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José Manuel Durão Barroso

President of the European Commission

Statement by President Barroso on the economy and on Greece at the end of a debate on the economic situation in Europe during the weekly meeting of the European Commission

Press conference

Brussels, 16th May 2012

Good afternoon ladies and gentlemen.

The College this morning held an extensive debate on the urgent economic challenges facing Europe.

We in the Commission consider we have the responsibility to help find ambitious, yet feasible solutions to deliver growth.

The College confirmed its stance that stability and growth go together. They are two sides of the same coin.

Further progress requires action based on a combination of sound public finances, deep structural reforms and targeted investment, because it is essential to achieve sustainable results – in terms of confidence, competitiveness, increased economic activity and jobs.

That is why it is important to analyse all these elements – including, of course, the quality of public finances, the quality of the investment and the need to combine the different elements in the right policy mix. This is not just about fiscal consolidation. It is not just about investment. It is about fiscal consolidation, structural reform and investment for sustainable growth.

These principles will continue to help the Commission in the preparation of next Wednesday's informal European Council. This informal European Council will be an important step with a view to the June European Council, where we expect some formal decisions to be taken.

We will put together a growth initiative which we will discuss at the June European Council. This growth initiative will of course be built on the proposals already on the table and also the programmes already agreed, namely the Europe 2020 strategy for sustainable growth. But I think we should now go further.

Firstly, the Commission will push for progress on the proposals that have already been put forward and were highlighted in our Europe Day message last week.

These include our project bonds proposal and our call to increase the capital of the European Investment Bank – and thus the lending capacity of the European Investment Bank – as well as a further optimisation of the use of Structural Funds.

These ideas are gaining ground among Europe's leaders now and they have support in the European Parliament. So it is time to agree on these proposals. It is time to decide. Proposals exist, now we need decisions. They can help to unlock investment and in so doing, boost demand in a relatively short timeframe and also help create jobs.

In this context our proposal for the 2013 budget and for the next Multiannual Financial Framework are fully relevant. The 2013 budget is about making money available now for investment and jobs, so the budget is an instrument for investment. The next MFF is important because its level of ambition is an indicator of our joint willingness to invest for growth, through joined up action, and thus boost confidence now. So even if some of those proposals are for the medium term, the fact that they are approved now is very important in terms of confidence enhancement.

We will continue to work for a swift adoption of the Financial Transactions Tax and will bring more detailed proposals on how its revenue can be used for targeted investment. And we want Member States to swiftly give the Commission a mandate to allow us to start negotiations on tax evasion and tax fraud. I regret the fact that yesterday in ECOFIN two Member States reiterated their veto to a mandate for the European Union to negotiate with third parties. There are billions and billions of euros that can come back to the European Union if we have this mandate for negotiation with third countries and special jurisdictions.

Secondly, the College also looked at the further steps that could be taken to kick-start growth. That means accelerating the delivery of some of the elements of the Europe 2020 Strategy and finding ways to step up the implementation of reform commitments made by many Member States in the Euro Plus Pact.

There is no easy road to growth, but an intensification of reforms at both the national and the European levels can help.

For instance, when it comes to issues like services, opening up closed sectors at national level across the EU, including in some of our most competitive Member States, can provide a boost to growth across the EU, spur competition, spur demand and also drive down prices for consumers. This is also one of the key ways in which we can address the problem of imbalances within the EU and within the Euro area, by opening up markets for less competitive Member States to take advantage as they begin to benefit from structural reforms.

At the EU level, a "Single Market Act Mark 2" will address these imbalances by unblocking the bottlenecks and obstacles in the Single Market that make for uneven market access between Member States and hold back internal demand and consumption in certain Member States.

Thirdly, in terms of our economic governance, the College agrees that we will apply the Stability and Growth Pact intelligently. We will use its in-built adaptability where appropriate. We will come back to what this means in detail on 30 May when we adopt the country specific recommendations and we will present them as a package also with recommendations for the European Union as a whole.

All of these actions reflect our firm determination to continue working to create the conditions for growth through stability, reform and investment. This is also the message I will take to our international partners at the upcoming G8 summit. Indeed I will leave immediately after this statement for the United States where I will be participating in the UN General Assembly on the economy and then in the G8 in Camp David.

Greece has decided to organise new elections. The President of the Hellenic Republic has made every effort to find a solution for the formation of a government. I pay tribute to his work and commitment for a better future for Greece in a united and strong Europe.

In a democracy, new elections are the natural consequence of the impossibility to form a government following an election.

It will now be for the Greek people to take a fully informed decision on the alternatives, having in mind that this will be indeed an historic election. On the country's future. On their own future, of the Greek people. It is important now that the Greek people take a decision fully informed about the consequences of their decisions. We will of course respect the democratic decision of the Greek people. At the same time the Greek citizens should be aware that there are 16 other democracies in the euro area. The democratic decisions taken in the euro area must also be taken into account.

I would like to send a special message to the citizens of Greece:

Greece is part of our family. Greece is a very important Member State in the European Union. We want Greece to remain a part of our European family, of the European Union and of the euro. The Commission has been working tirelessly to that end. It will continue to do so. This being said, the ultimate resolve to stay in the euro area must come from Greece itself.

We are fully aware that the present situation is asking a lot of the Greek people, with many sacrifices. But this is a result of policies made in the past. We must tell the Greek people that the programme for Greece is the least difficult of all the difficult alternatives. The problems it addresses are real. This is why the commitments taken by Greece and all the euro area Member States should be kept. Not because the European Union or the euro area wishes it like that, but because there is no other alternative that has less pain and less difficulties.

The programme offers solidarity in exchange for reforms. Support in exchange for reform. Access to finance that would not exist under any other circumstance. The reality is that there is no easier way.

Any other way out would be even more painful for the most vulnerable people and also for the majority of Greek citizens

Let me emphasise very strongly that the programme is not just about cuts or fiscal consolidation. Greece should also focus on the implementation of structural reforms and growth-enhancing measures, because there are many growth-enhancing measures in the programme. A few weeks ago, on 18 April, the Commission presented a comprehensive Communication detailing what Greece and Europe can do together to make things better in that country. We want to stand by Greece. We want to work together with Greece. Now it is of course up to the Greek people to say if they want to work also with the euro area Member states and with the European institutions

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