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Vice-President of the European Commission Responsible for Interinstitutional Relations and Administration

Speech to the European Parliament

Plenary at the European Parliament – preparation of the Spring European Council

Strasbourg, 15 February 2012

President, Honourable Members,

As you know, Europe is in an unprecedented economic situation. After years of crisis, our forecasts show that growth is now virtually at a standstill and will remain low in the foreseeable future. Unemployment is unacceptably high, especially for youth, and may remain so for many years.

This is the background for our action, the action of European institutions and national governments alike. We need to deliver on the greatest concerns of our citizens, jobs and growth this marked a turning point in the way we have addressed this crisis until now.

As we said in our Roadmap last October, we need decisive action to address the problems of Greece and restore public finances to health, to strengthen Europe's banking system and to build credible firewalls for the euro area. We need stability and discipline to prevent a repeat of recent events. But unless we can also get our economy growing and creating jobs, we will only have a partial solution and we will not win the support of our citizens.

This is why the informal European Council was such an important stepping stone for the Spring European Council. It represented the agreement of European leaders to concentrate on a few immediate priorities with substantial potential for growth and employment – first and foremost for our young people and to help Europe's SMEs to thrive.

This message was already at the core of the 2012 Annual Growth Survey (AGS) adopted by the Commission last November, and which launched the next European semester. The AGS is the contribution of the Commission to the Spring European Council. We will call upon the European Council to give very strong backing to the priorities we have identified. I hope we can also count on the support of this House.

Once adopted by the Spring Council, these priorities will guide the Member States in drawing up their new programmes, which are due to be presented in April. On the basis of these, the Commission will put forward country-specific proposals for discussion in May and adoption at the June European Council.

What's important here is that very little of what is in the AGS is completely new – there is, and has been for some time, a broad consensus on the need to cover jobs and growth as well as getting public finances into order. The problem is that one of these priorities has been the focus of efforts, to the detriment of the other, undermining the whole approach.

[We already have a policy for jobs and growth – it's called Europe 2020. We also have the European Semester, which represents a quantum leap in economic policy coordination in Europe. And for the first time, this year's semester will take place within our strengthened system of economic governance, based on the six-pack legislation that the EP played such an important role in developing. What's needed now is a firm commitment at national and European levels to pick up the pace of the reforms and to carry that commitment through to 2012. ]

The Commission has already put forward proposals for tackling one of the key problems in the EU economy, youth unemployment. There are 7.5m young people across Europe not in employment, education or training, and such high levels of youth unemployment are unsustainable both in economic and social terms. Getting young people onto the labour market is an essential element of our efforts to ensure future growth.

The Commission has set up action teams that will visit the eight Member States with the highest youth unemployment rates. They will examine with the national authorities and social partners ways to make sure that policy measures and all available EU and national funds are focussed on combating youth unemployment as well as accelerating and strengthening support to SMEs. Our initial contacts with the Member States have been encouraging and we will be able to report on very concrete progress by the time of the Spring Council.

I'm sure these issues will be discussed again at greater length in a moment as you debate the Cornelissen, Gauzès and Berès reports.

I started my presentation in a pretty downbeat fashion, but I'd like to conclude on a more optimistic note. While no-one is brave enough yet to suggest that we have turned a corner, that the worst might be over and we might finally be back on the road to growth, it is (I think) fair to say that we now at least have far greater control over our future.

The new measures that have been proposed by the Commission and agreed by the co-legislators – I'm talking about the so-called six-pack – have given much greater visibility to the European semester, allowing us to take action far earlier than before and avoid the kind of fire fighting that has dominated discussions up till now.

For example, the Commission adopted its first Alert Mechanism Report under the new macroeconomic imbalances procedure yesterday on the basis of which we decided that 12 countries should be subject to a more in-depth review. Our recommendation will now be discussed in the Council and Eurogroup and of course feedback from the EP is also welcome. Depending on the outcome of the proposed reviews, the Commission could recommend that the Council issue preventive recommendations or corrective recommendations.

This may not seem particularly optimistic, especially for the 12 countries concerned, but it underlines the rapid and effective improvements that have already been made to the way in which public finances are managed in Europe. We need to have the right tools in place to monitor progress, address risks and propose remedies well before a crisis hits, to be sure would never happens again.

Thanks to widespread agreement between Commission, Parliament and Council, we now have those tools, and though it is early days, I would say that they seem to be working. I fully expect the positive spirit of the informal council to continue through to the Spring Council, and for the Heads of State and Government to endorse the guidelines for growth and, more importantly, for them to meet their commitments on the ground.

Thank you for your attention.

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