Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-12-13-Speech-2-014-000"
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"Mr President, the Commission’s fundamental point of departure for last week’s European Council was crystal clear: the European Union needed to give a comprehensive response to the current crisis, making a firm commitment to the euro and to the irreversibility of our currency.
I welcome, first of all, the fact that Member States have agreed to advance to July 2012 the entry into force of the permanent European Stability Mechanism. As you know, I had already suggested precisely this in September during the State of the Union debate before this House. I also welcome the fact that Member States have now finally agreed to deal properly with the involvement of the private sector, with the ESM applying the same principles as the IMF. The Commission has always warned of the possible negative effects of PSI on market confidence. The decision now taken should reassure investors.
An agreement also emerged that the ESM should not, as was initially planned, be subject to the rule of unanimity. Decisions will now be taken by reinforced qualified majority. Here again, I had proposed this already for the EFSF, but without success. So I am happy to see that now, for the ESM, things are going in the right direction.
More immediately, leveraging of the EFSF will be deployed very rapidly, with the ECB acting as its agent in the EFSF market operations. I hope that Member States will confirm their commitment to provide the IMF with additional resources of up to EUR 200 billion within the coming days.
We now need to go further. The spring European Council in March will discuss how to further deepen fiscal integration of the euro area on the basis of a report by the President of the European Council, together with the President of the Commission and the President of the Euro Group.
The Commission’s Green Paper on European stability bonds of 23 November will feed into this debate. As you know, this is very controversial for some governments. Nevertheless, I was encouraged to see support for our assessment that stability bonds can make an important contribution in the future to completing a fiscal stability union and creating a stronger liquid bonds market in Europe.
We also need to go further on growth, on investment, and on measures to promote jobs. Fiscal discipline is of course key, but – let us be frank about this – we cannot build our economic union just on discipline and sanctions. We also need a Europe of growth and of jobs. A Europe of responsibility, certainly, but also a Europe of solidarity.
Let me now move on to the key elements of the new fiscal compact.
First of all, it includes a commitment to ensure that, as a general rule, national budgets will be balanced at least, and that such balance is defined as the annual structural deficit not exceeding 0.5% of GDP. To give this national debt brake or ‘golden rule’ maximum legal effect, Member States commit to enshrining it at constitutional or equivalent level. The Court of Justice will have competence to review proper transposition of this commitment. This is a sound foundation for sustainable medium- to long-term fiscal policies and a strong signal to the markets that European governments are serious about their new ‘stability culture’.
Secondly, the excessive deficit procedure under Article 126 of the Treaty, which, as you know, applies to all 27 Member States, will apply in a stricter way for the euro area Member States. In future, the euro area Member States will commit to accepting true automaticity for triggering the deficit procedure from the moment when a Member State breaches its commitment to reduce deficits. The same automaticity will apply throughout the whole procedure for any ensuing steps proposed by the Commission, including the preventive arm. Only a qualified majority against the Commission proposal would be able to stop the process.
The new commitment will add to the ‘six-pack’ automaticity for which this House fought so hard. It will put the Commission at the heart of ensuring fiscal discipline, in line with your position. We will accept this increased responsibility knowing that its democratic legitimacy derives from this House and that it is here that we will be held accountable for our objectiveness and our resolve.
It is indispensable to have more discipline, structural reforms for more investment, more convergence, and credible mechanisms of solidarity. All these elements belong together.
All in all, the agreement on substance at this summit is quite impressive.
But frankly, we cannot say the same on form. The reason why it took until 5 a.m. on Friday morning to reach this agreement was not the substance, but was mainly the form. The debate was on whether this should happen through a revision of the European Union Treaties, involving all 27 Member States and all the European Union institutions, or should it be outside this framework, with a new treaty? As you know, in the interim report presented to the Heads of State or Government, the President of the European Council, together with the President of the Euro Group and myself, tabled proposals in line with a treaty revision involving all 27 Member States and all the European institutions. Personally, I made every possible effort to agree this fiscal compact fully within the current Treaties.
This approach required that all 27 Member States played their part. As you know, one Member State was opposed to amending the Lisbon Treaty. The United Kingdom, in exchange for giving its agreement, asked for a specific protocol on financial services which, as presented, was a risk to the integrity of the internal market. This made compromise impossible. All the other Heads of State or Government were left with the choice between paying this price or moving ahead without the UK’s participation and accepting an international agreement among themselves.
In search of compromise, I tabled a clause providing, in the European Union Treaties, that any measures adopted by the Council and applying to the euro area only must not undermine the internal market, including in financial services, nor constitute discrimination between the euro area Member States and the others. Unfortunately, this compromise proved impossible and so it was not possible to have a solution that could allow all 27 Member States to agree in the framework of the current Treaties.
On a more positive note, I must also say that I was encouraged by the resolve of almost all the Member States to have more, not less, integration, to make more, and not less, use of the Community method and the European institutions, and to work for more, and not less, coherence.
Most Member States made it clear that they do not want to circumvent the Community method and the European institutions. They do not want to diminish the executive role of the Commission nor the prerogatives of this Parliament. The agreement will not replace Union institutions and procedures but will, on the contrary, build on them. And at my request, they have made a clear commitment to integrating the agreement fully into European Union law as soon as possible. This will need to be strongly reflected in the legal text now.
