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European Commission - Speech - [Check Against Delivery]

Towards a more powerful EU: rebalancing the EU architecture

13 November 2014

Vice-President Maroš Šefčovič

Tatra Summit, Bratislava


First, I would like to say that I am delighted to be back. This summit has proven of real added value to interchanging disciplines and cross-sector perspectives on the future of Europe. We need these exchanges more than ever as the pace of change related to the economic and geopolitical situation is accelerating, and the newly elected European Parliament and Commission are gearing up to face these challenges.

I am all the more happy to be here as this forum shows the extent to which my home country and hometown Bratislava are decisively anchoring the strategic thinking and networking on EU priorities to the transformation of the region.

In exactly four days we will celebrate the 25th Anniversary of the Velvet Revolution - who would have thought that a quarter of a century later Slovakia would be a member of the EU, a member of the eurozone, currently chairing the Visegrad group and foreseen to take the Presidency of the Council in 2016.

Even if we have faced times of economic hardship, we should not forget what has already been achieved, the foundations on which we are building.

It is with this spirit that I propose to address my presentation: "Towards a more powerful EU: rebalancing the EU architecture".

Time´s accelerating

When I said in my introduction that the pace of change is accelerating, I meant it. And not necessarily in a negative way. External changes are a source of uncertainty but also major reform catalyst. Let me give you some examples:

Looking back slightly more than twenty five years ago: we – in this part of the world - were living behind the iron Curtain. With - at that time - no perspective whatsoever of reaching the other side of the fence, where the far-away lights of democracy and freedom seemed like a distant dream. We are now part of the same family. As we celebrated last Sunday the 25th anniversary of the fall of the Berlin wall, our children are now growing up in a free and secure Europe. They can travel, study, work, live wherever they want - this has become part of their DNA.

Looking back only ten years: at the start of 2004, the EU had 15 Member States - and many doomsayers were telling us that the upcoming enlargement to Central and Eastern Europe would mark the end of integration, the conversion of the EU into a loose free trade zone, at best. Now we are 28, our integration is alive and kicking, and soon we will be 19 in the euro area ... In the meantime we managed to smoothly integrate staff from 13 Member States into our institutional framework and to reform our administration to provide better value-for-money to our citizens.

Looking back six years : we were entering into the worst economic and financial crisis since the Great Depression. Many speculators predicted the Grexit and the implosion of the euro. Some were even prompt to announce the collapse of the EU. Not only did none of this happen - we were able to pull in the same direction to keep Greece in the Eurozone and the euro on its sail – but we also managed to reform our economic governance at EU level by putting into place a banking union, a fiscal union and an economic union.

Where am I getting at?

Hopefully looking ahead in five years we will be able to say: back in 2014, as we seemed to be emerging from the economic crisis, we had a fragile recovery, very high levels of unemployment in some Member States and citizens' trust in all their political institutions was at record-low. But thanks to our resolute collective action, we were able to consolidate our sustainable growth path, to boost jobs and to progressively regain our citizens' confidence.

All this is not pure wishful thinking. As you know, governing is precisely about making possible what is necessary. A more powerful Europe is necessary. So how do we make it possible?


First the Democratic dimension

A starting point is through greater citizens' involvement.

In May 2014, for the first time in the history of integration, EU citizens got to vote for the frontrunners of the main European political parties. And, upon proposal by the European Council, the European Parliament elected Jean-Claude Juncker, the frontrunner from the party with most votes in the assembly. For the first time, a direct link has been established between electors' choice and the proposal of President of the Commission. Things can still - and will - be improved but one thing is for sure, as our newly elected President Jean-Claude Juncker has stated: there is no going-back. This is a major breakthrough in terms of democratic legitimacy. It benefits all EU institutions. And it should not be taken for granted - again, only a few months ago it was highly doubtful that European and national political parties, let alone the European Council, would play the game !

As per public attitudes, some signs are encouraging: in the July Eurobarometer opinion polls, the number of citizens who felt that their voice counted in the EU had risen from 29% to 42% - the highest level in ten years.

We now need to consolidate these first results.

How?

In a small book I recently published on my first five years at the European Commission, I try to explain how to address the legitimacy issue. By boosting ownership of decisions taken in Brussels.

