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José Manuel Durão Barroso

President of the European Commission

Speech at the European Parliament debate on the start of the Danish Presidency of the Council of the European Union

European Parliament

Strasbourg, 18 January 2012

Mr President,

Prime Minister Thorning-Schmidt,

Honourable members of the European Parliament,

I would like to start by thanking you, Prime Minister, for your opening address, which set out your vision for a responsible, dynamic, green and safe Europe. Prime Minister, when we met in Brussels soon after your election in October last year, I told you of my conviction that Denmark will make a decisive contribution to our common project.

Having listened to you today, your inspiring remarks about your sincere commitment to the European values and to the Community method, I am even more convinced of this.

Honourable members,

We are all aware of the harsh economic realities in today’s European Union.

In October last year the Commission presented a 5 point Roadmap to stability and growth. We said we needed to work – at the same time – to:

• Give a decisive response to the problems of Greece

• Enhance the Euro area's backstops against the crisis

• Strengthen the banking system, namely through recapitalisation

• Frontload stability and growth enhancing policies

• Build a more robust and integrated economic governance.

Let’s be clear: without implementation of a credible response to the Euro area crisis, our prospects for economic growth will not be achieved.

The Commission will urge the Member States to complete what is still pending in this Roadmap – from a lasting solution for Greece, to implementation of a credible system of firewalls.

While we put these instruments in place, our response cannot only be about discipline and sanctions. Yes, discipline is needed but we also need convergence. Yes, stability is indispensable but we also need growth. Europe needs greater convergence, solidarity and growth.

More and more, our partners and international investors are asking the following question: what is Europe's medium and long-term prospect for growth? It is clear that we will not overcome this crisis without a credible response to the question of growth.

The Commission has been saying for years what needs to be done, but let's be frank action by the Member States has been uneven and in some cases insufficient. If we are serious about overcoming the crisis, we must be serious about adding decisive action on growth to the decisive action already underway on financial and fiscal consolidation.

So where is this growth going to come from? Since there is reduced fiscal space in most of our Member States, it will come mainly from delivering structural reforms, increasing our competitiveness and targeted investment.

We must deepen the internal market, invest in priority projects namely in innovation, get the best possible effect from funds not yet spent, and gain market access in fast-growing economies outside Europe.

Let’s look at the real economy and just consider as an illustration the following point: we have roughly 23 million people unemployed across Europe. We also have around 23 million small and medium sized enterprises. If we can create the right conditions for each SME, on average, to create one job, we could succeed in our fight against unemployment. So the answer for growth is in our enterprises including our small and medium size companies.

The way to reach this goal is by having more flexible and competitive markets, less red tape and better access to finance. These are the problems of our companies today in many of our Member States: they do not have access to finance. We have put proposals on the table, namely to use the structural funds as guarantees to finance SMEs and also proposals for venture capital. I hope there will be swift progress with these proposals.

We have also made concrete proposals to tackle youth unemployment, one of the greatest challenges we have today in Europe. We have proposed the Youth Opportunities Initiative. I hope that the informal European Council on the 30th January will agree to move forward these concrete proposals.

Social justice is also part of the solution. Social justice is also a central element of our growth strategy because the sacrifices must be fairly distributed throughout society. Our crisis response is not credible without this element of social justice. I believe that social dialogue is crucial in this regard and I will meet with the social partners next Monday in Brussels and I hope the same is followed in all our Member States.

As I said earlier growth in Europe must come from deepening our Single Market. We should release its full potential, namely through the adoption of key measures such as the framework for venture capital, updated procurement rules and a better framework for online commerce and e-payments.

And we must urgently reach agreement on the European patent. We have been discussing this for decades. I fully expect negotiations on this to be completed early in the Danish Presidency. I call on the three Member States, France, Germany and the United Kingdom, who are holding this up over a site issue of some offices, to swiftly find a compromise. Frankly, it is not acceptable! It is not acceptable that such a crucial initiative is blocked over such a trivial disagreement. Europe needs to innovate to grow. And innovation is severely hampered by the current complex and expensive rules that we have been trying to overcome for decades. It is time now to make history and to score a victory for ambition, for common sense and above all for Europe's innovators.

Honourable Members,

Many of the measures we need are already on the table in the Europe 2020 growth strategy. There will be no resolution to this crisis unless we get serious about implementing them. We have to be consistent, perseverant and determined over time.

The Europe 2020 strategy is not a strategy that can wait until 2020 – it needs action now.

Central to the strategy is sustainable growth. We share with Denmark the priority given to green growth.

The Commission looks to the Danish Presidency to conclude negotiations on the energy efficiency directive that we proposed in June last year, and to move forward with the low-carbon energy roadmap for 2050 that we presented in December.

The Danish Presidency will also oversee the second European Semester for economic policy coordination. This will be the first European Semester to be implemented within our new system of economic governance.

We must build on the experience of the first Semester to show that we are serious about the need to reform and ready to take full account of the deep interdependence of our economies. The Commission brought forward the publication of this year's Annual Growth Survey to allow plenty of time for the European Parliament and the Council to examine the priorities we have identified before the Spring European Council. It is critical to ensure that the intelligent fiscal consolidation, growth-boosting measures and structural reforms recommended in the Survey are pursued in a determined manner across all the European Union.

Honourable Members,

The governance aspects of the economic agenda are also likely to retain a high profile.

We expect to conclude the negotiations on the new fiscal compact, discussed at the European Council last December. I am convinced that the Danish Presidency will play a constructive role in acting as a bridge between the countries that are inside and those outside the Euro area. The Commission looks to the Danish Presidency to uphold not only the principles of unity between all Member states, but also the legitimate role of the European Union Community Institutions in the negotiations on this agreement.

You will also be charged with pushing forward the two new proposals on strengthened economic governance for the Euro area, proposals the Commission put forward in November under Article 136 of the Treaty. These build on what was already agreed in the so-called 'six-pack'.

The Danish Presidency will also be leading negotiations on the Multiannual Financial Framework, which will be a key engine for growth and job creation in Europe over the coming years.

These discussions will not be easy in the current climate but I believe that the proposals on the table are balanced and at the same time ambitious and realistic. I am confident that you will support the Commission's efforts to simplify the budget and to focus every euro on delivering tangible, concrete results for Europe's citizens.

Let me close by saying a few words about our ambitions for an open and safe Europe. The European Union is today a very different place from 10 years ago when Denmark last held the Presidency.

At that time (I remember well I participated as a Prime Minister of my country in that historic European Council in Copenhagen) Denmark chaired the negotiations that enabled 10 new member states to join the European Union. In that way Denmark has shown its very important commitment to openness. The Commission supports a strengthening of Europe's voice on the global stage and to the role of the High Representative and the External Action Service. I also expect Europe to play a key role in the Rio+ 20 negotiations, confirming our leadership role on matters of sustainable development.

We welcome the Presidency's intention to strengthen the Schengen agreement and the common asylum system. I would like to underline here my sincere appreciation of the decision taken by the Prime Minister and the new Danish government's commitment to the full respect of free movement in the European Union.

To close, Prime Minister Thorning-Schmidt, allow me to state that in challenging times such as these, I am sure that the European Union will benefit from Denmark's progressive and innovative attitude more than ever before.

The challenges are great, the programme is extensive, but with the right, responsible approach, and with the support of the other European institutions, I am sure the Danish Presidency will achieve its goals.

Prime Minister, I wish you the greatest of success.

Thank you for your attention.

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