Difficult monetary, economic and social situation of Eurozone countries (debate) 
President
The next item is the Council and Commission statements on the difficult monetary, economic and social situation of eurozone countries.
Diego López Garrido
Madam President, we are in an unprecedented situation in the euro area, because this is the first global financial crisis since the euro has been in existence. What is happening in the euro area and in the whole of the European Union is that although it did not cause the crisis and it is not where the crisis began - we know that it began in the United States - we have suffered its effects just as much as the country where it began.
Obviously, the situation of public deficits has arisen as a result of the crisis and of positive action by governments to prevent, among other things, the collapse of the financial system. These deficits inevitably mean that governments have less room for manoeuvre in terms of their budgetary policies.
The debate concerns the economic situation, the monetary situation and the social situation. Regarding the economic situation, it must be said that the euro area as a whole has now come out of the recession and it has also avoided the risk of deflation, although there are obvious disparities in the rates of growth and growth is still not entirely sustained. We need to ensure that growth is sustained and consolidated, which is a fundamental objective of economic policy throughout the euro area, but we are no longer in a recession. The euro area as a whole is no longer in recession.
It is, however, true that job creation is falling behind. This year, there will still be severe unemployment throughout the euro area, but we are on the right path towards growth. In fact, this is one of the matters that is going to be dealt with in the informal meeting of the European Council on Thursday: the importance of growth in order to return to sustained growth, maintain the European social model and begin to create jobs once again, good-quality jobs.
Regarding the monetary system, despite the fact that there is tension in the securities markets, the European Union and its institutions have acted correctly. The European Central Bank has done its job well and is continuing to do so by gauging the strategies for bringing us out of the crisis. It is therefore reasonable for the stimuli not to be abandoned during 2010. In fact, the European Central Bank is gradually phasing out those stimuli, and is already removing some of the measures that it adopted. An example of this is removing the cash advantages granted to banks, which has been possible because the credit markets have gradually returned to normal.
It should also be pointed out that the Eurogroup and Ecofin have managed the crisis well, and have also created a supervision structure for the financial system that is going to be debated in this House. We hope that this will be one of the central elements of the political debate during the term of the Spanish Presidency.
Regarding the social situation, we are obviously suffering the consequences of high unemployment throughout the euro area. Although there are also disparities in unemployment levels across the euro area, it is undoubtedly the main issue for Europeans at the moment. They want employment, they want a return to growth, which will create employment. Not the volatile, precarious employment that may have existed in some countries of the euro area, but good-quality employment.
Among other things, it should also be pointed out that it was obviously high unemployment that triggered the 'automatic stabilisers', which resulted in unemployment aid and subsidies. In turn, these influenced the deficits that the Member States have as a result of our political and social system, which protects those in the most vulnerable situations, such as those who lose their jobs.
In the future - and this is another subject that will be dealt with on Thursday at the informal European Council meeting - there will have to be a policy of employability, which we call 'Europe 2020', as a model of growth and creating quality jobs.
To conclude, Madam President, I believe that in this case, it has been demonstrated that it has been absolutely vital to coordinate and strengthen the euro area and that it continues to be a place where there is significant monetary and economic protection. It has been demonstrated that the euro area needs to be strengthened and that it will be possible to expand it when there are countries that can meet the requirements, but that expansion is also a positive thing.
Also - and I will now conclude - it is essential that we move towards integration and economic convergence in the European Union. There are still disparities between the economic positions in the Union. We need to move from monetary union towards true economic union, as stated in the treaties. The treaties talked about economic and monetary union, and it was described as such, but monetary union was implemented before economic union.
The coordination of economic, employment and social policies is laid down in the treaties. It is an obligation and it is one of the principles, one of the lines or ideas raised by the Spanish Presidency. Coordinated public policies have been effective when they have truly been coordinated. This was the case when the European Economic Recovery Plan was made, when fiscal policies were implemented around maintaining the credibility of the Stability and Growth Pact, which was vital. It was also the case when coordinated financial policies were undertaken, for example, bank guarantees and increasing deposit guarantee funds. In short, it is about what economists call 'economies of scale' also being done at a political level, because at a political level, significant coordination produces good results.
This is the Council's vision of this difficult situation, but we are coming out of it and we need to emerge from it much more strongly and solidly. This will undoubtedly be one of the central objectives of the informal meeting of the European Council on Thursday:
Joaquín Almunia
Vice-President of the Commission. - Madam President, the Commission is concerned about the substantial economic and fiscal challenges that Greece faces. The difficult situation in Greece is a matter of common concern for the euro area and for the EU as a whole, as large and persistent domestic external imbalances threaten the macro-financial stability of the country with a serious risk of spillovers into other parts of the euro area.
The Greek authorities and the Greek people are aware of the challenge in front of them. On 15 January, the government presented an ambitious stability programme intended to tackle these issues. The programme envisages a deficit reduction from an estimated 12.7% in 2009 to below 3% in 2012, starting with an adjustment of four points of GDP this year. This programme displays an appropriate degree of ambition given the sheer size of the consolidation needed and is a front-loaded programme. In more detail, the Greek authorities have announced a package of concrete measures for 2010. Some of these measures have already been submitted to the Greek Parliament and are to be implemented shortly. Plans for the later years of the programme are less detailed at this stage.
Last week, on 3 February, the Commission adopted an integrated approach and surveillance mechanism which combines our assessment of the stability programme, a recommendation on the excessive deficit procedure to bring the budget deficit below 3% in 2012, as the government established in the programme, and another recommendation using Article 121(4) of the EU Treaty for the first time to ensure that Greece's economic policies are consistent with our broad economic policy guidelines and with the proper functioning of our Economic and Monetary Union. We have also started an infringement procedure to ensure that Greece addresses the problems that have prevented the reporting of reliable budgetary statistics until now and the Commission announced its immediate initiative on audit powers for Eurostat.
As regards the stability programme, the Commission fully supports Greece in its efforts to redress a difficult economic and fiscal situation. The measures and policy intentions outlined in this programme are an important step in the right direction. The successful large government bond issue on 25 January seems to indicate that market participants share this view, albeit at a high interest premium, and increases in the spreads thereafter also show that they remain cautious.
However, there are risks to the programme targets and the medium-term fiscal adjustment. The macro-economic scenario outlined in the programme is rather optimistic and there is some uncertainty about the underlying revenue projections, especially the estimated impact of efforts to tackle tax evasion during an economic downturn. Given recent market developments, interest and expenditure projections also seem to be on the low side. As far as the recommendation on the excessive deficit procedure is concerned, our recommendations as regard measures to be taken this year rely fully on the measures announced by the Greek authorities in their stability programme. They include measures to be implemented in the first quarter of this year, such as wage bill cuts, reduction in public employment, progress with health care and pension reforms, tax and excise duties increases and tax administration reform. Some of the fiscal consolidation measures have already been submitted to the Greek Parliament and should be implemented shortly. The Greek authorities are invited by the Commission in our proposal to the Council to present by mid-March a detailed implementation report announcing adopted measures and the calendar of the announced measures. An evaluation of the risks should also be carried out so that, in case risks materialise, compensatory measures should be put in place as necessary.
In this context, the Commission welcomes the announcement on 2 February of further measures, notably a nominal public sector wage freeze and an increase in excise duties on fuels to safeguard the budgetary target for this year, as well as the Greek authorities' readiness to adopt and swiftly implement additional measures if needed.
As regards the later years of the programme, we call for further adjustments of a permanent nature, continued tax administration reforms and an improvement in the budgetary framework. Obviously, Greece is also requested to further pursue efforts to improve the collection and processing of general government aid. Given that plans are less detailed, we propose setting up a tight reporting system in which the Greek authorities will report on a quarterly basis on measures implemented, results achieved and measures to be implemented. This tight reporting system will ensure that the plans will materialise as planned. We also adopted the recommendation to put an end to the inconsistency with the broad guidelines of the economic policies and the risks of jeopardising the proper functioning of economic and monetary union, given the continuous loss of competitiveness of the Greek economy, and the widening of external imbalances as well as by the large spread in financial markets vis-à-vis benchmark bonds.
Moreover, co-movements in spreads in other countries are also evidence of clear risks of spillovers to other Member States. In this context, Greece is expected to adopt a comprehensive structural reform programme aimed at increasing the effectiveness of the public administration, stepping up pension and health care reform, improving labour-market functioning and the effectiveness of the wage bargaining system, enhancing product market functioning and the business environment and maintaining banking and financial sector stability.
