Barroso: 'Europa strijdvaardig kredietcrisis te lijf' (en)
President of the European Commission
Driving European recovery
Opening remarks of President Barroso at the press conference presenting the Commission's contribution to the Spring European Council
Brussels, 4 March 2009
Today the Commission has adopted its contribution to the Spring European Council. We are proposing a European framework for implementation and coordination. Our message is clear: There is a serious crisis but there is a way out of this crisis. Europe has the unity, the confidence and the determination to win this battle.
The crisis is affecting almost every EU household. The impact on people's jobs, mortgages and standard of living is now being felt. The crisis is starting to bite.
But we are acting to provide redress, to restore confidence.
We have come a long way in six months. Now we must intensify our work, namely in terms of coordination, in terms of implementation and in monitoring the measures that were agreed. And our framework, the proposals we've made today concentrate on four main areas; the economic, financial, social, and the global effort.
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-First in economic terms we propose driving European recovery forcefully implementing the coordinated response agreed so as to rebuilding confidence and lending,
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-On the financial sector, we propose repairing the financial markets, so as to make them future proof addressing notably some specific problems in the banking sector,
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-Regarding the social issues we support people through the crisis and we are proposing some concrete ideas,
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-And we are of course working also working on the global scale because we need a global response.
That is the purpose behind today's communication. It is not about more words, it is about more action.
Firstly, it is time to break the cycle of declining confidence and unwillingness to lend. We need to put an end to the uncertainty about the valuation and location of impaired assets. We need transparency and disclosure to ensure a level playing field between banks. Cleaning out the banking system is a prerequisite for a return to normal credit conditions. And we know that the problem of credit to real economy is indeed being felt all over Europe and also in many other parts of the world. Recapitalisation should be designed so it helps not only the home institution but also subsidiaries in other member states. The Commission Communication on impaired assets has paved the way for this. Our Communication that was by the way very well received in the Informal Meeting of Heads of States and Government last Sunday should now be taken forward swiftly and decisively because it gives us the level playing field to address the issue of the banks and the problems of impaired assets.
Secondly, we need to rebuild trust in the financial markets in general. Today we have set out a detailed roadmap towards a European system of supervision. A system where ethics are taken into consideration. Where people can be sure that those to whom they have entrusted their money are properly regulated. The Commission today broadly endorses the de Larosière report recommendations, and sets out how to take them forward. As you know the European Commission took the initiative to create that High Level group on regulation and supervision and now we have decided to endorse in general the conclusions of that very important piece of work. We will present a European financial supervision package already by the end of May, based on those recommendations. Action is urgent. So we propose to move quickly to creating authorities at the EU level. And even before that in April we will make our legislative proposals on hedge funds, private equity and executive remuneration.
Thirdly, we need to implement the European economic recovery plan to support the real economy. 3.3% of GDP is being pumped into the system to boost the economy now and invest in a sustainable future. 25 billion euros is coming from the European budget. I also want to see the unspent money of that budget used namely on energy interconnections. We are also front-loading structural funds. We are starting to stabilise the system. Now we need to make people and business feel the effects on the ground. Member States must act in a coordinated manner. To take one example: our Communication on the automotive industry has spelled out the way to do this for the car sector. Today's Contribution to the Spring European Council delivers the first comprehensive overview of the different measures taken in Member States in different sectors aimed at different targets. This overview shows significant convergence between measures to alleviate financial constraints on business, on infrastructure investments, and on measures to support household purchasing power. I think if you look at the annex it is very instructive, because we are for the first time presenting a comparison, a benchmark of the measures that are being taken in each of our Member States in different fields. Different kind of measures, of course, because situations are very different, but we believe they follow under the same basic agreed principles.
Successful recovery will depend on ability to make the most of both internal and global markets. If we use the Single Market to the full then we have the strongest possible platform for recovery. In 2006 alone, Europe was richer by 240 billion euros or 518 euros for every EU citizen because of the single market. Intra-EU trade is up by a third. Today we set out the principles that should shape the European recovery including a shared commitment to openness and a level playing field internally and externally. We are very much encouraged by the results of our informal Summit on Sunday where there was a strong commitment to defend the internal market. European businesses are now European players; support mechanisms must be designed in a way that allows them to draw on this strength. Going national is going back, going European is moving ahead. We will monitor this very closely.
Fourthly, we need to do all we can to cushion the impact of this crisis. The labour market is now deteriorating rapidly. We need to manage the human cost of the recession and avoid the deepening of a social crisis. We need to keep people in employment by providing financial support to temporary flexible working-time arrangements. We need to protect jobs, but where they are lost we need to invest in re-training and skills upgrading. I am happy that the Czech presidency accepted the idea of the Employment Summit in May in Prague and I believe that this Employment Summit should address structural weaknesses of the job market, reduce the social impact of the crisis, and build a new consensus with the social partners. A practical example, we will want to renew European Globalisation and Adjustment Fund. We will want also for the preparation of this Employment Summit to actively involve the social partners. In fact some time ago I received the social partners in the European Commission in a meeting of the College and I will propose that social partners be invited to the Employment Summit in May.
Finally, a global crisis needs indeed a global solution. Today we put on the table our proposal for a European response for the G-20 meeting in London. Europe will speak with one voice in London. We need to improve the global financial and regulatory system. We need global institutions for the 21st century. And we need to support balanced growth in global markets through coordination of fiscal measures, promotion of open trade, promotion of development to keep our targets regarding the Millennium Development Goals, and of course a multilateral initiative also on trade finance. These are concrete proposals that we are putting forward in London. And I hope that the Spring European Council will agree on a common position for London. So that when we go there, the Commission and some European Member States, we will speak for the whole European Union.
To conclude, we have set the right course through the most violent economic storm for decades. We must have the confidence and determination to see it through. Europe has shown as never before that there is a capacity to act together, for example on banks and on the fiscal stimulus. In the new phase we are now entering, we will do even more to help our citizens through this crisis and to build our common future. I really believe that if there is a political will on the side of the Member States we will achieve our goals.