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European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

Introductory statement on the European Council

European Parliament Plenary debate

Strasbourg, 12 March 2014

Mr President,

Mr Minister,

President of the Council,

Honourable members,

It goes without saying that, today, the eyes of Europe and of the world are set on the crisis in Ukraine. I am sure the European Council also devotes a great part of its work to this big issue. But since we are going to discuss this issue later this morning, I will now concentrate on the other main elements on the agenda of the European Council.

I expect the European Council to take stock of the progress that has been achieved so far in the response to the economic crisis and focus on the policy decisions needed to consolidate the recovery. We need to keep up the pace of structural reforms and to reinforce our specific actions regarding the issue of unemployment.

The European Council, that will also be the last before the European elections, will be a very important moment to maintain the momentum. It will conclude the first phase of the European Semester and debate the next steps to take in our reform agenda.

The Commission has already presented its assessment of the economic context and the state of play of macroeconomic reforms in countries under additional scrutiny. Only two weeks ago we had a debate in this plenary which led to the adoption of a resolution of this Parliament on where it sees the priorities in this European Semester. I was glad to note that there was a large degree of convergence on the priorities.

As you know, we have revised upwards our economic forecasts. We now expect growth of 1.5% this year for the European Union as a whole, and 2% next year. This is again a slight improvement. Growth is returning in Europe. This is also true for the most vulnerable Member States. Domestic consumption and investment are set to expand further, thus reducing Europe's dependency of the recovery on the external sector.

This is good news for public budgets, because debt levels are still too high in several Member States, and will need to be reduced further through smart fiscal consolidation and structural reforms that support growth. Weak competitiveness is still a crucial concern in a number of countries, so implementation of our 2020 Strategy and the Country-Specific Recommendations remains as necessary as ever to improve their growth prospects.

And this is even better news for citizens, because growth is a prerequisite for jobs. The need to generate jobs, especially to fight youth unemployment, remains one of our main priorities. That is why we are urging governments to put in place youth guarantee schemes. And that also is why we are organising a follow-up conference on this in Brussels in the beginning of next month, precisely to keep the momentum on what I think is the most important social challenge in Europe today, unemployment and most specifically youth unemployment.

Honourable members,

Confidence is based on credibility.

Credibility depends on delivering our commitments.

Since we launched work for our banking union in 2012, we have seen the positive impact in terms of helping restore confidence and stability in Europe's markets. The Single Supervisory Mechanism is on track to begin its work later this year. Now it is urgent to deliver the final element – the Single Resolution Mechanism.

Today's trilogue will be very important.

The Commission has defended its proposal with vigour. It is the Council alone which has to answer for its insistence to put some elements into an intergovernmental agreement. But we need to be realistic. So the Commission argued once again in the Council meetings this week that the intergovernmental agreement needs to be kept to the minimum. We are in favour of the acceleration of mutualisation of the fund and for it to have effective access to funding from day one. And we are with Parliament in seeking simpler governance rules, respecting the autonomy of European Union law and its decision making procedures, the institutional balance and the prerogatives of each institution to determine their own organisation.

Yesterday in ECOFIN no progress was made as regards the respective role of the Council and the Commission, and the Commission remains deeply concerned as to the compliance of the Council's approach with the case-law of the court.

Let me be clear: the Commission has been and continues to work constructively with you for an outcome that is as close as possible to our original draft, which is fully compatible with and upholds the primacy of European Union law.

Honourable members,

I expect the European Council also to endorse the approach of the Commission's communication on a European Industrial Renaissance - and then not only talk the talk but also walk the walk, because a lot of the levers to make our industries more resilient are indeed at national level.

The problems are clear: Some of our industries have lost competitiveness. Investment in research and innovation remains too low, holding back the modernisation of our industrial base. Progress on improving the business climate remains uneven. European firms face higher energy prices than most of their leading competitors and have difficulties acquiring qualified labour and capital in affordable conditions.

The Commission is committed to do its part of the work, for example:

  • making our own rulebook more business-friendly;

  • completing the integration of networks;

  • supporting investment in new technologies through Horizon 2020;

  • providing €100 billion of European funds for smart specialization in industry over the next 7 years;

  • assuring better access to finance - in particular for SMEs;

  • supporting the development of skills;

  • cutting red tape;

  • negotiating trade agreements;

  • and supporting economic diplomacy and the internationalization of firms….