What are the next steps in this very detailed process of surveillance? Our recommendations will be discussed by the Eurogroup and Ecofin next week, and then a first report should come in mid-March elaborating on the calendar for implementation to safeguard the 2010 targets. Then, on a quarterly basis, starting in May, Greece should report on the way in which they are responding to the Council decision and recommendation. Each report will be subject to a Commission assessment. It is clear that, if there are signs that risks are materialising, additional measures would need to be implemented. Therefore, it is crucial that the Greek Government stands ready to adopt additional measures if necessary, as they have already indicated.
In conclusion, we are living in an unprecedented situation but we are facing it. Greece has adopted an ambitious programme to correct its deficit and to reform its public administration and its economy. It deserves support in this difficult task, and the Commission supports Greece. The integrated surveillance mechanism, together with the willingness of the authorities to tackle the problems, is the guardian of a successful implementation of fiscal consolidation measures and structural reforms that will put Greece back on a sustainable path. Timely and rigorous implementation of the budgetary measures and of structural reforms - and both fiscal measures and structural reforms are contained in the programme adopted in Greece by the Greek authorities - together with the tight monitoring of the situation, is the key to finding an adequate solution to the present tensions in our markets.
Corien Wortmann-Kool
The Group of the European People's Party (Christian Democrats) has taken the initiative for this debate because the problems in the euro area countries make a strong European approach very urgent. That is what we are concerned about.
In recent years, Member States have too often distanced themselves from the Stability and Growth Pact. That is why I call on the Council today, and not only where Greece is concerned, to commit itself more widely and fully to much stronger coordination of monetary policy at the informal summit meeting this coming Thursday and at the Ecofin meeting next week.
The Spanish Presidency can also set a good example in its own country, because the situation there is also urgent.
Mr President, on behalf of my group, I would like to offer my heartfelt support to the way in which the European Commission is dealing with Greece. Admittedly it is months too late, but it is absolutely necessary. The same must also apply to other countries in the danger zone. The solution lies not in providing more money from the European budget, but in actually implementing the reform plans.
I hope that you are also working on an emergency scenario, should one be necessary, and are therefore investigating all options, including cooperating with the International Monetary Fund (IMF). At the same time, we must keep a cool head because, given the extent of the budget problem, the reactions on the financial markets are seriously exaggerated. This underscores the urgent need to quickly strengthen European regulation of the financial markets.
Udo Bullmann
Madam President, Mr Almunia, during this transition period in particular, I thank you for your commitment to your previous mandate and I wish you luck in your new role. I would also like to extend this wish to your successor, Mr Rehn. I wish him courage and luck for the important tasks he is taking on.
There are three things we can learn from the present situation. The first is that what Mr Barroso has presented to us as Europe 2020 is lacking in substance. It is a long way from being sufficient to create the coherence in the European Union that we urgently need in order to prevent the situation that we are currently facing from occurring again in the future. This strategy needs substance, and I hope that the scheduled milestones in the next few weeks will provide the opportunity to improve on it. We urgently need better coordination of economic policy. The Spanish Presidency is right to emphasise this. The Presidency should not allow itself to be intimidated in this regard.
The second thing we can learn from the current situation is that some Member States are, of course, in need of modernisation and the figures are surely correct in this regard. However, there is a need for modernisation in more than one country. There are also countries that have to do more, because they are able to do more. I have no doubt that the new Greek Finance Minister, Mr Papakonstantinou, will do an excellent job and I do not know any sincere politicians who would dispute that. He deserves our trust and we should give him our support.
The third thing we can learn is that the European Union must be armed. If the markets put the euro area to the test, then Europe must be a position to respond to this and it must be possible for the response to be unconventional. If there is further speculation against individual countries, we must be in a position to make credit available under average European rating terms. That will need to be organised. We can find support for this kind of action in the Treaty of Lisbon. I would say to the Council and the Commission: be prepared for the need to negotiate.
Guy Verhofstadt
I think that, in contrast to the representatives of the Group of the European People's Party (Christian Democrats), I am not really an advocate of the intervention by the Commission.
First and foremost, I think we must recognise that what we are witnessing with Greece is also the consequence of the failure of the Lisbon Strategy. The countries have actually grown apart from each other in the last ten years. The difference between Germany and Greece has not lessened over the past decade, but increased, and this is a consequence of the fact that we have pursued a Lisbon Strategy that was much too weak.
Secondly, I also think that a tactical, strategic error has been made by the European institutions - the European Commission and the European Central Bank - by not taking immediate action. Action was taken far too late. For six weeks, all sorts of declarations were made by European leaders, who stated that the Greek leaders had to take measures, that the measures were not strong enough, or even that they had no confidence in the ability of the Greek leaders, and so forth. We have heard it all. I say to you that we, ourselves, are partly responsible for the reaction of the financial markets with respect to Greece. How can you now expect the financial markets to have confidence in a club if the members of the club themselves no longer have confidence in Greece and in the measures being proposed by Greece? I therefore think that the approach has been wrong. If the European Central Bank and the European Commission had created a package for Greece much more quickly from the outset, we would not have had any infection of the euro area of the type we are currently witnessing.
Neither should it be said that nobody was aware of Greece's problems. People have been talking about the Greek issue in the lobbies of the European Commission for three or four months and have been saying that there would be a problem with Greece at some point. That is indeed the only reason, ladies and gentlemen, that explains why there is a rate on Greece, with its 12.7% deficit, while there is no rate on the United Kingdom, with its 12.9% deficit. Therefore, this no longer really concerns the bare figures; it concerns the financial markets which, due to the fact that we, ourselves, are not exuding sufficient cohesion, confidence and solidarity, are pouncing on Greece. This situation could have been avoided by a very strong intervention by the European Commission and the European Central Bank.
A strategy or a recommendation, Commissioner: let us solve this ourselves! I am absolutely against the fact that we are bringing in the IMF, the International Monetary Fund, to solve problems in the euro area. We will solve the problems in the euro area ourselves, so we do not need the IMF.
Finally, my last point, which is about more than Greece. The present situation is a test case for the cohesion and internal unity of the euro.
Pascal Canfin
Madam President, on behalf of the Group of the Greens/European Free Alliance, I would like to tell the Spanish Presidency that we fully support its analysis of the political will to progress towards new tools of governance and towards an economic union, and not just a monetary union, as Mr Bullmann also pointed out. You will have our political group's full support in this undertaking.
In actual fact, leaving aside the Greek case, which is at stake, I believe that we need to review all the tools of economic governance of the euro area and, in particular, the Stability and Growth Pact. More than half of the Member States in the euro area no longer adhere to the Stability and Growth Pact.
Moreover, let us not forget that, until fairly recently - until the crisis - Spain was fully compliant with the Stability and Growth Pact criteria, but that did not stop it, two years later, from finding itself in a radically different situation, with a 20% unemployment rate, or from completely disregarding those criteria.
What does this mean? It means that, with a Stability and Growth Pact that is narrowly focused on public finance criteria, which are absolutely necessary but insufficient, until recently, Spain controlled its public debt and its public deficit but, at the same time, allowed its private debt to soar. There has been an explosion in private debt, a speculative bubble on the property market, and a recession on a much greater scale than elsewhere, with the result that a massive injection of public money is required. This is indeed proof that, by having a blinkered view of the Stability and Growth Pact and a view of euro area governance that is focused solely on public debt, one fails to see the bigger picture, which would make it possible to anticipate the next crisis and to prevent it.
I should therefore like to know what proposals both the Spanish Presidency and the Commission have put on the table in order, of course, to reaffirm the Stability and Growth Pact and, above all, to integrate it into a more comprehensive system.
Secondly, you say - and you are right - that public finances need to be controlled better, that a return to more stable debt levels is necessary. In your view, does that depend solely on a decrease in public spending, or does it also depend on the ability to increase certain taxes? If so, which ones? Also, what role can fiscal cooperation between ourselves play in enabling the Member States to regain some room for manoeuvre that will allow them to make up their deficits, not only by reducing expenditure, but also by regaining some room for manoeuvre so as to increase their revenues?
Kay Swinburne
on behalf of the ECR Group. - Madam President, sovereign debt spreads have widened dramatically over recent months for certain euro Member States, leading to much speculation in the markets about defaults, bail-outs and even the viability of certain Member States within the euro framework.
