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European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso on the review of the Lithuanian Presidency

European Parliament plenary session, Strasbourg

Strasbourg, 14 January 2014

Mr. President,

President Grybauskeite,

Honourable members,

With the conclusion of the Lithuanian Presidency, the European Union ended the year 2013 on a high note.

The successful closure of Ireland's support programme proves that, when adjustment and assistance go hand in hand, we can overcome even the most serious kinds of crisis in a Eurozone country.

Spain's exit from its specific banking programme shows that we can effectively address grave concerns about the financial institutions even in a larger economy. It proves that through reform and increased responsibility we can put the banking sector once again on a sound footing.

With the accession of Latvia, the Eurozone is expanding - another unambiguous sign of renewed confidence in the euro.

These are encouraging signs for the European Union and especially for Member States that still face hard times and challenging transitions. I believe that Europe as a whole should take heart that the situation can - and is - being turned around.

It is hugely important to note that at the start of this new year – a crucial year for Europe – we are in a far better place than we were at any time since the start of the financial crisis. We owe this only to combined, concerted and continued efforts at national and at European level.

Honourable members,

I want to pay a sincere tribute to the Lithuanian Presidency. Through a lot of hard work and commitment, the Lithuanian team has been able to push forward a number of delicate and decisive initiatives.

For the months ahead, our top priority should remain the banking union. Over the past five years we have undertaken a fundamental reform of the way banks are regulated and supervised. We want a thriving and responsible European banking sector, at the service of the real economy, where banks – not taxpayers – carry the costs of their own mistakes.

Today Europe's banks are better capitalised, better regulated to manage risks and better supervised.

We are now at the beginning of the end of public bank bail-outs with the welcome agreements reached by the co-legislators in December on the Bank Resolution Directive and Deposit Guarantee Schemes.

Banking union is a crucial sign of our commitment to a genuine and deep Economic and Monetary Union and to restoring decent lending conditions throughout the Euro area; and it is an essential part of decoupling bank risks from sovereign debt.

So it is now imperative to work for agreement on the Single Resolution Mechanism, the remaining building block needed for a genuine European banking union. The Council has set out its position in December, opening the door for negotiations with this Parliament.

As you know, the Commission would have preferred a system fully based on the community approach. The Commission has rigorously defended the Article 114-legal base for its proposal. Like you, we are concerned that the introduction of an intergovernmental dimension to address the transfer and mutualisation of funds undoubtedly adds further unnecessary complexity.

But at the same time - and we have to face reality - there appears to be no other approach which will obtain the necessary support in Council. So the question is not: Are we happy with the Council position?

The question is rather: Can we afford to waste the opportunity to reach a final agreement before the end of this Parliamentary mandate? Can we afford to put at risk the emerging signs of returning confidence? That is what is at stake.

So as Parliament and Commission, I believe that we should now work hand in hand to achieve our goal: a Single Resolution Mechanism that is the indispensable, final piece of the banking union for Europe. For that, we need to fight to the limit to ensure that the intergovernmental dimension is kept to the absolute minimum of what is politically necessary. We should also be very vigilant to make sure the outcome remains fully compatible with, and upholds the primacy of, European Union law.

Honourable members,

2013 was also very much the year in which we proved the maturity and the effectiveness of the economic governance framework as we have developed it since the start of the crisis, including the tools of the two-pack implemented for the first time.

This European Semester cycle offered less drama than previous editions, but more genuine debate and, in the end, more gratifying decisions. We can build on these experiences and the policy results when we further focus on growth and jobs in the months to come.

We have at the same time continued to deepen the debate about the future of our governance framework, notably at the December Summit with a real, in-depth discussion about contractual arrangements that could expand the partnership between Member States and the European Union; deepen an effective solidarity between countries; and reinforce the sense of ownership of reforms within Member States.

This certainly has to include more attention to the social dimension of the Economic and Monetary Union, the topic of a communication of the European Commission and of two ministerial debates under the Lithuanian Presidency. As part of the European Semester, we have proposed a new scoreboard to allow for better and earlier identification of major social and employment problems. From the beginning, this has been an integral part of what our reform efforts are all about. There is now broad support across Europe to fine-tune our approach further, to focus our attention even more and to work closer together with social partners to improve the results.

Earlier in the Lithuanian Presidency we reached an agreement that is the very basis of the European Union's role and ability to make sure reforms lead to more jobs and better opportunities: the Multiannual Financial Framework. And I remember well the extensive discussions we had, namely between the Council and the Parliament, and also how we, together, were able to reach the final deal. I want to thank – once again - all leaders in the European Parliament that worked with us to have this historic agreement concluded.

As I have always stated, our response to the crisis has to go beyond fiscal consolidation and structural reform. Certainly, they are indispensable, but we also critically need investment; and for many of our regions the European budget is the first – and in some cases almost the only - source of public investment. So is it vital that we make progress and do not delay in implementation.

One aspect remains especially urgent, and it is one in which European institutions and actors have strongly taken the lead but where cooperation with Member State governments is essential: youth unemployment.

The Commission has been giving top priority to all initiatives aimed at tackling youth unemployment, but the implementation by the Member States remains crucial. By 31 December 2013, 17 out of 20 Member States, in which the youth unemployment rate is above 25% and therefore are eligible to benefit from the Youth Employment Initiative, have submitted their Youth Guarantee Implementation Plans. So three Member States were still missing.

