Question Hour with the President of the Commission
President
The next item is the Question Hour with the President of the Commission.
Manfred Weber
Mr President, Mr Barroso, ladies and gentlemen, in its session today, the Commission approved the new SWIFT agreement, and did so by a large majority or even unanimously.
I would like to ask the President of the Commission - since I am sure he is aware that many of our citizens are concerned about data being passed on - where he sees substantial progress and how we can convince our citizens of the necessity of this agreement.
José Manuel Barroso
President of the Commission. - It is true that the revised draft agreement was today adopted unanimously by the Commission. We believe it is subject to strict compliance with safeguards on privacy and the protection of personal data. It ensures the principle of necessity and proportionality and its purpose is strictly limited to the prevention, investigation, detection or prosecution of terrorism and terrorist financing.
The agreement, as it stands now, respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights. The agreement secures significant safeguards for the data when processed by the provider. It provides also for transparency of the use of data and the availability of a process for seeking judicial redress.
The Commission therefore considers that this draft is compatible with respect for fundamental rights and will give appropriate answers to Parliament concerns, as expressed when the resolution on the interim fifth agreement was voted in March 2010.
Manfred Weber
Mr President, I just have a brief supplementary question. It concerns the content of the agreement that you have presented. I would like to repeat my previous question. What are the implications of this agreement for transatlantic relations? How important is it for the other topics that we need to discuss with the US? If you could give us an idea of this, I would be very grateful.
José Manuel Barroso
President of the Commission. - It is extremely important, in fact. I can tell you that our American partners consider this to be probably one of the first priorities, if not the first priority, in the current discussions with the European Union. This agreement is crucial for European Union relations with the US. Since 1 January 2010, significant volumes of data which were previously received by the US Administration have not been available, and this is creating problems in their programme. That is why we believe we should also solve this, bearing in mind the importance of transatlantic relations. Of course, these transatlantic relations are critically important, but this does not mean that we should not stick to our principles of privacy and data protection.
At the same time, I think we have reached a very, very good agreement now and Commissioner Malmström has done very important work. So I also believe that from a broader political point of view, it is important that we come to an agreement on this matter with our American partners.
Martin Schulz
Mr President, Mr Barroso, following on from the questions put by my fellow Member, Mr Weber, did Commissioner Malmström inform the College that there are great concerns in this House regarding the current state of negotiations?
Is the Commission aware that what it has resolved today is undoubtedly not what Parliament considers to be sufficient progress? Do you realise, Mr President, that you have adopted something today that, if implemented in this way, will result in people employed by private companies such as Swift having greater rights of control than officials of the European Union? Did Mrs Malmström explain this to you? If so, how could you have decided this? If not, why did Mrs Malmström not make you aware of it?
José Manuel Barroso
President of the Commission. - Of course, the College was permanently informed by the Commissioner responsible about the negotiation process. Just today, Commissioner Malmström informed us about the final outcome of those negotiations. More than that, she told us that she has maintained a very intensive dialogue with many of you in the European Parliament. We are well aware of the concerns expressed by this Parliament and she told me that she has kept Parliament regularly informed in terms of the negotiation process.
The Commission has fulfilled its role in negotiating; it is now up to Parliament to accept or not to accept the deal. I strongly recommend you do because it is important for the security of European citizens as well. We believe that we have achieved the necessary level of protection in terms of fundamental rights and data protection, but of course, this is a very sensitive matter. We believe that the rights of this Parliament have been fully taken on board but we had to negotiate on behalf of the European Union and, as I told you, today's decision of the Commission was taken unanimously.
Martin Schulz
Mr President, Mr Barroso, thank you for your kind descriptions of your debate. It did not answer my question, however. I will therefore try to be more precise this time, and I would ask you to be very precise in your answer.
Did Mrs Malmström tell you during the debate in the Commission before the College made its decision that there was a risk that Parliament would reject the text that you are now presenting as an agreement? Or did Mrs Malmström say to you: 'We will get a parliamentary majority with this text'? Let me repeat my question very precisely. Did Mrs Malmström say: 'We will get a parliamentary majority for this text' or did she say: 'With this text it is uncertain whether we will get a parliamentary majority'? I would be grateful if you could answer precisely.
José Manuel Barroso
President of the Commission. - Commissioner Malmström cannot prejudge what Parliament's vote will be. She is perfectly aware of that.
Your question was if Mrs Malmström had told me or the College about what the vote or the reaction of Parliament would be: if it was going to vote 'yes' or 'no'.