The EU, through the ECB, cannot impose fiscal criteria on these Member States. Nevertheless, the effects of this crisis have repercussions for the EU and the ECB in terms of having to orchestrate a solution, international confidence in the euro model and the future smooth operation of the euro sovereign debt markets.
We have spent a lot of time and energy in the last year investigating procedures, oversight, transparency and effective risk management of international capital market participants. These measures affect the secondary market in securities, but I believe there is a strong case to apply the same principles to the primary market, particularly in the unique situation of the eurozone debt-issuing members.
Specifically in the UK, Northern Rock became insolvent as it raised money in the short-term markets to fund long-term liabilities. When the market questioned the business model and refused to lend, the business model de facto collapsed. Certain euro Member States are facing the same issues right now. I propose that the ECB, whilst not having any power over budgets or capital-raising, can have an input over the debt maturity profile if it felt that a Member State is over exposed through short-term market movements.
Greece has to raise EUR 31 billion over the next few weeks. Portugal has to roll over existing debt equivalent to 17% of its GDP at a time when France also has to roll over existing debt equivalent to 20% of its GDP. The maturity profile of debt is left to Member States, but the cumulative effect of tapping the market simultaneously leaves the EU exposed in times of crisis, leading to difficulties in raising capital in the markets.
In the eurozone, perhaps the ECB should have an oversight of accumulative debt issuance and advise Member States on responsible management.
In conclusion, a simple first step would be for the EU, and specifically eurozone Member States, to have a sustainable debt maturity strategy as the absolute debt level at this time is less important than the amount of debt which is up for renewal.
Nikolaos Chountis
Madam President, ladies and gentlemen, the new Commission is starting its job with a huge lie: not only are the Treaty of Lisbon and the Lisbon Strategy not helping to protect us from the crisis; they are one of the causes which drove us into it. They have failed resoundingly.
The global crisis highlighted the boundaries, the strengths and the structural problems of the European global development model. The Stability Pact no longer exists; the crisis abolished it, as proven by the deficits and rate at which public debt is increasing in Germany, Spain, Italy, Portugal, Great Britain and Greece.
The crisis does not only concern Greece. It concerns the European Union and, because of the decisions taken, it concerns the euro area. The Left warned against and opposed these policies. Unfortunately, the Right and the social democrats are insisting on using the same tools to deal with the crisis.
With the Lisbon Strategy, we have dismantled the social state. We talk about a Europe of cooperation, while the European Central Bank is lending to merchant banks at a rate of interest of 1%, but allowing the Member States to borrow from the money markets at a rate of 6%. The European Union is following the United States in terms of its model and its military services. How is it that we accept the US credit-rating firms, such as Moody and others, as the official judges of the economic policy of the Member States and let them dictate economic policy?
We therefore need to change the Stability Pact and replace it with a Development and Employment Pact. The European Union cannot and must not compete at global level on the basis of wage costs. Finally, we must discourage the promotion of competitiveness on the basis of a deterioration in labour relations and rights.
Nikolaos Salavrakos
Madam President, earlier we heard the programming statement by Mr Barroso and his new team of Commissioners.
I personally was left with the impression that all of us who are members here are in the same boat, not the same armada. There is a huge difference.
Based, therefore, on Mr Barroso's programming statements, I look forward to the future of the Union being designed on the basis of stronger ties between the Member States, especially at economic, social and development level. However, I fear that there will be a huge increase in 'stray' capital, in 'nomadic capital' which moves and is moved on the markets. By promoting and then abandoning local markets, like a passing tornado, it is destroying the real economies and reaping profits with no real investment. The euro, of course, limited the potential for 'stray' capital to speculate on exchange rates.
That, therefore, is the reason for the attack suffered today by Greece, which needs special support. Bearing in mind, therefore, that the European Union, according to the 2008 statistics, produces approximately 38% of global wealth, I think that, in the present monetary crisis, the European Union failed or did not wish to exert its powers of economic intervention on the global financial markets.
I wish to send a message both to this Parliament and to all my fellow members; a message from Schumpeter. There is a creative destruction which will leave Europe, the European currency and Greece unscathed, but which is absolutely necessary in order to demonstrate, both to Greece and the other Member States, the solidarity of the Member States.
Jean-Marie Le Pen
(FR) Madam President, ladies and gentlemen, what is happening in Greece and Portugal today, and in Spain and Ireland tomorrow, is scandalous. These same Anglo-Saxon agencies, which sat back obligingly while the rogues issued and traded in toxic assets and which did not see anything coming, are now the strictest of all towards those Member States that rushed to the aid of a financial sector that was undeserving of it.
The crisis caused by the irresponsibility of the markets and the banks, and this huge amount of aid, are directly responsible for the increase in the public deficits and the public debt that these same markets are today trying to penalise.
So much for the ethical capitalism announced by Mr Sarkozy, the European Union and the G20. The only lesson the banksters have learnt from the crisis is that the taxpayer is an endless source of resources, profits and guarantees, for rumour has it that the scale of this panic is down to a US bank, which received US Government aid, and to two hedge funds, also from the United States, which want to profit both from the exorbitant interest rates imposed on Greece and from the credit default swap market, those insurance policies on government borrowing, which themselves are the subject of independent speculation.
It will not be enough to regulate hedge funds - which you are scared to do - or the derivatives markets, as Mr Barnier is proposing. There is no point in creating a European economic government. The Twenty-Seven are in the same mess anyway, and solidarity is not an option. It is the free international movement of capital that must be called into question, otherwise there will not be a recovery, but a repeat of the crisis.
Jean-Paul Gauzès
(FR) Madam President, President, Commissioner, like Mrs Wortmann-Kool before me, I am, of course, going to tell you that we approve of the positions adopted by the Commission to deal with the current situation in Greece.
As regards the Spanish Presidency, we are pleased to note the objective that you are setting yourself to improve the coordination of economic policies. This strong political will must also be applied in order to see through two current and important projects: the structuring of a genuine form of financial supervision and the regulation of hedge funds.
True, Europe must not be a fortress, but nor must it be a sieve. In both these areas, the Presidency really must have room to manoeuvre so that it can negotiate productively with Parliament. We expect the Council, at its next meeting, to send out a strong signal to the public and to the market: to the public to restore confidence in the euro, and to the market to show its solidarity with Greece. The Council must give a strong indication that it will not let itself be overawed by the attempts to destabilise the euro made by certain speculators who have no hesitation in speculating against those Member States that are currently facing economic and social difficulties.
Pervenche Berès
(FR) Madam President, Mr López Garrido, Commissioners, this debate is important, not only because the euro is under attack, but also because on Thursday, we will have the first summit under the leadership of President Van Rompuy.
I note that, today, Europeans are standing firm and are convinced that we cannot allow the IMF to intervene in Greece. I welcome this, because it would mean closing the door on everything that we have been requesting for so many years, namely economic governance of the euro area.
When we call for economic governance of the euro area, it means that, faced with the volatility of the markets, we need to equip ourselves with the means to react and to keep pace with the markets. Clearly, today, we are failing on that score.
What I also see is that the situation within our European apparatus today is such that if you are outside the euro area, you can be 'helped', whereas if you are inside it, things are much more complicated. I never imagined the euro area becoming a zone in which there is no solidarity. The very operation of the euro area is based on the concept of solidarity.
None of the member countries of the zone, no matter what its export strategy, no matter what its deficit level, no matter what its public debt level, has a chance of emerging from the crisis if one of the links is attacked.
Yet what are we seeing today? A mechanism that works in such a way that the financial markets pit the different parties against one another, test our capacity for solidarity and test our ability to keep the very concept of the euro area alive. For the euro area concept is the idea that, if we want to give ourselves room for manoeuvre, to look beyond speculation as the only mechanism available, then we have to develop our own strategy.
However, this ability to basically become somewhat immune to the way in which the foreign exchange markets were operating prior to the adoption of the euro, with the sovereign debt rating mechanisms, has been reintroduced within the euro area itself.
This is what we must focus our attention on. This goes far beyond the proposals that are today on the table, and it is incumbent on President Van Rompuy to embark, next Thursday, on those projects, which are very important.
Peter van Dalen
(NL) Greece only recently gave an insight into the actual extent of its debts. They are much bigger than had been thought. The budget deficit is approaching 13%. Unfortunately, Spain, Portugal and Italy also have high budget deficits.
