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European Commission

Maroš Šefčovič

Vice-President of the European Commission responsible for inter-institutional relations and administration

Speech by Vice-President Maroš Šefčovič on the preparations for the European Council meeting (19-20 December 2013)

European Parliament/Strasbourg

11 December 2013

Thank you very much Mr. President,

Honourable members,

President Barroso would have liked to be here with you for this important debate, as he usually is prior to each European Council meeting, but he decided to take part in the memorial ceremony for Nelson Mandela, one of the greatest political figures of our time, and therefore I am honoured to be able to present to you the Commission's assessment ahead of next week's European Council.

Over the past twelve months, the Commission's message to you has consistently been the following:

Enormous efforts in fiscal consolidation, structural reforms, financial markets stabilisation and, last but not least, the active solidarity have been made within the European Union. If we manage to sustain these efforts we will see that our crisis response will ultimately succeed.

As we meet today, we see that it is working already. We are starting to see the results. Economic indicators point towards a slow but significant upturn in both growth and confidence. The situation in all programme countries has improved and stabilised.

This is most visibly underlined by Ireland's graduation from its adjustment programme. It is hard to think of a stronger signal, first and foremost to the citizens of Ireland but also to the citizens all over Europe, and then of course also to the financial markets and international lenders. Ireland's commitment and sustained efforts are paying off. This is the right moment to pay tribute to the resilience and determination of the Irish people and their political leaders throughout this process. And the Irish example shows that linking responsibility with effective European support and solidarity has proven to be the right answer. We should all see this is as an encouragement for other countries under adjustment programmes. The Commission is confident that their hard work, which is ultimately our common hard work, will also pay off in the end.

Latvia adopting the euro as of next month is another indication of confidence in the euro as our single currency. In economic terms 2013 has been a turnaround year in this crisis.

Honourable Members,

2013 was a successful year also for other reasons. I am thinking of our joint achievements to agree and adopt the Multi-Annual Financial Framework. I am thinking of our breakthrough in creating a Single Supervisory Mechanism in the banking sector. We have taken new steps in reforming the European Union's economic governance. I feel encouraged by the way in which the European Semester and in particular the coordination of national budgets is developing.

But we must be absolutely clear that we need to maintain our efforts. The recovery cannot be just for some. Unemployment and hardship remain part of a very harsh reality for many European families. So we cannot and will not leave the job half-finished. That will remain the Commission's message to you and also to the European Council next week.

Honourable Members,

Now, at next week's Summit meeting, we need to take this forward. We have a chance to make 2014 a very successful year.

We have to continue on our reform path as set out in the Commission Blueprint for a Deep and Genuine Economic and Monetary Union.

The economic governance framework that we have now fully implemented for the first year with the new tools of the two-pack is a massive improvement on what was in place before the crisis. But it needs to be completed. We should go even further to ensure the sustained stability of the Euro area for the coming years. We owe it to our citizens and we owe it to our countries and especially to those who have suffered so much to recover and remove the debris from the last crisis. We know we still have to go further to prevent the next one.

For this, we need to first of all complete the banking union by putting in place a Single Resolution Mechanism and the Single Resolution Fund. The Commission appreciates the efforts made in this House to advance quickly in forming your views on our proposals. Now it is for the Member States to fully engage in the debate and to come to a general agreement still this month. Some progress was made in the Council last night and I am confident that an agreement will be reached still before the European Council meeting. It is important that we can fully conclude on this crucial piece of legislation before European Parliament elections. Linked to this, following last night's further discussions in the Council, there is good reason to hope that an agreement on the two pending proposals on Bank Resolution and Recovery and on Deposit Guarantee Schemes can be achieved in the trilogues before the end of the year.

Completing the banking union must be our most immediate and most important objective. However, with this the work will not be finished. We need to underpin our model with an even more credible and coherent system for coordinating economic policies across Europe, coupled with effective solidarity. The European Council next week will therefore continue the reflections on contractual arrangements and associated solidarity mechanisms.

Contractual arrangements, together with solidarity mechanisms, can be an important tool to ensure that important structural reforms take place effectively and timely. These new arrangements would constitute one additional step in our governance to improve the follow-up of country-specific recommendations. And they would include the possibility to provide financial incentives to support implementation of the reforms.

