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Speech by President Barroso during the key debate on the preparation of the European Council

European Commission - SPEECH/13/102   06/02/2013

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European Commission

José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso during the key debate on the preparation of the European Council

European Parliament plenary session/Strasbourg

6 February 2013

Dear President,

Dear Minister,

Honourable Members,

Before it was decided to focus this European Council on the Multi-annual Financial Framework following the failure to reach agreement in November, this meeting was originally intended to be devoted to two issues of strategic importance to the European Union: first, our external trade policy and, second our southern neighbourhood.

President, Honourable Members,

Trade is making a vital contribution to our economic recovery. In 2012 external demand was the main source of growth for the European economy. It contributed almost an extra 1% to EU GDP with about 30 million jobs in Europe depending on our exports.

We are by far the world’s largest trading power and we do use our weight to shape world trade so as to reap the maximum benefits from globalisation.

But if we are to benefit as fully as possible we must pursue a strategic forward looking approach to our international trade relations.

If we are to achieve this we must be pro-active and ambitious. We must preserve and reinforce the multi-lateral system that has served Europe and the world for 60 years. But as a complement we must also look to deepen our bilateral trade and investment relations.

We have agreed many bilateral agreements and are working towards others. Among these, we have already implemented a landmark Free Trade Agreement with Korea; negotiations with Singapore have been completed and we expect to complete negotiations with Canada in the near future, with, we hope, India to follow.

We will shortly start negotiations on a free trade agreement with Japan and are looking at the possibility of such an agreement with the United States. I have been exploring this directly with President Obama and the United States administration for some time, and I am sure that a Transatlantic Free trade Agreement will bring even greater benefits from our single most important economic relationship.

These strategic partnerships are vital for our economic future. But realising these opportunities will require a clear vision of our long term interests, the capacity to manage the complexity of the negotiation and the necessary trade-offs – and you can do that effectively. At the same time it requires the ability to speak with one voice and to constructively engage our partners.

Of course while the EU as a whole is doing well in terms of global trade some Member States and regions are doing better than others. We need to address these issues in our economic and structural policies, namely in the framework of the on-going reforms for competitiveness.

We must also ensure that our commitment to open markets will continue to be upheld by our capacity to act against anti-competitive trade practices, through the appropriate trade instruments.

President,

Honourable members,

Yesterday with President Hollande we spoke about the situation in Mali. I will not repeat this today but I would like to say a few words about our Southern neighbourhood as delivering on our commitments to our Mediterranean partners continues to be a top political priority.

Let me be very clear, our external credibility will be largely judged by our capacity to act with our partners in the region to jointly shape the common neighbourhood. The situation on the ground varies: democracy will not come overnight and the path to achieve it will not be a straight line.

The mass movements across the region were about the desire for democracy and freedom. We will continue to support these ideals so as to avoid that extremist forces hijack the political transitions underway. We will be especially attentive to the respect of fundamental rights, namely the rights of women.

Right after the outbreak of the uprisings the European Union has adopted a comprehensive and ambitious package of support. In the last two years we have mobilised 600 million euros of fresh funding for programmes in the region. We have enlarged the European Investment Bank mandate and modified the EBRD one, opening up an additional 2 billion euros in funding. We have proposed an ambitious trade and mobility agenda and concrete sectoral support.

However the political uncertainty has limited the capacity of our partners to benefit from the full potential of our offer. Tunisia has held elections and approved a new Constitution without major turmoil. The President of Tunisia will be with you in this House later today to discuss the progress his country has made. But in Egypt the process of transition continues to be polarised. In Libya there are still security concerns.

And of course we have the extremely dramatic situation in Syria. Syria remains a stain in the world’s conscience. In response to the humanitarian drama the Commission has increased its support by 100 million euros, bringing the total to 200 million euros. But humanitarian aid is not enough. As I have said before: the international community has the responsibility to stop this bloodshed.

President and Honourable Members,

In the months to come, the European Commission will seek to deepen our economic relations by launching the negotiations for a Deep and Comprehensive Free Trade Agreement with Morocco, Tunisia, Egypt and Jordan and by signing mobility partnerships with Morocco, Tunisia and Jordan. We will also draft a Road Map for the establishment of an EU-Southern Mediterranean Energy Community. And we will develop projects with the region on transport, environment, water and rural development.

Nor will we neglect the civil society. We will deepen our support and extend measures which directly touch people's lives: for example, by doubling the Erasmus Mundus/Tempus scholarship for the countries in transition in the Southern Mediterranean partners.

This is a joint endeavour that can only be successful if the European institutions, this Parliament and the Commission, together with the European External Action Service work hand in hand with our Member States. This is an historic opportunity for democracy. We can try and fail but we should not fail to try.

President, Honourable Members,

The discussions in the European Council on the MFF tomorrow and Friday mark a very important moment for Europe but so too is our debate in this Parliament today.

The Lisbon Treaty changed the way the MFF is decided, requiring the consent of the European Parliament "given by a majority of its component members".

This is a point, the role of the European Parliament, which I made at the last European Council discussion on the MFF and also in my bilateral contacts in the run up to this week's meeting. And just last Monday, in a meeting I have organised in Brussels, for which I invited the President of the European Parliament, Martin Schulz, the President of the European Council, Herman Van Rompuy, and also the Taoiseach Enda Kenny, as President in office of the Council, I made this point in a very clear way.