EU decisions are taken collectively, by the European Parliament and the Council, in most cases on the basis of a proposal from the Commission. And yet how many times do we hear national politicians or the press blaming "Brussels" for unpopular decisions to which they have agreed? The response is … many times! Decisions may be taken in Brussels, but they are not made by Brussels. They are made by EU institutions, national governments, parliaments, acting together. National leaders need to take responsibility vis-à-vis their national constituencies for the decisions they themselves take in Brussels. The mass media, including the social media, also play a defining role in communicating EU decisions to the citizens and we – politicians – need to reflect as to how we can best get across to them issues that are often complex.

We know this is not easy. I campaigned here in Slovakia for the European elections and I can tell you how difficult it was to take the debate away from oversimplified narratives dictated by Eurosceptic parties and some part of the press. We need to offer a credible and forthcoming political narrative that people can adhere to.

And by we, I mean "we", all pro-European forces – all the actors who have a direct interest in rebuilding trust in politics, be it at European or national level.

To this end the new European Commission has proposed a rebalancing act to the other EU institutions, the Member States and the citizens of Europe.To a great extent, this rebalancing concerns EU priorities, governance, powers and Commission structures.


Rebalancing priorities: investing in the people

The number-one priority for this Commission is to get people back to work. President Juncker was quite clear about this in his first address as President-elect to the European Parliament.

To do this, structural reforms and fiscal responsibility is simply not enough. We know that we also need to stimulate demand and investment to restore growth and jobs in Europe.

The President has thus proposed a rebalancing to shift the focus of attention from austerity to investment. As you know from my colleague VP Jyrki Katainen, before the end of the year we will launch an ambitious "jobs, growth and investment" package to mobilise up to 300 billion euros in additional public and private investments in the real economy over the next three years. These investments should ensure high economic and social returns.

What is important: the social dimension is being put back at the core of the European project. We have committed to assess the social impact of any Commission proposals. We will look also very carefully at the social – not only economic - impact of the CSR or any future conditional stability support programmes for euro area countries, to make sure we always seek a balanced approach.

 

Rebalancing the governance: joint ownership

Coming back to the issue of collective decision-making, the human or social dimension goes hand in hand with making sure that the agenda decided in Brussels does not stay in Brussels.

This means reforming the legitimacy, the transparency and the effectiveness of the governance of the European semester by promoting joint ownership of decisions taken in Brussels. We need to engage with a broader range of actors, reaching out to national governments, national parliaments and social partners.

My colleague Valdis Dombrovskis is Vice-President for both the euro and social dialogue. As such, he will work with his project team to steer social dialogue and engage with social partners at EU level on all aspects of interest for delivery of our priorities.

National governments and parliaments also need to be better involved in the decision-making. We need to adjust the governance system so that they progressively feel co-owners of the decisions taken. This means reinforced upstream dialogue to ensure stronger support and thus implementation downstream. All Commissioners will be politically active in the Member States, in dialogue with the national parliaments and the citizens, presenting our agenda, our main proposals, listening to concerns and ideas and engaging with the main stakeholders.

As I said, without the involvement and support of these actors, the important reform agenda decided in Brussels will stay in Brussels. What we need to do is to bring Brussels decision-making closer to the citizens. In the same way as we need to bring the citizens closer to the EU. It´s a two-way street.

During my first mandate, I´ve worked extensively on involving both citizens and parliaments better in EU policy-making. Still more can be done – we need to give a greater say to the European and national parliaments in the new EU economic governance framework. As mentioned by President Juncker, we also need to review the troika to have a more legitimate and democratically accountable structure.

 

Rebalancing of powers: subsidiarity

Not everything should be decided in Brussels. As President Juncker recalled, we want a European Union that is "bigger and more ambitious on big things and smaller and more modest on small things".

Everything that is not a priority policy on which this Commission aims to deliver concrete results will be left where it belongs - to the Member States who are more legitimate and better equipped to give effective policy responses at national, regional and local level, in line with the subsidiarity principle.

 

Rebalancing of structures: the project teams

To deliver on these new priorities, the Commission is organised around project teams lead by Vice-Presidents.

Let me say a word on this organisation which is quite original for a political institution. The objective is to break down silos and create synergies by steering and coordinating the work of a number of Commissioners in priority areas or projects such as jobs, growth, investement, a deeper and fairer EMU, a connected digital single market or a resilient Energy Union. Strong cooperation will be needed both within each project and also between projects.

