Local view for "http://purl.org/linkedpolitics/eu/plenary/2009-03-25-Speech-3-007"
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"Ladies and gentlemen, I would like to welcome you all on the occasion of the regular report from the European Council President following the Council’s Spring Summit. First of all I must apologise for not being able to stay through to the end of the debate as usual. The Deputy Prime Minister, Mr Vondra, will stand in for me in the second part, following the speeches of party representatives. The reason I must return to Prague, as already stated by Mr Hans-Gert Pöttering, is the unprecedented obstruction from the socialists which we have been confronting throughout the Presidency and about which I have been quite open. If the government falls it will definitely not threaten the Presidency and the fact that the socialists did not care that the Czech Republic was presiding over the European Council and refused even the most basic cooperation will be damaging mainly to social democracy. The Presidency should not suffer through this because I am certain that what I said here in my opening speech in the European Parliament about how we would try to moderate the discussion and achieve a compromise is something that we have undoubtedly managed. The Spring Council provides proof of that. In my country it is customary when someone is speaking for others not to interrupt but it seems habits are rather different here.
The third area concerns external relations. The European Council formally approved the Eastern Partnership initiative as an addition to our foreign policy or immediate neighbourhood policy. Given that there are icebergs to the north and the Atlantic Ocean to the west, then it is in the south and east that our neighbours live and it is there that the countries which could potentially threaten both our economy and our social and security situation are situated. The Eastern Partnership was an objective of the Czech Presidency and I am delighted that it has been approved with a firm commitment of EUR 600 million. I would like to pre-empt questions about the participation of Belarus. We are considering this. Belarus has made some progress and the suspension of the ban on granting visas to members of the regime is being extended. At this moment we are holding the door open to Belarus but no decision has been taken. If the Member States do not agree to this and there is no decision from all of the 27 Member States then President Lukashenko will simply not be invited, although both the opposition and the neighbouring states are recommending that we do invite him. I feel that this is a question I cannot respond to if you ask me at this point in time, and that is why I am pre-empting it.
I informed the European Council about the meeting and the informal summit with President Obama on 5 April in connection with the fulfilment of other priorities, specifically the transatlantic relationship. The organisational details have still not been finalised but you will all be informed in detail. The summit will be arranged around three main thematic areas: discussions uon the G20 summit, cooperation over energy and the climate where the EU wants to remain a key player just as the US does, and external relations and the geostrategic area from the Mediterranean Sea to the Caspian Sea, which means Afghanistan, Pakistan, the situation in Iran and of course the Middle East. The summit with the US is important but we should clearly avoid inflated expectations as there is no coming of the Messiah. The US has a host of domestic problems that must be resolved and that is precisely why it is a good thing that Barack Obama will speak in Prague about his fundamental view of this year, in which he will of course want to send a message to EU citizens about the main positions and the main aims of the new US administration.
There were many other issues at the European Council about which I am ready to respond. If I have left something out I will add it in the discussion following the speeches of the party leaders. We will probably not meet again like this because you are leaving to launch an election campaign, but I would be very pleased if you could resist launching it here and now. I hope that the struggle for seats in the European Parliament will be fair and that you will meet again after the elections and continue your work.
Allow me to proceed – keeping strictly to the conclusions of the European Council – to the issue of why I am actually here today and why we took certain steps at the European Council. Before that, however, I would like to comment on the Tripartite Summit with the social partners which preceded the Council meeting. There was a relatively strong turn-out. Apart from myself and European Commission President José Manuel Barroso the next two prime ministers also participated, in other words Mr Reinfeldt of Sweden and Mr Zapatero of Spain, and following the meeting I was very buoyed up and very surprised at the consensus between the social partners not only over the aims of the Presidency but generally over solutions to the developing unemployment situation resulting from the global financial crisis.
If anyone is interested I will speak more about the Tripartite, but we agreed on three basic principles, which are to enable much greater flexibility in the labour market along with labour mobility and to put much greater efforts into boosting levels of education and skills among the workforce in such a way that they can be brought to bear on the labour market, etc. The Spring European Council was actually the second meeting of Heads of State or Government that we have organised but it was nevertheless the first properly formal summit. The topic attracting the greatest attention was of course the question of how to resolve the current economic crisis. I completely reject assertions that we are doing little in the way of more profound measures. I will quote one figure: EUR 400 billion. This EUR 400 billion amounts to 3.3% of EU GDP and represents an unprecedented step and together with the automatic stabilisers which the EU has and the US, for example, does not have, I believe that the example quoted today by José Manuel Barroso is highly informative. A worker dismissed from Saab in Sweden enjoys social standards that are completely different to those of a worker dismissed from General Motors somewhere in Chicago and the governments in these two cases have completely different approaches, as the automatic stabilisers multiply the EUR 400 billion to something substantially higher and give us an undisputed advantage over the US in this regard. The fundamental support for the agreement from all 27 Member States confirms the validity of the Lisbon Strategy, as it is one of the four pillars upon which the entire Strategy actually rests.
