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European Commission

José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso at the European Parliamentary Week on the European Semester for Economic Policy Coordination

European Parliamentary Week/Brussels

30 January 2013

President Schulz

President van Rompuy,

President of the Irish Dáil, Seán Barrett,

Mesdames et Monsieurs les rapporteurs, Sharon Bowles, Alain Lamassoure, Pervenche Berès,

Distinguished Members of Parliament, the European Parliament and national parliaments,

Let me start by congratulating you all, the European and the national Parliaments of the EU, for organising this event. I welcome that the European Parliamentary Week has become an integral part of our European Semester.

And I encourage you to even further strengthen inter-parliamentary dialogue and cooperation in the years to come.

Let me also apologise that I have to leave you soon because I've already postponeded the European Commission meeting to 10h so I could participate in the opening session but Commissioner Vice-President Maroš Šefčovič, who is also in charge of inter-institutional relations, including with national parliaments, will be present in the debate.

Honourable members,

Today, Europe stands at a crossroads, and so does European democracy. We are moving further on the deepening of our union – and we have to do so, if we want to lead Europe out of the crisis towards a more stable and sustainable future. As a consequence, we need to move further on the path toward a genuine European political sphere as well.

Yes, we must reform the European Union and this we want to do with the support of our citizens, with democratic legitimacy, with democratic debate.

And for me democracy means parliament. We need the European Parliament, we need the national parliaments.

Honourable members,

We have come a long way, since the beginning of the crisis, to address Europe's weaknesses, to strengthen our economies, to fit our governance to the times and to the challenges demanded of them. Today we can say that those who predicted the implosion of the euro have been proved wrong. The sustainability of the euro has been ensured. Since end-2012, the European Union and the euro area are starting to climb out of recession. Financial market indicators have even significantly improved, and what is interesting, rather as a result of policy developments related to the future governance of the Euro and the European Union than to economic fundamentals.

So my first message to you is that efforts, at European and at national level are worthwhile. They are not in vain. But, and this is my next message, exactly with the same level of intensity, there is absolutely no room for complacency. The social situation is very severe. Unemployment, in particular youth unemployment is a huge concern for all of us. In 12 of our 27 member states youth unemployment is higher than 25%. And some of our Member States, as I've been saying very clearly and very loudly, face a genuine social emergency.

Finally most Member States today are ready to acknowledge that they need to tackle the problem of unemployment also at European level. We know that many of the instruments to fight unemployment are at national level. But frankly, we cannot, at the European Union, avoid addressing this issue. Already back in 2009 I had taken the initiative for an EU Employment Summit at the level of Heads of State and Government. The response at the time was not overwhelming, to be frank, it was really a disappointment. Because only some Member States accepted, and, in fact, the so called summit became a summit with two Heads of State. But the Commission did not stop here and took further measures, for instance, setting up action teams to assist eight member states where the situation is particularly worrying, and to channel structural funds into areas and action where the support is most needed. And it has been already mentioned, we have now proposed the Youth Guarantee. I hope it will be adopted. It is clear that we must take even stronger measures to fight unemployment, notably youth unemployment and I am confident that this is going to happen. I believe that we are still on time to address the issue of youth unemployment in the discussion for the next Multiannual Financial Framework. We could do this if there is political will through a proper instrument.

Our first priority in the very near term has to be indeed the MFF, the Multiannual Financial Framework. It is going to be discussed in the European Council next week. The MFF is one but an indispensable part of our response to the economic crisis. It is essential for growth, competitiveness and jobs. It is simply indispensable in order to boost investments, notably in the most vulnerable countries and regions. And while of course the MFF has a strong solidarity side, rightly so, it is not just money for the less prosperous regions…. No! All countries are net beneficiaries of the European budget as I think was discussed during your sessions. The MFF offers even to the strongest Member States a European dimension to their economic growth, their infrastructure and their research, which provides huge benefits also for them. And frankly, I cannot see how some governments that are speaking about the need to support growth, rightly so, and to support competitiveness, rightly so, when it comes to the discussion of the most important instrument we have at European level to promote investment, the answer is not so clear.

I have not given up on a good MFF which is worth defending, in spite of all the pressure. The role of the European Parliament which has to give its consent to any compromise result will be vital to achieve this.

Another immediate task is to finalise legislation on the single supervisory mechanism for banks. We need in fact to make progress on the banking union and this was a very important step of the SSM. It was a milestone in creating a Banking Union, but now we need a single resolution mechanism for banks, for which the Commission will present a proposal before the summer.

