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European Commission

José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso: Key Debate: Preparation of the European Council meeting 13/14 December 2012

European Parliament/Strasbourg

12 December 2012

President of the European Parliament,

President of the Council,

Honourable members

When I addressed this house on the State of the Union in September I announced the Commission's intention to present a blueprint on how to deepen economic and monetary union still this autumn.

On 28 November, the Commission has delivered on this promise.

The blueprint is the sum of the many reflections and discussions throughout the crisis.

It reflects the many debates we have had in this house, and for which I am truly thankful.

More specifically, let me recall that during our debate in October, when discussing the outcome of the October European Council, I presented to you already the broad lines of this blueprint: the key principles, the main deliverables in the short and in the longer term, and how we want to strike the balance between responsibility and solidarity.

I am sure, by the way, that you have noted the large degree of convergence between this blueprint and Parliament's own resolution of 20 November "Towards a genuine EMU", based on the report by Marianne Thyssen.

And I made it very clear already in October that the blueprint is the start of a debate, and not its end. And of course, the European Parliament must and will be involved and take part in this debate at every stage of the process. One of the reasons the Commission opted for the presentation of the blueprint, and in so doing fulfilling its institutional role with its right of initiative, is indeed our desire to create a basis for a more comprehensive process transparently addressing the institutions, the Member States and our citizens.

Therefore, the scope and perspective of this blueprint, whilst contributing to this week's European Council, reach beyond it.

The blueprint sets out the Commission's vision and also concrete ideas, as well as possible legal options towards a genuine economic and monetary union. It maps out the work not only for the weeks and months, but for the years ahead.

It starts with the most pressing tasks that need to be done in the very short term to further stabilise the economic and monetary union in general and the Euro in particular and on which all further steps will need to be based on. It goes on by sketching out in detail the steps and measures needed for the completion of a deep and genuine EMU in the medium and longer term.

President, Honourable Members,

Through the blueprint the Commission is also giving its contribution to the European Council this week. The European Council will address these issues on the basis of the report presented by the President of the European Council in collaboration with myself, the presidents of the European Central bank the Eurogroup.

The objective of the Commission's contribution is two-fold:

First, we must not lose the sense of urgency for action. The situation has improved but remains fragile. Complacency is not an option.

The important reforms under way in many Member States remain to be carried through. The delivery on decisions taken at the level of the European Council, for example for a single supervisory mechanism for banks and following its establishment, for the possibility for the ESM to directly recapitalize banks, remains to be completed.

This is why rapid political agreement on the single supervisory mechanism and its endorsement at this European Council is crucially important. The SSM is the single most important step for the further deepening and completion of Economic and Monetary Union.

This is why I want to thank the Parliament for its timely and constructive cooperation on this very important dossier.

But second, we must not lose the overall perspective that lends credibility and purpose to the urgent action: the definition of a roadmap towards the EMU for the future. It is important, it is indeed essential, that the European Council gives a clear message that the individual decisions taken so far and still to be taken are embedded in a comprehensive approach that guarantees the irreversibility and the sustainability of the EMU and Euro.

In order to facilitate the agreement on such a roadmap, the blueprint sets out the main guiding principles on which a genuine EMU should be built.

It is first of all the Commission's view that the deepening of the EMU must take place within the institutional and legal framework of the Treaties on the basis of the Community method.

Secondly, we must make sure that discipline and responsibility go hand in hand with solidarity and convergence. We need both. It is not a question of choosing between solidarity and responsibility; both are needed if you want to have a genuine EMU.

Thirdly, the EMU in general and the Euro area in particular must integrate quicker and more decisively than the European Union at large, whilst maintaining the integrity of the European Union and its policies conducted at 27, notably the Single Market. This means that measures taken for the Euro area must acknowledge the specificities of belonging to a single currency.

But they should be open to the participation of other Member States, wherever appropriate. Particular attention must be paid to the convergence between the existing and the future members of the single currency.

Lastly, creating a deep and genuine EMU will require commensurate steps towards a Political Union. This means that increased democratic accountability must accompany any Treaty change conferring further responsibilities on the European Union level. As the Blueprint states and I am quoting: "…it is the European parliament that primarily needs to ensure democratic accountability for any decisions taken at European level, in particular by the Commission." end of quote.

Whether you look at the proposals which are already on the table, like the SSM and the Two-Pack, or whether you take the announcements in the Blueprint, the Commission is and will be applying these principles to the full.

This is why the blueprint has chosen the transparent approach and commitment to present explicit ideas for Treaty changes in advance of the next European Parliament elections, so as to enable the necessary broad public debate and the decisions building on it.

I am looking forward to discussing all of this in more detail with you in the coming weeks and months.

President, Honourable Members,

The future of the EMU is without doubt the most important point on the agenda of this week's European Council. But even such a major challenge does not exhaust the agenda.

We must reform our structures, our instruments, certainly, but we must also refine our policies.

Above all, for reforms to work, they need to be fair and equitable. Because inequality is not sustainable and that is why we must also strengthen social cohesion.

I have made this point in the State of the Union speech before this Parliament and it has been at the heart of the Commission's work.

Let me therefore draw your attention to two initiatives which the Commission adopted last week and which make it crystal clear that the Commission sees social justice and fairness in our societies as a key element of today's policy priorities.