Gordon Brown was here yesterday and he had an opportunity to explain clearly the approach of the 27 Member States, the mandate for the G20 summit and the three other
pillars to this Strategy. We agreed that all of the short-term measures must be temporary and that is how we view them. The medium and long-term priorities and the Lisbon Strategy objectives were confirmed and the short-term ones must follow the same line. I would like to say openly that the European Council was more or less horrified by what US Finance Secretary Timothy Geithner had to say about permanent measures. Not only is America repeating the errors of the 1930s in the form of massive stimulus packages, protectionist tendencies and calls for protectionism, the ‘Buy American’ campaign and so on. The combination of these steps and – what is worse – the initiative to make them permanent measures, amount to a road to hell. We should take a look at the history books, which have clearly been gathering dust. I consider the greatest success of the Spring Council debates to be a clear rejection of this route and this short-sighted approach. I categorically reject the claims of European Socialist Party Chairman Poul Nyrup Rasmussen that the European Council has done little to combat the crisis and that we are waiting for the US to rescue us. Not only is the path taken by the US itself discredited by history but also, as I said earlier, social security levels and the general provision of social needs to ordinary people are strikingly different in the US and at a far lower level. The US path is dangerous because the Americans will need cash to finance their social stimulus packages and they will obtain it easily since there is always someone willing to purchase US bonds. However, this puts market liquidity at risk, taking liquidity out of the global financial market so that the sale of other bonds, possibly European ones and definitely Polish, Czech and perhaps other ones too, will be put at risk as there will be no cash in the system. This approach is causing concern and in my opinion it will be a topic of discussion at the G20 summit. The G20 summit will provide just one of the opportunities for us to talk about this. The discussion may continue later at the informal summit of the 27 Member States with the US administration and Barack Obama in Prague. I firmly believe that we will find a common approach with the US because we definitely do not want a confrontation between the US and Europe. In today’s world - and the crisis has demonstrated this to us once again - no economy exists in isolation and the level of interconnectedness is very high, which means that in times of crisis we all share the problem and we can solve it only by acting together.
The second pillar of the agreement, in terms of seeking a solution to the current crisis, is preparation for the G20 summit. The documents drawn up by Gordon Brown and his administration are excellent and you had an opportunity to familiarise yourselves with them yesterday. The three-pillar approach involves a solution for the financial sector and fiscal stimulus packages, regulating and – I would say – correcting the defects within the system and regenerating global trade, which means pressing for renewed discussions with Doha within a WTO framework. This approach coincides precisely with the specific make-up of the solution put forward by the European Council which has won unanimous consent. I would also like to applaud the agreement for the fact that we finally provided a concrete number in respect of increasing the disposable resources of the International Monetary Fund and we set this specific obligation at EUR 75 billion. The 27 Member States share a unified position, a single voice and a common aim ahead of the G20. I regard this as the greatest success of all, because the entire European Council meeting was a test of European unity, European solidarity, European values and the unified European internal market. If any of these were undercut, then we would emerge from this crisis in a weaker state. On the contrary, I believe that if we respect these fundamental attributes we will emerge in a stronger state. There is no reason for pessimism ahead of the G20 discussions, as Mr Rasmussen fears. I believe that we have all understood the need to act in solidarity and to cooperate, as Graham Watson from the Group of the Alliance of Liberals and Democrats for Europe confirms.
