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European Commission

José Manuel Durão Barroso

President of the European Commission

Statement by President Barroso following his meeting with Austrian Chancellor Werner Faymann

Press conference/Vienna

20 June 2013

Good afternoon, ladies and gentlemen,

It is a pleasure to be back in Vienna and to meet Chancellor Faymann.

Before entering into the most important topics of the European Council agenda, let me start by expressing the European Commission's solidarity with the victims of the recent terrible floods in Austria.

We commend the efforts of the local and national services, including the many volunteers, to help the people affected. And we stand ready to assist you with our Solidarity Fund, should Austria request it.

Ladies and gentlemen,

My last meeting with Chancellor Faymann took place early April here in Vienna. At the time, we discussed in particular the deepening of the Economic and Monetary Union and the Banking Union, as well as the EU's Multi-annual Financial Framework.

It's time to take our agenda forward, at next week's European Council.

Of course, we know one meeting alone will not solve Europe's problems – but we can make several decisions that will affect people's lives and improve our prospects of confidence, of a return to better times.

This means finding quick and concrete solutions for two major problems Europe is facing: youth unemployment and financing our economy, especially SMEs.

On youth unemployment, we are mobilising all the tools we have at European level to support Member States in combatting it. I hope that, at the next European Council, Heads of State and Government will be in a position to turn commitments into determined action. We have to address our citizens' needs even more vigorously. And the most important concern at European level is unemployment.

It's time to develop a European consensus on the practical ways to resolve the crisis.

It's time to act together to deliver growth and jobs.

We have presented some time ago the proposal for the Youth Guarantee. This was to some extent inspired by the Austrian model; we consider it one of the best examples in Europe in terms of training young people. And we were happy with the fact that all Member States supported our proposal for the Youth Guarantee. We don't have yet the financing, and that is why we now made the proposal that we are going to discuss at the European Council: to frontload those EUR 6 billion that are in the conclusions taken by the European Council to be spent over the next seven years, and to focus all this amount in the first two years, from 2014 to 2016.

That could be a contribution to the Member States, specifically those that are in a vulnerable position, that don't have these resources at national level. That will increase confidence. And I think it's also a question of justice and fairness.

Very much linked to this problem of unemployment is the problem of financing the economy, or the lack of financing the economy, especially SMEs. In many of our Member States we have a real problem here. That is why, working with the European Investment Bank, we have now completed some proposals that are going to be discussed tomorrow by finance ministers (and that I hope will be endorsed in the next European Council) in terms of blending some instruments we have at European level with other resources at national level.

It means basically the following: using the structural funds, those that the European Commission has the responsibility to manage, together with structural funds in national envelopes, and blending them with a loan from the European Investment Bank creating a huge leverage effect for the financing to SMEs. Because we are seeing that in many cases there are real bottlenecks in terms of financing the real economy.

So we know this is not a panacea. We know that the problems in terms of financing at European level can only be solved when we correct some of the imbalances we have in Europe, and also when we have completed the Economic and Monetary Union, namely the banking union.

And once again, thank you Chancellor Faymann and Austria for the support in this regard. In fact we need, at the same time, to find short term solutions to be creative and innovative. And that's what I call an element of the new European consensus.

Frankly, I believe that the debate that I hear about austerity or growth is not very useful. This is not the big question. And that debate is only dividing us.

What we need is a combination of policies that have to be tailored to the different specific situations of each country. A combination of policies that mean fiscal prudence, certainly – we need it -, more emphasis on the structural reforms for competitiveness, but also targeted investment, because without investment there is no growth. And without investment there are no more jobs.

This is what I think it's important, to build this new consensus, and to avoid some kind of partisan debates that only create lack of confidence.

And that is my last point in this matter. One of the difficulties we have today in Europe is the lack of confidence. I know that confidence is a very general political formula; all politicians like to speak about confidence, consensus and nice words like that. This is a very important variable of the growth situation. Because what we see in many of our countries is that savings are at record levels, even in countries that have very important difficulties. And savings are at record levels why? Because investors don't feel confident to invest, consumers don't feel confident to consume, to buy, to purchase.

This is why it is important that now the different capitals of Europe don't come with contradictory messages, saying sometimes very different things. And we need this European consensus about the need to restore growth - but growth that is sustainable. Not artificial growth, but sustainable growth. This is what we need. And I believe that if Europe pursues this line with determination will get out of this crisis stronger than before.

Essential for this is a sense of fairness. Because the citizens of Europe are, let's say, very often angry. And for good reason. They have seen huge amounts of money to save the financial sector and the taxpayers have been asked to contribute. That's why the Financial Transaction Tax is also important. Because it's an element of fairness, to show that the financial sector – and we have nothing against the financial sector, we want a dynamic and modern financial sector - should also give a fair contribution to society.

That's why I want once again to thank Austria for the leadership role that it had in the idea of a Financial Transaction Tax. The Commission has put forward a proposal; we have now 11 countries ready to move on with it. Let's hope that it doesn't take too much time because, I insist, this element of fairness is also a condition for confidence, and confidence is key for growth and jobs.

Thank you for your attention.

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