Europe must not bring in a Trojan Horse. That would indeed be the case if support were granted to these countries, as some people wish. That must not happen, because we would then be rewarding bad policy with a bonus. The Stability and Growth Pact clearly indicates how countries must act in the event of a crisis and the pact primarily indicates what must be done before a crisis occurs, namely by putting a strict budget and spending policy in place in good time. The Netherlands made a start on this as much as a year ago. The Southern European Member States have left it too late. Fortunately, they have now made a start - better late than never - on putting their affairs in order.
I am watching for the effects of the measures they are taking with great interest. If stock markets and the euro fall a little in the meantime, then that will not be a disaster for either investors or export companies, far from it, in fact.
Charalampos Angourakis
(EL) Madam President, the talk about speculative pressures on the euro area and on the euro and the talk of the risk of economies collapsing in Greece and other countries in southern Europe as a result of public finance problems, excessive debt and deficit is being used to the full by the European Union, the bourgeois governments and other imperialist associations, as an excuse for speeding up and stepping up capitalist restructurings and increasing the degree of exploitation of the working and grassroots classes.
The European Union and the governments are blackmailing and terrorising the workers in order to get them to consent to the rules of the market economy and the European construct of big business, in order to impose wage and pension cuts, flexible forms of employment, drastic cutbacks in social benefits and a barrage of harsh tax measures, and to uproot poor and middling farmers from their land.
It is a lie to say that the capitalist crisis is due solely to maladministration and corruption. Debt and deficits are the creations of the capitalist system, of the Treaty of Maastricht and, of course, of the Lisbon Strategy. That is why the bourgeois governments and the European Union, which bear full responsibility for the situation that has arisen, are calling on the working classes, the grassroots classes to submit and join national campaigns. However, the workers should turn their back, because the interests of the plutocracy are not the same as the interests of the workers, given that we live in a capitalist society.
The workers are demonstrating en masse in response to the war that has been declared and we welcome that and support them.
Barry Madlener
(NL) Greece may even threaten to declare itself bankrupt along with other countries, thanks to years of weak left-wing policy by left-wing politicians who have held office in Europe: Gordon Brown, Barroso, Schulz, Cohn-Bendit, Guy Verhofstadt. Mr Verhofstadt, could you please also listen to me? Billions have flowed to weak Member States and, even at the time of its accession, Greece appeared to be manipulating the figures, but no, you were blind to that. Europe had to and would expand. Thanks to failing politicians such as you, these economies have been artificially inflated, and now they are deflating.
What is happening now? You are continuing as normal with your disastrous policy. Who is knocking on the door of the European Union? Even more poor countries: Albania, Iceland, Macedonia, Croatia, Serbia, Kosovo and even Turkey. Poor countries that are also suffering under enormous corruption. Then there is Spain, which, despite high unemployment, has legalised some 700 000 illegal immigrants, who have also brought their families here - and there is presently 20% unemployment in Spain!
Mr President, this policy of immigration must stop.
Anni Podimata
(EL) Madam President, there can be no doubt that Greece, like other countries in the euro area, faces a huge public deficit and debt and, as you know and as the Commissioner mentioned, the Greek Government has already tabled a fully substantiated and ambitious but realistic programme to deal with them.
There can equally be no doubt that Greece, like other countries in the euro area, has been, and is, at the epicentre of coordinated speculative pressure, the basic aim of which is to undermine the euro and economic cohesion in the euro area. This is not a Greek, a Portuguese or a Spanish problem; it is a European problem and we have an obligation to demonstrate the real causes of this situation.
As we did a year ago, we are stressing that the global credit crisis is linked to the uncontrolled operation of the financial markets and we must be equally direct in stating today that the uncontrolled operation of speculative capital is a basic parameter of the current situation in the euro area and is to the detriment of European taxpayers' money.
So our first obligation today must be to defend the euro and the euro area against speculative pressures and, secondly, we must realise that we can no longer remain fixed on close monetary unification and that, until real economic convergence is achieved between the euro area states, both the so-called slow-lane economies and the overall credibility of the euro area and the stability of the euro will be affected.
Burkhard Balz
(DE) Madam President, it has been rare for me to be overlooked. Nevertheless, I will gladly begin my speech now.
We all know that not all Member States in the euro area have been equally hard hit by the financial and economic crisis. In my opinion, however, countries that have been particularly hard hit need to take more extensive measures than those that have not been affected as badly.
The stability of the euro must, of course, remain the crucial and overarching goal. That also applies to the measures for consolidating the budgets of the individual Member States of the euro area. These measures are not only in the interests of the countries themselves, but also of the countries that are not as badly affected.
However, we must also consider carefully what measures are necessary and what measures might perhaps be less effective in helping the countries out of this crisis. Although we could help the countries with the greatest economic problems in the monetary union to obtain money on favourable terms, for example, by means of a Union loan to several euro area states, this favourable external credit would hardly be able to alleviate the acute problems they are facing and would also do nothing about the causes of the problems.
In my view, these countries have, in the past, failed to make important reforms, for which they are now paying the price. The problems are therefore largely of their own making and therefore need to be solved in future by the relevant countries themselves. For that reason, we need to implement strict austerity and reform programmes, as announced by the Commission. In my opinion, it would be disastrous if the taxpayer always ends up footing the bill.
Patrick Le Hyaric
(FR) Madam President, Commissioner, many interesting things are being said here, but I believe that we must have the courage to call into question the very criteria on which the European Union is today based. There is even an article in the Treaty of Lisbon and the Treaty of Maastricht that prohibits the European Union from assisting Greece.
The fact of having given speculators a free rein as one has done by allowing the completely free movement of capital, and the fact of advocating tax competition, which results in zero taxation on capital and companies, means that, little by little, the national budgets are drying up, and now, under proposals such as the one made earlier by Mr Almunia, the peoples are being asked to carry the can by having their salaries squeezed, their retirement age pushed back and their social security systems destroyed.
Therefore, every single one of these criteria must be changed, the Growth and Stability Pact must be replaced with a human development pact for work, employment and training, and the decision must be taken to change the role and the tasks of the European Central Bank so that the euro becomes a unifying common currency and not a currency to be speculated on, as it is today. The decision must be taken to introduce new initiatives against tax evasion and capital flight, and to do away with tax havens, as had been promised. Lastly, courage must be shown in order to tax speculative capital movements.
Andrew Henry William Brons
Madam President, there is a natural relationship between the current health of a state's economy and the value of its currency. As the economy grows, so should the value of its currency so that it can enjoy the cheapness of goods and services that it chooses to import. Equally, as an economy stagnates or even declines, so will the value of its currency, leading to an export boom and recovery of the economy, assuming, of course, its manufacturing and service industries have not been destroyed by globalisation.
However, the currency of a nation trapped in the euro straitjacket cannot adjust to the needs of its economy and people. This crippled Britain between 1990 and 1992 when we were in the Exchange Rate Mechanism. Now it is strangling Greece and other client states of the euro.
This should be a warning for any country outside the eurozone. Join us at your peril. In the short term, you will see the needs of your economy unattended. When you do decide to withdraw, you will be faced with a debt to the eurozone that has been inflated by your own devalued currency.
José Manuel García-Margallo y Marfil
(ES) Madam President, we are here for the first time in the history of the euro to talk about the financial situation of a handful of countries. I am emphasising the word 'countries', because the Spanish Presidency sounded like it was talking about outer space, and Commissioner Almunia only mentioned Greece. I would like to know whether the Commissioner continues to maintain in his closing speech that the problems of Spain and Portugal are similar to those of Greece and if so, what he would do about it.
However, we are here to talk about these financial situations because the finances of a few could ruin the credibility of the currency of all and open the door to a two-speed Europe. The gap could increase when the exit strategy referred to by the Spanish Presidency is implemented, because we could find that the less developed countries have to deal with monetary difficulties and harsher monetary policies and, more importantly, have to use much more money to pay off debts and much less money to create employment. Believe me, ladies and gentlemen, without a sustainable economy, it will be impossible to balance finances. Without employment, tax revenue will continue to fall and unemployment benefit payouts will continue to rise.
We are facing a crisis of confidence, and when there is a crisis of confidence, the first thing we have to do is tell the truth. We have to say how we have ended up here. What are the affected countries doing to get themselves out of debt? Are the stability pacts credible or not? Above all, we need to know what they are doing to straighten out their economies, because as I said before, without sustained growth, there will not be a sustainable economy or sustainable finances.
