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European Commission

José Manuel Durão Barroso

President of the European Commission

Intermediary and closing remarks by President Barroso following the State of the Union 2012 Address

Plenary session of the European Parliament/Strasbourg

12 September 2012

Thank you very much Mr President,

First of all, I wanted to listen to all the Members of the Parliament before having the possibility to respond and I will be more than happy also to discuss more in concrete afterwards with the Group leaders. But I think it was important, to have the contribution from all Members of Parliament that wanted to take the floor at this stage.

Let me first underline that I saw in this debate, of course, different positions, some criticisms, some comments, but I think I can see, at least from the most relevant pro-European forces a strong support for the agenda that I have put forward. An agenda that combines ambition with realism. Ambition is very important, but so it is the way to deliver on that ambition. Ambitions without results are simply good intentions. And sometimes I have the impression that in Europe we are full of good intentions, but not enough results.

This is why we need to have this vision, vision of a medium term, longer term European Union that is a federal path and I hope we do not engage now in semantic discussions about exactly how to qualify it, it is a federal path and this is ambition, but at the same time, we need to respond to issues that are extremely serious and urgent now, even before we get the necessary, in some cases, revision of the current treaties.

So this is our way and this is the way the Commission will pursue with determination. This is the only realistic way to achieve progress in Europe. And those that pretend that the status quo is enough or those that pretend that tomorrow there will be all things changing are not in fact serious about what has to be done for Europe.

I don't resist to recall something that a predecessor of mine, Jacques Delors, one day told me. He said it in French, it was a good advice: "Méfie-toi des excités". Beware of the very excited.

We need to have an ambition, but at the same time, to do every step with our feet on the ground. And not forgetting one thing: that we are accountable to the European citizens and we have to have them with us. That is why one of the most important messages I believe brought you today, was how we can complete the European democracy. What we can do, not against our countries, because our countries, they remain the most important political reference for most of our citizens. But what we can do with our countries to show that they will count in world only if they accept a much stronger union. That on their own alone they will not have the leverage or the capacity to discuss on an equal footing with Americans, or Chinese, or other powers, but that together in Europe, yes, we can do it and we can make a difference. That is exactly the message I brought here today. A message of working with our countries, yes, but not for the sake of nationalism, precisely to win the battle against the nationalists or the extreme populists, to have a democratic federation of countries, of course federation of citizens, a union for the citizens of Europe. This is the message I brought you today and this is the only way to go forward if we want to achieve results.

If you read my speech last year, at that moment some of the ideas were not taken very much in consideration. But we have seen one year afterwards that finally the Governments and I believe most of the political forces have agreed. I have proposed the redirection of structural funds, I have proposed the refinancing of the EIB, I have proposed the creation of project bonds. All these ideas were not consensual at that time, now they are agreed.

It was also the Commission that proposed some time ago the creation of a strong backstop, at that time we proposed €440 million. It was rejected by some, it was considered not realistic. Now we have it, and today we have got, it was about time, the decision of the constitutional court of Germany. So it shows that what is not consensual today will become a consensus tomorrow. Our duty here as European institutions is precisely to build on this consensus, to show ambition at the same time to do it with realism, in the way to achieve those steps.

Some concrete questions that have been put to me, namely on the banking union, that are I think very important. One is about doing it or not with the European Central Bank. 14 of the 17 national supervisors in the Euro area today are already the central banks, and indeed the UK is moving now to put these tasks to the bank of England. So there is no single model in the EU and in the Euro area, what matters is the quality and the credibility of the supervision.

But now let's be frank: do we want to delay or do we want to have a solution? We have agreed, and it was a proposal of the Commission, to do it around the European Central Bank because it is well established European institution, a federal institution in the Euro area. Of course we will do it being sure of the separation between what are the monetary function and will be the supervisory function. Our model offers all the guarantees that one could ask for the independence of monetary policy. But what we need is a credible supervisor that can break the national capture of national supervisors, and to do so quickly. That is why the ECB is by far the best placed.

And once again if we start now changing this we will be late. Probably it is in the interest of some to delay the solutions, but it is certainly not in the interest of the European Commission, we want to have as soon as possible a single supervisory for the Euro area. And this is why we have put a proposal that in fact also addresses other matters like the relation between the Euro area and the non-Euro area members.

The Single Supervisory Mechanism will strengthen the Single Market. The proposal is designed not to create any wall in the Single Market. The ECB will apply the single rulebook, the substantive rules on bank capital requirements and so on, that are agreed by all 27 Member States. More effective and consistent application is good for the stability and safety of all.

The non-Euro area Member States should be able to take part, the proposal is as open as possible; those outside the Euro can take part through a close cooperation arrangement. We have gone as far as possible within of course the current Treaty legal limits.

