember the good times we spent in Stuttgart when I visited you and when we had the occasion to discuss important matters in terms of governance and what could be the contribution of the regions and local authorities, also to the governance of Europe, including of course, the implementation of the Europe 2020 strategy.

I am also very happy to see such a large gathering of European regional and local authorities and leaders. Let me recognise the Mayor of Lisbon, my city. Thank you very much, António Costa, for coming here. I see that so many of you have so important responsibilities in your entities that I really want to make a point that I make very often when you are not here – it is that you are also leaders of Europe. Sometimes, when you see the problems of Europe, the press says Europe and by Europe they mean Brussels, but Europe is not Brussels alone. It is Stuttgart, it is Lisbon, it is all over. We need the leadership of the capitals of our Member States, but also in our regions.

This tells a lot on our common and resolute commitment to pull forces together to build a stronger and closer Europe.

We know, and you have mentioned it Wolfgang, our Union is facing some of the most daunting challenges of its history.

The crisis has cut out our growth potential by one quarter. Beyond the crisis, ageing will reduce our workforce and this could further lessen our capacity to grow.

The recovery is now stalling. Unemployment has increased significantly. Uncertainty and risks are high. Confidence is low. The impact on investment and consumption is worrying.

So we are not complacent when we make the analysis of the situation, because I really believe we should be serious about the analysis of the situation. The situation is difficult, but now we need to confront it, we need more than ever to show a common political will to act together, decisively and urgently.

We must do whatever it takes to put an end to this period of uncertainties.

We need to be at the same time firemen and stop the spread of the sovereign debt crisis.

But we also need to be architects and build a strong and sustainable recovery on sound foundations.

And I believe we are, in spite of all the difficulties, we are basically on the right track. After last week's European Council, we have now an agreement to go forward for a new "fiscal compact" and strengthened economic policy coordination.

Our main priorities are crystal clear: Confidence in fiscal sustainability and in the financial system has to be restored. And Europe's growth potential has to be enhanced.

And above all we need a swift implementation of the decisions already taken.

That is the only way to give hope to the millions of unemployed people and notably young people who are too often the worst hit by the crisis.

We have to fully realize that our social model depends on this generation being financially able to support Europe's ageing population.

We have to fully realize that in all our countries, regions, and cities, we need banks that are able to lend normally, governments that are able to borrow; companies that are willing to invest, consumers who are willing to spend.

We need bold reforms at a national and regional level; and also enhanced governance at a European level.

And this is exactly what the Commission has emphasized in its 2012 Annual Growth Survey as being key priorities for national and EU efforts during the coming year.

The Annual Growth Survey that we have put forward and that was, by the way, very much welcomed by all the Heads of State and Government at the last European Council, puts a strong emphasis on the need for implementation, especially of growth-enhancing measures. I understand that because of the sovereign debt crisis, but also the financial crisis, most of the media attention was based in terms of the response to the European crisis and in terms of fiscal consolidation. But we have said it time and time again – it's not just about fiscal consolidation. This is impossible to avoid, because without this fiscal consolidation we will not have the credibility and the confidence for investment.

But what we need more than ever in Europe now is to restore the possibilities of growth. We need growth-enhancing measures also as a way of clear messages and signals in terms of sustainability of our public finances in the long term.

Fiscal consolidation and discipline are certainly key as sound public finances are an essential part of sustainable growth.

But we are also saying that we need smart fiscal consolidation. This is the way to promote growth and competitiveness for today and tomorrow.

This means that some spending are not just current costs but also vital investment in the future. I think for instance in terms of education, research, innovation, also infrastructure (there is some infrastructure that can generate growth, namely if we address the problems of missing links in the European infrastructure) and energy. There is a huge potential for investment in energy, for instance in green energy in Europe.

By the way, I would like to welcome the results of the Durban summit. I know that some were not completely happy with the results, but the reality is that we were expecting it to be much more difficult and at the end, we have now for the first time all the major emitters accepting that there will be an agreement that will be binding globally. And this was, I have to say it to you with some pride, the result of the European position. It was the European position that consistently has stated that we could not agree with a new Kyoto commitment if there was not a commitment of all the major emitters. For the first time they have accepted it, both developed and emerging economies that so far did not accept to go forward in this direction. And I would like to pay tribute also to the very important contribution given by Commissioner Hedegaard who really played a major role in this summit.

So I want to underline this to you, because I know that now it is not so fashionable like two or three years ago to speak about green growth and fight against climate change, but I know that many of you care about this issue. I know for instance the important role of the Covenant of mayors to fight climate change. And I want to tell you, that is my deep conviction, that this will remain in the very first priorities of the global agenda for the future. It is true that we have gone now through a period of relatively less attention because of the more imminent impact and more visibility of the financial and the sovereign crisis, but this is indeed critically important from a structural point of view. I think there is a huge field of opportunities for growth and development of green technologies, green growth all over Europe, and I hope that the mayors and the regional leaders of Europe will not give this a second priority, but a first priority, because indeed we should not lose this race.

This is why we have to insist in a smart, intelligent and inclusive growth.

Europe 2020 is now.

Of course we have set some targets for Europe 2020 but it does not mean that we start only on 2020, in fact the work is already going on. It is now that we have to take the right decisions and implement the right reforms to get the economy back on track over the course of the decade.

It is now that we must frontload growth-enhancing structural reforms to guide our economies towards new sources of growth and also social cohesion.

So it is highly time for all stakeholders to implement the decisions that have been agreed upon by all.