Elisa Ferreira
(PT) Madam President, Commissioner, in a monetary union, there can be no attacks on Greece, Spain, Ireland or Portugal, but rather attacks on the Union and attacks on the euro, which make the most of any signs of fragility or any breaches which open up within the solidity of the bloc as a whole. In this context, I must inform you, Commissioner, that your statements were inappropriate and dangerous but, coming from someone with your experience and background, I can only assume that they reflect an outpouring against the stubbornness and inaction by the Commission of which you are part because monetary union is much more, as you well know, than a single currency, a Stability Pact or a single Central Bank.
For monetary union to be sustainable over the long term, it cannot limit itself to looking at short-term, nominal indicators, it cannot leave out the real economy, economic growth or employment and it cannot ignore the substantial internal divergences of a regional and social character which occur alongside it and which the Commission detected very well in the work which it did on the 'EMU@10'.
For these reasons, each member country has its obligations. Whoever believes, however, that monetary union is a project which is now complete is making an unpardonable mistake. We need to stop talking and start acting. The Lisbon Strategy did not work because it had neither means nor instruments. Today, if we want monetary union to persist and remain firm, it is necessary to replace terms such as 'solidarity' and 'economic policy coordination' with concrete means and instruments which, up to now, have not been there.
The Commission has just been put in office not to continue doing what it has done before but to learn lessons and initiate a new phase. That is what I expect and I trust them to do it.
Ilda Figueiredo
(PT) Madam President, in this debate, it was fundamental to ensure that the European Union would make a break with its monetarist policies and the blind criteria of the Stability Pact. It was fundamental to back social progress in order to give priority to the resolution of the problems of unemployment and poverty, in order to support production and the creation of jobs with rights, in order to guarantee economic and social cohesion, in order to implement budgetary support measures for those countries in the most serious situations, particularly by advancing funds without the need for the national governments to match them. Unfortunately, however, nothing of that was heard here.
Commissioner Almunia insisted on the same policies and the same neoliberal recipes, attempting to make the same people as always bear the consequences of the bad policies of the European Union, including, Commissioner, your own responsibility for the sad and lamentable statements which you made regarding Greece, Spain and Portugal, which, in the case of my own country, Portugal, for example, resulted in the unleashing of a speculative attack. The speculators did indeed profit from your statements. My own country and others, however, lost as a result of those statements and the policies which are currently in place. For these reasons, we tell you that it is the time to change policy.
Othmar Karas
(DE) Madam President, Commissioners, the euro is our shield and it has proven to be a stabilising force. That also demonstrates that the Maastricht criteria and the Stability and Growth Pact need to form the essential basis for the deficit strategy and the exit strategy. However, they should not form this basis alone. Both strategies need to be supported by sustainable growth and employment policy. We need to combine the Europe 2020 strategy with the other strategies. We need an innovation agreement, an investment agreement and a coordination agreement in the European Union, encompassing all Member States.
I am therefore in favour of the finance ministers implementing the three-point plan proposed by Mr Almunia on 22 December 2004 for strengthening Eurostat as quickly as possible. These sensible, necessary measures have been obstructed for five years. We need to raise the status of Eurostat and we need to review the statistics of the Member States and to coordinate the statistics of the ECB and the European Union. We need an opening balance sheet for the European Commission, we need to review the finances of the Member States on the basis of common criteria set by the Commission and we need a steering committee between the Commission, Eurostat, the ECB, the EIB and the Member States for national action plans.
Responsibility, honesty and transparency are required - and no games of hide and seek or cat and mouse by the Member States and the finance ministers.
Antolín Sánchez Presedo
(ES) Mr President, the economic crisis has enabled us to appreciate the value of the euro and of economic coordination.
It is now indisputable that the role played by the euro area and the European Central Bank in providing stability and a response to the credit crunch, along with the concerted action at European and international level, in which you played an important leading role, Mr Almunia, have made an essential contribution to preventing the most serious and even disastrous effects of the crisis.
The crisis has caused a major decline in economic activity, huge job losses and a considerable deterioration in public finances. Although it appears that there are indications of a burgeoning recovery, the forecasts for this year show a drop in employment and an increase in public debt in the European Union.
The crisis has also brought to light the diversity of situations and the differences that exist between the different Member States. Tensions have emerged, tensions which - let us not be naïve - are not always associated with economic principles or potential. We need to ensure that they do not cause us to forget our serious economic interdependency and our major commitments.
The European Union is facing its greatest challenges since its formation. Someone described international recovery using the letters LUV: L for Europe, U for the United States and V for the emerging countries.
Europe cannot be left behind. It is time for reforms, imagination and integration. The fundamental priority should be to increase the potential for growth of our economy.
Alfredo Pallone
(IT) Madam President, ladies and gentlemen, the weakness and the recent crisis in certain euro area countries are not just the result of the difficulties of Greece, Portugal and Spain, but also those of the Union itself.
This is not a problem only in terms of economic resources, but it is also a political problem. Before attending to sick countries, Europe must attend to itself, because the real problem behind this crisis is also the Union's weakness. Common and effective rules and instruments are required.
Firstly, we need to expedite supervision reform and to create a system that actually works and does not merely replicate the existing authorities, which have proven to be ineffective in predicting and managing the recent crises, and to move beyond the bureaucratic logic, which, up to now, has been adopted to deal with systemic crises.
Secondly, it is therefore necessary to coordinate and harmonise fiscal policies, even at the cost of leaving behind the more reluctant countries. Some maintain that intervention is required on the part of the International Monetary Fund, ignoring the catastrophic signal that this would send out to financial markets in terms of the direction in which the euro area would be heading. In the case of the current crisis situation in several euro area countries, the European Union has a political, social and moral duty to take action.
George Sabin Cutaş
(RO) Certain countries in the euro area are currently facing severe financial problems, illustrated by the size of public debts and budget deficits, which are much higher than the threshold permitted by the Stability and Growth Pact. The main logic behind the Stability and Growth Pact was to avoid incidences of 'stowaway' actions by imposing limits on public debt. However, this failed to take into account the need to increase public debt when the financial situation is worsening at macro-economic level, and it is further affected by the exponential rise in private debt.
The rapid decline in the state of finances in certain Member States poses a threat to both the stability of the euro and cohesion at European Union level. To avoid such consequences, solidarity must be demonstrated between Member States by adopting joint measures offering mutual support to countries experiencing difficulties. There is also a need to relax the Stability and Growth Pact's criteria, which is an option provided for in a declaration annexed to the Final Act of the Treaty of Lisbon.
Therefore, it is still our responsibility to show a united political will and implement the reform of the Pact, which has now become a necessity.
Theodoros Skylakakis
(EL) Madam President, numerous members have spoken about the help needed by Greece. This is the wrong message. Fruitless debate about aid is of no help. Greece obviously has huge financial problems, but it can deal with them. There is now broad consensus on that, both among political forces and, more importantly, among the Greek people.
I also heard that the main problem for the euro is the speculators. When the euro was strengthened, what were the speculators then? Euro-philanthropists? We need to look at what we are doing wrong.
Greek statistics are also being discussed. Let us not forget, however, that the statistics were also European. Did Eurostat, the European Commission and ECOFIN not know that the Greek debt could not get any bigger without a corresponding deficit? Did the debt, not just the Greek debt, ever drop consistently to 60%? In my opinion, the basic problem in the euro area is that its rules were applied mainly on the basis of political criteria and that those in control and those being controlled are one and the same.
A second problem about which there is too little talk is the overall loss of competitiveness and the ever-widening competition divide between the North and the South. There is no euro area, there is no monetary zone with a widening competition divide between its members. It is a fatal long-term risk to the cohesion of the euro area and is a question which should certainly preoccupy us.
Robert Goebbels
(FR) Madam President, with this all-out attack by a few international banks against the euro, the world is once more confronted with the stupidity and greed of the markets.
It is true that the English-speaking countries have never been in favour of the euro. Nevertheless, the euro has become the most stable currency in the world. In fact, the dollar and the euro form a duopoly. A duopoly will always be unstable. There will always be movements between the two currencies. However, if the markets have any sense, they should see that the deficits of the euro area as a whole are well below those of the United States or Japan.
