Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-11-18-Speech-2-265"
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"en.20081118.29.2-265"2
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"Mr President, Mr President of the Commission, ladies and gentlemen, the effects of the financial crisis on the economy are becoming more clearly apparent. The Commission’s autumn forecasts predicted a significant downturn in growth in the European Union for next year. Several Member States have already entered into recession, and, in 2009, economic growth could, at best, remain at zero in the European Union.
It must also, in terms of Community legislation, quickly take up its responsibilities by speeding up the adoption of the measures proposed by the Commission regarding the supervision and regulation of banks and rating agencies.
The French Presidency knows that it can count on the full and active involvement of your Parliament and its groups, and for this I am grateful to their chairmen. Europe will thus be able to assume a position of strength at the next international meetings scheduled for 2009.
These initial results in the financial sector are evidence of the effectiveness of Europe’s united approach. Nonetheless, they are only one part of the European response to the crisis. Indeed, this united approach must also inspire the European Union and its Member States to respond to the effects of the crisis on economic growth.
The Council Presidency stands firm in its conviction on this issue. Just as in the financial sector, the Member States will not achieve any concrete results in supporting growth unless they cooperate closely with each other, and, beyond that, with their major international partners. The G20 summit delivered a strong message in this respect. We have to involve, on a global scale, all the macroeconomic instruments in order to avoid a long-term slowdown of the economy.
As the situation has developed, the central banks have reacted quickly by reducing interest rates. The Presidency welcomed the European Central Bank’s robust decision, at the beginning of November, to reduce its interest rates by 50 basis points, and on several occasions we have applauded the ECB’s action in response to the financial crisis and its active participation in the deliberations of the Eurogroup and the European Councils.
With regard to budgetary matters, the G20 has indicated that significant room for manœuvre should be used wherever it exists. The Member States of the European Union have responded to this call by saying that we should use all the room for manoeuvre permitted by the Stability and Growth Pact when there is a sharp turnaround in the economic cycle.
The French Presidency, working closely with the Commission, intends to do everything possible to ensure that national plans in support of the economic cycle are closely coordinated with Community initiatives so as to maximise the economic effects as a whole.
We are expecting, Mr Barroso, new proposals by the end of the month. It is a matter of finding responses that can be applied at Community level and of harnessing all instruments with the capacity to help support the European economic cycle. Certain European budget appropriations – I say this because I was present at the debate in this House – could be rapidly mobilised to respond to the slowdown.
Furthermore, while ensuring the proper functioning of the internal market, we should also ensure that all the flexibility of European state aid rules is used so that the Member States and the European Union give effective support to those economic institutions that are most threatened.
We also want the European Investment Bank to be fully involved in the efforts to support the European economy. Resources, as you know, have already been made available to ensure financing for small and medium-sized enterprises. The support measures should be part of a more global plan, making it possible, in particular, to support the sectors most at threat, as the entire EU car industry is today.
Furthermore, financial tensions are beginning to have repercussions on the financing of economic institutions. Public authorities within the Member States are making every effort to ensure continuity in the financing of businesses and households facing the growing risk of credit restrictions.
These additional efforts at Community level will need to be actively enhanced at Member State level by means of closely coordinated national recovery measures. Looking ahead to next month’s European Council, the Presidency intends to lead the discussion between the Member States on the priorities for such recovery action. Several Member States have said that they were considering support measures for certain sectors of industry.
Such measures must be the result of consultation between partners in order to be fully effective and to preserve the integrity of the internal market, and the Ministers for Economic and Financial Affairs, together with Commissioner Almunia, will prepare the European Council discussion on these themes at their next meeting on 2 December.
Mr President, Mr President of the Commission, ladies and gentlemen, the European Union has shouldered its responsibilities effectively within a few weeks in the face of an unprecedented destabilisation of the world economy. Europeans have managed to unite in the face of immediate danger in order to take effective and urgent action. We must learn all the lessons from this action, which has been crowned with success. This European unity must be preserved so that we continue to act together, so that, faced with our partners and alongside our partners, we press for a fundamental reform of the financial regulatory system, and so that, together, we deal with the turnarounds in the economic cycle.
In this way, we – Council, Commission and Parliament – shall prove together that the European Union has the means to effectively take control of its destiny and to do what all Europeans expect, that is, to act as a global player.
Europe and its international partners are therefore facing the worst financial crisis since 1929 and they must face up to an economic slowdown on an exceptional scale. As you know, since our last debate on 8 October, the Council Presidency has pursued only one objective and held only one conviction: the essential unity of Europeans in the face of the global financial crisis.
Faced with the threat of a real breakdown in the European financial system, the French Presidency has succeeded in promoting a European action plan to support, as a matter of urgency, financial institutions threatened by the crisis, and together the Member States have decided to guarantee interbank financing and to recapitalise the banks.
The effectiveness of this joint European action was also demonstrated last weekend at the G20 summit meeting of Heads of State or Government in Washington, attended by President Barroso. Europe, represented by the President of the Council, President Sarkozy, and by the President of the European Commission, Mr Barroso, initiated this historic summit. It demonstrated great unity in giving the Council Presidency, on 7 November, clear positions to defend with our major partners.
We can now feel very pleased about the outcome of this approach, since the summit’s conclusions keep the main issues that Europe upholds – that is, transparency and responsibility – central to the functioning of the international financial system. We have also achieved positive decisions in line with the European Union’s proposals, such as registration of rating agencies, the principle of monitoring or regulating all the activities of financial institutions, and linking remuneration with the avoidance of excessive risk taking.
For the first time all the major economic and financial institutions have agreed to respond strongly in order to avoid a recurrence of a crisis of this magnitude. They have all agreed on an ambitious plan of action, which the Finance Ministers will have to spell out in detail in the weeks to come.
The European Union will obviously have to continue to bring all its weight to bear in international discussions. You know that you can count on the French Presidency to promote European unity and thereby to offer a common ambition with regard to fundamental reforms on all the issues identified in Washington. We are counting, of course, on the Czech Presidency to take these initiatives forward.
With regard to rating agencies, accounting standards, monitoring of hedge funds, the fight against tax havens, the accountability of private institutions and the reform of multilateral financial institutions, the European Union must continue to speak out strongly in order to achieve definite results."@en1
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