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European Commission

Viviane Reding

Vice-President of the European Commission, EU Commissioner for Justice

Main Messages: Trieste Citizens' Dialogue

Citizens' Dialogue/Trieste

16 September 2013

1. Free Movement

The cornerstone of our Union is under threat. I want to make it absolutely clear: Free movement is a fundamental right, and it is not up for negotiation. Let language not betray us: European citizens exercising their right to free movement are not 'immigrants'. All European citizens have the same rights. Let me also be clear that Roma people are EU citizens and as such of course have the right to free movement.

Ugly populism is rising in some Member States. But whilst such rhetoric may win votes today, the price would be paid by generations of European citizens tomorrow. This is why I expect national politicians to be firm and resist populism. Populist scaremongering about welfare tourism has no place in Europe.

I also want to remind them that it was the Member States themselves who agreed to enlarge our Union. Do they now want to deny the citizens of those "newer" Member States one of their fundamental rights?

We are all rightly proud of the four freedoms that form the building blocks of the European Union. But they go together, Member States cannot pick and choose as they like. If business and markets can profit from a borderless Europe, then citizens must profit as well.

Limiting free movement would hurt our economy – and that at a time, when Europe needs more growth to get the 26 million people who are currently unemployed back into work. Because we know that labour mobility benefits both the individuals who find jobs in this way and the countries they go to. For instance, after the EU enlargement round of 2004, labour mobility from the new Member States is estimated to have increased the GDP of the "old" EU15 countries by around 1% in the period from 2004 to 2009.

Cities and especially smaller towns and rural areas can feel overwhelmed. However, the EU does offer financial help to them. The European Social Fund provides money for projects promoting social inclusion and combating poverty – like vocational training and language courses. Central governments need to inform authorities at regional and local levels much better about the help available to them.

2. Future of Europe

A true political union is about much more than just a common approach to economic and fiscal policy. That is why we are for example working to complete a European area of freedom, security and justice. It is essential that citizens can trust that the rule of law will be upheld and their rights protected anywhere in the Union. So in the medium term we should perhaps also start thinking about an EU-Minister of Justice.

3. How the EU is fighting the crisis

Today's Citizens' dialogue takes place on the day on which exactly five years ago, the world looked into the abyss, because of the fall of Lehman Brothers.

Today, we can say, that we have come far in our efforts to overcome the crisis. We have stood firm by the euro, proving all the doomsayers wrong.

Recovery is in sight, so we must not give up now. Member States' far reaching and sometime painful reforms are starting to pay off. We can see green shoots: In the second quarter of this year, Europe's economy started growing again with Gross Domestic Product (GDP) rising by 0.3% in the Euro-Zone and 0.4% in the EU as a whole compared to the first three months of the year.

Unit labour costs are falling in countries like Greece, Spain and Portugal. Member States that were shut out of the capital markets for years can now borrow again from private investors at sustainable interest rates – Ireland and Portugal returned to the markets in March and May respectively, issuing 10-year-bonds. And Europe and the Euro are still attractive. In July, we welcomed Croatia as the 28th member of our Union. Latvia will join the Euro-Area in January 2014, Lithuania is set to follow.

It will take time until this recovery leads to large numbers of jobs being created. But we will continue to stand together.

Europe is like a family. When a member of a family has problems, the others support him. But of course everyone also has duties in a family. Everyone has to behave responsibly, in a way that does not harm the others. So those European countries that implement reforms and put their finances in order will continue to receive help from those that are financially stronger. Solidarity for solidity – that is the way we get out of the crisis.

4. Next steps: Federalising Banking supervision

We must learn from past mistakes: the collapse of the financial system was prevented in almost all EU countries thanks to huge injections of government money. The total value of state aid is estimated to amount to about 12.5% of GDP, but it will be years before we know the full fiscal cost.

In Ireland alone, the country in which the crisis started five years ago, the cost of state capital support to the three largest banks amounted to 29% of GDP. And state support for the banking sector continues still in almost every country.