The Commission has adopted a communication on those instruments earlier this year. But let me stress again that this is not a way for Brussels to make life difficult to Member States.

Quite the opposite. The disciplinary element is already deeply enshrined in the European Semester and in the Fiscal Treaty. Now it is a question of reinforcing the "agreement"-aspect that allows more involvement of national political actors and stakeholders – the process should be agreed from the bottom up. And we need to discuss how to make the "solidarity"-element more concrete, so as to provide the necessary help to finance these reforms. After all these reforms are in the common European interest. This is all about stronger commitment, ownership and implementation – to the benefit of the Euro area and the EU as a whole.

The Commission hopes that the European Council can flesh out next week some basic principles on this issue, which would form the basis for further work to be taken forward during the first half of 2014. First and foremost, we need to be clear about firmly anchoring contractual arrangements and solidarity mechanisms in the existing framework of the European Semester. We need to focus them on those policy areas with the most likely effects on competitiveness, employment and the functioning of the EMU. We need to agree on their scope and engage all Euro Area countries while leaving the mechanism voluntary for non-members. Financing the solidarity support should come from all participating Member States. Whether in the form of budgetary support, grants, loans or guarantees, it should reflect the ambition level of reforms and the shock absorption capacity of the receiving countries.

Honourable members,

The second major item on the European Council agenda is Common Security and Defence policy. The need for a common approach to defence matters has never been so crucial. The Commission has been calling for progress already for some time, notably in this House in all of President Barroso's State of the Union speeches.

With our communication of last July - "Towards a competitive and efficient European defence and security sector" – the Commission has pushed this debate higher up the European agenda. We have set forth concrete proposals towards a more competitive and less fragmented European defence industry. We want to sustain and enhance Europe's military capabilities and the European Union's autonomous action.

We have to work towards a more cohesive European security and defence policy mainly for three reasons.

Firstly, because we need an effective and visible Common Security and Defence Policy as a tangible expression of our international commitments. We need to be able to back up our values and positions with effective security and civilian missions whenever and wherever necessary. Through EU battle groups and speedy deployment of EU civilian missions, we can show that we are as good as our word.

We also need critical technological expertise and autonomy in key capability areas. New threats and challenges, such as cyber security and trafficking of human beings, make the link between our internal and external security dimensions closer than before.

Secondly, we need to go further in this area also because public budgets across Europe are under pressure. The only sensible way to match increasing ambition and decreasing resources is through more cooperation. Today, more than 75% of investment in defence equipment is still spent nationally. We need to avoid duplication of the programs. It makes no sense that we need seven models of the same helicopters or sixteen types of frigates serving the same purpose, while the US has just one. We need to share assets and to develop common standards, or we will risk losing critical expertise and autonomy. Economies of scale and efficiency gains can and should further strengthen our defence capabilities.

Thirdly, also in this area we talk about economic growth and employment. The defence and security sector directly employs 400.000 people and indirectly generates another 960.000 jobs in Europe, with a turnover of €96 billion in 2012 alone and €23 billion of exports in 2011.

To maintain those jobs the need for innovation-driven competitiveness is huge. We want our companies to remain competitive on the world stage. We need to invest in a knowledge-based industrial network able to generate cutting-edge defence technologies, by exploiting the dual potential of research.

We also need Member States to fully implement the 2009 Directives opening up defence procurement. We want and we have made proposals to promote greater access of SMEs to defence and security markets. We also intend to do more to develop standards in critical technology areas and to promote a common approach to certification, a key enabler of industrial competitiveness. We are putting emphasis on space and satellite communications, to propose new approaches benefitting the security and defence sector.

This is not a debate for Europe alone. Our Common Security and Defence Policy is developed in close cooperation with our partners, notably the United Nations, NATO, the OSCE, the African Union and strategic partner countries and organisations. We owe it to them to make our efforts as focused and as effective as possible. Because pooling our resources and know-how is the way to do it.

So with the discussion taking place within the European Council, the Commission hopes to generate real ambition and momentum for closer defence cooperation and synergies among Member States. We need a more integrated and competitive industrial base, in cooperation with the European Defence Agency as well.

Honourable members,

This House has always been relentless in its support for a stronger, more united European Union, a Union fit to secure and improve the welfare of its citizens, and a Union ready to take up its rightful role in international politics as well.

