Local view for "http://purl.org/linkedpolitics/eu/plenary/2012-10-23-Speech-2-127-000"
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"en.20121023.5.2-127-000"2
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"Mr President, first of all regarding the assessment of this European Council, some of you have probably noted that in my initial statement I mentioned three European Council summits. I did that on purpose because this summit was important in terms of confirming some earlier decisions. That represents some progress already because the reality is that, unfortunately, doubts existed as to the commitment of some governments regarding decisions they had taken previously. In fact, though, the final decisions on some of those most important matters will come later, namely regarding the EMU in December and regarding the MFF, hopefully, in November.
One point I want to make clear, and that I do not agree with, is the position of those who say that they are in favour of the content of the two-pack, they are in favour of more integration in supervision of budgetary policy, they are in favour of reinforcing the competence of the Commission and the European institutions, the Community method, in terms of economic governance, but they will not support this – they will not approve it – before decisions are taken on other issues like the redemption fund. This is a mistake. It is a mistake because if you make progress on one very important issue in the European Union dependent on other issues, where you know very well that there is not yet agreement between all our Member States, you are in fact paralysing progress and economic governance in the euro area. That is a choice for you to make, but my strong advice to all the pro-European forces is to support everything that enables us to put as much as possible under the Community method and in the European institutions and this is certainly the case with the Two-pack proposals.
Now another issue which was mentioned was the situation regarding some statements made by the IMF. I want to be clear on this aspect as well. The reason we have this crisis today, contrary to what some Eurosceptics suggest, is not because of the euro area. We have a crisis today in the European Union economy because of excessive debt created by national governments and because of the irresponsible financial behaviour in some sectors, including outside of Europe. So Europe was not the cause of the problem, Europe is indeed the victim of the problem and is now trying to be part of the solution. This is the reality.
It was irresponsible behaviour in terms of the excessive debt of public authorities and the sometimes completely irresponsible behaviour of some actors in the financial sector which created the problem. The proof of this – that this is not the problem of the euro – is that, for instance Mr Farage, your own country, which is not a member of the euro, is now implementing a very difficult austerity package. The British people are suffering the consequences of past mistakes. It was not the euro that created the Britain’s problems.
So it is intellectually – I repeat – it is politically and intellectually dishonest to pretend that the euro is the cause of our problems. In fact, it is the European Union that is part of the solution because, without the support of other countries in the euro area, some of our Member States would not have the financing necessary to keep their states running, to keep their social services, to keep their national health systems, to keep their public education. This is the reality.
So Europe is part of the solution and now we have to do everything we can to stabilise the euro area and to create the conditions for growth. But what growth? Sustainable growth! Not the growth of the past. The growth fuelled by excessive debt is not sustainable. The growth fuelled by irresponsible private credit is not sustainable, as we have seen.
We have to return to conditions for growth that is sustainable. This why the IMF, like the Commission, like the ECB, is in favour of fiscal consolidation. What the IMF said, and we can completely agree with this, is that the situation is different in some Member States and so those countries which have the margin to promote growth in terms of internal demand can do so, and in some cases there can be fine tuning of the objectives. Indeed I want to make it very clear that it was the Commission which proposed, and we were supported by the IMF, but it was the Commission which proposed one more year for Portugal and Spain to reach the budget consolidation targets. It was our proposal, not the IMF’s proposal. So, first for Spain and then for Portugal, the Commission recommended to the Council that the deadline for correction of excessive deficit be extended by one year.
Our fiscal rules, the revised Stability and Growth Pact, allow for this: when the economic situation turns out to be worse than expected and the reduction of the deficit in structural terms is taking place, an extension of the period to correct a nominal deficit can be granted. This is not automatic. The situation will have to be assessed on a case-by-case basis.
This was also the position of Madam Lagarde when she said
which means in English: advice ‘when it is needed and possible’, and this is exactly the position taken by the institutions that are monitoring the situation in some of our countries.
So my assessment of this European Council is that it was certainly a step forward in terms of previous decisions being confirmed, but it was not yet the comprehensive response needed for the current challenges in the euro area and in the European Union. I consider this a fair assessment of the results of this European Council. Of course we have to know that we are working on extremely sensitive matters where, to be frank, the initial positions of our Member States are very diverse and where the interest, I believe, of all the European institutions is to create the right conditions for consensus and operational decisions.