Of course, she hopes it will be in favour. If not, she would not have completed the negotiations on behalf of the Commission. After Parliament's 'no' vote some months ago, we had a very important discussion in the Commission. I also spoke with Commissioner Malmström several times. We are aware, and she personally is very well aware because she has invested a lot of time in contacts with Parliament, about some questions that may be raised regarding this agreement, but we are not anticipating now how Parliament will vote. I can tell you this now. She could not tell me, but she told me that she is still in consultation with Parliament. There is not yet an agreement when a vote will take place on that proposed agreement.
This is what I can tell you, to the best of my knowledge, about the information that the Commissioner responsible gave to me and to the College.
Guy Verhofstadt
Mr President, rest assured that I am not going to ask questions about Swift - we will speak about that later - but, yesterday, Mrs Merkel and Mr Sarkozy had their summit. They decided on an economic governance approach in the Union and not in the euro area. Personally, I do not believe that this is a very pertinent decision, because it is not a matter of pitting the euro area against the European Union. We need economic governance in the European Union and we need economic governance in the euro area - we need it in both. Moreover, we need it even more strongly in the euro area than in the European Union since we have the single currency.
My question to Mr Barroso is as follows: what do you think about this? Do you agree with us that we need economic governance as much in the euro area as in the European Union? Secondly, we believe that the Commission must be the one to oversee this economic governance. It is impossible for a Council that meets four times a year to ensure that economic governance takes place in Europe with all the problems that we are having. It is now up to the Commission to move into the driving seat. I would also like to know the Commission's position on this matter.
José Manuel Barroso
Mr President, Mr Verhofstadt, of course, when it comes to the powers that are already granted to the Union, the Commission is the economic government of Europe. That is the only solution that is compatible with the treaty. When it comes to trade, competition, and a very substantial share of the budgetary surveillance powers, it is the Commission, and I believe that it is sometimes necessary to remind those of our governments that have not read the treaties properly of this point.
Having said that, the Commission alone cannot fulfil this task. We must work in concert with the Council, which has some very important powers, and also with the European Council, which gives general direction and impetus to the work of the Union. I also agree with your first statement. In fact, we have the solution for the euro area and for the whole of the European Union. Just read Article 136. Article 136 of the Treaty of Lisbon now offers us far greater opportunities to come up with proposals for the euro area, because it actually has special meaning within the euro area; more duties also means more rights, not only for those who share a currency, but also for the Union as a whole. Therefore, I hope that the economic governance of the European Union will be strengthened, but always in accordance with the spirit of the treaty and of the Community method.
Guy Verhofstadt
Mr President, the first test will come, of course, on Thursday, when we are also going to decide on Europe 2020. I hope in any case, Mr Barroso, that it will not be the Council that monitors and manages Europe 2020. The Commission must be the one to take charge of it, because I have never seen Heads of State or Government punish and criticise one another. That does not happen between peers, and that is why I believe that the Commission must defend its position in the context of Europe 2020 and within the working group that Mr Van Rompuy is currently heading up.
José Manuel Barroso
Mr President, Mr Verhofstadt, you yourself have been a Member of the European Council; you know the European Council well. Indeed, the European Council is a very important institution, but it cannot micromanage economic policy. That would be a fundamental mistake.
Not only would it go against the spirit of the treaties, but it would be a fundamental mistake. The European Council does, of course, give direction and impetus - this is laid down in Article 16 of the treaty - but, afterwards, it is up to the various institutions, to the Commission, within the scope of its powers, and also to the Council, within its various groups, to verify the implementation of policies.
I am anxious to tell you that the Commission is determined to play a full part in monitoring the entire process of the 2020 strategy. We now expect our Member States to support this strategy. I am encouraged by the discussions that have taken place so far. I also expect the support of the European Parliament. I am very encouraged by the positions adopted by this Parliament, and I can tell you that the Commission is ready to play its part in full.
To conclude, Mr President, I should like to thank you most sincerely for the very clear position that the four main political groups in this House adopted in the press conference, which was one of defending the Community method and respect for the spirit of the Treaty of Lisbon.
Rebecca Harms
Mr President, Mr Barroso, to change the subject: the Gulf of Mexico. Deepwater Horizon, I believe, is a name that is currently making people around the world confront the idea of the limits of growth, the limits of the wasteful use of oil and the limits of man and technology. In this connection, I would like to know, Mr Barroso, how the Commission intends to ban - on a precautionary basis - the planned oil and gas production in the northern North Sea and the Arctic in the areas where the European Union has responsibility. That is something that can still be decided.
Secondly, I would like to know whether you actually believe that the rules that we have in the European Union on oil and gas production will protect us from any repeat of such catastrophes in areas where we have responsibility.
José Manuel Barroso
President of the Commission. - We do not know yet the reasons for the accident in the US as the investigation is still under way. It is important to know whether the causes were mainly of a technical nature or linked to shortcomings in the regulatory framework or in compliance by industry. Therefore, it is too early to provide evidence of what might or could happen in Europe.