While it is true that the new Greek Government has inherited an unenviable budgetary situation, it is clear that, even if Greece were to go bankrupt, which is totally impossible, it would not cause the euro area to break up. The United States Government had just presented a budget showing a USD 1 600 billion deficit. To make up this deficit, Washington has to borrow each day more than USD 5 billion. Greece's additional annual debt equates to less than one week of the United States' additional debt. Which country is putting the world's financial stability in danger? Greece or the United States?
Confronted as it is with the stupidity of the speculators, Europe must impose more transparency and more practical regulation on the markets, which really are too greedy, Madam President.
Diogo Feio
(PT) Madam President, in a debate regarding the economic situation of certain member countries of the euro area, the remedy is clear: we need more economic and monetary union, we need better competitiveness, and we need better solidarity. I am speaking to you, Commissioner, as someone who, being Portuguese, knows very well the difficulties involved in seeing the public debt grow, the deficit becoming difficult to control or public spending being excessively high. What these countries need is solidarity and the right signals. Unfortunately, the signals sent out by the statements which Commissioner Almunia recently made were not good, when he compared the Portuguese and Spanish situation to the Greek one. They were unfortunate and imprudent statements which had immediate effects on the market. The stock markets in Lisbon and Madrid plummeted; things should not be made more difficult than they already are.
Political management is extremely important. What I know is that this lesson must be learned for the future, because in this way, we can have better economic union, backing Europe to a greater extent in order to create solidarity and understand that the situations in the various Member States are completely different and are not comparable. If we can take away this lesson, it is certain that the future of the euro area will be a better one.
Frank Engel
(FR) Madam President, the following observation must be made: the Economic and Monetary Union is indeed monetary, but hardly economic. Europe's monetary concerns are in conflict with the economic and budgetary sovereignty of the Member States.
At this moment in time, speculative attacks on the euro could have disastrous consequences. Greece, Portugal, Ireland and Spain are the most affected. Behind them, however, the entire euro area is at risk.
To avoid the worst, Europe must urgently introduce a form of common governance of its economic and budgetary policies. After all, that is what economic union is all about. Only in this way will we, together, have a realistic chance of consolidating public finances in the euro area and beyond.
With the current instruments, and by persisting with the budgetary sovereignty of the Member States, I fear that this consolidation is a pipe dream, with all the consequences that that entails.
Edward Scicluna
Madam President, we must identify any weaknesses in the eurozone and address them with vigour, because the alternatives are too bleak to contemplate. A glaring weakness is the lack of a strong centralised monitoring function of the whole eurozone economy.
Special attention needs to be given, firstly, to the discontinuation of cash-flow accounting by any EU Member State, and their finances. Secondly, the public finances and the reporting need to be audited according to EU-approved standards. Thirdly, oversight should be provided for economic forecasts which have been a cause of unnecessary and misleading public financial projections. Fourthly, the results of stress tests by the EU need to be published regularly. Finally, I think we should discourage eurozone members from the easy way out of financial engineering and fiscal one-offs, delaying real adjustments which we all know must come from credible and sustainable spending programmes.
Olle Schmidt
(SV) Madam President, what is happening in Greece is not just a concern of those who are part of the euro area, but concerns the whole EU. It is therefore important that this difficult situation is dealt with in a responsible manner by the EU. Greece must do its part, live up to its promises and reform its policy. For me - someone who is keen to see Sweden join the euro area as quickly as possible - it is of the utmost importance that we in the EU resolve this difficult situation. It should, after all, be said that the euro has been incredibly successful in weathering the most severe financial crisis. Who would claim that 16 currencies would have been better than one strong currency? No one!
Greece sneaked into the euro area by the back door, which is now showing us how important it is that the rules of admission are tough but fair. A well ordered economy is a prerequisite for growth and wealth, even for those outside the euro, and naturally, that applies just as much to those countries that are part of the euro area. Those talking about speculation should bear in mind that a well ordered economy and public finances form the basis for this.
Michail Tremopoulos
(EL) Madam President, for Greece, about which there is a great deal of talk, the problem is not just a problem of public finances. It is about the complete collapse of the model which has been applied over the last fifteen years and which wanted the Greek economy to be based on a constant increase and expansion in private consumption.
Moreover, for years, some people have maintained that spending on arms is spending on development. As a percentage of GDP, SIPRI reports that Greece wastes 3.3%. This is the second highest percentage in NATO after the United States of America. It is the fifth biggest importer of arms in the world in absolute terms, with 4% of global trade. Of course, reductions in defence spending have been planned in the budget for 2010. The Ministry of National Defence has a budget of EUR 6 billion, down 6.63%.
I wish we would see a change in the arms diplomacy that has brought us to this impasse. Greece has no colonies to exploit, but it does have staying power. We also need to activate European solidarity and to promote international initiatives on a global green new deal.
John Bufton
Madam President, what is the future of the euro in the light of the problems in Greece and, for that matter, Spain, Italy, Portugal and Ireland? It must be of some reassurance to the UK that we never joined the euro. It seems promises of strength through solidarity could not be further from the truth.
The problem for the 16 nations in the eurozone is who pulls the purse strings. With little fiscal coordination and no treasury, membership of the euro is by no means an elixir for good economic health. It turns out that, when all turns sour, no one will bail you out. Instead, they take the opportunity to seize greater control while you are on your knees. We must wait to see how Greece will react to becoming an economic protectorate of the European Union and whether it will bring civil unrest. Is this really the European dream? Who is next, Spain, Portugal, Italy or Ireland? Perhaps Member States, and especially the eurozone states, should think long and hard about the here and now before turning attention to talks on economic policy post-2020, when there might not even be a euro to protect.
Mr Barroso this morning talked about the European dream: for the good people of Greece, it has become the European nightmare.
Andreas Mölzer
(DE) Madam President, as we know, the European Commission has placed Greece under supervision on account of its soaring budgetary deficit. This massive intrusion on national sovereignty can really only be justified by the fact that we also need to rescue the single currency and avoid the risk of damage to other participant countries. However, the foundation stone that is the essential prerequisite for the introduction of the euro, namely the Stability Pact, clearly only exists on paper. Many Member States and the Council have expended less energy in recent years on budgetary discipline than on watering down this important agreement. The Commission has sat back and watched this development of half-hearted procedures against deficit offenders.
We therefore need to press for the increasing net indebtedness of the Member States to be drastically reduced if we do not want to put our currency and our economic area at serious risk. For this, absolutely crucial and forceful measures are needed.
Elena Băsescu
(RO) I believe that every Member State must be prepared to join the euro area in order to avoid extremely severe potential adverse effects on the national economy. The economic instability experienced by some countries in the euro area must be kept in check to prevent the consequences being felt across the whole European Union. The economies of Greece, Spain and Portugal recorded large budget deficits in 2009 due not only to the global economic crisis, but also to the inadequate measures implemented by their own national governments.
Romania will present the euro area convergence plan by the end of February, in accordance with the negotiations with the IMF and the European Commission. My country has suggested entering the exchange rate mechanism in 2012, which is actually the phase prior to entering the euro area. This means that our budget deficit must drop below 3%.
Stavros Lambrinidis
(EL) Madam President, Commissioner, thank you for your kind words about the measures being taken by the Greek Government. The government has indeed introduced harsh measures, and the European Commission has indeed ratified the government's programme and a very harsh programme has indeed been ratified in order to monitor the application of the measures, which the government instigated and which it wants.
And yet the spreads increased. The problem is not that the markets were reserved, as you said. The problem is that the markets speculated and speculated wantonly. The very people who caused the crisis are now making money from the ruins they caused. And what about the European Commission?
I ask you the following: firstly, will you take action now, not only for strict monitoring of the states, but also for strict monitoring of the markets and, if so, what?
Secondly: it is unacceptable that talk about the International Monetary Fund in the euro area has dragged on for so many months. However, the International Monetary Fund does one thing: it imposes harsh measures and then lends cheaply, which leaves no room for speculators. Do you intend to take steps to give financial support to the countries which apply such harsh public finance programmes?
Czesław Adam Siekierski
(PL) The situation which has arisen in some countries in the euro area requires serious consideration. Seeking its causes in the economic crisis is only partially justified. Many of the causes lie elsewhere. Firstly, the great differences in the level of economic development in different euro area countries was ignored. Secondly, the discipline of the Stability and Growth Pact was not maintained. Budgetary discipline was not kept in a responsible way, which led to a large growth in the public finance deficit. Thirdly, banks and other financial institutions were not suitably monitored - this does not apply only to these countries. How can we fight this? In accordance with the solidarity principle, the repair programme prepared by individual countries must receive support from the European Union, which entitles the European Commission and the European Central Bank to monitor realisation of the programme. For it is also unacceptable that the costs of the crisis should be borne primarily by the poorest, an example of which was the protests by Greek farmers.