And there are lots of other safeguards. The decisions of supervision of cross border banks will be continue to be made in colleges of supervisors, in which most Member States will keep their full say, even where the ECB is the home supervisor. And the European Banking Authority will keep all its powers to solve disputes and upholding Single Market rules also vis-à-vis the ECB.

This is to show to you that no one more that the Commission is committed to the idea of the integrity of the European union, yes, to the principle of the non-discrimination between the Member States, to the Article 4.

I was as Prime Minister one of those who was fighting for the recognition of the principle of equality between all our Member States. Of course different economic dimensions, different demographic dimensions, but regarding the law all the Member States have exactly the same dignity and we should strive for unity based on these principles.

Some of the points were regarding growth and social matters. First of all growth, we have to be very honest about this, the biggest problem we have for growth in Europe is the problem of lack of competiveness that has been accumulated in some of our Member States, and we need to make the reforms for that competitiveness. And there are other difficult problems, more urgent, like the lack of financing to the economy. Some of our countries in fact are making impressive, impressive efforts of adjustment. What Greece has achieved is sometimes not sufficiently recognised; or Ireland or Portugal. Impressive adjustment! But what problem they have, they have also a problem of financing the economy precisely also because there was the contamination of the problems of the sovereign to the problems of the banks. So we should not forget what was the origin of this crisis, and the origins of this crisis I have to say to Eurosceptics, no, it was not the Euro. No it was not the Euro! Britain is putting more money from the tax payers to save the banks than any country in Europe. Island is not a member of the Euro or the European Union so it was not the Euro that created the problem; it was irresponsible behaviour of the financial sector in many areas of the world, including the United States. This was the crisis of the problem.

Let me tell you that unfortunately I see that some people in the financial sector have learned nothing. After what happened we continue to receive reports of rigging with the Libor, manipulating the interest rates; we have seen banks in the US financing Iran against all the legislation of the United States. We have seen banks from Britain financing drugs smuggling in Mexico. We continue to see some intolerable practices in the financial sector. And this was part of the problem; that is why we need to regulate and to have credible supervision in the financial sector as well.

But this was not all the cause of the problem. There was also unsustainable debt created by our governments. This is the reality. I am sorry, some prefer to listen to some part of the reality but we have to look at the reality in full. That is why we need to see how we came here. We came to this situation because financial markets did not behave properly and that was the responsibility not of the EU, but of the national supervisors. The EU at that time had no responsibility at all in terms of national supervision. We are now creating, we are now establishing the first elements of this European supervision and also the problems of the debt were created because some Member States did not respect the Stability and Growth pact that they have themselves signed. And so when there is no respect for the rules of course there are problems of credibility. So I think it is fair to say that the current problems of Europe were not created by the European Union to the Member States, they were much more created by the Member States to the European Union and this is the reality we have today.

Now we have to see how to get out of this situation and to get out of this situation requires proper financial supervision and regulation. It requires also addressing the problems of deficit and so Member States that are under this pressure should continue with consolidation efforts and also structural reforms, because there is an underlying problem of lack of competitiveness in some of our Member States. It is not easy. There will not be a magic solution. It will require time, determination, persistence, coherence.

I know that populists they manipulate feelings and anger. They can give a very simple solution – their solution is "no". To say "no" is easy. To say "no" to Europe is easy. It is difficult and it requires leadership to say "yes", but also to say how we can move forward. That is why I am asking you to bring the conditions for a true European debate with a true European democracy and I am making the signal for the next European elections, because I believe in democracy. I was elected when I was 29 years old in my Parliament. Mr Farage, don't look at me like that, because in fact I really have a great admiration for the wisdom of the British people. Every time you tried to be elected in Britain you were rejected. That is why you came here and this shows that British people know that it is much better to keep you away from their system. Every time I was running for elections in my country I got elected. I was leader of the opposition, I was Prime Minister, and as President of the European Commission I received the support of this European Parliament. But I think we have to go forward. I think we need to go for the next elections with all the relevant political parties, not you frankly, but all the relevant political parties to present a candidate for European Commission President and to have a true political debate.

Today we have adopted formally a new regulation for European Political Parties and I am calling not only on citizens, not only on you, but also on the best forces in Europe to engage sincerely in this debate. I want to make an appeal to my pro-European and federalist friends. Sometimes I believe we are wasting too much time and energy making criticism for secondary issues. I think we have to unite the pro-European forces regarding the future of Europe, to keep the social market economy. The social market economy is in the Treaty of Lisbon. It is not an invention. But at the same time to prepare the European consensus to reform those economies so that they become more competitive.

That is why European democracy is important. There are some people that say "democracy cannot be transnational, it can only be national, because it is based on national parliaments". I am sorry, but those who say that they have not understood that we are already in the 21st century. In the 21st century we have transnational phenomena like the financial markets that if we don't have transnational mechanisms to deal with them, in fact the peoples, the citizens, will not have the leverage to regulate and to have their say. This is why at European level we need also a European democracy that is not built against our national democracies, but as a complement to them, as a coordination, and that basis for European democracy is precisely this Parliament and that is what I am telling you. And I am telling you that the Commission is ready to engage with this Parliament and that we are going to put proposals before the next European elections so that we can have a real European debate. Where the political forces those are for Europe can say why they are for Europe and those who are against it should also say why they are against Europe.

