Local view for "http://purl.org/linkedpolitics/eu/plenary/2012-09-12-Speech-3-009-000"
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"Mr President, President of the Council, honourable Members, it is an honour to stand before you today to deliver this third State of the Union address, although at a time when the European Union continues to be in crisis – a financial and economic crisis, a social crisis, but also a political crisis, a crisis of confidence. At its root, the crisis results from irresponsible practices in the financial sector, unsustainable public debt, and also a lack of competitiveness in some Member States. On top of that, the euro faces structural problems of its own. Its architecture has not been up to the job. Imbalances have built up.
When we speak about the crisis – and we are all speaking about the crisis – have we really drawn all the consequences for our action? When we speak about globalisation – and we all speak a lot about globalisation – have we really considered its impact on the role of each of our Member States?
The starting point for new thinking for Europe is to really draw all the consequences of the challenges that we are facing and that are fundamentally changing our world. The starting point is to stop trying to answer the questions of the future with the tools of the past.
Since the start of the crisis, we have seen time and again that interconnected global markets are quicker and therefore more powerful than fragmented national political systems. This undermines the trust of citizens in political decision-making and it is fuelling populism and extremism in Europe and elsewhere.
The reality is that, in an interconnected world, Europe’s Member States on their own are no longer able to effectively steer the course of events.
But, at the same time, they have not yet equipped their Union – our Union –with the instruments needed to cope with this new reality. We are now in a transition, in a defining moment. This moment requires decision and leadership.
Yes, globalisation demands more European unity. More unity demands more integration. More integration demands more democracy – European democracy. In Europe, this means, first and foremost, accepting that we are all in the same boat. It means recognising the commonality of our European interests. It means embracing the interdependence of our destinies and it means demanding a true sense of common responsibility and solidarity because, when you are on a boat in the middle of the storm, absolute loyalty is the minimum you demand from your fellow crew members.
This is the only way we will keep up with the pace of change. It is the only way we will get the scale and efficiency we need to be a global player. It is the only way to safeguard our values – because it is also a matter of values – in our changing world.
In the 20
century, a country of just 10 or 15 million people could be a global power. In the 21
century, even the biggest European countries run the risk of irrelevance between global giants such as the US or China. History is accelerating. It took 155 years for Britain to double its GDP per capita, 50 years for the United States, and just 15 years for China. But, if you look at some of our new Member States, the economic transformation going on is no less impressive.
Europe has all the assets it takes – in fact much more so than previous generations faced with similar or even greater challenges. But we need to act accordingly and mobilise all these resources together. It is time to match ambitions, decisions, and actions. It is time to put a stop to piecemeal responses and muddling through. It is time to learn the lessons from history and write a better future for our Europe.
This is now being corrected but it is a painful and difficult effort. Citizens are frustrated. They are anxious. They feel their way of life is at risk. The sense of fairness and equity between Member States is sometimes being eroded. Without equity between Member States, how can there be equity between European citizens?
What I demand, and what I present to you today, is a decisive deal for Europe – a decisive deal to project our values, our freedom and our prosperity into the future of a globalised world; a deal that combines the need to keep our social market economies on the one hand and the need to reform them on the other; a deal that will stabilise the EMU, boost sustainable growth, and restore competitiveness; a deal that will establish a contract of confidence between our countries, between Member States and the European institutions, between the social partners, and between the citizens and the European Union.
The decisive deal for Europe means that we must leave no doubt about the integrity of the Union or the irreversibility of the euro. The more vulnerable countries must leave no doubts about their willingness to reform and about their sense of responsibility. The stronger countries must leave no doubts about their willingness to stick together and about their sense of solidarity.
We must all leave no doubts that we are determined to reform and to reform together.
The idea that we can grow without reform or that we can prosper alone is simply false. We must recognise that we are in this together and we must resolve this together. This decisive deal requires the completion of a deep and genuine economic union, based on a political union.
Let me start with Europe’s economy. Firstly, we need growth, sustainable growth. Growth is the lifeblood of the European social market model. It creates jobs and supports our standard of living. But we can only maintain growth if we are more competitive. At the national level it means undertaking structural reforms that have been postponed for decades – modernising public administration, reducing wasteful expenditure, tackling vested interests and privileges, reforming the labour market to balance security with flexibility and ensuring the sustainability of social systems.