The Commission hopes that the Heads of State and Government will be able to come to a political agreement that can be the basis for the Council to obtain the consent of the European Parliament.

And today I appeal to all the Heads of State and Government to bridge their differences and come to Brussels in a spirit of compromise and European responsibility so that this political agreement can be found.

Further delays would send out a very negative message at this time of fragile economic recovery. The risk is that positions would harden and would become even more difficult to overcome. It is why we are actively working for an agreement which addresses the needs and the priorities of the European Union, and ensures that the financial means are made available to allow the Union to fulfil its legal obligations.

We must not forget that the European Union budget is, despite its relatively small size, around 1% of EU GDP, the most important instrument at the European level for investment: investment which is a vital and an integral element of our agenda for growth and competitiveness, notably in the most vulnerable countries and regions.

Yes, we need stable public finance; yes, we need deep structural reform for competitiveness, but European investment is also needed especially in areas where a Euro invested at the European level adds more value than a Euro invested nationally.

President and Honourable Members,

The crisis is far from over and our MFF is also an indispensable part of our response both to the economic and to the social crisis. For many of our Member States the support they receive from the European Union budget is essential to have a chance to beat the crisis. In other words, whether those countries will have a real opportunity to invest for growth and jobs.

The MFF is also an expression of solidarity. There are Member States which simply do not have the means to support their local workers when a company decides to move its plants elsewhere. There are some member states which do not even have the means to take care of the most deprived. Do we want these people, do we want these societies to turn their back to Europe?

The same goes for the 5.7 Million of young unemployed people in the European Union. I want to make an appeal to the Heads of State and government not to miss this opportunity to use the European budget to fight youth unemployment. We have a chance to take the right decisions, to offer our young men and women the perspective of a life in dignity.

I want us to build on other initiatives of the Commission to fight youth unemployment, for instance, the reorientation and reprogramming of the structural funds in 8 Member States most affected by youth unemployment and also the proposal for a Youth Guarantee. We should use the MFF to support these and similar actions.

Last month I have mentioned this idea in the joint meeting with the European Parliament and national parliaments. I expressed the hope that this week, Member States in the European Council can support our ambition to find concrete measures which hit the ground rapidly and make a difference.

A Youth Employment Initiative would be a powerful signal of solidarity and value added at the European level. It is critically important that such an initiative enters into force as soon as possible.

President,

Honourable Members,

The MFF is of vital importance for the EU to stay one of the most competitive regions in the world by implementing Europe 2020 which, let us not forget, was agreed by all our Member States. For this we need to provide the financial means for world-class research and innovation. And we need to have the most modern infrastructures in place to fully exploit the potential of the single market.

Since most Heads of State and Government will naturally be focusing on their national priorities and for what they see as their national envelopes – I have to tell you, my experience is that most of the governments speak more about their national envelopes than about the European perspective - I will fight hard to preserve the European dimension of our budget – for instance, on Horizon 2020 for research, Connecting Europe, COSME for SMEs and Erasmus for All.

And of course I will underline the need for the social dimension with appropriate funding not only for the European Social fund and the Youth Employment Initiative but also the Globalisation Adjustment Fund and the programme of Aid for the Most Deprived.

For all these reasons we believe that it is important to have an MFF but not every agreement is a good agreement. We need a constructive agreement which reflects the commitments which the Heads of State and Government have made in the past for growth and for investment at the European level, for competitiveness and for implementing our agreed Europe 2020 agenda;

At the same time we also need to respect the commitments we have made in terms of strong support for cohesion, territorial, social and economic cohesion and also for the Common Agriculture Policy.

Last but certainly not least, for thousands and thousands of people in the poorest parts of the world the MFF with its development and humanitarian aid funds is the difference between life and death. Moreover our external relations budget goes a long way to determining the leverage the European Union will have in many parts of the world.

That is why we also need to look at the external relations part of our budget, at least for those who believe the European Union should be present and strong in the world of the 21st century.

President, Honourable Members,

My position has always been to strike the right balance between ambition and realism. This is what the original proposal by the Commission stands for.

I will do as much as possible to keep a level of ambition in the final agreement. However, it is clear that any agreement between the Heads of state and Government will unfortunately be lower that the Commission and this Parliament would hope. Under these circumstances it is even more vital that the quality of the budget is ensured. To achieve this, the agreement must address a number of concerns on issues such as flexibility, own resources and a robust review mechanism. I'm sure this is very important in view of the required consent of this Parliament.

Flexibility can apply in many different ways. Most importantly, it will be important to have the possibility to move unspent amounts from one year to the next and also to have flexibility between the different headings of the budget. Nobody can predict the kind of challenges the EU will be facing in two, three or four years from now and for which it might need to mobilise funding.

Also, it would only be logical within a seven years financial framework to have a clause in the MFF which will allow us to take stock at mid-term, and to see whether adjustments are necessary.

Finally I hope, and I will make the strong case for it at the European Council, that the next MFF will pave the way and launch the process towards a reform of our own resources system.

President,

Honourable members,

I have set out the very difficult and challenging environment in which we are discussing the next MFF. I continue to believe that an agreement is possible.

I still hope that with a spirit of European responsibility it will be possible to have an MFF which responds to the challenges which the European Union faces. Let us work together for this to happen.

I thank you for your attention.


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