Georgios Papanikolaou
(EL) Madam President, about ten years after the creation of the euro area, it is clear that the European Union exists but, unfortunately, we are still a very long way from economic union. We see that the attack on the euro via the weakest national economies is taking on epidemic proportions and Europe is, ultimately, a spectator, not so much because it was surprised, but rather because it does not have the financial tools to react.
There is no institution, with the exception of the Committee on Competition, which can coordinate the interventions and actions of the national economies in times of recession. Unfortunately, there is no unanimity and common determination between the Member States, even though we have a common currency.
I think that today's test does not have any one country's name on it. It is a test for the euro itself. I would like to believe that, when we decided to have a single currency, we had already decided that we would now have a single voice and a united front.
Mairead McGuinness
Madam President, thank you for indulging so many one-minute speeches on this issue. The new Commission, I presume, is pleased to be in place, but it is going to have to hit the ground running because of the problems we are discussing here.
There are those who are revelling in the problems of the eurozone, but I think the bulk of us want to see a resolution. Ten years on, I do not think we should throw the baby out with the bathwater. Having said that, it is very clear from listening to this debate that there are serious problems in some Member States, and the severity varies among those with problems - and Ireland is one of those. However, the rules in my view have not been effective. We need to pre-empt rather than react: when a crisis is with us, it is too late. We need to be ahead of the markets; you cannot buck the markets as others have tried to suggest we can, so we need to have strict and timely supervision and scrutiny and then immediate action. I wish you well.
Hans-Peter Martin
(DE) Madam President, despite all the criticism that people like me have expressed about particular deplorable states of affairs in the European Union, we were always very much in favour of the introduction of the euro. Back when I was a correspondent for der Spiegel magazine, I saw speculation against particular currencies and the euro has protected us against that.
However, what we are seeing now is a massive loss of confidence by savers and, in particular, by citizens in countries in which the budgetary criteria have, to a certain extent, been met. My question to you, Commissioner, is this: has it not become abundantly clear to you over the last few years that Greece is deceiving us? There have been abundant rumours in this regard. However, we knew that Greece did not actually fully meet the criteria at the start. Why has this not been monitored more intensively? How do you intend to deal with such a difficult issue in future? I ask this with my own country, Austria, entirely in mind, where similar rumours are currently circulating in the same way they did about Greece a few years ago.
Arturs Krišjānis Kariņš
(LV) Madam President, the attacks by speculators on Greece, Spain or Portugal are not the cause of the problem, but its consequence. We know too well that no family can long afford to spend more money than it earns. The result is bankruptcy. The same applies to governments. No government can long afford to spend more money than it collects in tax revenues. The result is either bankruptcy for the government, or, as we are currently experiencing, attacks on the currency by speculators. What these countries have to do is what Latvia, which was affected by the crisis as long as a year ago, nearly a year and a half in fact, has done. That is, to reduce their government spending drastically by so-called internal devaluation. I would suggest that the Greek Government take advice from the Latvian Government on how such decisions may be made. They must be made, and they already have been made in Europe in the past. Thank you.
Diego López Garrido
Madam President, I think that we have had a very broad debate, with great awareness of and concern for the economic situation. It has also been a very constructive debate, with a series of points on which we can agree in terms of assessing the situation.
Firstly, I think that there has been a general confidence in the euro area during the debate. The euro area will undoubtedly emerge strengthened by these sudden movements in the markets, which cannot be explained by the situation of the real economy. As pointed out by Mr Karas, Mr Sánchez Presedo and Mr Goebbels, who talked about what is meant by what someone described as the protective shield in the euro area, we are convinced that if the euro area had not existed, the crisis would have affected European countries much more.
Furthermore, we do not believe that the Stability and Growth Pact is in crisis. The proof of this is the detailed procedure referred to by Commissioner Almunia for supervising the programme implemented by the Greek Government.
The problems in the euro area will be resolved within the euro area, whose mechanisms are equipped to do so, in a situation in which, as I said in my previous speech, Europe is clearly coming out of the recession and is emerging from the most serious crisis that we have seen for nearly a century. It is doing so in a relatively short period of time, which demonstrates the economic strength of the European Union, and also that the governments acted immediately when something happened that had the potential to cause the international financial system to collapse. Naturally, this immediate intervention had to result in deficits. There are currently 21 European Union countries that have been in this situation, which is the logical consequence of the essential intervention because, amongst other things, as I said before, in Europe there are social protection systems that mean that the most vulnerable people have to receive help from the public coffers.
Mr Canfin asked me what proposals the Spanish Presidency has in this respect. There have been short-term interventions by the governments, which I have mentioned. A strategy is emerging for bringing us out of this situation, but obviously, in order to bring us out of the crisis in the medium term, the Spanish Presidency of the Council is clearly proposing economic union. It is proposing that there should not only be monetary union, but that economic union should also have an important place in the European Union, which is, furthermore, what the Treaty of Lisbon states.
Article 5 of the Treaty on the Functioning of the European Union states this very clearly: 'The Member States shall coordinate their economic policies.' 'The Union shall take measures to ensure coordination of the employment policies.' 'The Union may take initiatives to ensure coordination of [...] social policies.'
This is stated in the Treaty of Lisbon, and I am therefore very much in agreement with moving towards harmonisation. For example, Mrs Wortmann-Kool, Mr Feio and Mr Papanikolaou referred to this in their speeches. Mr Bullmann mentioned the need for socio-political coordination, as did Mrs Podimata. Likewise, there was the position of Mr Canfin of the Group of the Greens/European Free Alliance, and of Mr Pallone and Mr Gauzès, who talked about the need for regulation of the financial markets. Mr Verhofstadt talked about the need for internal cohesion in the Union. All this is what we could call economic union, internal economic cohesion in the Union.
This is what we need to aim for, with clear political leadership of the Union, which is already taking place. We need to think about the fact that the day after tomorrow - just as the Spanish Presidency of the Union has begun, incidentally - the informal European Council is going to meet to take the reins of the situation politically speaking. I am sure that it will also send a strong European message to the public and to economic and social players, a pro-European message, a message of European unity, of confidence in the European governments, including the Greek Government, and of confidence in our opportunities.
This is an important European Council meeting, which is being held now in order to focus our efforts on a strategy for growth and job creation, which we call Europe 2020. I am convinced that the initial foundations for this strategy are going to be laid at this immediate, very early Council meeting, which means that we want to act immediately and with political leadership in the European Union in this time of need.
Joaquín Almunia
Madam President, thank you very much to all the Members of this House who have spoken during the debate for the references that they have made to the policies, attitudes and proposals of the European Commission, of which both I and my colleague, Olli Rehn, have taken note.
Allow me to say a few things, which I will say in four points. There have been many speeches and I cannot answer each and every one of them, but I believe that I can essentially respond to all of them using four points.
Firstly, as I have said many times in Parliament over a period of nearly six years as Commissioner for Economic and Monetary Affairs, I fully agree with the need to increase coordination within the Economic and Monetary Union and within the European Union. All of the Member States of the Union that are not yet members of the euro area, in other words, of the final phase of the Economic and Monetary Union, are going to be, apart from two Member States that have an opt-out. I do think, however, that in the next few years, we will see them abandoning their opt-outs and wanting to join the Economic and Monetary Union too.
In order to have coordination, we need to deepen and broaden supervision, and the activities of analysis, debate and recommendation based on that analysis and debate, with regard to fiscal policy and other macro-economic and structural policies.
If you recall, this was one of the first conclusions of the report that I presented here on behalf of the Commission in the first half of 2008, before Lehman Brothers, on the first 10 years of the Economic and Monetary Union. Since then, we have debated in the Commission, in the Eurogroup and in the Council, and also here in Parliament, how to improve that supervision, how to extend it, through what is now the heart of supervision and the framework for budgetary discipline, the Stability and Growth Pact, while also broadening it.
I agree with those of you who have said that it is not only about implementing a fiscal and budgetary policy that is in line with our rules, but that there is a need to go further, because there are other imbalances that put growth, employment and the situation of public finances at risk.