At the European level, we need to be more decisive about breaking down barriers, whether physical, economic or digital. We need to complete the single market. We need to reduce our energy dependence and tap the renewable energy potential. Promoting competitiveness in sectors such as energy, transport or telecoms could open up fresh competition, promote innovation and drive down prices for consumers and businesses.
The Commission will shortly present a Single Market Act II. To enable the single market to prosper, the Commission will continue to be firm and intransigent in the defence of its competition and trade rules. Let me tell you frankly that, if this is left to the Member States, they will not resist pressure from big corporations or large external powers.
We need to create a European labour market and make it as easy for people to work in another country as it is at home. We need to explore green growth and be much more efficient in the use of resources. We have to be much more ambitious about education, research, innovation and science.
Europe is a world leader in key sectors such as aeronautics, automotives, pharmaceuticals and engineering, with global market shares above a third. Industrial productivity increased by 35% over the last decade, despite the economic slowdown. Today some 74 million jobs depend on manufacturing. Every year start-up firms in the EU create over 4 million jobs. We need to build on this by investing in our new industrial policy and creating a business environment that encourages entrepreneurship and supports small businesses.
Over the last four years, we have made bold decisions to tackle the systemic crisis. But despite all these efforts, our responses have not yet convinced citizens, markets or our international partners. Why? Because, time and again, we have allowed doubts to spread – doubts over whether some countries are really ready to reform and regain competitiveness, doubts over whether other countries are really willing to stand by each other so that the euro and the European project are irreversible.
This means making the taxation environment simpler for businesses and more attractive for investors. Better tax coordination would benefit all Member States. We also need a pro-active trade policy by opening up new markets. This is the potential of Europe’s economy. This is the goldmine that is yet to be fully explored. Fully implementing the Growth Compact agreed at the June European Council can take us a long way.
And we could go further with a realistic yet ambitious European Union budget dedicated to investment, growth and reform. Let us be clear: the European budget is the instrument for investment in Europe and growth in Europe. The Commission and this Parliament, indeed all pro-European forces – because most Member States support our proposal – must now stand together in support of the right multiannual financial framework that will take us to 2020. It will place little burden on Member States, especially with our proposed new own-resources system but it would give a great boost to their economies, their regions, their researchers, their students, their young people who seek employment, and their SMEs.
It is a budget for growth. It is a budget for economic, social and territorial cohesion between Member States and within Member States. It is a budget that will help complete the single market by bridging gaps in our energy, transport and telecoms infrastructure through the Connecting Europe Facility. It is a budget for a modern, growth-oriented agriculture capable of combining food security with sustainable rural development. It is a budget that will promote a research-intensive and innovative Europe through Horizon 2020 because we need this European scale for research.
Now we come, as a test of credibility, to many of our Member States. I want to see if the same Member States that were always speaking about the need for growth and investment for growth will now support the budget for growth at European level.
This budget is also the tool to support Europe 2020, our strategy for growth, which we need now more than ever before. Europe 2020 is indeed the way to modernise and preserve the European social market economy.
Our agenda of structural reform requires a major adjustment effort. It will only work if it is fair and equitable because inequality is not sustainable. In some parts of Europe we are seeing a real social emergency with rising poverty and massive levels of unemployment, especially among our young people. That is why we must strengthen social cohesion. It is a feature that distinguishes European society from alternative models.
Some say that because of the crisis the European social model is dead. I do not agree. Yes, we need to reform our economies and modernise our social protection systems, but an effective social protection system that helps those in need is not an obstacle to prosperity. It is indeed an indispensable element of it. Indeed, it is precisely those European countries with the most effective social protection systems and with the most developed social partnerships, that are among the most successful and competitive economies in the world.
Fairness and equity mean giving a chance to our young people. We are already doing a lot. Before the end of the year the Commission will launch a Youth Package that will establish a youth guarantee scheme and equality framework to facilitate vocational training.
Fairness and equity also mean creating better and fairer taxation systems. Stopping tax fraud and tax evasion could put extra billions into the public purse across Europe. This is why the Commission will fight for an agreement on the revised Savings Tax Directive and on mandates to negotiate stronger savings tax agreements with third countries. Their completion would be a major source of legitimate tax revenues.