The Commission will do all it can so that this agreement is legally safe and institutionally acceptable. The Commission will contribute to these negotiations as Guardian of the European Union Treaties and of our institutional model.
Let me be clear: the Commission will not accept any intergovernmental treaty that would be in conflict with Union law. I will take a direct interest in this question and I am sure Parliament will do so as well. In fact, I expect that Parliament will also be associated with these negotiations.
So, you may ask, how can we square the circle concretely? How can we progress by way of an international agreement, without eroding the Community method?
This point will require our utmost attention and our joint scrutiny over the next days and weeks. In my view, the best way of doing it is to follow a basic principle: the agreement should contain stronger national commitments, but the European Union institutions should act exclusively on the basis of the European Union Treaties. Thus, we will apply the European Union’s monitoring and correction system as reinforced by the ‘six-pack’, and there will be no other parallel or competing structures.
Over the past 18 months, we have achieved some progress within the European Union as a whole, at 27, on the basis of the existing Treaties, with the European Union institutions taking the decisions. As a result, we now have a European strategy for growth and employment: Europe 2020. We have a substantially reinforced Stability and Growth Pact, with the ‘six-pack’, which will come into force today and will apply to all 27 Member States.
The Commission, acting pursuant to the European Union Treaties, will monitor how Member States have been living up to their additional commitments made in this agreement. I intend to make full use of Article 136, by proposing to this House all the legislation that will be needed to make this construction work, to tie this fiscal compact back to European Union law and to buttress it with the democratic legitimacy of this Parliament.
Fortunately, we have not seen a split of the European Union between the 17 and the other ten. This was the greatest risk ahead of the summit. This is not an agreement at 17 plus, but an agreement at 27 minus.
Last week, most Heads of State or Government of the Member States showed their readiness to move ahead with European integration, towards a fiscal stability union. They showed that they want more Europe, not less.
Of course, this was not the only subject at the European Council: some other important issues were also discussed last week, such as the annual growth survey, enlargement and energy. I will come back to these tomorrow when we will assess the results of the European Union’s work during the Polish Presidency of the Council. At this moment, I just want to highlight the historic agreement that was signed for Croatia to join our Union.
It is indeed very important that Member States agreed on a fiscal compact, but let me say that this is not enough. The problems in the euro area are not only fiscal but also financial, and, above all, problems related to lack of competitiveness. We need to restore growth and promote employment. The commitment to fiscal discipline is indispensable for Europe, but the reality is that structural reforms for competitiveness and growth-enhancing measures are the key to restoring not only the confidence of investors but also, above all, the confidence of our citizens.
This is why I insist on the need to pursue the comprehensive approach that the Commission has presented in our road map for stability and growth. I hope Parliament and the Member States will support this line and work together for the deepening of the internal market, including the rapid implementation of existing commitments on services, energy, innovation, the digital agenda and free trade agreements, and for swift adoption of pending proposals to enhance growth, such as support for SMEs, better regulation, tax initiatives, fast-tracking proposals, especially those that extend the benefits of the Single Market, and, last but not least, targeted investment at European Union level, including through project bonds. Yes, we need investment at European level, and that is why our MFF proposal – and, for instance, the Connecting Europe Facility addressing the issue of the missing links in networks – is so relevant for Europe’s growth and employment prospects.
Finally, I wish to highlight that, even if today, attention is turned elsewhere, green growth remains key to employment in Europe. This is why I welcome the conclusions from Durban, with all major emitters agreeing for the first time to have a new comprehensive and binding legal instrument which will include limits on CO
emissions. This was only possible because of the leadership from the European Union: I am very proud of the role of the Commission in this matter. This shows that, with consistence and coherent efforts, Europe is able to put its mark on global agreements.
The same kind of coherence and persistence will now be needed for implementation of the growth agenda for the European Union. This is exactly what our citizens expect from us: a Europe of responsibility, yes, but also a Europe of solidarity; a Europe of stability, yes, but also a Europe of growth and employment.
We have the European Semester, through which we coordinate our fiscal and macro-economic policies and implement our agenda for growth on an annual basis. We also have the new macro-economic imbalances procedure. There is also the Euro Plus Pact.
There are two brand new Commission proposals, made on 23 November, under Article 136, on further strengthening fiscal discipline, which I hope will be adopted in a fast-track procedure through an early first reading agreement.
We also have our assistance and adjustment programmes, including those for three euro area Member States. There is the European Central Bank playing its role, there is the European Financial Stability Facility (EFSF), and there will be the European Stability Mechanism (ESM).
The main purpose of this European Council was to show our joint determination to tackle persisting market tensions by consolidating these achievements and reinforcing them even further. Indeed, during Thursday night, an agreement was reached to create a genuine ‘fiscal stability union’, a new ‘fiscal compact’.
On substance, this agreement was ambitious, and it was unanimous. Unfortunately, it was not unanimous on the form, with one Member State unable to join. I will come back to both aspects – substance and form – in a moment.
Let me first highlight a number of important conclusions of the summit which match the position that the Commission has taken for some time."@en1
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