Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-04-07-Speech-3-013"
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"en.20100407.4.3-013"2
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"− Mr President, honourable Members, dear colleagues, today I report back to you on the first formal meeting of the European Council that I have had the honour to chair.
The mechanism respects the Treaties and meets with overall agreement of the Member States, of the Commission and of the Central Bank. Consequently, the Greek Government has not needed to request any financial support, though we will continue to monitor very closely the situation.
Let me just say that the IMF participation initially gave rise to some apprehension on the basis that it could appear to be external support for a euro area unable to solve its own internal problems. Upon reflection, however, the view prevailed that the International Monetary Fund is, after all, financed to a significant degree by European money, so why should European countries not be able to draw upon its facilities? We have set up and financed the IMF for this very purpose and it would be strange not to make use of it and its expertise. Close cooperation with the IMF appeared therefore to be acceptable, certainly in an operation consisting of a majority of bilateral euro-loans.
Two further aspects of the statement have given rise to much comment.
First, the European Council wants to draw lessons from this crisis. That is why it created a Task Force under my authority. That Task Force will be established in close cooperation with the Commission and include representatives of the Member States, the rotating presidency and the European Central Bank. It will present its conclusions before the end of this year. The European Council will take the final political decisions. I intend to give a high priority to this work. The Greek case highlighted the limitations of the current fiscal surveillance mechanism in the euro area. We must explore all possible ways to reinforce fiscal discipline and propose a framework for crisis resolution. A strengthening of our mechanisms is essential. What legal texts may eventually require amendment is an open question that must be explored, while remaining aware of the different procedures that would be required to amend the various legal instruments.
The Task Force has to deal with two aspects of the problem, revealed by the recent crisis: responsibility – how to prevent such budgetary indiscipline happening again – and solidarity – how to avoid improvisation, if a financial crisis eventually happens again in a Member State.
The Greek case has also highlighted the need to look at the issue of divergences of competitiveness inside the eurozone and the Union, on which we began a discussion that will be pursued in June and is an aspect of the eurozone economy to which we have paid insufficient attention. Without more economic convergence, we will jeopardise the common currency and the common market. This discussion is crucial. Budgetary discipline is not sufficient. Behind budgetary problems lie economic problems.
The second item giving rise to comments was the paragraph in which we stated that ‘we commit to promote a strong coordination of economic policies in Europe. We consider that the European Council must improve the economic governance of the European Union and we propose to increase its role in economic coordination and the definition of the European Union growth strategy.’
Some have commented on the fact that the French version of this statement refers to ‘
’ instead of ‘governance’. Let me make it very clear that there is no divergence here in what we are seeking to achieve. We want to make full use of the European Council as the body in which we can coordinate both Union and national instruments to improve our economic performance. The European Council is neither the executive nor the legislative power of the Union. The mission of the European Council, according to the Treaty, is to give impetus and guidelines to the political direction of the Union. This applies also to economic policy. That indeed is what the bulk of the European Council meeting focused upon when we turned to examine the Europe 2020 strategy.
Here, I can report steady progress, which we will pursue further at the June European Council. Based on the proposals of the European Commission – and I would like to pay tribute at this point the work of President Barroso, – we have already identified five key targets on which our efforts should focus:
First, bringing the employment rate up to 75%, notably through the greater participation of youth, older workers, low-skilled workers and the better integration of legal migrants;
As you know, that meeting had on its agenda our economic strategy for Europe 2020, and our strategy for global negotiations on climate change. That agenda was supplemented by having to deal urgently – for the second time in two months – with the situation in Greece and related questions concerning the eurozone. Allow me to start with the latter point.
Second, improving the conditions for research and development, in particular with the aim of bringing combined public and private investment levels in this sector to 3% of GDP;
Third, reaffirming, and integrating into our economic strategy, the climate change targets that we have already committed to achieve by the year 2020;
Fourth, improving education levels, in particular by aiming to reduce school dropout rates, and by increasing the share of the population having completed tertiary or equivalent education;
Finally, promoting social inclusion, in particular through the reduction of poverty.
More work needs to be done on these targets, in particular by developing appropriate indicators – and Member States now need to set their national targets, which will be differentiated according to national situations. Some of these targets are reflected in EU legislation, whilst others are not of a regulatory nature, but represent a common endeavour to be pursued through a mix of national and EU level action.
The last two of these five targets – education and social inclusion – gave rise to some comment. They do, of course, represent key aspects of what has been called the ‘European model’ of society, where market forces are tempered by social commitment, and indeed by environmental awareness. However, some have pointed out that education is a national or indeed, in many states, a subnational or regional responsibility. That is true – and there is no intention whatsoever to change that fact. What it does represent is the need for all levels of government to work together on our common strategy, with each taking responsibility for their part in our common effort.