On too many occasions, we have seen a vicious spiral. First, very important decisions for our future are taken at European summits. But then, the next day, we see some of those very same people who took those decisions undermining them, saying either that they go too far or that they do not go far enough. Then we get a problem of credibility and a problem of confidence.
The Commission will continue to fight for a fair and ambitious Financial Transaction Tax that will ensure that taxpayers benefit from the financial sector, not just that the financial sector benefits from taxpayers. Now that it is clear that agreement on this can only happen through enhanced cooperation, the Commission will do all it can to move this forward rapidly and effectively with those Member States that are willing. This is about fairness. Fairness is an essential condition for making the necessary economic reforms socially and politically acceptable and, above all, because fairness is a question of social justice.
In the face of the crisis, important decisions have been taken. Across the European Union, reform and consolidation measures are being implemented. Joint financial backstops are being put in place, and the European institutions have consistently shown that they stand by the euro. The Commission is very aware that in the Member States implementing the most intense reforms, there is hardship and there are – sometimes very painful – difficult adjustments, but it is only through these reforms that we can come to a better future. They were long overdue. Going back to the status quo ante is simply impossible. The Commission will continue to do all it can to support those Member States and to help them boost growth and employment, for instance through the re-programming of structural funds.
Allow me to say a word on Greece. I truly believe that we have a chance this autumn to come to the turning point. If Greece banishes all doubts about its commitment to reform – but also if all the other countries banish all doubts about their determination to keep Greece in the euro area – we can do it. I believe that if Greece stands by its commitments it should stay in the euro area as a member of the European family.
Securing the stability of the euro area is our most urgent challenge. This is the joint responsibility of the Member States and the Community Institutions. The ECB cannot, and will not, finance governments. But, when monetary policy channels are not working properly, the Commission believes that it is within the mandate of the ECB to take the necessary actions, for instance in the secondary markets of sovereign debt.
Indeed, the ECB has not only the right but also the duty to restore the integrity of monetary policy. It is of course for the ECB, as an independent institution, to determine what actions to carry out and under what conditions. But all actors – and I really mean all actors – should respect the ECB’s independence.
I have spoken about the economic policy measures that we must implement as a matter of urgency. This is indispensable. But it is not sufficient. We must go further. We must complete the economic and monetary union. We must create a banking union and a fiscal union and the corresponding institutional and political mechanisms.
Today, the Commission is presenting legislative proposals for a single European supervisory mechanism for the euro zone. This is a stepping stone to banking union. The crisis has shown that, while banks became transnational, rules and oversight remained national. When things went wrong, it was the taxpayers who had to pick up the bill.
Over the past four years the EU has overhauled the rulebook for banks, leading the world in implementing the G20 commitments. But mere coordination is no longer adequate – we need to move to common supervisory decisions, namely within the euro area. The single supervisory mechanism proposed today will create a reinforced architecture, with a core role for the European Central Bank, and appropriate articulation with the European Banking Authority, which will restore confidence in the supervision of the banks in the euro area.
It is not acceptable to present these European meetings as if they were boxing events, claiming a knockout victory over a rival. We cannot belong to the same union and behave as if we do not. We cannot put at risk nine good decisions with one action or statement that raises doubts about all we have achieved.
It will be a supervision for all euro area banks. Supervision must be able to look everywhere because systemic risks can be anywhere, not just in so-called systemically relevant banks. Of course, this is in a system that fully engages the national supervisors.
The package comprises two legal texts – one on the ECB and the other on the EBA – which go together. It is clear that Parliament will have a crucial role to play in the adoption of the new mechanism, and after that in its democratic oversight.
This is a crucial first step towards the banking union I proposed before this House in June. Getting the European supervisor in place is the top priority for now because it is the precondition for the better management of banking crises, from banking resolution to deposit insurance.
In parallel the Commission will continue to work on the reform of the banking sector, to make sure it plays its role in the responsible financing of the real economy. That means improving long-term financing for SMEs and other companies. It means rules on reference indices, so that we do not again see the manipulation of bank interest rates affecting companies and mortgage holders alike. It means legislation to ensure that banks give a fair deal to consumers and another look at the structure of banking activities to eliminate inherent risks.
