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European Commission

José Manuel Durão Barroso

President of the European Commission

Statement by President Barroso following the European Council dinner on 18 October 2012

Joint press conference/Brussels

19 October 2012

This is the first of three crucial European summits before the end of the year.

The central message I made tonight was that we need to deliver on our commitments.

Firstly, we have agreed to have legislative decisions on the Single Supervisory Mechanism by the end of the year, so in fact until 1st January 2013.

Let's not forget why we are acting. We are advancing in our response to the crisis. Now we need to definitively break the negative link between bank debt and sovereign debt. This is urgent! Speed matters and that is why the Commission put its proposals on the table within weeks of the June European Council. Delivering on this will give a very important signal to our citizens, our international partners and to investors in general.

Today we have discussed the main open issues on the adoption of the Single Supervisory Mechanism.

The European Council has confirmed the key principles. We will now work to finalise agreement on the legislative framework before the end of the year. The European Central Bank will have a fundamental role so a clear separation of supervisory and monetary functions is essential. The new supervisor will be able to intervene, if needed, with any bank in the euro area; it will be as inclusive as legally possible for non-euro area member states who want to join and the integrity of the Single Market will be respected.

Delivering this will enable us to honour the 29 June agreement of the Euro Area summit on direct recapitalisation of banks. Tonight we confirmed what we agreed in June and I now expect Finance Ministers to follow the position of the Heads of State and Government and work to complete the technical details as quickly as possible.

Our second commitment is to give a clear long-term vision for economic and monetary union. The discussion tonight, based on the report prepared by the President of the European Council, in cooperation with myself and the Presidents of the Eurogroup and the European Central Bank, has allowed us to get a much clearer idea of the views of the member states. It was a long, deep, dense, interesting discussion.

The Commission will set out its thinking in a few weeks' time in a Blueprint for economic and monetary union. We see this as a contribution to this process.

The Commission is a strong advocate of deeper integration, in particular for the Euro area. This is urgent.

The starting point must be to do this in a way that is open to all, that takes into account convergence with the Member States that want to join the Euro in the futureand that preserves the integrity of the Single Market. So these principles should be respected in the future architecture of a genuine economic and monetary union. It is very important to state once again that the European legal framework and its institutions provide the right basis to take this work forward.

I would also like to say a word about the issue of fiscal capacity of an economic and monetary union. To deliver lasting results, we need to develop a fully equipped Community economic governance together with a genuine, credible fiscal capacity. We need a stronger and more binding framework for the implementation of key economic policies, in particular in the euro area, as the only way to prevent imbalances.

While much has been done here, for instance through the six-pack and the Country-Specific Recommendations, further steps are crucial to combine specific conditions with specific incentives and to really make the economic and monetary union sustainable. This is in fact one of the interesting elements of this contractual arrangements between the Member States and the Union.

This is something for the medium/longer term, where it would function as part of the incentives needed for countries going through the hard times of reforms. Therefore, this, like the fiscal capacity, has nothing to do with the preparation of the next Multiannual Financial Framework which we will decide separately and on its own merits next month.

Overall, I think we had a good session. Much of the ground work has been done for the key decisions to be taken in the next weeks.

Finally, let me say a word on Greece. I believe the euro area Heads of State and Governments' statement on Greece is indeed a very important document that was approved in today's meeting.

I thank you for your attention.

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