And what annoys me today, to be very open with you and that we have to recognise, is that in many of our countries those who are taking the lead in the European debate are the anti-Europeans, are the euro-sceptics, are the populists, are the extreme nationalists and that is why I think we have to provoke the pro-European forces to ask them to come and say what would be the consequences of not having this Europe. Because many of the young people around Europe don't remember when a great part of Europe was under totalitarian communism or when in the south of Europe there was no democracy. They don't remember what is non-freedom of movement. So we need to make the case for Europe and for that we need the pro-European forces from the left to the right, to the centre to come and fight for that ideal, to explain it, to have the initiative and not always to be on the defensive. I think this is what we can do for the next European elections and that is why the European Commission will come with proposals that will enable us to leave our comfort zone. Sometimes we see some of the governments of Europe giving up to those extremist forces because they believe that like that there will keep some of the votes. And that is a very important point I want to make with you, because some of us instead of trying to attack each other, would be giving a better use of our time if we could try to convince not only the parties here in Strasbourg, but the parties back home in the capitals to say the same thing they say here in Strasbourg, because the reality is that very often we hear here the parties saying one thing and we know very well that the same parties when they are in the governments back home they say a very different if not a completely contradictory thing. This is why we need to build a true public space in Europe with a true European democracy, with true European parties and true European institutions not working against our Member States, but working for a Union that goes beyond the Member States and that gives each Member State and our citizens the capacity to defend our interests and our values in a global world.

So, very concrete answers to very concrete questions. First of all to Mr Martin, because you are accusing me of giving too much attention to other Members of the Parliament. We are precisely now discussing in the Commission what we can do in terms of this issue of the risks inherent to different kind of activities between banks. And, as you know, Commissioner Barnier asked Mr Liikanen to come with a report. We will, based on that report, take decisions about what we can do precisely to prevent risks associated to too big banks, namely also the possibility of addressing the issue of different activities they may pursue.

Other concrete issues: Romania and Bulgaria. We already have said that we believe that Romania and Bulgaria meet the necessary conditions to become members of the Schengen area, and I want to reiterate it here today. That, of course, does not mean that we do not have the right to act when we believe some decisions taken by any of our Member States can put in question some of the principles of the rule of law that all Member States accepted.

Some of you insisted on the issue of social cohesion, and indeed it is a very important matter. The reality is that we are doing what we can at European level. But there are here differences between the instruments available at the national and the European level. As you may be aware, one of the concerns we have now in terms of the discussion for the next MFF, is the opposition that some of our governments are signalling, not only to the reinforcement of the Social Fund, but also the Globalisation Adjustment Fund (that is so important for workers that they may feel the impact and they be considered redundant because of some structural transformations in Europe) and even to the Solidarity Fund, because there are some governments that are simply proposing the elimination of this Fund.

I want also to thank those of you that made a reference to the European program of aid for deprived persons. I like to confirm: the Commission will come forward with a proposal for a new program to help poor people in Europe, because there is now rising poverty in Europe. So, that is why we have to be absolutely sincere and frank – yes, I say the word once again about this – you cannot withdraw from the European institutions the instruments to show solidarity and afterwards criticise Europe because Europe has not enough solidarity. We need to act at European level also in the social area. This is critically important, not only because it is just, but because we need a social dimension at European level, so that we can keep the support for our social market economy and for our European project.

And when we speak about more Europe, it's not just 'more Europe' for the sake of Europe or for the European institutions. The crisis in the Euro Area has shown that the credibility of the Euro as a single currency is also dependant on the coherence and the invigoration of the decisions taken for the Euro Area. So when people ask me about why we need more Europe: we need more Europe if we want to keep and sustain a common currency. We need more integration of the institutions but also more harmonization of the norms to avoid behaviours that are, indeed, against the common norms, and also we need more coherence of the policies. So this is at least indispensable for a common currency, and of course we want to make these proposals not just for the Euro Area, but for the European Union. Because we want this to be united, and we want this to be open for all. If some members do not want to join us, of course they have that right, but they should not have the right to avoid those who want to have a stronger union to build that stronger union, not only for the currency, but also for our common goals of a united Europe.

Finally, Mr President and Honourable Members, let me thank you for this debate. I believe in democracy. I believe in national democracy, but also in European democracy. And I want to reiterate that today, in the 21st century, only with national democracy our citizens will not be able to control their future, and their countries will become irrelevant. We are living fundamentally new times, and that is why we need to complete our national democracies with a strong European democracy, and this Parliament is the basis for that future, stronger European democracy. I thank you for your attention.

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