While oil exploration in Europe is not taking place in the same extreme conditions as those in the Gulf of Mexico, we must also deal with the possibility of an accident near our shores. Drilling techniques have similarities, even if the waters are much shallower in the North Sea.
The Commission is following developments closely. Commissioner Oettinger had already convened a meeting in May with major oil companies active in EU waters in order to get a precise picture of the situation in Europe and to obtain assurances from the industry on the current levels of safety.
The Commission works with the Member States to ensure robust prevention and emergency response systems in order to protect European citizens and the environment.
Rebecca Harms
Mr President, I would like to ask you to say once again whether you believe that the directive on environmental liability for sub sea oil and gas production is sufficient. I would like to know whether you believe that the non-uniform, relatively low upper limits on liability are really what we need in the light of the catastrophe in the Gulf. I would also like to know whether you are debating urgent improvements to technical inspections on platforms. Do you really believe that the environmental and climatic conditions in the Arctic are friendly enough to humans and technology for us to enter into the risks of sub sea oil production there too? It may not be quite as deep as in the Gulf of Mexico, but the conditions are tough.
José Manuel Barroso
President of the Commission. - Yes, you are right. Firstly, we have legislation. We have binding new standards and requirements applicable to offshore drilling and oil production facilities as regards equipment standards, worker safety, environmental sustainability, emergency prevention and preparedness. In addition, the Member States have enacted extensive national legislation to maintain a high level of safety of offshore operations in Europe.
Secondly, we have an information response system ready to fight disasters caused by oil spills from tankers or drilling and production facilities. This system includes a set of tools managed by the European Maritime Agency, focusing on prevention of pollution and response to pollution.
Thirdly, there is a Community civil protection mechanism that can give a response to any major crisis situation. Regarding the concrete point you made on liability, most European legislation on safety and the environment does not target particular industries, but we can see that this legislation is applicable to all relevant economic sectors. EU legislation sets minimum safety standards which individual Member States must strive to meet through their legislation. This is in line with the principle of subsidiarity.
Timothy Kirkhope
on behalf of the ECR Group. - May I return to EU-US relations just for a moment to say how pleased that I and my group - my group being a major group in this context - are to hear about the SWIFT agreement progress which we have been very much involved with.
Can I ask President Barroso to perhaps tell us what useful lessons have been learned by the Commission in relation to the SWIFT agreement which may be successfully and usefully employed when we deal with the very important PNR agreements that await our attention, now with the United States in the first place, but also with Canada and Australia?
José Manuel Barroso
President of the Commission. - It is probably too soon to draw all the lessons because we have not yet completed the process.
I am very much looking forward to the completion of the process in good harmony with the European Parliament because we cannot deliver without your support. That is, frankly, important.
There are two basic issues here.
One is about security with respect to fundamental rights and data protection. We are attached to this and we believe that this agreement, as it stands now, responds to the concerns expressed by Parliament after its first vote.
There is also another more general point that you, Mr Kirkhope, highlighted, and I thank you for that. That is the importance of relations with the United States of America. The USA is one of our most important partners, if not the most important, so I believe that we should also try politically to come to an agreement.
Vice President Biden came here and made a very, let us say, passionate case for the importance of transatlantic relations, also in this field. The Commission will not recommend the vote if we are not convinced that it is for the benefit of European citizens. I want to underline that point. It is for our security as well. At the same time, we would like to have it also as a signal of our commitment to what is a very important relationship with our most important partner.
Timothy Kirkhope
on behalf of the ECR Group. - I agree entirely with that. I think the European Parliament's behaviour on this, particularly latterly, has been a good democratic example for everybody. My supplementary deals with the question of sharing the burden on counter-terrorism between the United States and the European Union. Does the President believe that the agreements which we have been discussing place too much of a burden on the United States as opposed to allowing us to adopt the burden or be subject to the burden of sharing responsibilities and resources in respect of counter-terrorism?
José Manuel Barroso
President of the Commission. - I think this is an important point. In fact, during our conversation with the Americans, they told us that they are ready to support us if we want to establish a similar system at European level. That is a decision that we have to take here in Europe.
What we are accepting by this agreement is to provide some data, subject to strict conditions, to the American authorities, but we could also think about what we could do better among ourselves. The Americans told us they were ready to help us technically because they have more investment in that area than we have. I think that could be something for the future because I believe that we must all contribute to the fight against terrorism. It would be a great mistake to think that the fight against terrorism is an American responsibility and that we are just supporting them. It is a joint responsibility to fight against terrorism and to protect the security of all our citizens.
Gabriele Zimmer
Mr President, today, the European Parliament adopted Mr Cashman's report on the implementation of the Millennium Development Goals. One of our main messages to the Commission, to you, is that naturally we want to do everything we can to combine all the EU's resources in order to implement the Millennium Development Goals by 2015.