In all of this, the role of this Parliament is essential. The Commission endeavours to work in close partnership with you.
But there is a second element of a deeper economic union. It is the move towards a fiscal union. The case for it is clear: the economic decisions of one Member State impact on the others, so we need stronger economic policy coordination. We need a stronger and more binding framework for the national decision-making for key economic policies, as the only way to prevent imbalances. While much has been done here – for instance through the six pack and through the country-specific recommendations – further steps are crucial to combine specific conditions with specific incentives and to really make the economic and monetary union sustainable.
To deliver lasting results, we need to develop a fully equipped Community economic governance, together with a genuine, credible Community fiscal capacity. We do not need separate institutions or to create new institutions for that, quite the contrary. For this to be effective and quick, the best way is to work with and through the existing institutions: the European Commission as the independent European authority, overseen by the European Parliament as the parliamentary representation at European level. It is in such a framework that, over time, steps for genuine mutualisation of debt redemption and debt issuance can take their place.
So economic reform coupled with a genuine economic and monetary union are the engines to get our boat moving forward.
The Commission will publish a blueprint for deepening the economic and monetary union, already this autumn. This blueprint will be presented to this House because these questions must be discussed with and by the representatives of the people. At the same time, it will inform the debate at the December European Council that will be prepared by the report that the President of the European Council, I myself and the Presidents of the European Central Bank and the Euro Group have been asked to present.
Our blueprint will identify the tools and instruments and present options for legal drafting that will give effect to them, from policy coordination to fiscal capacity to debt redemption. Where necessary – as in the case of jointly and severally guaranteed public debt – it will identify the Treaty changes necessary because some of these changes require modifications in the Treaty. It will present a blueprint for what we need to accomplish, not only in the next few weeks and months but also in the next years.
This reveals the essence of Europe’s political crisis of confidence. If Europe’s political actors do not abide by the rules and the decisions they have set themselves, how can they possibly convince others that they are determined to solve this crisis together?
Ultimately, the credibility and sustainability of economic and monetary union – the credibility of our currency, the euro – depends on the institutions and the political construct behind it. This is why the economic and monetary union raises the question of a political union and the European democracy that must underpin it.
If we want economic and monetary union to succeed, we need to combine ambition and proper sequencing. We need to take concrete steps now, but with a political union as the horizon. I would like to see the development of a European public space, where European issues are discussed and debated from a European standpoint. We cannot continue trying to solve European problems just with national solutions.
This debate has to take place in our societies and among our citizens. But today I would also like to make an appeal to European thinkers, to men and women of culture, to join this debate on the future of Europe. We need them. I also make this appeal to you. This is the house of European democracy. We must strengthen the role of the European Parliament at European level. We need to promote genuine complementarity and cooperation between the European and national parliaments.
This also cannot be done without strengthened European political parties. Indeed, we very often have a real disconnect between political parties in the capitals and the European political parties here in Strasbourg. This is why we have to recognise that the political debate is cast all too often as if it were just between national parties. Even in the European elections we do not see the name of the European political parties in the ballot box. We see a national discussion between national parties. This is why we need a better statute for European political parties. I am proud to announce that the Commission has adopted a proposal for this today.
An important means to deepen the pan-European political debate would be the presentation by European political parties of their candidate for the post of Commission President at the European Parliament elections in 2014. This can be done without a Treaty change and would be a decisive step to make the possibility of a European choice offered by these elections even clearer. I call on the political parties to commit to this step and thus to further Europeanise the European elections.
A true political European Union means we must concentrate European action on the real issues that matter and must be dealt with at European level. Let us be frank about this. Not everything can be a priority at the same time. We need to be more selective and here some self-criticism will probably apply.
Proper integration is about taking a fresh look at where the most appropriate level of action is. Subsidiarity is an essential democratic concept and should be practised. A political union also means that we must strengthen the foundations on which our Union is built: respect for our fundamental values, for the rule of law and democracy.