First, we have presented an Action Plan against tax fraud and tax evasion, accompanied by two recommendations to Member States. It is estimated that around one trillion Euros a year are lost through tax evasion and avoidance in the European Union every year. That is money which ought to be available to put to the public good, but which is simply lost. We could finance a complete seven year Multi-annual financial Framework if we were able to recoup this amount of money that goes through tax evasion and tax fraud.

And why should citizens and companies who respect their tax obligations have to pay for the unscrupulous or criminal behaviour of others? How can that be fair?

But across our single market, loopholes in national systems make tax avoidance easier than it should be. This is why we have put forward ideas against aggressive tax planning to facilitate better co-ordination between Member States. And to take account of the reality of a globalised interconnected world, we have recommended strengthening the European Union's stance on tax havens to go beyond the current international measures.

Both recommendations will ensure a fairer tax system. The Commission will work actively with Member States to ensure they are fully implemented, and I count on the support of this House to maintain the momentum for change.

In addition, they also open the way for the adoption of the venture capital and social investment fund proposals, thus helping business, especially small business invest, expand and create jobs.

Honourable Members,The Commission has also adopted last week a youth employment package. This package is a complement to our existing work on the ground to alleviate youth unemployment. I strongly hope it will play an important role in helping Member States tackle youth unemployment, by establishing youth guarantees and a quality framework for traineeships. We want to ensure that all the young people receive a good quality offer of employment, or continued education, an apprenticeship or a traineeship within four months of becoming unemployed or leaving formal education.

While these programmes will basically be under national responsibility, the European Union could contribute through a targeted use of the European Structural funds in particular the European Social Fund.

This is a call for all economic actors to mobilise their potential to make sure that the current crisis does not sow the seeds of the next. Our generation must not create a vicious spiral of a lost generation.

The ideas set out in the youth package build on ideas tested and tried in previous stress situations at the national level, where they have worked – we owe it to our students, young workers and young families to undergo a joint effort also at the European scale.

President,

Honourable Members,

Of course we know that these measures are specific measures. We know that the real issue of social justice and prosperity can only be solved by addressing the structural problems in our economies: by stabilizing the Euro Area, certainly this one of the most important, if not the most urgent issue now, but also by taking all the necessary measures to instil again confidence in the European Union's economy. Because without confidence there will not be investment, without investment there is no possibility for growth and growth is the answer to the current problems of Europe.

What is important for the EU and the Euro area is to steady the course, to continue showing determination both in the direction of responsibility and solidarity. Continued reform is needed to generate sustainable growth and jobs. This is why the Commission in its Annual Growth Survey for 2013, while underlining the need to urgently address the social dimension, not to say social crisis, has maintained the following 5 priorities:

• pursuing differentiated, growth-friendly fiscal consolidation;

• restoring normal lending to the economy;

• promoting growth and competitiveness for today and tomorrow;

• tackling unemployment and the social consequences of the crisis;

• and modernising public administration.

These priorities are structural and it will take time before we fully benefit from their realisation. In the short term we need complement these efforts with investment. I therefore welcome that agreement was reached between the Council and Parliament on providing much needed financing for this year and on a budget for next year. I share Parliament's concerns that the agreement might not be sufficient to fulfil our legal obligations and economic objectives. This is why I signed the Declaration together with the President of the Parliament and the rotating Presidency making clear our expectations. At the same time, I want to congratulate the budgetary authority for its capability to finding compromise solutions which are defendable and give stability.

I want to have a special word of thanks for President of this Parliament Martin Schulz for his personal commitment to find the solution. And if I may also a special word of thanks to all the Members of the Parliament that worked so hard to find this compromise namely Alain Lamassoure and also the rapporteur.

We really need this capability, because we need also to show the same spirit for an agreement on the multi-annual financial framework.

I have said it before and I will repeat it again today. The European budget is essentially an instrument for investment and across Europe we cannot speak about the need for growth without recognising the critical need for targeted investment. The European budget is, at the European level, the most important instrument for this targeted investment. If we want to deliver growth across Europe we must have a budget that can deliver investment across Europe.

President,

Honourable members,

Last but not least, the European Council this week besides the economic issues will also deal with Political and Defence matters. You remember that in the State of the Union address I already spoke of the potential in our defence sector and the need also to work in a more European coordinated manner in this very important area.

It is vital that the sector faces up to the challenges of shrinking defence budgets and the fragmentation of European markets.

This is why also in this sector pooling and sharing of scarce resources is essential. Part of this task is, as we all know, inter-governmental. But the Commission also has a role to play. The Commission will further build on the 2007 Defence package and look into ways to mobilise defence-related Commission instruments, to make Europe's defence sector more efficient and competitive.

If Europe wants to be credible and promote its values on the global stage, indeed if we want to have a say in promoting peace in other parts of the world, then we must also move on with a Common Foreign and Security Policy including a defence dimension.

President,

Honourable Members,

To conclude let me just tell you exactly what I said to the Heads of State and Government; most Heads of State and Government of the European Union came to Oslo to commemorate with us the Nobel Peace Prize; and in a working meeting with Prime Minister of Norway, when we discussed very openly our challenges. I had the occasion to tell our colleagues, Heads of State and Government of Europe the following: Now, that we have received the Nobel Peace Prize we have to show that we really deserve it in concrete work every day. The Nobel Peace Prize, is an inspiration and a moral obligation and encouragement to work even harder for our European project. The Prize is not only a great distinction for the European Union. Even more than this it should strengthen the everyday courage; "le courage de chaque jour" which we need to see through these challenging times and to preserve the future of this uniquely historical project called European Union.

I thank your for your attention.


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