So far, however, the EU and its Member States have not met their obligations. There is currently a deficit of EUR 20 billion in the commitments made for achieving the Millennium Development Goals alone. I would therefore like to know what you are going to do - and specifically as regards the forthcoming Council meeting - to remind the Member States in particular of their commitments and to exert pressure on the EU to provide a clear, final picture at the UN conference in September and not to allow the individual Member States to repeatedly shirk their responsibilities in view of the growing crisis, when 1 billion people are currently living in poverty and hunger.
José Manuel Barroso
President of the Commission. - Mr President, I fully agree with the concern that your question raises. In fact, there is now a risk that, because of the budgetary constraints in some Member States, some commitments are not respected.
The Commission had a meeting some days ago in Addis Ababa with the African Union Commission, and one of the points raised by our partners in Africa was that sometimes they feel that commitments are not respected. So it is question of credibility and accountability, also on our side.
So, certainly, the Commission will defend the fact that we should keep our commitments. For instance, the commitments taken in terms of fast-start financing for the fight against climate change. I intend to go to the high-level event in New York. Just today, I received a letter from Secretary-General Ban Ki-moon highlighting the importance of this agenda, and we fully share his concerns.
I will raise the issue not only in the European Council this week, but also in the G20 and G8 outreach meetings the week afterwards in Canada. So, we remain very much committed to this.
I participated in the Gleneagles G8 summit several years ago and, in fact, the reality is that the most developed countries have not yet fulfilled all that they committed to do.
Gabriele Zimmer
Mr President, I do not doubt in the least that in the intervening years, the Commission has repeatedly come up with initiatives relating precisely to these tasks of development policy. For me, the question is what has been done within the Commission to create the structures, the resources and the conditions to implement, for example, the Twelve Point Plan drawn up by the Commission, and particularly by Commissioner Piebalgs. In other words, what is the Commission itself doing to create the conditions for policy coherence? Why, for example, do such serious matters as the struggle to implement the Millennium Development Goals play no part in the Europe 2020 strategy?
José Manuel Barroso
President of the Commission. - The Commission is doing its part through the Community budget. In fact, on several occasions, we proposed additional funding to the Member States. I remember, for instance, in the G8 in Japan, I proposed an additional EUR 1 billion for helping rural development in Africa and in other developing parts of the world, to come from the unspent money.
Now, to fulfil all the commitments on the European side, most of it has to come from the national budgets. In the current framework, with the current financial perspectives, we cannot be much more flexible. So that is what we are doing - speaking with our Member States so that we can, in fact, deliver on our previous commitments.
Niki Tzavela
Mr President, I will continue with a question on growth, in light of the Council summit on Thursday. The present economic crisis and the threatened slump in Europe must be addressed mainly by increasing investments. A basic concern, therefore, is to safeguard financing resources.
My question is this: are you considering, as the political leader of economic development in Europe and the Commission as a body, that the possibility should be examined of issuing European bonds to finance major European development investments, such as pan-European high-speed motorways, European research into climate change, e-health, a pan-European navigation system or major investments in energy, such as LNG terminals in the Euro-Mediterranean, in other words, major pan-European investment projects that will be funded by issuing bonds?
José Manuel Barroso
President of the Commission. - We hope these issues will be addressed in the next financial perspectives. Indeed, already in the EU 2020, we are making everything to do with these interconnections a priority for future financing at European level, be this in energy, in transport, or in other forms of immaterial connections, such as the digital agenda.
This is very much one of the sectors where we believe there is value added, where a euro spent at European level makes more sense than one spent at national level, because there is a European rationale for this kind of investment.
How to finance that does, of course, have to be discussed with the Member States. This is a very difficult time to discuss budgets with our Member States, but we believe we can make a strong case for stronger interconnections at European level.
Niki Tzavela
Mr President, I do not think that I received a reply to my question. Do you believe that we can address the risk of recession with immediate, pan-European, coordinated action by issuing European bonds?
Do not forget that we have to deal with a huge competitive global market in India, China and the USA. Will Europe respond with major investments on a pan-European scale? Will Eurobonds play a role by funding these investments? What do you have in mind?
José Manuel Barroso
President of the Commission. - Frankly speaking, I do not believe that there is now openness among all Member States to consider Eurobonds for this kind of expenditure. Just recently, we adopted a very important, ambitious programme in terms of a mechanism or a facility for helping countries with problems of debt. It is, in fact, some kind of obligation which Member States take to the financial markets, so I believe it will be extremely difficult to now get from the Member States the agreement with the Eurobonds principle for this kind of projects. Nevertheless, I think there are some possibilities of using other mechanisms. In my programme, I spoke, for instance, about having some public/private partnerships; I spoke about involving the European Investment Bank in a better way; we are looking very openly at all the possibilities of financing for those very important projects. But if you want my honest answer, it is that it would be difficult, if not impossible, now to get Eurobonds for that specific purpose.
