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European Commission

José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso to the EP Conference of Presidents on the outcome of the European Council meeting of 13-14 December 2012

European Parliament Open Conference of Presidents/Brussels

17 December 2012

President of the European Parliament,

President of the European Council,

Honourable members,

When I addressed you last week in Strasbourg I said that this is no time for complacency and this European Council was the occasion to take the decisions needed on the path towards a deep economic and monetary union, and to set out the actions that will need to be progressively delivered in the weeks, months and years to come.

Measured against these objectives, last week saw progress.

The breakthrough on the single supervisory mechanism for banks set the right note for the European Council meeting discussions on banking union.

The proposals on the Single Supervisory mechanism adopted by the Commission on 12th September made it possible for the unanimous position by the Council on 12th December, only three months later. The Parliament with its two rapporteurs Mrs Thyssen and Mr Giegold has worked just as quickly, which means that the trilogue discussions towards final adoption can begin this week.

This shows that in full respect for our unique institutional structure, the Union can move forward on the right policy at the right time, if there is political will.

The single supervisory mechanism is an indispensable foundation stone of the banking union. It is the necessary complement to the single currency, but is being delivered in a way which is open to all and is agreed by the 27 Member States within the Treaty framework. It shows that there is no necessary contradiction between deepening the EMU while maintaining the integrity of the single market and the European Union as a whole.

It also brings closer the possibility of direct recapitalisation of banks by the ESM. The European Council reaffirmed that it is imperative to break the vicious circle between banks and sovereigns. It agreed that further to the June 2012 euro area Summit statement and the October 2012 European Council conclusions, an operational framework should be agreed as soon as possible in the first semester of 2013, so that when an effective single supervisory mechanism is established, the European Stability Mechanism will, following a regular decision, have the possibility to recapitalise banks directly.

It is now important to secure the rapid conclusion of negotiations on the bank capital rules and the harmonisation of national bank resolution and deposit guarantee schemes. These proposals are at the core of the single rule book for banking – the common substantive rules that the single supervisory mechanism as well as national supervisors will apply.

I urge all actors to work for agreement on these proposals as soon as possible.

I have announced to the European Council that the Commission will then come forward with a proposal for a single resolution mechanism for banks. The Heads of State and Government agreed that this proposal "would be to be examined by the co-legislators as a matter of priority with the intention of adopting it during the current parliamentary cycle".

This is the logical next step – and it is a particularly important step on the road to creating a more sustainable and fairer banking system: a single resolution mechanism will make the banking system more resilient and at the same time protect taxpayers better from the consequences of banks in difficulty.

Banking union is very important as one building block of a stronger and deeper EMU. The European Council held a very open discussion on the overall future of the EMU, based on two contributions: the report of the President of the European Council in collaboration with the Presidents of the European Commission, the European Central Bank and the Eurogroup; and the Commission's Blueprint, which set out a vision for the medium and long term to put in place all the instruments and structures needed to ensure EMU is fit for the challenges to come. The two documents are complementary and set a rich agenda with a high level of ambition.

The issues at stake in the fields of fiscal union, of economic policy coordination and of commensurate political union are fundamental. They touch the heart of national policies and politics, indeed the heart of national sovereignty. That is why, as I said to this house last week, I did not expect any immediate decisions on the long term vision. The discussions at the European Council revealed the complexity of the issues at stake. The sense of urgency is not the same in all capitals and more work is needed to create a consensus and a way forward.

This being said, the European Council identified the adoption of the "two pack" as the immediate priority and noted the Commission's intention to come up with a proposal for the ex-ante coordination of major economic reforms in the context of the European Semester.

The Commission's suggestion of a Convergence and Competitiveness Instrument was the subject of much interest, questions and lively discussion among leaders, just as it was in the last week's plenary debate in the European Parliament. President Van Rompuy and I were asked to present possible measures and a time-bound roadmap to the June European Council on the feasibility and modalities of these contracts and a solidarity mechanism to support them.

As I said last week, at the core of the design of our idea is the principle that discipline must be coupled with solidarity. And that new instruments like such an instrument must fit within the EU treaty and institutional architecture and the EU budgetary architecture.

