Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-11-24-Speech-3-009"
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"en.20101124.4.3-009"2
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"Mr President, the European Council meeting of 28/29 October focused on the economic governance of our Union, in particular with the report of the Task force on economic governance. The report which it endorsed and the events since then, and I refer in particular to Ireland, have illustrated the importance of the subject in general and of the need for the rapidly deployable financial mechanism we decided on in May, in particular.
Regarding the third and final main element of the task force, this also brings me to the follow-up of the task force. We recommend a robust and credible permanent crisis mechanism to safeguard the financial stability of the euro area as a whole. All the Heads of State or Government agreed on that need and on the fact that it requires a limited treaty change.
Before concluding on this point, I would like to underline that the work on the Stability Pact is not simply about being punitive to Member States or about rectifying past mistakes. It is important to look at it in a wider context. We must not lose sight of the wider challenge of improving Europe’s structure and sustainable growth rates and a general economic performance.
This was the focus of the EU 2020 strategy agreed by the European Council earlier this year. The answer to those who fear that fiscal retrenchment will cut economic growth rates is to focus better on the underlying structural factors that hinder our economic performance and to remedy them. That will be the main objective of the European Council meetings of February and March next year.
The European Council also had a brief discussion on EU budgetary matters, stimulated, among other things, by the speech of your President at the opening of our meeting. We agreed to return to this in December.
In the meantime, our conclusions simply said, and I quote, ‘It is essential that the European Union budget and the forthcoming Multiannual Financial Framework reflect the consolidation efforts being made by Member States to bring deficit and debt into a more sustainable path. Respecting’ – and I stress this – ‘respecting the role of the different institutions and the need to meet Europe’s objectives, the European Council will discuss at its next meeting how to ensure that spending at the European level can make an appropriate contribution to this work’.
Let me reassure you that we acknowledge the new role of Parliament in line with the Treaty of Lisbon. We did not, of course, take a position as the European Council on the 2011 budgetary procedure, as this is a matter for the Council of Ministers and Parliament.
As President of the European Council, I appeal to all parties concerned to continue their consultations in order to reach a compromise on the 2011 budget with the shortest delay possible. In a compromise the various concerns have to be taken on board, while of course respecting the treaties.
This European Council also served – as will be the case for all European Councils – to prepare common positions for the European Union ahead of major international events. In this case, our attention focused on the preparation of the G20, the Cancún climate change conference and a number of bilateral summits.
On the G20, which has, of course, now taken place, we agreed on the priorities, which were then promoted by the representatives of the Union and by the EU Member States that are members of the G20. These included securing approval of the Basel III Accords on capital requirements and on the reform of the IMF. Concerning the latter, I would like to emphasise that this landmark reform was made possible by the open and constructive approach by the Europeans. We gave up two seats in order to reach the final agreement, thus bearing a large part of the adjustment effort.
Concerning the question of imbalances in the global economy and exchange rate policy, discussions were tense in the run-up to the G20 meeting. The summit made a right analysis and agreed on a process. We welcome the decisions to establish a set of indicators on imbalances and the assessment that will made in 2011. What is now crucial is to agree on policy conclusions and, if need be, corrective action on the basis of this assessment.
I pay tribute to the speed of the action of the Finance Ministers over the last week and I underline that this illustrates the level of determination of our concern to safeguard the stability of the euro.
On Cancún, the European Council also prepared the EU position for the negotiations starting at the end of this month. Since Copenhagen last year, numerous talks have taken place – formal or informal – but they are slow and remain very difficult. Cancún will probably only be an intermediate step towards a global framework on tackling climate change. The European Union regrets this of course.
Finally, regarding our bilateral summits, the European Council discussed our priorities and strategies for the forthcoming summits, namely those with the United States, Russia, Ukraine, India and Africa. This is extremely useful for President Barroso and myself and ensures that on such occasions we are speaking not just for the Brussels institutions, but for the 27 as a whole. I intend to make this a regular feature of the European Council meetings.
Colleagues, that concludes my summary of the most recent meeting of the European Council, which took place nearly a month ago. I will, in any case, continue my practice of briefing the leaders of your political groups immediately, within a couple of hours after the end of each European Council meeting. I am looking forward to hearing your views.
‘EU and euro-area financial support will be provided under a strong policy programme which will be negotiated with the Irish authorities by the Commission and the IMF, in liaison with the European Central Bank. […] Given the strong fundamentals of the Irish economy, decisive implementation of the programme should allow a return to a robust and sustainable growth, safeguarding the economic and social cohesion.’ I am here quoting the Eurogroup and ECOFIN Ministers.
The task force was not an intergovernmental conference, but it was a review of our working methods, priorities and procedures in this field. We sought to get the right balance between, on the one hand, laying down an overall European framework regarding the need to avoid excessive fiscal deficits and economic imbalances inside the Union and, on the other hand, allowing national governments freely to choose what they want to tax and how they want to spend, in accordance with their national political procedures and European law.
We want to ensure that each Member State fully takes into account the impact of economic and fiscal decisions on its partners and on the stability of the European Union as a whole. At the same time, we want to strengthen the capacity of the Union level to react when policies in a Member State present a risk to the rest of the Union.
These recommendations, like the others by the task force, are also extremely close to the Commission proposals. I also discussed these issues twice with the group leaders in the European Parliament and with the chairs of the competent committees, in accordance with the format you requested.
One clarification. Some people claim to be disappointed that there is not more automaticity in the decision making. Well, more automaticity is exactly what we propose. The Council – and it was the Council under the treaty – will decide on sanctions on the basis of a so-called ‘reversed majority’. This means a Commission proposal for sanctions stands unless a qualified majority vote against, whereas until now a majority had to approve the sanctions.
Only a few weeks ago, some Member States were very reluctant about the reversed majority. It really is a breakthrough; and furthermore the task force proposed a whole series of other measures aimed at strengthening the Stability Pact, such as more policy coordination – the European semester – sound statistics and independent fiscal councils.
Member States should feel that their policy decisions affect all their partners and the Union as a whole. This is the big lesson from the crisis. A general remark: the task force was a political framework aimed at rapidly generating consensus. All the breakthroughs we achieved now need to be translated into legislative texts. The work needs to be done by the Commission, the Council and Parliament. I trust all the institutions will keep up the momentum. It is a vital responsibility."@en1
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