Diane Dodds
President Barroso, you have been a supporter of Northern Ireland and the important progress that has been achieved in creating a stable and peaceful future for our people. In your task force report, you indicated your support and that of the Commission for the local devolved administration and the work that it is doing in securing a peaceful and prosperous future for the people of Northern Ireland.
In this time of economic turbulence, the agri-food industry in Northern Ireland is one of the most important sectors of the economy. This very important work could suffer from the proposed penalties for alleged breaches of the single farm payment scheme identified by Commission auditors.
Mr Barroso, would you agree that the proposed penalties on the Department of Agriculture and Rural Development in Northern Ireland for breaches of the SFP scheme between 2004 and 2006 are disproportionate in relation to the actual risk to the scheme? Will you and DG AGRI agree to look again at the suggestion of a five per cent flat-rate disallowance, given that the department in Northern Ireland is taking remedial steps to ensure that systems are accurate and that money has already been recovered in relation to the original claims?
José Manuel Barroso
President of the Commission. - Thank you for the comments regarding the support that the Commission has been giving to Northern Ireland. Indeed, we are very pleased about, and supportive of, the developments in Northern Ireland. The Commission has invested heavily in this process. I remember also my visit to Northern Ireland and will continue to do so.
I am aware of the issue you have raised of the single farm payment scheme. Commissioner Cioloş has outlined our position on this, but let me state very clearly that the clearance of accounts procedure is an administrative one. The Member State concerned is given a full opportunity to express its view, but the independence of the process is vital.
The Commission does not enjoy any discretion in the level of corrections, which follows established principles to ensure equal treatment to all Member States. I am sure that you all agree in this Parliament about the need to respect fully our regulations in terms of accountability. It is critically important. Just yesterday, I had a very interesting meeting lasting several hours with the Commission and the Court of Auditors and I want to tell you that, while supporting Northern Ireland very much, we have to respect strictly all the rules in terms of accountability.
Diane Dodds
I will just take up your time for one supplementary question in relation to that.
There is some concern in Northern Ireland that the actual disallowance rate has been levied on a very small level of sporadic inspections.
I would be grateful if the President would ensure that the Commission undertake proper evaluation of the procedures that are now in place to ensure that the scheme is properly administered.
José Manuel Barroso
President of the Commission. - Of course, I can give you all the guarantees on the part of the Commission that we will try to ensure that the scheme is properly administered.
But once again, the clearance of accounts procedure is an initiative procedure which includes several steps ensuring the Member States' right of defence, as well as the opportunity for conciliation by an independent body. And now we have to engage with this in a serious, objective manner.
Corien Wortmann-Kool
(NL) Mr President. President Barroso, you have just made a clear statement. The European Commission is the economic government of Europe. At a time when we are seeking to strengthen economic governance, however, we need to see more of the Community method. We stand shoulder to shoulder with you, but in Council circles there are ideas of moving more towards the intergovernmental method, including with regard to the Stability and Growth Pact.
What are the crucial elements relating to the task force and its outcome that you believe should be included in these conclusions in order to achieve stronger economic governance and a stronger Stability and Growth Pact using the Community method? Could you specify some of these elements? That would also be very helpful in terms of the public debate.
José Manuel Barroso
President of the Commission. - The task force was created in the specific context of support for Greece and, as you know, the Commission is participating in the task force in a fully constructive and loyal way. In fact, the task force was established by the President of the European Council in cooperation with the Commission. The Commission is participating in the task force and I am happy with the way that work is progressing in the task force. There is a consensus emerging on steps towards economic coordination in Europe, and most of those steps are completely in line with the proposals made by our communication of 12 May. So may I say that this task force is performing an important task, because they have addressed important points like the implementation of the Stability and Growth Pact and the European Semester. I am looking forward to the report of the President of the European Council to the European Council on Thursday. The Commission will, of course, not abdicate from its right of initiative and will present further proposals, building also on the consensus emerging in that task force.
Elżbieta Katarzyna Łukacijewska
(PL) We know how difficult the economic situation is for some Member States, and what effect this is having on the emotions of the residents, and not only of these countries, and on the decisions being made by individual governments.
You spoke not long ago, Mr Barroso, about the necessity of defending the unity of the European Union and of maintaining EU integration within a framework of 27 Member States. I would like to ask, and to find out, how you intend to defend this objective in a situation in which the pressure to come up with new methods is increasing, such as the idea to set up a European Office for the Economy, which would lead to closer economic coordination in the euro area. What guarantees can you give us that countries which, with significant efforts, are bridging the gap in terms of development, will not be relegated to the second division of the European Union?