In recent months we have seen threats to the legal and democratic fabric in some of our European states. The European Parliament and the Commission were the first to raise the alarm and played the decisive role in seeing these worrying developments brought into check. But these situations also revealed the limits of our institutional arrangements. We need a better developed set of instruments – not just the alternative between the ‘soft power’ of political persuasion and the ‘nuclear option’ of Article 7 of the Treaty.
Our commitment to upholding the rule of law is also behind our intention to establish a European Public Prosecutor’s Office, as foreseen by the treaties. We will make a proposal soon.
A crisis of confidence is a political crisis. The good thing is that in a democracy there is no political problem for which we cannot find a political solution. That is why, here today, I want to debate with you the fundamental political questions – where we are now and how we must move forward. I want to focus on the political direction and the vision that will inspire our policy decisions.
A political union also means doing more to fulfil our global role. Sharing sovereignty in Europe means being more sovereign in a global world. In today’s world, size matters and values make the difference. That is why Europe’s message must be one of freedom, of democracy, of the rule of law and of solidarity. In short, our values, the European values.
More than ever our citizens and the new world order need an active and influential Europe, not just for us here in Europe. It is important for the rest of the world that we succeed. A Europe that stands by its values and a Europe that stands up for its belief that human rights are not a luxury for the developed world but should be seen as universal values.
The appalling situation in Syria reminds us that we cannot afford to be bystanders. A new and democratic Syria must emerge. We have a joint responsibility to make this happen and to work with those in the global order who also need to give their cooperation towards that goal.
The world also needs an EU that keeps its leadership of development and humanitarian assistance, that stands by open economies and fights protectionism and that leads the fight against climate change. The world needs a Europe that is capable of deploying military missions to help stabilise the situation in crisis areas. We need to launch a comprehensive review of European capabilities and begin truly collective defence planning. Yes, we need to enforce our Common Foreign and Security Policy and to have a common approach to defence matters because together we have the power and the scale to shape the world into a fairer, rules-based and human-rights-abiding place.
A deep and genuine economic and monetary union, a political union with a coherent foreign and defence policy, means ultimately that the present European Union must evolve. Let us not be afraid of the word: we will need to move towards a federation of nation states. This is our political horizon. This is what must guide our work in the years to come.
Today, I call for a federation of nation states. Not a superstate. A democratic federation of nation states that can tackle our common problems, through the sharing of sovereignty in such a way that each country and its citizens are better equipped to control their own destiny. This is about union with the Member States, not against the Member States. In the age of globalisation pooled sovereignty means more power, not less.
I said a federation of nation states on purpose because I think that, in these turbulent times, in these times of uncertainty, it would be a real mistake to leave the defence of the nation just to the nationalists and populists. I believe in a Europe where people are proud of their nations but also proud to be European and proud of our European values.
Creating this federation of nation states will ultimately require a new Treaty.
I do not say this lightly. We are all aware how difficult Treaty change has become. It has to be well prepared. Discussions on Treaty change must not distract or delay us from doing what can and must already be done today.
A deep and genuine economic and monetary union can be started under the current treaties, but can only be completed with changes in the treaties. So let us start it now but let us have the horizon for this future present in our decisions of today.
Of course I will not list all these individual decisions. You are receiving the letter I addressed to the President of the European Parliament, and that sets out the Commission’s immediate priorities. We will discuss them with you before adopting the Commission work programme later in the autumn.
We must not begin with Treaty change. We must identify the policies we need and the instruments to implement them. Only then can we decide on the tools that we lack and the ways to remedy this.
Then there must be a broad debate all over Europe. A debate that must take place before a convention and an IGC are called. A debate of a truly European dimension. The times of European integration by implicit consent of citizens are over. Europe cannot be technocratic, bureaucratic or even diplomatic. Europe has to be ever more democratic and the role of the European Parliament for this is essential.
That is why the European elections in 2014 can be so decisive. Before the next European Parliament elections in 2014, the Commission will present its outline for the shape of the future European Union. We will put forward explicit ideas for Treaty change in time for a true European debate. We will set out the objectives to be pursued, the way in which the institutions that can make the European Union more open and democratic, the powers and instruments to make it more effective, and the model to make it a union for the peoples of Europe. I believe we need a real debate and in democracy the best way to debate is to debate our future and our goals in the elections at European level.
