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José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso on the outcome of the Spring European Council

European Parliament Plenary Session

Strasbourg, 13 March 2012

President of the European Parliament,

President of the European Council,

Distinguished members of Parliament

First, while I have already congratulated President Van Rompuy on his reappointment, I would like in this chamber to reiterate my thanks and appreciation for the work that he has carried out over the last two and a half years. I look forward to continuing to work with him to build a stronger European Union – stronger in defence of the interests of our citizens and also stronger in the world.

The President of the European Council has already outlined the main outcomes of this Summit, including the important discussions we had on external relations issues – namely the situation in Syria and relations with Iran, and of course the very important decision to grant candidate status to Serbia.

On my side I would like to highlight a few elements that demonstrate that the European Union may be turning the corner towards renewed stability and growth.

Let’s be clear – there is now less tension regarding the Euro area, but we are not yet out of the crisis. The situation remains fragile and we have to complete our work, including with the reinforcement of the firewalls. These are the indispensable counterpart of our reinforced economic governance.

As I have said before in this Parliament, I expect Heads of State and Government to focus not just on short-term crisis management, but also on growth. Smart, sustainable, inclusive growth, which is the key to job-creation and the future prosperity of Europe. This was, and remains, the first objective of the Europe 2020 strategy and it is at the centre of the comprehensive approach behind the Roadmap to Stability and Growth I presented in this Parliament last October. This approach is now gaining support and this European Council was a step in the right direction, although a lot remains to be done.

At this summit, progress was achieved concerning key elements of this comprehensive approach:

First, an agreement for a response to the problems in Greece;

Secondly, financial stability;

And thirdly, job-creating growth through our Europe 2020 agenda, namely through concrete initiatives frontloading targeted investments;

Let me start with Greece. Some people continue to say that Greece will not make it. I ask why? Why should Greece not be able to do the necessary reforms to its competitiveness? I believe it is possible. The Greek government and the Greek Parliament believe it is possible. The decision on PSI shows that it can be possible.

The priority now is to make the second programme work. This is our collective task: supporting the Greek authorities and the Greek people. To that end, the Commission is already taking concrete steps:

Together with those Commissioners most closely involved, I have had very concrete talks with Prime Minister Papademos and his team about getting key growth-enhancing decisions taken immediately. As you will have seen from my letter, we have agreed to concentrate on a number of key priorities. Improving youth employment, promoting a more business-friendly environment, providing liquidity to SMEs, sweeping away barriers to the absorption of structural funds. These are all areas where we can make real progress in weeks, not months or years.

The Commission Task Force under Horst Reichenbach is currently on the ground discussing how to put these measures into practice with the Greek government.

And finally, just yesterday I held a meeting with President Hoyer of the EIB, the European Investment Bank, to examine how our support for Greece can be made more effective.

To cement this approach, I intend, in the coming weeks, to present, together with Vice President Rehn, a Communication on growth and jobs for Greece, taking stock of the progress that has been made and setting out the top priorities for the future.

As I set out in the Roadmap to Stability and Growth, finding a lasting solution to the problems in Greece is an essential prerequisite for stability. Without stability there is no confidence. And without confidence we will not get growth and jobs.

Honourable members,

The signature of the Treaty on Stability, Coordination and Growth was a further sign of the commitment to discipline and convergence. This, as you know, was not the Commission’s preferred mechanism due to its intergovernmental nature. However, its signature – not only by euro area countries, but by 25 out of the current 27 Member States, is a political statement that the Euro is not just the currency of some countries but the Euro is the currency of the European Union. It is a strong political message about the irreversibility of the Euro. And it was very well received in fact by investors in Europe and outside Europe.

It is the very culture of financial stability that is a condition for true economic union. Together with the six-pack and the European Stability Mechanism, it is an important step in this process. It is therefore vital that all its appropriate provisions can be brought into line with European Union law as soon as possible. Contracting Member States have agreed to integrate the provisions of the Treaty into European law within five years. Already the Commission has proposed further amendments to the so-called Two Pack to make sure that important provisions of the Fiscal Compact are implemented under Community law. That means also with the active participation of this Parliament.

Naturally this agreement could not - and perhaps it should not – cover all the elements of an economic union, and its most pressing objectives like the internal market or economic, social and territorial cohesion. These objectives are indeed better pursued, from a Community perspective, in the framework of the existing EU Treaties, and through the European institutions and the Community method.

Honourable members,

Implementing the Europe 2020 agenda for growth and jobs dominated our agenda at the European Council. Financial stability is indispensable but is not sufficient. As we said several times we need financial stability and economic growth - one and the other.

As the Roadmap made clear, there are a number of elements towards growth that must be implemented at the same time. These include among others structural reforms, deepening of the Single Market, targeted investment – yes, we need investment, and boosting trade with foreign markets.

On these points, I made clear to the European Council that Member States must do more to close the implementation gap between political will and decisions taken on the ground.

I made it clear that it is not sufficient to speak about Europe 2020 only in Brussels, in the Justus Lipsius but we need to own this strategy at all levels including the social partners, the regions, our societies. I also made clear that we need a perspective of social inclusion because there are some situations of social emergency, raising poverty in many of our Member States.

I made the point that structural reform must be politically, but also socially acceptable to our citizens. Social dialogue is vital in this respect. That is why I place such importance on the Tripartite Social Summit at European level, and social dialogue between employers and unions at national level. This is one element in demonstrating that the path we are taking is a fair one, where the burden and the benefits are both shared.

Fairness was a key motivation behind the Commission’s proposals for a Financial Transaction Tax last year. More broadly, the last three European Councils have highlighted taxation as a fundamental component in our recovery efforts. This should not be a surprise. Recent figures indicate that as much as €1 trillion is lost every year in the European Union through tax evasion and avoidance. Compare this €1 trillion to what is needed to consolidate national budgets and you think that many problems could be solved.

A strong, unified stance is the only way forward to tackle the issue. The Commission is working on concrete measures to toughen our stance against tax evasion and fraud.

But Member States have an important duty to fulfil at European level too. There is no reason for any further delay on adopting the revised Savings Directive and the negotiating mandates for tax agreements with third countries. This is blocked as you know at the Council level. This is another negative example of the implementation gap I mentioned earlier: positions taken at the European Council but are not afterwards followed by the Council or by the Member States.

Honourable Members,

I have said that the programme for achieving growth is Europe 2020. And the instrument to achieving it is the Multi-annual Financial Framework.

The European budget is a budget for investment. And I hope that it will be in this perspective that we will have constructive discussions in the Member States about it. And I am pleased to see that the European Parliament has taken that position.

I am also pleased that Commission proposals on project bonds for infrastructure development and the roll out of broadband were accepted at this European Council. Together with other priority actions such as accelerating some initiatives under the Annual Growth Survey and completing the Single Market, these measures will create jobs in the short term and make the European economy more competitive in the longer term.

Our citizens want to see real action that will make a difference to their daily lives. Since the informal European Council at the end of January, the Commission has been taking this action with regard to slashing youth unemployment and support to SMEs. The SMEs are the answer to the need to create more jobs in Europe. Commission teams have visited 8 Member States since then. In almost every case, in close co-operation with the national administrations, they found ways of helping get more young people into work.

Honourable members,

Let me close by reiterating that we have now come a long way in creating more stable conditions that will enable us to do the bulk of the work still before us.

What we need is not constant drama about the Euro, but hard work and determination in our action to sustain the European social market economy. No, the European social model is not dead. But in a more challenging environment, we need a more competitive Europe that delivers stability and growth through responsibility and solidarity.

Thank you for your attention.

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