The major investment package under preparation, for instance, will rely extensively on the completion of the Energy Union. Not only will the focus of this package be notably on energy infrastructures, renewable energy and energy efficiency, but private investments will also need the right incentives through the completion of the single energy market and removal of remaining obstacles.

The project team I have the honour of coordinating as Vice-President for the Energy Union thus has a major contribution to make.

The Energy Union is an area with great potential on the impact on the life of citizens who – through their energy bills – pay a high price for our dependency.

 

The Energy Union

Building the Energy Union is one of the most pressing challenges of this Commission.

In this field, more than any other, time is accelerating.

Geopolitical events - notably in Ukraine and Russia, the worldwide energy competition and the impact of climate change are triggering what I would call a "mind switch" in terms of our energy and climate strategy. Momentum is thus building up for the Energy Union like never before.

So, what should a new European Energy Union look like? Upon my hearing as Commissioner-designate in the European Parliament, I proposed to work on five pillars with, amongst others, the Member States and the European Parliament:

  1. First pillar: security, solidarity and trust.

Security of supply: the EU currently imports 53% of its energy at a cost of more than 400 billion euros a year. We are the biggest energy customer in the world but we do not pull our international weight accordingly! We need to stop thinking of markets as national territories. We need to integrate. We need to explore common purchasing of gas. We will need to diversify our energy sources and routes, and reduce the high energy dependency on several of our Member States.

Solidarity: we should be ready to help and stand for each other. Solidarity is key to securing gas supplies.

Trust: this means increased transparency as to how Member States are negotiating with third countries suppliers. The Commission should be involved in these negotiations. Similarly, no Member State should modify its energy system without prior consultation of its partners as this may have huge consequences for their systems.

  1. My second pillar is based on completing the internal market for energy. A fully functioning, transparent and competitive energy market is the backbone of the European Energy Union. It will bring real benefits to both households – in particular the most vulnerable ones – through affordable energy prices – and the industry – through more competitiveness. The Third energy package must be fully implemented and applied through strict monitoring and assistance provided to the MS experiencing difficulties.

This should be supplemented by adequate energy infrastructure with good interconnections, in particular to integrate renewables into the grid and to unlock energy islands. Structural funds, the CEF, joint investments and this Commission upcoming Investment package will contribute to the financing of these energy infrastructure projects.

All in all, we will need to pool resources, combine infrastructures, and unite our negotiating power vis-à-vis third countries

  1. My third pillar is based on moderation of demand

We have to work to substantially reduce households and industry´s energy bills. The key to moderating energy demand is to substantially improve energy efficiency. This concerns for instance the heating and cooling of buildings. We have the technology. We need to apply and expand it, with solidarity mechanisms and joint funding when needed. Without an ambitious energy efficiency policy especially in priority areas such as buildings, transports and products the Energy Union will not be complete. This - I may add - is indispensable to not only increase our energy security but also enhance the competitiveness of European industry.

  1. My fourth pillar is the decarbonisation of the EU energy mix. I am very happy that we managed to find an ambitious agreement with the October European Council on our 2030 objectives. This breakthrough generates political momentum, showing that in Europe we are doing our homework. I am convinced that together with my Colleague Miguel Arias Cañete we will be in a position to lead – together with others – the global negotiations leading to a climate change agreement next year in Paris.
  2. My last pillar is based on research and innovation which is crucial to support energy projects. As part of our ambition to build a genuine EU we need to step up our efforts to bring new high performance, low-cost, low-carbon energy technologies to the market.

To conclude, momentum is building up for a resilient Energy Union with a forward-looking climate change policy. This game is worth the candle. We should put an end to our energy dependence and enhance our competitiveness. This will guarantee access to energy that is at the same time affordable, secure and sustainable.

[I intend to coordinate the work of my project team so as allow the Commission to present a short policy paper within the first few months of its mandate with concrete proposed priorities to make this Energy Union a tangible reality for all citizens.]

Of course none of this will be easy – we never said it would. But if we work together, Commissioners, Member States governments, European parliament, national parliaments, stakeholders, if we summon what is best in us to develop our energy independence and harvest both the environmental and economic benefits of the Energy Union I am convinced that it is - finally - within our reach.

As Vice-President for the Energy Union I will use all my resources to steer, coordinate and deliver on this fascinating project.

I thank you for your attention.


SPEECH/14/1684

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