Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-10-12-Speech-3-093-000"
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"en.20111012.14.3-093-000"2
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"Mr President, honourable Members, let me thank you for a very substantive and serious debate which certainly reflects the depth of the current crisis in Europe and how it is affecting our citizens. The financial market turbulence which stems from the sovereign debt crisis is having very negative ramifications on the banking sector and its lending capacity and, even more significantly, is taking a very heavy toll on economic growth and job creation in Europe. That is why it is essential that we build up and implement a comprehensive strategy in order to overcome this crisis.
Thirdly, we need to restore confidence in the EU banking sector through a coordinated, targeted effort of recapitalisation in conjunction with the other elements of our overall strategy. This calls for the combined efforts of the Member States, the European Banking Authority and the European Central Bank, alongside the Commission and Parliament. Such a bank recapitalisation strategy must necessarily mean that banks which do not currently retain the necessary capital should present recapitalisation plans and implement them as swiftly as possible.
Here, banks should turn first to private sources of capital, including through restructuring and conversion of debt to equity instruments. If necessary, the national governments should provide support, and if such support is not available, then recapitalisation should be funded via a loan from the EFSF. Any recapitalisation from public sources should be compatible with the EU rules on State aid. We are ready to extend the applicability of the existing State aid framework for bank support beyond 2011.
Finally, on the basis of the newly adopted six-pack – for which I wish to thank you warmly – and with regard to fiscal and economic surveillance, we need to strengthen the stability orientation in our economic policy making. I count on your support for the firm implementation of the new instruments and the toolbox from day one, which should be in mid-December or, at the latest, on 1 January 2012. However, we should also be ready to look further ahead and to develop a vision and a road map for more effective economic governance. A long-term vision must combine discipline with integration and, in that context, we are also working on the report on options for the Stability Bonds, to be ready before the end of the year.
So it is encouraging to find that we – that is, not only Parliament and the Commission, but also the Polish Presidency – see eye to eye on what needs to be done to overcome the crisis. This is a major joint effort for you, for us, and for governments and oppositions in all the Member States. I count on your support and also on your efforts in terms of communication. We have only a few days to win the necessary public and political support for this kind of comprehensive strategy for a truly European way forward. Let us do it together and let us do it now!
Some of you have said you want to see our proposals more precisely on paper. I understand that very well, but I can tell you today that we have adopted a road map for stability and growth, which presents a comprehensive but focused strategy for overcoming the economic and financial crisis, and includes several concrete policy objectives. Of course, many of these need to be further worked out in consultation with the other institutions – not least with Parliament, but also, for instance, with the European Banking Authority and the European Central Bank – as well as the euro area Member States and other Member States.
Many of you may remember, I hope, how the Commission called, back in January in our annual growth survey, for a comprehensive response to the crisis. That has not quite materialised. We were actually criticised for daring to make proposals which, according to some people, were not within our competence. Now our proposed strategy is based on those same broad outlines but is, of course, supplemented with new, strong elements that go beyond what we proposed in January.
Honourable Members, we have three immediate challenges which are very clearly outlined in this road map for stability and growth. First, as many of you said, we need to respond decisively to the problems in relation to Greece. The continuing doubts over Greece have contributed very significantly to undermining confidence in the financial stability of the euro area as a whole. They must be immediately and definitively removed, and that will require a decision on a sustainable solution for Greece within the euro area, with an effective second assessment programme based on adequate financing through private sector involvement alongside the public sector, and with robust implementation and monitoring mechanisms.
Mr Lambsdorff commented favourably on our proposal and said he had already been in favour of such a line at an earlier stage. I think it can only be a good thing if we have a convergence of views. As I see it, we now have to finalise this kind of sustainable solution.
Ms Jaakonsaari called for a broader political consensus in Greece, and I fully agree with her. A broader political consensus is essential to support the efforts of assessment and economic reform for the benefit of Greek citizens.
Secondly, we need to enhance the euro area’s backstops against the crisis. The euro area must be fully equipped with financial firewalls sufficient to contain the current crisis. Recent decisions to create the EFSF and the permanent ESM have gone a long way to building these instruments, but they still need to be completed and complemented.
It is now essential to make operational the decisions taken in July without delay, and to increase the flexibility and effectiveness of the EFSF in order to build a really strong financial backstop. This applies particularly with regard to the possibility of precautionary programmes which are pre-emptive in nature, and to improving the capacity of the EFSF to intervene, by purchasing government debt, in primary markets and to intervene under appropriate conditionality in secondary markets where exceptional market circumstances and risks to financial stability exist.
Moreover, the power of these backstop mechanisms need to be enhanced by maximising the utilisation of EFSF capacity without increasing the guarantees that underpin it, and within the rules of the Treaty of Lisbon. Early introduction of the European Stability Mechanism would also reinforce confidence in the crisis-resolution mechanism and would bring the advantages of a more robust permanent instrument. Efforts should therefore be made to accelerate the technical preparation and ratification procedures in order to have the ESM operational by, let us say, mid-2012."@en1
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