Local view for "http://purl.org/linkedpolitics/eu/plenary/2002-10-21-Speech-1-023"
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"en.20021021.4.1-023"2
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".
Mr President, ladies and gentlemen, I stand before you today at a time when we are all in good spirits and full of confidence in Europe's future. By approving the Treaty of Nice with a large majority, the Irish people have clearly indicated their support for the ideals and projects of the European Union. I wish to express my thanks to the Taoiseach, Bertie Ahern, and to President Cox for their work. With this result under our belts, we can embark even more confidently on the final stretch of the road to Copenhagen and final endorsement of enlargement.
Politicians like yourselves, economists, bankers and businessmen, with whom I have discussed this matter a thousand times, have been saying for months and continue to say in private and in their everyday conversations the same things that I said openly and frankly in the interests of our institutions' credibility. It is therefore time that we started to say in public what we say amongst ourselves in private.
The public mistrusts us and our institutions not least because they suspect that that only minor matters are aired in public and that the truly important decisions are taken behind closed doors. I am therefore pleased and proud that Parliament should be at the heart of this debate today.
The Pact is, as it should be, simple, but the situations to which the Pact applies are complex. One of the responsibilities of the European institutions is therefore to be aware of the complexity and diversity of the economies of the Member States – applying the same criteria to large and small alike – just as we have the responsibility to keep track of developments here in Europe and in the rest of the world. Indeed, we could hardly be unaware of the downturn in the economic cycle in Europe and worldwide. This downturn is so marked that a substantial part of the global economy could be in danger of experiencing the kind of deflation that we thought we had put behind us.
At the same time, we realised that the Pact had not prevented some Member States from adopting fiscal policies incompatible with the objective of stability. What were we meant to do in the circumstances? Were we meant to adopt an inflexible approach, trying to force the countries with the biggest deficits to stick to their budgetary targets regardless of the changing economic situation? Should we have made a further mistake, so compounding the mistakes made in the past when countries that had not balanced their budgets missed the chance offered by growth to balance the books?
That, ladies and gentlemen, would have been the wrong way to implement the Pact. Taking that approach could have jeopardised the economic prospects not just of the countries concerned but of the whole of Europe too, for we are bound together by the single currency. If the European institutions had tried to impose objectives that were no longer realistic, they would now be accused of endangering growth and jobs.
I, however, want Europe to win both battles - stability and growth. What a tragedy it would be if, in our endeavours to win the stability battle, we lost the trust and backing of our citizens, the trust and backing that are the foundations of the European democracy you represent.
This is why, last month, we floated ideas for making adjustments and introducing more sophisticated criteria for applying the Pact with a view to making it an increasingly valuable instrument for promoting stability and growth.
We suggested setting objectives that would restore balance and creating instruments to track progress. To bridge the gap at this critical moment, we also suggested giving countries in need of adjustment more breathing space, setting out a more realistic course of action for consolidating deficits.
Mr President, ladies and gentlemen, it is with pleasure, with great pleasure that I accepted your invitation to come to Parliament today together with Commissioner Solbes, who will give you an overview of the measures taken by the Commission and the current state of the economy. I am very pleased to be here today to discuss with you the coordination of economic policies and the Stability and Growth Pact, in particular.
We are talking about criteria that will ensure both stability and growth. Indeed, they will allow stability and growth to boost each other. We are talking about criteria that apply to all the Member States, both large and small, to the benefit of all the countries of the Union. Moreover, ladies and gentlemen, these ideas are completely in line with what we have been saying for a long time.
Last year, in our communication on strengthening the coordination of economic policies, we proposed a number of major improvements within the present institutional framework. As you will doubtless recall, we proposed developing information and economic analysis concerning the eurozone, improving the system of statistics we use, clarifying the principles common to fiscal and structural policies and, lastly, making our decision-making system more efficient.
Looking specifically at the recent case of Portugal, which was obliged to revise its own statistics substantially, I should like, in particular, to highlight the obvious importance of a proper system of controls on budget-related statistics.
We shall act in line with this approach when, as required by the conclusions of the Barcelona European Council, we put forward proposals shortly for improving both the transparency and the discipline of the Pact together. We shall do so by trying to clarify both the underlying principles of the Pact and the basic principles that should underpin national budgetary policies, thus taking the reality of European economic integration fully into account.
For instance, we shall show that the need for clear rules can be made compatible with recognition of the fact that the Pact's rules apply to different countries in different situations as regards levels of debt, financial burdens arising from the ageing of the population and the urgent public investment requirements.
If we apply the Stability and Growth Pact like this, it will truly come into its own as an instrument for coordinating economic policies, above and beyond its purely disciplinary aspects. It will, at last, become an instrument that is fully compatible with the growth and employment strategy adopted by the European Council at Lisbon two years ago, a strategy that Parliament has always supported wholeheartedly.
New and better rules are not enough, however. In order to protect the European Union’s common interest, once such rules are approved, we will need the capacity to implement them too. If we really want to solve the problems of growth and employment in Europe, we must achieve more intelligent – and more effective – coordination of economic policies, including the necessary structural reforms, coordination which is more easily implemented.