This is part of what we are doing.

But Member States have to be equally committed and decisive. Many of the issues have to be dealt at Member State level.

Some countries should do more to make sure government services and regulations support industry's needs; that labour markets are effective and conducive to job creation by companies, and that a particular effort is done to reduce the regulatory burden on SMEs; that innovation projects and investment levels are cranked up, because only technological progress can guarantee competitiveness in the longer run; and last but not least, that all the necessary steps are taken towards dismantling the barriers that still exist to the full internal market we wish. Because this is one of the most difficult problems we have in Europe, when it comes, for instance, to areas like digital, and including also energy. We need more steps to an energy internal market, so as to keep down energy costs, as the Council has committed to do before. I'm sure this is also going to be discussed, and I hope the clear signal is given in the European Council.

The same is true for energy and climate action policy. I think this is probably the most important point to discuss, together with Ukraine, in the European Council.

Companies need a clear long-term regulatory perspective to base their investments on and stay competitive. Rising energy prices for companies and consumers are a real cause for concern. At the same time, green technologies are critical for growth and jobs if we create the right environment for them to prosper sustainably. And finally, in the light of the crisis in Ukraine, no one will need to be reminded of the costs and dangers of Europe’s remaining energy dependence.

This triangle of competitiveness, sustainability and security was already the key rationale behind our 2020 climate and energy policies, and we have proved that we can make it work in practice. We are largely on track to reach our 2020 goals. Now, we must build on that and go beyond, setting the pace for an ambitious and affordable agenda towards 2030.

The strategic climate and energy framework which the Commission tabled a few weeks ago does just that. It proposes a binding, domestic greenhouse gas reduction target of minus 40% in 2030, compared with 1990. That is ambitious, not least when compared to other global actors. It is also feasible. And it is cost-effective, as our research shows, 40% being the smartest milestone on the path to our ambition for 2050.

Secondly, we should also set a binding 2030 target for renewables at EU level, of at least 27% of energy consumption. “Home-grown” renewables are key, also because they contribute to our energy security. We have, however, proposed not to set 28 individual national targets anymore, but rather to rely on a bottom-up approach, leaving more flexibility to Member States. Clearly, I think the lessons of the past show that this is the most efficient way to do. And we need a smarter European division of labour here. Member States remain free to set their own national renewables goals. We respect, and of course we have to respect, the national energy mixes, it's for them to decide what are the goals at national level, but we should continue to support renewables, provided of course they remain within our state aid rules. We shall make sure that their combined efforts add up to the overall European Union target. This is possible to do through a reinforced governance scheme.

Lastly, on energy efficiency, the current 2020 strategy, as you know, does not have a binding target. The Commission will undertake a review in mid-2014, and we should wait until after this review before we consider the next steps. And we expect to come with a proposal still in this Commission's mandate.

So the Commission has set out a framework. The ambition is clear. The ball is now in the camp of Member State governments, and of course of this Parliament. I expect the European Council already to make some progress, to give a clear signal that work will continue rapidly on the basis of our strategy, and that we maintain the momentum by coming back to this issue in the European Council later this year.

I believe the discussion in the European Council will be important, because we really need the ownership of the Member States to commit to this more ambitious programme. I know this is a difficult decision for some, but expect the European Union will be able to keep competitiveness and play a leading role on the climate agenda so that others can join in this effort. This is critically important. We cannot be alone in the world in this effort. We need to have the major economies with us. And we need to bring others along, in light of the High-Level event organised by Ban Ki-moon in September this year. This is a further reason why I think it is important that when we go to New York in September we already show that the European Union is leading the way with concrete proposals.

It's not too soon, as some are saying. 2030 is around the corner. Waiting is not an option. For our businesses, it's good to give them as soon as possible the certainly they need for their investments. And also internationally, the European Union can only continue setting the agenda if we do our own homework first.

Honourable members,

In all these areas, the internal challenges for Europe are clear and call for decisive action; the international context is demanding, and forces us to act together. I think the recent events have shown how important it is for the European Union to remain together, that Member States work together. The European institutions have taken the lead, and we must continue to do so.

With elections drawing near – and especially in times of economic hardship – we should not lay down our tools but do quite the opposite: work as hard as we ever did.

That is what our citizens expect from us.

That is what's at stake at the forthcoming European Council. I hope that the European Council will be responding to these issues with determined action.

I thank you for your attention.

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