It is highly time to address our weaknesses and to capitalize on our strengths. And I believe that now there is a greater awareness of the need to use all the possibilities available to stimulate growth.

First, we must tap the full potential of our sleeping giants from our human capital to the single market and the digital agenda. I call it sleeping giants because they are big but in fact they have not been used to the full. For example single market: we have already a single market for goods in Europe but not yet for services and the result is that our market remains very much fragmented and potential for growth there is simply immense; the same for the digital agenda that we are now pushing throughout Europe. also the need to exploit the possibilities of growth from the modernisation of our public administrations and our taxation system to a more business and innovation-friendly environment.

Let's look at just one example, the single market.

Completing the single market would significantly boost growth and in particular in services. The full implementation of the Services Directive could increase trade in commercial services by 45% and Foreign Direct Investment by around 20%. This can bring between 0.5 to 1.5% increase in GDP.

As you know the Commission intends to fast-track measures with a significant impact on growth and jobs and this includes the proposals on the Single Market Act.

Then, we must remain outward-looking. In a world where economists predict that 90% of future growth until 2020 will take place outside of Europe it would be self-defeating if we turned inwards. Europe is the biggest trade block in the world so it would be really a mistake now to close our doors. On the contrary we need to open more our doors. I know that in times of crisis sometimes there is this temptation to close; that would be defeating for Europe.

And last but not least we must fully mobilise the European Union added value. The European Union budget is not as some people say money for Brussels. This is investment for our countries, our regions and cities. This is money indeed for our citizens, money for our workers through the social fund, money for investment in the future of our regions.

So that is why despite the current fiscal restraint, it remains possible to stimulate growth. And the Commission is doing everything within its competence that can help restore growth.

That is why for instance we have proposed the Connecting Europe facility for the next Multiannual Financial Framework. This is an investment that will generate growth and jobs; and make life and travel easier for millions of Europeans. The reality is that we have not yet in many areas a real European space. When you look at that for example in terms of energy or transport or digital, and if we invest there we can show get one Euro spent at the European level brings more that one Euro spent at the national level. So I would really like to have the support of your regions and your cities for this new fund that we are proposing in the next European budget.

That is why we are also proposing to frontload some of the investments through the structural funds.

That is why we have made proposals to increase the co-financing rates for Member States receiving financial assistance programmes. And I am pleased that soon these new regulations will enter into force!

Ladies and Gentlemen,

Dear friends,

We all know that we will succeed only if we all share a common vision and also a common direction.

We need for that a real partnership.

And let me thank the Committee of Regions for its 2nd monitoring report on Europe 2020.

It is very important for the Commission to get the views from the local and regional authorities on how Europe 2020 is implemented on the ground and on the level of involvement of all stakeholders.

I would like to pay tribute to our regions' and cities' strong and active commitment to make Europe 2020 a success.

And I am pleased to hear that our Flagship initiatives are seen as potentially helpful for local and regional authorities across the European Union.

But your first main conclusion points to the fact that despite good progress Europe 2020 is still hindered by a partnership gap.

Let's be clear this must change. And this will change.

We need your full commitment but we also need to make sure that you are fully involved. This partnership gap has to be closed.

In fact this is at the core of our modernized cohesion policy: we want to build a closer partnership.

We want to ensure the overall coherence of all our different policies, to link all our common objectives and to guarantee proper ownership by all stakeholders at all the different political levels, what we call multi-level governance.

This is a new cohesion policy for a new world; a challenging and very interdependent world that is going through deep changes.

This is a new cohesion policy for a new partnership, a more effective partnership based on responsibility and solidarity, a partnership for progress.

This is a new cohesion policy that replaces a culture of entitlement with a culture of results focused on the right priorities and the right projects.

I think together we have to make it work for the benefit of all our citizens.

And the 2012 European semester will be a chance for local and regional authorities to be more firmly rooted in the new European economic governance cycle; from the Spring Council to the adoption of New National Reform Programmes and the country specific recommendations.

I am also really pleased that the Committee of the Regions supports our proposal for a partnership contract.

The partnership contract agreed between the Commission and the Member States will be closely linked to the National Reform Programmes and thus to the good implementation of Europe 2020.

I know that you personally are committed to this issue what can the regions do in terms of guaranteeing the implementation of the European 2020 programme and some of the main flagship initiatives. I believe that it is critically important that we have a functional way of doing this so that we can have your input and that you can be major decision makers and actors in this process.

We are determined to make this a part of our national reform programmes, to see how the different governments are able also to involve the regional and local authorities. I have been working on this not only with Olli Rehn, Commissioner responsible for Economic and Monetary affairs, but also with Johannes Hahn, your main interlocutor in the Commission who is responsible for regional policy. We need to put this together so that we can really deliver in terms of the implementation of Europe 2020.

Ladies and gentlemen,

We know all too well how high the stakes are. This is also about the future of Europe. This is about the defence of our interests and also, why not to say, about the defence of our values, about a better life for all our citizens.

So I hope that together we will show that together we can really make a difference in the lives of our citizens, that our Union really makes a difference for the better!

All of you here today, you represent the diversity of our cities, of our regions. With the impetus of the Council of European Municipalities and Regions and the Committee of the Regions, and also very importantly, the other organisations at the regional level that are present here today, I believe that you have a key role to play to better link the European level to the regional and local levels and build a stronger and more united Europe while respecting its diversity.

Indeed you have also a key role to play "in the process of creating an ever closer union among the peoples of Europe."

I count on all of you and I thank you again for your strong commitment.

Thank you


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