This is not just a debate for the euro area in its present membership. Let me be very clear. In Europe we need no more walls dividing us because the European Union is stronger as a whole in keeping the integrity of its single market, its membership and in its institutions. No one will be forced to come along and no one will be forced to stay out but the speed will not be dictated by the slowest or the most reluctant.
This is why our proposals will be based on the existing Union and its institutions – on the Community method. Let us be clear – there is only one European Union, one European Commission, one European Parliament. More democracy, more transparency, more accountability, is not created by a proliferation of institutions that would render the European Union more complicated, more difficult to read, less coherent and less capable of acting.
This is the magnitude of the decisions that we will need to make over time. That is why I believe we need a serious discussion between the citizens of Europe about the way forward – and also about the possible consequences of fragmentation, because sometimes through unintended consequences we get fragmentation that we do not want – but also about what we could achieve if leaders avoid national provincialism: what we can achieve together.
We must use the 2014 election to mobilise all pro-European forces. We must not allow the populists and the nationalists to set a negative agenda. I expect all those who call themselves Europeans to stand up and to take the initiative in this debate. Because even more dangerous than the scepticism of the anti-Europeans is the indifference or the pessimism of the pro-Europeans.
To sum up, what we need is a decisive deal to complete the EMU, based on a political commitment to a stronger European Union.
The sequence I put before you is clear. We should start by doing all we can to stabilise the euro and accelerate growth in the EU as a whole. The Commission will present all the necessary proposals – we have started today with the single supervisor – to create a banking union, in line with current treaty provisions.
Secondly, we will present our blueprint on a deep and genuine economic and monetary union, including the political instruments. This will be done this autumn. We will present here again all proposals in line with the current treaty provisions.
My message to you today is this: Europe needs a new direction. And that direction cannot be based on old ideas. Europe needs a new way of thinking.
Thirdly, where we cannot move forward under the existing treaties, we will present explicit proposals for the necessary Treaty changes ahead of the next European parliamentary election in 2014, including elements for reinforced democracy and accountability. This is our project, a project that is step by step but with a big ambition for the future, with a federation as the horizon for Europe.
I am sure that many will say that this is too ambitious and that it is not realistic. But I want to leave you with some questions. Let me ask you – is it realistic to go on as we have been doing? Is it realistic to see what we are seeing today in many European countries? Is it realistic to see taxpayers paying banks and afterwards being forced to give banks back the houses they have paid for because they cannot pay their mortgages? Is it realistic to see more than 50% of our young people without jobs in some of our Member States? Is it realistic to go on trying to muddle through, just trying to accommodate mistakes with unconvincing responses? Is it realistic to think that we can win the confidence of markets when sometimes we show so little confidence in each other?
To me, it is this reality that is not realistic. This reality cannot go on.
The realistic way forward is the way that makes us stronger and more united. Realism is to put our ambition at the level of our challenges. Realism is to tell our youth that, yes, there is hope if we stick together. If there is a bias in our analysis, let it be a bias for hope. We should be proud to be Europeans, proud of our rich and diverse culture. In spite of our current problems, our societies are among the most human and free in the world. We do not have to apologise for our democracy or for our social market economy or for our values.
With high levels of social cohesion, respect for human rights and human dignity, equality between men and women, respect for our environment – these European societies, with all their problems, are among the most decent societies in human history. I think we should be proud of them.
In our countries two or three girls do not go to prison because they sing songs criticising the leader of their country. In our countries people are free and proud of that freedom and people understand what it means to live in freedom. In many of our countries, namely the most recent Member States, there is a recent memory of what was dictatorship and totalitarianism.
Previous generations have overcome much bigger challenges. Now it is for this generation to show they are up to the task. Now is the moment for all Europeans to leave business as usual behind and to embrace the business of the future. The European Union was built to guarantee peace but today this means making our Union fit to meet the challenges of globalisation.
That is why we need a new thinking for Europe, a decisive deal for Europe. That is why we need to guide ourselves by the values that are at the heart of the European Union. I believe that Europe has a soul and this soul can give us the strength and the determination to do what we must do.
You can count on the European Commission. I count on you, the European Parliament, because together, as Community institutions, we will build a better, stronger and a more united Europe, a citizens’ union for the future of Europe and also for the future of the world."@en1
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