Our approach is for an improvement of the existing procedures rather than for another layer of economic governance: namely, specific support to specific challenges identified within these procedures. One could call it a "stress mitigator" that should help Member States to tackle particularly demanding reforms or adjusting imbalances. This instrument can be a crucial tool in dealing with the fundamental issue of competitiveness and can be seen as a further contribution to our agenda for growth. They are instruments for competitiveness and growth.

The Commission will be working for solutions which are inclusive, firmly within the Community method and hence subject to the scrutiny of the Parliament. It is our intention to present further ideas after the decision on the next MFF as the basis for an in depth debate and discussion, including with this House.

Overall last Thursday's debate on the EMU was a valuable opportunity to set out a broad common political vision, one which includes many of the elements and sequencing of the Commission's Blueprint and which does not close down any possible avenues for the future. Between the Commission and the European Parliament, I believe we could easily agree on a more ambitious pace. But we should also recognise that momentous developments as proposed in our blueprint will require deeper democratic discussion in our Member States.

I would also like to highlight the fact that the European Council acknowledged the importance of the social dimension of EMU including social dialogue. As you know the European Commission, while focussing the blueprint on the institutional architecture of EMU, has always insisted on the importance of using all elements of EU policies to complement actions at the national level to address fundamental issues of equity and social cohesion in the Union.

The need to ensure democratic legitimacy and accountability while making progress on EMU was acknowledged in the 4 Presidents' report and the blueprint. I am happy that the European Council has clearly stated that "Further integration of policy making and greater pooling of competences must be accompanied by a commensurate involvement of the European Parliament."

Honourable members,

I underlined last week the priority which the Commission is giving to measures to combat the growing social crisis in Europe. The European Council addressed these important issues in the context of the Annual Growth Survey. The European Council agreed with the five priorities presented by the Commission and will further examine the AGS package leading up to the spring European Council in March. The conclusions call on the Council to address the proposals of the Youth Employment Package without delay, in particular with a view to adopting the Commission's proposal for a recommendation on a Youth Guarantee at an early date in 2013. This is very welcome. If we are to deliver a job-rich recovery and if we really what to combat social exclusion, we have to start by ensuring that no young person is out of education, training, apprenticeships or better still, work, for more than four months.

A job-rich recovery also requires us to make the best of all our assets, and the first of those is the Single Market. The co-legislators now need to conclude the remaining SMA I files as a matter of urgency. The Commission has urged this for some time and I would like to ask this House to do all it can to ensure that the remaining seven priority measures are adopted and can be implemented as soon as possible.

Concerning the SMA II, all legislative proposals will be presented by the Commission by March 2013 with a view to their adoption during the current parliamentary cycle. We will set the bar high, and will be ready to make the case for change even in sensitive areas such as the opening of network industries.

But I am encouraged that there was, at Heads of State or Government level, a real commitment to deepen the Single Market and to extending smart regulation. Now we need to turn this political will into concrete progress. I am glad to say that based on Commission proposals we have finally an agreement on the Single European Patent. After 30 years it was time to have this adopted.

Honourable Members,

There was also in the European Council an important discussion on foreign policy and defence matters. I will not repeat what the President of the European Council said, but let me just conclude by saying that I believe this summit was one of work and application rather than headlines and arguments. The intensive discussion on future of the EMU should help foster national ownership. This is critically important. All options remain open on the path towards deeper EMU and the Commission will keep driving the process with a sense of ambition. This ambition coupled with the decisions taken on the next tangible steps forward, and some of these decisions were taken, namely the important decision of the SSM, and also the agreement on the next disbursement to Greece, show that we are tackling the crisis, here and now, and we also have a long term vision.

I am confident that with the necessary hard work and sense of urgency Europe can overcome its current difficulties. The Commission stands ready to deliver the proposals we have announced and we are prepared to hit the ground running in 2013. Clearly the first priority will be to reach agreement as quickly as possible on a MFF, because we should not forget that our budget is a budget for growth and investment, on an MFF that really delivers, a European budget that is compatible with our agenda for growth.

That is why I would like to conclude by wishing this house a very peaceful, restful and happy Christmas - and a very busy New Year!

I thank you!

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