The distribution of responsibilities for coordination of economic policies must be clearly defined. Europe's citizens must be sure that the system is in safe hands, hands that are capable of supervising the system and ensuring consistency, both in quiet periods and, even more so, in times of difficulty and crisis.
As I am sure you will remember, ladies and gentlemen, two years ago, I raised this issue before you and I have come back to it on several occasions since then. We need an authority that has the power to supervise the system in a way that is both rigorous and intelligent with due regard for the complexity of our economies, an authority that is capable of intervening in defence of the common good, so that each Member State can adopt the economic-policy measures necessary to prevent its economy from having adverse effects on the economies of the other Member States.
What I have to say is simple. Economic and Monetary Union needs rules that are clear, effective and, above all, respected. To achieve this, we need an authority that can act to protect the common good with due regard for the rules defined in the context of interinstitutional cooperation by adjusting economic policy to changing circumstances.
Only a strong authority can both apply the rules strictly to prevent behaviour that is off-course and adapt the rules to changing circumstances, where necessary.
I want to make this point even clearer. Budgetary policy is the responsibility of the authorities of the Member States. That is true today and it will continue to be so in future. For its part, the Commission is an institution whose sole mandate is to work for the common interest of Europe while respecting the full equality of all the Member States.
By its very nature, the Commission is therefore naturally suited to the role of steering, on the basis of the mandate and the rules established by the Council and subject to Parliament's control, the system that must ensure the coordination of economic policies on a Europe-wide scale.
There are plenty of examples to support the idea of giving responsibility to an independent, impartial referee such as the Commission. Today, I will mention only one, and the case in question is relevant precisely because it is very controversial. It concerns the early warning the Commission proposed to the Council a few months ago. As you will all remember, the proposal was not taken up, despite the fact that both the Council and the Member State directly concerned agreed on the substance of the Commission's proposed measure and, in fact, appropriated it.
In any case, the shortcomings of the decision-making mechanism are still there for all to see. That is why the Commission's first formal contribution to the work of the Convention included proposals to prevent such situations from recurring in the future, suggesting that the responsibility of the authority to issue such early warnings should be enshrined in the Treaty. The Commission also proposed that the Treaty be amended to incorporate the coordination of economic policies more fully within the framework of interinstitutional cooperation guaranteed by the Community method. Lastly, the Commission put forward proposals for addressing in full the need for unitary representation of the euro in international organisations.
Those, ladies and gentlemen, are the proposals we put forward within the Convention. However, there is nothing to stop us adopting some of those proposals as of today. Indeed, the changes are of great importance now and they will become even more important with the impending enlargement of the Union. We therefore call upon the Council to consider these proposals as a matter of urgency. In the meantime, we will continue to uphold the Pact's current rules staunchly, fulfilling our responsibility to propose the improvements we regard as appropriate when and where this proves necessary.
I am especially grateful to Parliament for giving me the opportunity today to discuss an issue of such vital importance before the representatives of the peoples of Europe. European monetary and economic policies cannot and must not be discussed behind closed doors. A democratic Europe, the democratic Europe we all want must be a Europe where the policies that affect wealth, employment, growth and development are an essential part of open political debate.
Within the Convention, the Commission has made every endeavour – and will continue to do so – to point out intelligent ways of establishing a centre of responsibility and authority in the system for the coordination of European economic policy. I call upon you, ladies and gentlemen, to support these efforts.
The Stability and Growth Pact has been and remains extremely important for Economic and Monetary Union. The Commission, as the true, faithful guardian of the Treaties, has carefully monitored its implementation and will continue to do so in the future. As the Italian Prime Minister who promoted and approved the Stability and Growth Pact and led the country into the single currency, and now as President of the Commission, I am a committed, firm believer in the value of the rules that underpin Economic and Monetary Union and the Stability and Growth Pact. I am a staunch defender of these rules, this Union and this Pact.
Economic and Monetary Union has brought tremendous benefits both for the countries subscribing to it and for the other European Union Member States. Gone are the days of the huge deficits common in the 1990s. Gone are the days when national currencies were exposed to the ups and downs of speculation.
Along with these benefits, however, Economic and Monetary Union brings specific responsibilities. Responsibilities for everyone – Member States, European institutions and ordinary citizens. With a single currency, the euro, each Member State's growth and jobs will depend not only on what is now our common monetary policy but on their own fiscal policies too.
Stability is the prerequisite for growth and employment in Economic and Monetary Union. The Stability and Growth Pact has been the cornerstone for promoting and managing the culture of stability so successfully introduced with the Maastricht criteria.
Nevertheless, awareness of the extraordinary things the Pact has already brought about and will continue to bring about in the future should not blind us to the limitations of the institutional framework in which we have to apply it. Still less does it mean enforcing the Pact inflexibly and dogmatically, regardless of changing circumstances. That is what I called – and still call – ‘stupid’.
I do not think that it is the role of the Commission or of myself as President of the Commission to apply rules in that way. Neither the Commission nor myself have been appointed to enforce rules blindly, ignoring their limitations. The European citizens have a right to be informed, and we have a duty to tell them what we think is right, what we think works, and what, on the other hand, we think could and should be improved."@en1
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