In particular, in the case of countries under financial assistance, namely Greece, Ireland and Portugal, one must assess the consequences on that sustainability of a possible prolongation of an adjustment period. Prolonging the adjustment period can delay reversing the increase in the government’s debt ratio and put it on a declining trend. This in turn will delay the return of those countries to the market, possibly requiring extra financing, and then comes the question: are the other euro area countries – because decisions are taken by the governments – the Commission makes the proposal in the end but I want to make it clear that the decisions are taken ultimately by governments – are the euro area countries ready to provide extra financing? This is an important issue. This means that for programme countries the possible prolongation of the programmes is subject to the severe constraints stemming from high levels of debt. These are also in fact the views of the IMF.
Now, one thing it is important to note and which people have not paid sufficient attention to, is that some of those who are now saying that we should be more, let us say, flexible in terms of the fiscal targets, are exactly the same people as are proposing hard restructuring of debt; are exactly the same people as believe that the euro area is too big, that southern Europe should not in fact be in the euro area, that it was a mistake to have those countries in the euro area. This is exactly the point I want to make: we do not agree. We believe we should do everything we can to keep the integrity of the euro area because when you accept more flexibility in terms of fiscal adjustment you have to think what the consequences in terms of deficit stability will be and how we can keep those countries going to the market as soon as possible so that they can finance their own state. It is very important to understand this.
This is why in fact I wanted to respond to those direct questions from you, to say that a lot remains to be done, but I believe that this European Council was an important moment for discussing the difficulties in a relatively open manner.
I am not underestimating in any way the difficulties and challenges ahead. I think we are now coming to a moment where, probably because there is less pressure coming from the markets, the sense of urgency in all of our capitals is not the same. That is why I expect Parliament and the Commission, as European institutions that keep firmly to the agenda, to understand that, without a complete comprehensive response to the euro area governance, we will not have the necessary conditions of confidence and confidence is critically important to restore investment and growth and jobs. This is our final and ultimate goal. Growth and jobs, but I repeat, sustainable growth for sustainable jobs.
One point where there was some progress was on the single supervisory mechanism (SSM) and I am also glad that this debate today has shown a broad degree of consensus on the principles set out in the Commission proposals and reflected in the European Council conclusions. These include, most importantly, that the SSM should cover all banks, that there needs to be openness – as full as possible – and to have as full as possible participation by the non-euro Member States which so wish, and that the SSM is a key element in proving that the European Union is capable of moving forward, of restoring confidence, deepening the EMU and opening up the way to decisions on bank recapitalisation by the ESM.
I particularly welcome the determination expressed by Parliament, namely by rapporteur Ms Thyssen, to advance the SSM work so that we can reach a quality result by the end of 2012. The Commission will work closely with you to further improve the SSM proposals and open the way for the operational phasing-in of the system in 2013 – as had in fact been proposed by the Commission – starting with systemic banks and eventually extending to all banks in the euro area and participating non-euro area Member States.
Another important issue that was mentioned here – I think it was a question by Mr Mauro – was the sense of urgency. I want to tell you that I made that urgency clear. The reality once again, if you want to be honest in our assessment, is that not all Member States feel the same degree of urgency. This is probably due to the fact that they are in different financial and fiscal positions, but I believe that it is important for the credibility of our response that this response is properly prepared. Some of these issues are extremely difficult from a political and technical point of view but the decisions should be as urgent as possible.
Another issue that was raised concerned a social pact for Europe. How can we complement some of these decisions with proper consideration of the social dimension? The elements proposed in the social pact are, to a large extent, already reflected in the Europe 2020 strategy. That is, let us not forget, a strategy for inclusive growth, and in fact the macroeconomic imbalance procedure has been an integral part of the implementation of this strategy during the second European semester. This has implied a number of new challenges for all of us, notably in terms of ensuring that the labour market and social issues are adequately reflected and assessed within this new framework.
This integration results from the fact that economic growth and employment and social aspects are two sides of the same coin. It was interesting to see in the debate that many people are speaking about having a real minister for finance in Europe. They should probably also be thinking about having a real minister for the economy in Europe, so that we complete the work on financial stability with a commitment to sustainable growth and also to the economic and social dimension. Employment and social cohesion are not just an outcome of economic growth but are also an important determinant. The Commission strongly believes that our values of social justice, solidarity and equal opportunities must remain at the heart of European integration and continue to be understood as prerequisites for our future economic prosperity, for the well-being of European citizens and for European cohesion. They must also appear in the European Union’s growth agenda.
At the beginning of 2013 the Commission will present a social investment for growth and cohesion package which will also address various aspects mentioned under what some of you have described as the social pact. The message I want to convey to you is that, yes, we are doing everything we can with the tools and instruments available at European level to inject this economic and social dimension into the broader response to the current crisis in the economic situation of the European Union.
Regarding the future responses on mutualisation of debt, you know what our position is. The Commission has stated it and we will also address this issue in the blueprint I have mentioned."@en1
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"‘conseil nécessaire et possible’"1
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