José Manuel Barroso
President of the Commission. - First of all, I have stated several times in this Parliament and on other occasions that we are against any kind of competing or parallel divisions of institutions in the European Union.
We have one Union, the European Union, with our institutions, with the 27 Member States today, and of course we fully respect the treaties.
We can, in the current framework, do more for economic coordination and clearance. We have, namely, Article 121 of the treaty that is clear in stating that Member States' economic policies are a matter of common concern. What a Member State does has implications in the other Member States. Article 121 is an implicit call for coordination by Member States. We have Article 126 that deals specifically with budgetary policies, and Article 136 allows the Commission to take initiatives to reinforce coordination, also within the euro area but within the general Community framework.
This is the important point to understand. We can make some proposals for the euro area, but always within the framework of the European Union, and not having the euro area as something separate from the rest of the European Union. I believe this is critically important for the success of a Union that is really based on the principle of solidarity.
Sergio Gaetano Cofferati
(IT) Mr President, ladies and gentlemen, my opinion of the work of the Commission and of the task force itself over the last few months actually differs somewhat from that of President Barroso.
I have the very distinct feeling - and I would like you to prove me wrong - that the idea of the recovery process and of the necessary austerity measures, which I too believe to be essential, has very clearly gained ground, including in the media, but that the idea of growth and development, on the other hand, has greatly diminished. The Stability and Growth Pact is in danger of becoming a stability pact only, if not in its intentions, then at least in the actions announced.
I believe it is essential instead to implement measures that are capable of supporting growth, starting with the creation of Eurobonds. I should like to know from you whether the concern for growth really is a fundamental concern of the task force but even more so whether it is a fundamental concern of the Commission.
José Manuel Barroso
President of the Commission. - The task force was for economic governance and, when I was expressing my overall satisfaction with the work so far, I was referring to that. Of course, growth is a separate issue now. Growth is the most important point for the European Union economy. Without growth, we will not be able to deliver to our citizens what they expect. We will not be able to keep our social market economy. Our citizens will not be able to realise their full potential.
That is precisely the goal of EU 2020 - growth, growth and growth. Not just any kind of growth, but intelligent growth, sustainable growth and inclusive growth. Of course, we believe that to have growth, we need confidence, and unless confidence comes back to the financial markets in Europe, we will not be able to achieve that higher level of growth and restore the growth potential before the crisis. That is why fiscal consolidation is so important and reforms are so important, not as an end in themselves, but as a means to achieve greater levels of growth to increase the growth potential in Europe.
Syed Kamall
I think we all agree on the need for sound economic governance. But let us be honest about what is happening. What we have seen is blatant flouting of the Stability and Growth Pact rules and engagement in what we would call, probably rather euphemistically, off-balance-sheet activities and financial engineering.
Now I am sure we can all agree that the EU Member States must adhere to the principles of sound monetary policy, fiscal responsibility and honest accounting, but do you see this as an opportunity for the EU to gain power over Member State budgets, or will you tackle the real problem of countries that have cooked the books and amassed massive budget deficits, rather than focusing on increasing power over Member State budgets?
José Manuel Barroso
President of the Commission. - Speaking frankly, I am not looking at this point in terms of a fight for competence or grabbing power. That is not the problem. What we have now, and it is clear - Article 120 of the treaty - is a situation in which the economic policy of a Member State is not just a matter of national concern. We have seen during this crisis that the decisions taken by one country have a very direct spill-over effect on the other countries. So it makes sense, for instance, that the Member States, when they are preparing their budget, know what others are doing as well, because the decisions of others will have an impact on their own decisions.
We do not want at all - and I want to make this clear - to interfere in the sovereign powers of our national parliaments. It is very important for this to be respected, but it makes sense that when we are discussing the economic policy for Europe - and we have seen how interdependent we are - we should be aware of what the main intentions of the other economies are. This is the right point. What is the added value of being together? This is the sensible line the Commission is proposing, and we believe that now a consensus is emerging along these lines.
Enikő Győri
(HU) Ladies and gentlemen, the ongoing crisis has made it clear that the Union has no more time to lose. Immediate action is needed in terms of economic policy issues. We need concerted action in three areas: economic governance, long-term growth strategy and the reform of financial services. Moreover, this should be done in such a way that we do not forget to integrate the tried and tested common policies, such as the common agricultural policy or the cohesion policy. This is because Europe can hardly be successful in the world if it lacks internal cohesion and safe food production.