Only a few countries have managed to put in place a credible resolution system.

To offer a robust response to the future, the European Commission has made its proposals on resolution. It is time to overcome the unwillingness that exists in some Member States and federalise banking supervision and resolution.

We should apply the logic of the Single Supervisory Mechanism to bank resolution systems and deposit guarantee schemes. A federal safety net for financial markets would be to the benefit of all and prevent the huge declines we have seen in some markets.

Let me give you an interesting example from the past: comparing the effects of the financial crisis in Ireland with those in Nevada demonstrates the stabilising effect of US federal institutions, such as the Federal Deposit Insurance Corporation (FDIC) and the home mortgage backers Freddie Mac and Fannie Mae. Both countries experienced a housing boom and bust of similar magnitudes, but thanks to a federal shock absorber in the US, Nevada’s GDP declined by only 3.6%, compared to Ireland’s at 17.6%

5. Consular protection

Europe is not for politicians, it is for citizens. And the best way to show that to people is by acting, by strengthening their rights and making sure they can freely exercise them.

When Europeans travel around the world, it does not matter if they have an Italian passport, a Croatian one, a German or a Spanish one – they are European citizens. So if they get into difficulties in a non-EU country, if they fall victim to a crime, for instance, and their own Member State is not represented in that country, they have the right to seek assistance from a consulate or embassy of another Member State.

We put new rules on the table in 2011, to clarify how Member States have to help citizens in these instances. But to this day, Member States have not adopted the new rules. I am calling on them to overcome their differences and find an agreement so we can improve the protection of our citizens all over the world. Small-minded bickering must not stop the EU from strengthening this great example of EU solidarity.

6. Unemployment

Unemployment is the biggest concern for Europeans - one in two people tell us it is their main worry right now. Still, across the EU, 26 million people are out of work. Combating unemployment must therefore be Europe’s top priority.

It is therefore high time for all of us to act. I welcome the fact that here in Italy for example, the government has approved a set of measures to make sure companies hire more young people, planning to spend Euro 1.5 bn which will come partly from national resources but mainly from EU structural funds.

In fact all over Europe, governments are moving to tackle the problem. The Heads of State and Government have given their firm commitment to implementing the European Commission’s Youth Guarantee. No person under 25 should have to wait more than four months for a job, a traineeship or an apprenticeship. The EU is providing Euro 6 billion, and the Commission has proposed that priority be given to funding concrete projects so that the money can be put to use as soon possible. What is important now is that governments provide us with concrete proposals so that the money can start flowing.

There is often a mismatch of skills and vacant jobs – a highly qualified engineer, say, might not be able to find work in Italy, when companies in Germany are desperately looking for someone just like him. The Commission wants to ensure that a person looking for work in another Member State would be able to continue to receive unemployment benefits from home for up to six months.

I have heard of unemployed people from the southern European countries who have moved to Member States like Germany and found a job there. The German and the Spanish government are working together to support this. But much more could be done.

7. Enlargement

The biggest achievement of the European Union is uniting a continent of 500 million citizens in peace. This achievement was recognised by the highest honour of the Nobel Peace Prize. I think the EU has to continue its vocation to remain open to its neighbours.

That said, I think that our top priority at the moment should be to concentrate on getting our own house in order. We need to make sure that we can have a more integrated and more democratic Union in the future. We have to find the right balance between deeper integration and further expansion bearing in mind that the EU is a mix of old and young Member States, a mix of sizes, a mix of languages and a mix of constitutional histories.

Just think for a second about this remarkable achievement: a European continent where you can drive from Tallinn to Brussels without having to stop at a single border to show a passport. That is possible because of our common European policies, laws and instruments.

This openness and vision should continue to unite countries in Europe. But we also need to be very clear that before countries can join the EU, they must fulfil all strict criteria, notably ensuring respect for freedom, democracy, equality, the rule of law, the independence of the judiciary, and respect for fundamental rights. Only then will the EU's enlargement policy be credible and successful.

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