And we need to conclude the legislation known as "two pack", which is essential to further shield our economic governance against future storms. With the two pack Europe is passing another credibility test.

Honourable members of national parliaments,

I want to say a special word of thanks to you for coming to Brussels.

You came to Brussels to discuss about different facets of the European Semester that proved itself as a credible instrument for economic and budgetary governance, capable of restoring confidence and creating growth and jobs. We cannot allow the momentum for reform to slow down. You have discussed over the last two days the priorities which the Commission had set in its Annual Growth Survey for 2013.

Let me even go beyond the Annual Growth Survey. If we wish to return to a lasting growth it is essential that we take action on no fewer than three distinct fronts:

First, in the Member States themselves, by making structural reforms that will enable them to balance their public accounts and increase the competitiveness of their economies; our common focus should continue on reforms for more flexible labour, product and services markets. This is key for competitiveness. Deepening the Single Market, with an emphasis on all infrastructure sectors, transport, energy and digital, features high among our work programme and the priorities of the Annual Growth Survey.

Second, in the Euro area, by taking specific measures that will make it possible to improve the governance, action and effectiveness of the budgetary policies of the various countries;

And, third in the 27-28 Member States, by reinforcing the accountability and solidarity mechanisms, which will include a deepening of the Economic and Monetary Union as well as progress towards a political union, with heightened scrutiny and democratic control of the new functions attributed at European level.

The Blueprint on a deep and genuine economic and monetary union, which the Commission presented two months ago, is precisely about launching a European debate on the future of the European Union and the EMU. It raises the hard questions on how to strengthen cooperation and integration in the financial, fiscal, economic and also in the political field. And it provides some of the answers and aspirations as we see them - some concrete and short-term, others more ambitious and long-term. Some depend on political will only, they can be done now; others require treaty change. All of them demand a broad and profound political exchange of ideas.

Honourable Members,

The crisis of the last years has shown the limits of individual action at national level and the need for European cooperation and integration. Too often solutions had to be designed ad hoc. European Union institutions and member states under the emergency had to act as fire-workers and architects at the same time. Structural and permanent replies are needed, and this is what we are currently working on. The road ahead also includes a reinforcement of European democracy. Accountability and legitimacy need to be brought in line with institutional realities, just as we did in previous steps in the process of European unification.

Both the European Parliament and national parliaments play a crucial role in that.

The European Union will remain a system of governance on multiple levels. So maximum democratic accountability must be provided at that level where the decision is taken, taking into account all levels where its impact will be felt. This also means, honourable members, that one thing is crystal clear: democratic accountability and legitimacy within the European Union in the 21st century take place at national and at European level. And this should not be seen as a zero sum game. These are complementary concepts.

The European Parliamentary Week is an expression of precisely this. The European semester must embody a strong parliamentary dimension. And it is obvious that many issues are at stake and decisions need to be prepared or be taken which involve both the European Parliament as much as national Parliaments, be it in budgetary, fiscal or macro-economic terms.

I am therefore very much in favour of making full use of the Economic Dialogue as set up by the six-pack legislation between the European Parliament on the one hand and the Commission, Council and the Euro Group on the other. We need to involve Parliament in particular before the European Council debates the Commission's Annual Growth Survey and again before the adoption of the country-specific recommendations. Commission and Council should also be present systematically at meetings between members of the European and national Parliaments, and the Commission is eager to exchange views with national parliamentarians on their country's recommendations as well.

Overall, a genuine Economic and Monetary Union demands a genuine debate on the European Union's economic approach. That is politically self-evident, so let us make it happen in practice.

The moment is right. There is nothing like an election campaign, I am thinking now about the European Parliament elections in 2014, to bring Europe closer to the people. By debate, by providing a better understanding for what is at stake.

We can do this also by strengthening the vehicles of politics, by enhancing the role of European political parties. This is why the Commission has proposed to give European legal status to European political parties. I hope the political parties will contribute to further Europeanise these elections so that we can really have a democratic European debate.

Honourable Members,

Let me conclude and tell you that step by step, Europe is meetings its challenges directly and successfully. Many challenges remain, notably the social challenges. But we are making progress on addressing very important structural problems of confidence.

Those speculating against the Euro earlier have underestimated the political capital that is invested in it. Let us continue to prove them wrong, and beware not to disinvest at such a crucial moment, just when our investment is starting - and I underline: starting to pay off.

A lot still has to be done. Stabilisation is not a recovery. We may have calmed unrest among markets; we have yet to raise hope among citizens.

I thank you for your attention.

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