As regards social inclusion and the reduction of poverty, some have said that this is an outcome, not a means. It will be the result of our efforts, not an instrument. Although I understand that argument, social inclusion is a competence of the Union according to the Lisbon Treaty, and it is also a key instrument for improving our overall economic performance, as well as for securing public support for what we want to achieve. It corresponds to the profound aspiration of peoples for fairness in our economy. We ignore it at our peril.
Besides identifying these five targets – on which further work will be necessary – the European Council underlined that rapid progress is required on strengthening financial regulation and supervision, both within the Union, where the European Parliament has important work before it concerning financial regulation, and in international fora such as the G20, to ensure a level playing field at the global level.
Progress is particularly needed on issues such as capital requirements; systemic institutions; financing instruments for crisis management; increasing transparency on derivative markets; considering specific measures in relation to sovereign credit default swaps; and implementation of internationally agreed principles for bonuses in the financial services sector. The Commission will shortly present a report on possible innovative sources of financing, such as a global levy on financial transactions or on banks. We have to find solutions so that a new financial crisis cannot happen again, but we also have to address the moral crisis that was at its root.
The European Council went on to have a discussion on climate change and on how to refocus our efforts after Copenhagen. A global and comprehensive legal agreement remains the only effective way to reach the agreed objective of staying below a 2°C increase in global temperatures. We agreed to remain ambitious and constructive in the international negotiations, but we agreed also that a stepwise approach should be followed, building on the Copenhagen accord. The pledges made on emission reductions are insufficient to meet the crucial target of 2°C. The negotiations need a new dynamic. The next meeting, in Bonn, should set the road map for taking the negotiations forward. COP-2 in Cancun must produce concrete decisions and must address remaining gaps. The Union and its Member States will implement their commitment to provide EUR 2.4 billion annually over the 2010-2012 period for fast-start financing, and we remain committed to jointly mobilise USD 100 billion per year by 2020 to help developing countries fight climate change.
How, in what circumstances and by whom financial support should be provided, if needed, to the Greek Government, was the subject of much debate in the run-up to the European Council. Indeed, prior to our meeting, there appeared to be a wide divergence of views. This is really not unusual in the history of the Union, certainly when so much is at stake – the key point is that we reached agreement. The Union’s capacity to find a compromise remains intact. It is fundamental to our existence.
In this context, we had a discussion on how to address key partners in the world introduced by the Vice-President of the Commission/High Representative Cathy Ashton, whose pertinent analysis was well received.
We will raise these issues not only within the United Nations process, but also in other settings in order to help build the necessary momentum. We will pursue internal work as well. We will hold a dedicated European Council debate on energy policy, and on how to shift towards an efficient, low-carbon economy, exploring all its aspects, including security of supply.
Mr President, honourable Members, I can conclude that the European Council has made clear progress and has avoided huge and damaging pitfalls that could have set us back a long way.
Curiously, some have suggested that my own role in this process was merely that of a spectator whilst others have accused me of being a power-grabbing dictator. Let me assure you that I am neither. The permanent President of the European Council has to be a facilitator and a builder of consensus in an institution that can only work by finding the necessary and sufficiently ambitious compromises.
I had hoped that my start as permanent President of the European Council would have been easier. The two coming years will be difficult. I am fully aware that the worst of the recession is over, but not the problems.
We reacted efficiently in dealing with the initial financial crisis, but it is often more difficult to stay united and act consequently once the storm is over. This means there can be no ‘business as usual’ over the coming two years. That will also be the case for the European Parliament.
In the event, a large number of bilateral contacts between Member States and myself, the conclusions of the meeting of the eurozone ministers on 15 March, proposals by the Commission on loans by the Member States and intense negotiations between France and Germany helped pave the way to finding a compromise acceptable to all.
I convened and chaired a meeting of the heads of state and government of the eurozone countries and presented to them a draft statement which, after being amended, was accepted unanimously.
The parts of the text for which the European Council is competent were discussed and agreed by the European Council itself. The European Central Bank also agreed.
In the statement, we reaffirm that all euro-area members must conduct sound policies in line with the agreed rules and should be aware of their shared responsibility for the economic and financial stability of the area.
We fully support the efforts of the Greek Government and welcome the additional measures announced on 3 March, which are sufficient to safeguard the 2010 budgetary targets. Those measures were requested by the informal European Council of 11 February.
On the basis of the mechanism of solidarity we put in place, we stand ready, should market financing prove insufficient, to step in and provide support through a European-led operation of bilateral loans from the euro area Member States, in cooperation with the International Monetary Fund."@en1
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