I am therefore asking the President of the Commission whether he is dedicated to harmonising the Europe 2020 strategy with the existing common policies. I would like to ask you, the custodian of the Community approach, which is something I greatly respect you for, whether you wish to preserve in the three areas of EU policy mentioned above the principle that any changes should only be implemented by treating the EU as a single entity and taking into account the interests of non-euro area states, making sure that the EU's internal cohesion is not affected.
José Manuel Barroso
President of the Commission. - You are completely right when you underline what I have been calling the holistic approach to economic policy. It is a mistake and I think now Member States are well aware of it.
When we speak about economic policy in Europe, just to consider the Stability and Growth Pact or just to consider the financial services reform, it all comes down to growth. To have sustainable growth, we need of course to have sound economic governance in Europe, we have to respect the Stability and Growth Pact, and we need the credibility of sound public finances, but we also need new regulatory supervision for the financial market and we need to invest in our potential for growth. This is precisely what EU 2020 is about. It is about reform. That is why I am insisting that we need fiscal consolidation and structural reform.
And, of course, we need to pursue the economic policies that are so important for us in Europe, namely in terms of economic and social cohesion - not only for 16 - or 17, because I hope that Estonia will join the euro area very soon - but for all the 27 Member States.
Franz Obermayr
(DE) Mr President, Mr Barroso, Mr van Rompuy - the President of the Council - wants to use the task force to rapidly create new rules on the euro in order to manoeuvre the EU out of the current euro crisis.
Commission President, you have already cited Article 121 several times. You speak quite rightly of mutual dependence and of the fact that economic policy naturally does not only concern the individual Member State. My specific question to you, Mr Barroso, is as follows: to what extent is the task force preparing possible sanctions against states that repeatedly infringe budgetary rules? Can the Commission imagine withdrawing EU subsidies or withdrawing structural funds? What does the Commission think of the idea of the temporary withdrawal of voting rights as a possible sanction? Finally, what is the Commission's position on demands for a uniform insolvency rule for insolvent Member States?
José Manuel Barroso
President of the Commission. - You have raised many questions. First of all, what we are doing now in the task force and indeed in the Commission - a communication on 12 May already mentioned this - is examining the possibility of reinforcing the Stability and Growth Pact, including by broadening the arsenal of incentives for compliance, as I prefer to call it.
I believe it makes sense to have these incentives for compliance - some people speak of sanctions - because we need the credibility of those instruments to ensure that the Stability and Growth Pact is respected. As we have seen, the problem was that some Member States did not respect the treaty that they themselves had adopted and ratified.
How can we do this? We want to do it in a fair manner, not just penalising those countries that are in the Cohesion Fund. That is why we are looking for ways of implementing those incentives for compliance, irrespective of whether or not the countries are cohesion countries. Those incentives for compliance can be reinforced in several ways, for instance, more upstream, including using them in the preventive part of the Pact, or more consequently, for instance with an increased degree of automaticity. We are looking at several ways and the Commission will put forward some legislative proposals on this.
Juan Fernando López Aguilar
(ES) Mr President, Mr Barroso, I would like to hear you talk about unemployment when detailing the objectives of the task force on economic governance, because you have referred on numerous occasions to the strategy as a strategy for intelligent, sustainable and inclusive growth.
Moreover, it should be inclusive, above all, for the more than 20 million Europeans who feel excluded because they have been shut out of the labour market by the brutal crisis. There are more than 20 million unemployed people who want clarification when we tell them that economic governance, stability and supervision - the economic and financial supervision package - will be reflected in a strategy that is directly aimed at getting all those people who have been personally affected by the outbreak of the crisis back to work, with ambitions of increased productivity and, hence, competitiveness.
In particular, I would like to hear you say how it will be reflected in the participation of those EU Member States that will be involved in this opportunity, which must not be squandered, and which must be relevant to the defining of new rules for global economic governance at the upcoming G20 meeting in Toronto.
José Manuel Barroso
I believe that what Mr López Aguilar said is absolutely key. We have to take a holistic view of all this. We cannot look only at certain rules of governance relating to the Stability and Growth Pact; we have to also look at what we can do for growth within Europe, especially in order to ensure that growth is sustainable and inclusive.
We have said on numerous occasions that we do not want the costs of this amendment, of this adjustment, to be borne by the weakest. They were not the ones who caused the crisis. For that reason, we think that there must be better redistribution of the sacrifice, and also, as Mr López Aguilar has said, that there needs to be an external dimension. That is why we are going to the G20 determined to propose mechanisms for the financial sector's contribution to the response to the crisis, while also seeking to strengthen a common European position on the world stage, especially within the G20.
Petru Constantin Luhan
(RO) With regard to the Europe 2020 strategy, a new European strategy promoting employment and economic growth, its main objectives approved by the European Council on 25 and 26 March this year also include those relating to improving the conditions for research and development, especially so that the combined levels of public and private investment in this sector can reach 3% of GDP. It is also mentioned that the Commission will devise an indicator intended to reflect the intensity of research, development and innovation.