Issues on which the Commission and the Parliament have cooperated over the last months and years - each time raising the bar and adding to the momentum for European action - have recently made real progress.

On migration, for instance, the Commission expects that the European Council would endorse the need to move forward with the concrete actions which flow from the work of the Task Force for the Mediterranean.

The Lampedusa tragedy has made it painfully clear that we need to step up border control operations and enhance our capacity to detect boats in the Mediterranean. It has also underlined the limits of national policies to deal with a large and complex problem such as illegal migration flows, showing the need for more assistance to Member States with particular migration problems and real solidarity. Let me recall that the Commission is setting aside financial support of up to 50 million euro (including emergency funding), and in support of Italy in particular 30 million euro have been set aside, including for border surveillance operations under the Frontex mandate. The nature of the problems calls for such support, to the benefit of all of us.

In order to improve the fight against trafficking, smuggling and organised crime, practical cooperation and exchange of information must be reinforced also with third countries. Regional protection programmes can be made stronger, notably for Northern Africa. Our resettlement efforts can be a lot better and together with Member States we should explore how to open new and better legal channels to access Europe, for instance for seasonal workers, students or researchers.

Last but not least, we need to step up our cooperation with third countries. For instance, new Dialogues on migration, mobility and security should be launched with a number of Southern Mediterranean countries, notably with Egypt, Libya, Algeria and Lebanon.

Honourable Members,

The European Council will also take stock of the progress made in implementing the Compact for Growth and Jobs and the two sets of Single Market Act proposals. There is positive news to report but there are still some important proposals where we can and must make progress still during this term. Member States need to deliver on their commitments. Just to give one example which the European Council will address next week: Taxation policy, in particular the fight against tax fraud and tax avoidance.

An Action Plan was adopted a year ago. The Commission has made the necessary proposals for an advanced and comprehensive system of automatic exchange of information between tax administrations, and for tighter corporate tax rules against aggressive tax planning. We are pursuing negotiations on stronger tax agreements with Switzerland, Andorra, Monaco, San Marino and Liechtenstein. The European Union is also a key player in shaping the OECD work on global standards. But yesterday once again the ECOFIN Ministers failed – given the opposition of two Member States - to reach agreement on the Savings Directive.

I hope that together with you we can keep up the pressure to make progress in this area.

And finally, the European Council will hopefully agree on giving concrete impulses to improve companies' access to finance - and SMEs in particular. We have already made headway. The European Investment Bank has significantly and successfully boosted its activities following the capital increase agreed last year. The EIB and the European Commission have together explored further ways to develop risk-sharing instruments that can leverage resources from the EU budget with EIB support. At next week's summit, the Commission will continue to push Member States in their ambition to use and improve such activities.

President, Honourable Members,

Let me conclude with a few remarks on the situation in Ukraine. I know you have had a plenary debate on the Eastern Partnership yesterday afternoon. I believe this is a topic which cannot pass unmentioned also in our debate this morning.

Let me recall in clear and plain terms the position of the European Commission: European values and principles must be respected. This is particularly true for the Ukrainian authorities. But it is true for everyone, of course. Especially after what happened last night, we have to reiterate that violence is never the answer. The solution must be found by political means, and this solution must be found through dialogue with the Ukrainian opposition and civil society.

President Barroso spoke already twice with President Yanukovych on the phone after the Vilnius Summit calling upon him to show restraint in the face of recent developments, not to use violent force against peacefully manifestations and to respect fundamental freedoms of Ukrainian citizens.

The High Representative / Vice-President of the Commission Cathy Ashton is in Kiev today on the ground in order to assist in finding political and peaceful solutions for the very tense situation that Ukraine is living today.

The people of Ukraine have clearly demonstrated that they support Ukraine's European choice. Our offer to Ukraine to sign the Association Agreement, including a Deep and Comprehensive Free Trade Area, remains on the table. But the necessary conditions outlined in Council conclusions need to be met. And the political current tensions need to have a political and peaceful solution.

I welcome that this was also the very large consensus that emerged from your debate yesterday.

On all these things which I just mentioned, Commission and Parliament have worked hand in hand for the European common interest and will continue doing so.

Thank you very much Mr President.

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