I agree with all of you who said that we do not need to call on the International Monetary Fund for all of this. It is true that all of our countries are members of the International Monetary Fund, but we can and must do it ourselves.
If we are coordinated enough, if we have political will, if we use the tools provided by the treaty, if we carry through our declarations of intent and major objectives to their ultimate conclusion, we have more than sufficient capacity and tools to do what we need to do in order to tackle difficult situations such as the one that we are currently facing.
In the case of Greece, I will mention two issues that have been the subject of debate, which I have already discussed in detail. Firstly, Mr Verhofstadt, who is unfortunately no longer here, said that the Commission intervened too late. I do not know how quickly Mr Verhofstadt's country asked the Commission to take action on budgetary matters, but I would like to remind him that there were elections in Greece in early October. Two weeks after coming to power, the new Greek Government corrected the notification that we had received a few days before the elections, changing the deficit from 6% to 12.7% in three weeks!
This was not just a statistical correction. In this massive increase in the deficit in Greece, to a large extent there has been an absolute lack of control of budgetary policy. This is not a statistical matter. They are not asking Eurostat to resolve it. This is an issue of management, due to a government that allowed revenue to drop or did nothing when revenue was dropping and allowed expenditure to increase or pushed expenditure up because the elections were approaching. Plainly speaking, that is what happened.
Moreover, in relation to the statistical problems, and in response to Mr Martin - as I think Mr Karas said - at the end of 2004, I proposed to the Council on behalf of the Commission that we strengthen Eurostat's ability to conduct audits when there were statistical problems that could not be resolved through standard notifications. Eurostat does not compile the data. Eurostat receives notifications from the Member States. In order to see beyond the authority giving the notification, Eurostat needs powers that it does not have. The Commission asked for those powers and the Council did not grant them. I have told the Council that we are going to ask it for those powers again. My colleague Olli Rehn, who from tomorrow will be responsible, with no more transitions to be made, for economic and monetary affairs, has a proposal prepared for adoption by the new Commission at its first formal meeting, once you have kindly given us your approval today.
Following this notification, the Greek Government put forward a budget for 2010, which had not been put forward before the elections, and not only the Commission but also the Eurogroup and Ecofin approved the excessive deficit in the light of the new situation. We did so with recommendations that could not be prepared until we had a programme in front of us, which the Greek Government drew up and sent to us on 15 January. Based on that programme, as I said before, we made the recommendations on 3 February.
It is true that if we had a magic wand we could have acted on the very night of the elections. I can tell you, however, that I believe that the Greek Government, the Commission, the Eurogroup and Ecofin acted swiftly. The latter two began debating the situation even before we made the recommendations to them. There is no way that we could act more quickly if our aim is actually to resolve the problems. If all we want to do is make statements, of course we could act.
Thirdly, I fully agree with the need to increase confidence in the euro and in the Economic and Monetary Union. This is everyone's responsibility: it is the responsibility of the Member States, the Commission, the Council and Parliament.
Incidentally, as an aside, as some of you have referred to statements that I made when presenting the recommendations for the Greek Programme, I ask you, in the interests of confidence, to refer to what I actually said, rather than referring to what others say that I supposedly said. That is all I ask.
Finally, the Council meeting on 11 February, the day after tomorrow, which was mentioned by Mr López Garrido, among others, is a very important meeting. It is a special Council meeting because there are not many matters on the table. It is a meeting at which there will be two contributions, from the President of the Commission and the President of the European Council, with an open political debate, which, at the present time, is extremely important, with tension in the financial markets that we have not experienced in the euro area since the single currency was created and a crisis worse than we have experienced for 80 years. We need to respond to this situation, not only with an exit strategy, but with a medium-term strategy so that this decade is one of growth and employment.
If you will allow me a minute to say my last words as Commissioner for Economic and Monetary Affairs, I will tell you what I would like to hear at the end of this European Council meeting. I would like to hear a clear demand to each and every one of the Member States, in this case starting with Greece, to meet their obligations, and to implement the measures that they have committed to as members of economic and monetary union and the recommendations given to them by the economic and monetary union authorities. We need to demand that all Member States fulfil and apply the rules that we have all made.
Secondly, I would like a political commitment to be made at the highest level for more coordination, better coordination and the strengthening of the Economic and Monetary Union as an economic zone, not only as a central bank for the economic and monetary zone, not only as a body that issues recommendations.
Both within and outside our borders, economic and monetary union, the euro area, needs to speak clearly, firmly and credibly, because this increases the confidence of our citizens and of the other citizens of the European Union and of the world in our currency and in our project, which is not only an economic project, but goes much further.
Finally, I would like the leaders of Europe to say to the Greek authorities, 'In exchange for your efforts, you have our support.' The support cannot be free of charge. That would create a climate for future imbalances and future crises. The support needs to be clear, and we have the tools to do this, in exchange for a clear commitment that everyone is assuming their rightful responsibilities.
President
The debate is closed.
Written statements (Rule 149)
José Manuel Fernandes  
I hope that the European Commissioners will be a factor that promotes stability and that they will produce rigorous and well-grounded statements, in contrast to what occurred with the recent statements by Commissioner Joaquín Almunia, who demonstrated a lack of prudence and contributed to stock market losses and a lack of confidence among international investors in relation to Portugal and Spain.
In order to face up to the crisis, the Member States of the EU launched recovery plans and gave stimuli and incentives to the economy, and as a result, increased their deficits. However, we also know of Member States which, either owing to incompetence or intentionally, were wrong about their deficits. Recent events have obliged the European Union to give new impetus to proposals for supervision and to implement a strengthened strategy of economic coordination.
It is also proposed that a system to monitor the value of each Member State's deficit should be formally implemented, with the aim of quickly defining corrective measures, so as to avoid any irreversible situations. This system should function almost in real time. It is also important to clarify the calculation formula for deficits so as to avoid any massaging of public accounts and to avoid the recurrent use of debudgetisation techniques to camouflage the value of the deficit.
João Ferreira  
The campaign unleashed as a result of the situation in Greece, which some people are now trying to extend to other countries, is despicable and reveals the true objectives of its principal protagonists, amongst which should be included the European Commission itself and some of the principal economic powers of the EU.
The pressure being exerted on countries such as Greece, Portugal and Spain to fight their deficits cannot be disentangled from the interests of speculative financial capital and its aim of engaging in a turf war for the euro against the dollar. It is these interests that are being defended, even at the cost of the interests of the people in those countries.
Several questions arise:
What objective reasons exist for us to have to reach 2013 with deficits of less than 3% (regardless of what may happen in terms of economic growth)?
What is the point of an economic and monetary union which does not implement any policy of solidarity and cohesion?
If the ECB can regularly lend money to national banks at rates much lower than those which exist in international markets, why can it not do so to governments?
Why has there been no creation of instruments which might allow those countries in greater difficulty to obtain financing at rates which are lower and closer to those obtained by other countries?
Ivari Padar  
The financial situation in some countries in the euro area, which has been under consideration today, clearly shows the risks that are caused by moving away from the agreements in the Stability and Growth Pact. In light of the problem as a whole, we can see how important it is to have reliable statistics. We must certainly draw serious conclusions from this whole problem, and in every country, both within the euro area and outside it, the way out entails recognising our problems honestly and providing our own measures for getting out of the difficulties, and additionally, solidarity from the European Union. At the same time, the problems described cannot be solved by delaying the expansion of the euro area. It is clear that, if there are countries which have fulfilled the necessary criteria, then those countries must be admitted to the euro area. Time has shown that a single currency has been an additional guarantee of reliability in complex times.
Jarosław Leszek Wałęsa  
Mr Almunia, Poland is preparing for entry to the euro area, and so we are looking carefully at the problems of euro area Member States. Unfortunately, more countries are experiencing problems, and the European currency now faces its greatest challenge since it was created. Ladies and gentlemen, Greece will not manage on its own. I agree with those who have spoken before me that what is needed is stronger coordination of Member States' economic policies. The global economic crisis has led to the destabilisation of many economies and world markets, in the face of a recovery, albeit a fragile one, are afraid that incompetent action might be taken by Member State governments to prevent the collapse of euro currency markets. Therefore, the only realistic way out of this situation, the only way to prevent the collapse of the currency market is stop-gap help for Greece as well as long-term, planned action to stabilise the position of the euro.
(The sitting was suspended for a few minutes)