The current crisis, as we all know, is a crisis of confidence. The third key area for resolving the crisis is therefore the restoration of confidence. It is not enough simply to pour money into the system. We tried that and the banks are still not lending. The banks must start lending money but they will not if they do not have confidence. The liquidity that is available to them has not solved the problem. Confidence can neither be decreed nor purchased. Within the framework of restoring confidence we have therefore taken a further step towards strengthening confidence by doubling the guarantee framework for countries outside the euro zone to EUR 50 billion just in case it is needed. We have agreed even on this. We even agreed that it was necessary to avoid a blanket approach and to proceed on a case-by-case basis for each bank and each country and we considered the one-size-fits-all approach to be dangerous at this point in time. Markets are nervous, reacting immediately, excessively and negatively to every signal. We therefore need better regulation. I would emphasise that ‘better’ might mean the introduction of regulation where none has existed so far. This is where you step in, ladies and gentlemen of the European Parliament. We would like to reach agreement – and there are signs that this is possible – over legislative acts which in essence would fulfil our vision and our ideas on better regulation of rating agencies, insurance company solvency, capital requirements of banks, cross-border payments, electronic money and so on. I would be delighted if you could approve these regulations during your session and if they could take effect and be implemented immediately. I warmly welcome, as we all do, the Larosière report, which has a brilliant analytical section and a very instructive implementation section, and in this sense the European Council has reached clear conclusions. Perhaps the most important task of the Spring European Council was to assess progress to date on the implementation of the renewal plan as set out by the Council in December. It is precisely here that most of the noise and criticism is centred – in my view undeservedly. The plan is allegedly deficient, slow and unambitious. I would like to set the record straight. I have already mentioned the EUR 400 billion or 3.3% of GDP, not including funds for recapitalising banks and guarantees amounting to more than 10% of GDP, which is all the EU can afford at the moment. This will still make a very significant impact on the Stability and Growth Pact and a very significant impact on public debt and on how matters are settled in the ‘day after’ period, in other words after the crisis has passed, to put it in simple terms. I believe that even the EUR 5 billion which was finally approved, and which forms only a small part of the enormous sum of EUR 400 billion, is the result of very difficult negotiations affecting many countries. This is firstly because a sum of money does not constitute an anti-crisis measure if it is not drawn down in 2009–2010. It is also true that there is no transparent system for assessing projects, no proper list of these projects and that there are some things missing and others of which we have too much. We finally reached agreement after very complex negotiations and here the Czech Presidency clearly played a dominant role in that it brought about the agreement to approve the EUR 5 billion and to send the money to you in the European Parliament, so that you could deal with it.
The renewal plan has a Community aspect of course, in respect of which about EUR 30 billion is available today, as well as a national aspect, in respect of which every Member State within the framework of the plan is implementing its own fiscal stimulus. In my opinion the key issue agreed on by the European Council is the validity of the Stability and Growth Pact. If we want to come through this crisis with a Union that is intact, undamaged and reinvigorated then we must respect our own rules. In my opinion it would be a great error to create new packages without ensuring that all of the national and Community procedures had been initiated, that we knew what their impact would be and whether or not there was a need for further fiscal stimulus measures and the European Council even agreed to this. If it is absolutely necessary the European Council will take further measures, but at this point we do not know whether or not we must take them as nobody knows when the crisis will bottom out or when it will end. It would be completely absurd for us to take further measures without knowing the effect of the steps taken so far with the EUR 400 billion fiscal stimulus. The plan is ambitious, diversified and comprehensive and it will solve the problems of growth and employment differently according to the situation in each country as well as problems linked to the economic situation of course.
The second major theme of the European Council was the climate and energy question. We made significant progress both in energy security and climate protection. Apart from anything else energy security is one of the main priorities of our Presidency and the need for it was demonstrated in January. The gas crisis has not been resolved. A gas crisis might be sparked off tomorrow, the day after tomorrow, in a month, next year, whenever. The proof of what I am saying lies in the fact that even the anti-crisis package of EUR 5 billion is targeted mainly, if not exclusively, at the interconnections between European countries and includes a very wide range of mechanisms and projects aimed at reducing the dependence on one supply route. We have agreed that an anti-crisis mechanism for handling a collapse in supplies must be ready by next winter in order to respond to any problems that might arise. It is more than clear that we need this. It became apparent in January, particularly in Slovakia and Bulgaria, but also in a number of other countries.
The climate debate: discussions and preparations are already beginning for the Copenhagen Conference. Both Denmark, as the host country and Sweden in the course of its Presidency will handle this matter and the Czech Presidency is already working on it intensively. We are trying to find a joint position at the European level. We are beginning to negotiate with the major players without whom the success of the Copenhagen Conference cannot be assured. These include the US and of course Japan, China and India as well as other big countries and large-scale polluters. The biggest discussion – and I would like to touch on this only briefly – revolved around whether we should now establish not only the mechanisms but also the shares of the individual EU countries in the funding package that we are providing to help developing countries - third countries - to fulfil their obligations within the framework of the climate protection fight. The decision we took was the right one. In a situation where we are negotiating with all of the major players, who for now are acting more in word than in deed, it would be very poor tactics and very bad if we ourselves established barriers and limits which the others would not respect. The negotiating position is far better if we have a free hand and this was agreed by the countries which actually tabled the last proposal, i.e. Sweden, Denmark, the Netherlands, the UK and Poland. As far as the Polish approach is concerned, of course, we respected the interests of countries that are rather wary of this mechanism as well as the interests of countries which play a leading role in matters of climate change. All countries, even those that view this as an absolute priority, agreed that we have yet to find the actual mechanism, the key and its wording, far enough in advance of the Copenhagen Conference."@en1
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