My question is:
Which method are you going to use to devise this indicator and has a consultation schedule for this already been established?
José Manuel Barroso
President of the Commission. - You are right. We have made reference to the 3%, but we have not just mentioned research and development but also the concept of innovation, since this is not only a question of basic research but how research is translated into economic activity. What can research do to produce more growth and more employment? As you know, there is not a well-established indicator for innovation, which is a technical issue dividing some experts.
I personally have been discussing this with the OECD for instance. The Secretary-General of the OECD and some of his experts came to Brussels recently, and we are working with them and others to have an indicator of innovation that could be agreed upon by the academic community and the policy-making community. That is what we are doing, and we certainly want to do so in open consultation, so we very much welcome all contributions to this. It is a highly technical point, but I believe that it is critically important that we develop better indicators for innovation.
Ilda Figueiredo
(PT) Mr President, we know that the escalation of the economic and social situation is a matter of concern for many of the EU Member States. Economic growth remains very weak and is insufficient to reduce unemployment and create the jobs that the EU needs.
On the other hand, the measures that are being taken, especially austerity policies in the name of compliance with the Stability Pact and its criteria, not only run counter to the need for job creation and economic growth, but they are also exacerbating inequality and poverty. Thus, in the European Year for Combating Poverty itself, we see a situation where exclusion, poverty and unemployment are on the increase.
So I wonder, Mr President, do you not think that there is a pressing need to give priority in these macro-economic policies to social sustainability, rather than continuing to insist on financial sustainability, which undermines social sustainability itself? Do you not think that it is time to revisit the Stability and Growth Pact and its irrational criteria, and to give priority to employment and the fight for social inclusion?
José Manuel Barroso
I believe that we cannot have social sustainability without financial sustainability. Without financial sustainability, there is no confidence; without confidence, there is no investment; without investment, there are no jobs. That is why you should not set yourself up in opposition to stable and sound macro-economic policies, and concern for poverty and the most vulnerable.
In relation to poverty, we ourselves made combating poverty and the fight for social inclusion one of the objectives of the 2020 strategy, along with some concrete goals, and I agree that nowadays there is a greater risk of poverty in our societies. We are seeing new poverty phenomena which are extremely worrying. That is why governments must examine how they can respond to this issue as part of their priorities, but the solution - I must reiterate - cannot be found in budgetary indiscipline, because if this is the solution, we will probably see the situation deteriorate in some countries and, by extension, the situation for the most vulnerable within those countries.
John Bufton
I wonder, can you please tell me who is really profiting from the Greek bail-out package? Is it the people of Greece, or Greece's richest private banker, Spiro Latsis, who holds a 40% stake in the third-biggest bank in Greece, Eurobank EFG Group?
Could your friendship, sir, with Mr Latsis possibly be a conflict of interest?
José Manuel Barroso
President of the Commission. - The package put forward by Greece and the European institutions is for the benefit of the Greek people and the European economy overall. If this were not the case, it would not have been approved by the 27 Member States. Regarding the insinuation you make, I really believe that it does not deserve any kind of answer.
Georgios Papanikolaou
(EL) Mr President, it would appear that the German and French Governments agree that the European Union does not need new institutions. At least that is what Mrs Merkel and Mr Sarkozy appeared to be saying last week. However, it would appear - as we have already heard - that we are moving towards a new amendment to the Stability Pact, in which sanctions will be imposed, such as the withdrawal of voting rights, on Member States which do not apply discipline in the financial sector.
My question is very simple: do you believe that the problem of governance in Europe can be dealt with by and restricted to disciplinary issues in terms of financial adjustment? Or that, in the midst of a crisis, with the monetary tool at Community level and the financial tool at national level, we shall end up in an impasse?
Problems exist which we have repeatedly highlighted. Just yesterday, Moody's again downgraded Greece's credit reason for no good reason. Will the truce you referred to bring about specific, tangible results for the future?
José Manuel Barroso
President of the Commission. - The European institutions, together with Member States, will do their best to have something that is more credible in terms of the implementation of the Stability and Growth Pact.
It is quite obvious that there were problems in terms of implementation and non-compliance by some of the Member States with the rules that they themselves had agreed.
Already now, some limitations and even sanctions are possible under the current treaties and without new reforms.
In the future, we want to have that in an objective manner. We are looking for ways of improving the credibility of the pact in a fair way, so that the measures can be implemented objectively, irrespective of the country's status as one the richest or poorest Member States. I believe it is in the interests of all of us to have a more credible way of implementing the Stability and Growth Pact.
President
That concludes Question Hour with the President of the European Commission.