An important contribution to foster action on the ground was the agreement reached on the European Social Fund Regulation, and in particular on the Youth Employment Initiative. Now that the framework for the Youth Employment Initiative is set, it is crucial that national authorities proceed with speedy programming of activities in order to ensure a quick and effective implementation.

Also, to link up Europeans further with job opportunities across the European Union, the Commission will later this week present the way we aim to strengthen the EURES network.

I call on all Member States and social partners not to slow down on this issue that is so decisive for our credibility and for the future of our young people.

Honourable members,

In the social agenda, let us not forget that we also successfully concluded on the posting of workers issue under the Lithuanian Presidency. This was indeed a very important agreement.

This is an important step forward to encourage the use of free movement rights and that these free movement rights are done in a way that is - and it seems to be - socially fair.

Honourable members,

The Lithuanian Presidency gave great priority to the Vilnius Summit, so that we could move forward with the Eastern Partnership. Indeed, it has been a very important – and I would say, historic - Summit and we have been able to make progress in our relationship with our Eastern partners, especially going forward on the way to economic integration and political association with those that are ready for it and really willing it.

But we have also seen how challenging the situation in Ukraine is, and why we should not give up on our commitment to those countries in our neighbourhood that want to link up with the freedoms and the way of life they see in the European Union.

On the streets of Kiev – this was indeed one of the most important moments of the Vilnius Summit; it was not only in Vilnius, it was on the streets of Kiev - we have seen Europe at its most popular: a beacon of hope and values, a guarantee of human rights and liberties. Around diplomatic tables, we have seen Europe at its best: united in defending Ukrainian citizens' dignity and opinions; ready to support their sovereign right to decide on their own destiny, and to improve their chances of a better, more prosperous and more democratic future.

While we have so many people now disappointed at the European Union, to see young people – and sometimes not so young – in the freezing nights of Kiev, waving so high the flags of the European Union, I think that confirms how important the European Union and its values are. Not only for us here in our Member States but also for the rest of the world.

Other elements of the Eastern partnership were also pursued. The EU-Georgia Association Agreement was initialled, and so was the Association Agreement with Moldova. Visa facilitation was on the table and the Joint Declaration of the Vilnius Summit made clear that we will enhance cooperation in strategic areas in the future as well.

Honourable members,

The tragic events of Lampedusa - and I had the occasion to witness the dramatic consequences personally on that island - the unforgettable deaths of 350 people, signalled and symbolised the difficulties of individual Member States to deal with complex migration issues in a globalised world – and pushed us all towards a renewed effort in this area. In the Task Force we have worked out a holistic strategy to respond to such problems, recommending more than 30 concrete actions on cooperation with third countries; on regional protection, resettlement and reinforced legal migration; on the fight against human smuggling and organised crime; on proper management and better surveillance of sea borders; and on solidarity with Member States experiencing especially high migration pressures.

At the same time, we have prepared the ground for debates that may often be less visible but are equally important for the future economic welfare and political relevance of the European Union.

At the December Summit the European Council has, for the first time ever, discussed concrete defence issues that are so important for our leverage as a political actor and international player. This is a theme I have raised in all of my State of the Union speeches in front of you in this Parliament. Now, everyone underlined the need for a credible, reinforced and refocused Common Security and Defence Policy as a strategic, geopolitical and economic imperative, and there was a consensus on the wish to co-operate more among Member States and with our allies, especially NATO, and on the obligation to maintain a technological lead in our defence capabilities and our industrial base.

From 2001 to 2010, in a rapidly changing and often threatening global context, EU defence spending has declined from 251 billion euros to 194 billion, meaning we must do more with less money. We can only do that together.

Security issues in the broader sense - from energy policy in both its internal and external dimensions, which also remains high on the agenda for the months to come, to cyber security and data protection – are at the heart of European Union's raison d'être. We share the problems and suffer the threats together, so we are increasingly destined to work out the solutions together.

Ladies and gentlemen,

Honourable members,

I hope this common European destiny - in these and plenty of other areas - will be realistically highlighted and strongly defended in the months to come, when the future of the European project will be debated and decided on, especially during the European elections.

We are not there yet. As we will discuss tomorrow, on a number of important files the preparatory work of the Commission and the Presidency will need to be followed up and brought to a conclusion still before the end of your mandate.

We still have a lot of work to do, even if - when you think of where we were some time ago and where we are now - we have reason to be confident.

Honourable members,

Let's not forget that not so long ago some people predicted the implosion of the euro, even the disintegration of the European Union. And now, with consumer and investor confidence resuming, growth - even if it is timid growth - is expected. The recession is behind us.

But we should avoid any kind of complacency. With such high levels of unemployment in some of our Member States, and with many of our companies - especially SMEs - still lacking the financial means to invest and create jobs, we cannot yet say we are out of the crisis.

But with determination and resolve, we can overcome the current challenges. In the past months we have again done a lot of the groundwork to do so.

2014, I am sure, will be a year of positive change for the European economy. Let's work together for that to happen sooner rather than later.

Thank you for your attention.

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