Preparation of the Eurozone summit of 11 March 2011 (debate) 
President
The next item is a statement by the President of the Commission on the preparation of the Eurozone summit of 11 March 2011 (2011/2615/RSP)).
José Manuel Barroso
Madam President, honourable Members, we are currently experiencing one of those incredible moments when the historical process seems to speed up. On our doorstep, on the other side of the Mediterranean, a wind of freedom has started to blow.
This is such an important and urgent matter that I should first of all like to tell you that the College has just approved the Commission's contribution to assist the countries south of the Mediterranean in their transition process and to breathe new life into our relations with our Mediterranean neighbours. I shall present this contribution with Baroness Ashton during the Extraordinary European Council next Friday.
The men and women on the southern shores of the Mediterranean, especially the young people, are currently demonstrating their rejection of authoritarian regimes and their aspiration to political freedom and social justice.
Although we are aware of the extreme complexity of the situation and the challenges and difficulties that it presents, the European Union cannot afford any ambiguity. We must stand shoulder to shoulder with those who are demanding political freedom and respect for human dignity. We cannot countenance any ambiguity on the part of the European Union. A regime which fires on its own people has no place within the concert of nations.
We are offering these peoples a 'partnership for democracy and shared prosperity' founded on three pillars: democratic transformation, involvement with civil society and mutually supportive development.
We are aware of the challenges that await us. Saying no to dictatorship does not automatically guarantee the rule of law and democracy. The road to democratic transition is never an easy one. It can sometimes be winding and it is always demanding. However, Europe must stand shoulder to shoulder with those who aspire to political freedom and social justice.
Honourable Members, I would now like to turn to the other meeting to be held on Friday 11 March, the informal summit of Member States in the euro area.
The crisis has shown just how interdependent our economies are. It has shown up certain structural weaknesses. That is one reason why we must strengthen our economic governance.
The Commission has long fought for more coordinated national economic policies and stronger governance in Europe. Our proposal is to further develop the economic pillar of our Economic and Monetary Union. We highlighted this point in our report on the 10 years of the euro, EMU@10. However, the truth of the matter is that some governments were extremely reluctant to espouse a development of this nature.
Today, everyone admits that there is a need for genuine European economic governance and, moreover, the markets are continually reminding us how essential this is. This is the reason why the Member States, in the conclusions of the work of the task force, presided over by the President of the European Council, arrived at a very broad consensus on the proposals presented by the Commission on strengthening economic governance - proposals that are currently under discussion here in Parliament and in the Council.
Furthermore, we came to an agreement on the implementation of the European semester, which will help to extend economic governance, by including in the early stages not only budgetary policies but also economic policies and structural reforms for each of the Member States. It was within this context of strengthened economic governance that recently, the idea of a 'competitiveness pact' emerged, inviting Member States in the euro area to make additional efforts, largely on the basis of their national competences, to become even more competitive.
It is true that whilst the economies within the European Union are indeed extremely interdependent, those of the euro area are particularly so.
Gaps in competitiveness are a genuine problem for those countries which share the same currency. Their competitiveness and the convergence of their economies are essential in ensuring the viability of a strong and stable euro area, which will be to the benefit of the entire European Union.
Having said that, we must recognise that this idea has raised a number of concerns: fear of a two-speed Europe (the euro area and the others), the danger of losing sight of certain aspects of the economic recovery that are just as important as competitiveness, and also possibly the calling into question of the Community approach. These are all legitimate questions and we must respond to them unequivocally. This is a question of mutual confidence and credibility.
Honourable Members, I was also a little surprised to have to point out, at the last European Council on 4 February, that any specific initiative for competitiveness and for the euro area had, quite obviously, to be in accordance with the Treaty.
In its conclusions, the European Council decided that 'in taking their inspiration from the new framework for economic governance, the Heads of State or Government will take additional measures with the aim of enhancing the quality of the coordination of economic policies within the euro area in order to improve competitiveness, and this would lead to a greater degree of convergence without harming the single market'.
Moreover, I was very happy to see that, in the end, these conclusions contained explicit reference to the need for these additional advances to be made 'in accordance with the Treaty'. You might think that this goes without saying, but it is better that it is said.
The European Council therefore gave the President of the European Council a mandate to lead, in close collaboration with the President of the European Commission, consultations with the Member States of the euro area in order to determine the concrete means needed to press ahead with this.
These consultations clearly showed that, in general, Member States are in favour of adopting the Community approach.
Now I would like to be very clear on the principles that, in the Commission's view, must necessarily be abided by for such a competitiveness pact, which it might be better to call a 'convergence and competitiveness pact', since it involves measures aimed at reducing differences within the euro area, and indeed within the European Union.
The first principle is that this pact must be carried out under the conditions laid down in the Treaty and within the existing system of economic governance. We can, in this way, be sure of a truly Community approach. Because history, and notably the experiences with the Stability and Growth Pact, has shown that it is only through the Community method that we can produce results which are democratically legitimised at European level, and which are binding and can be controlled.
The pact must, of course, also respect the role of the Commission. This is essential in order to guarantee objectivity and independence in monitoring the efforts of Member States, the integrity of the single market and of all the acquis communautaire, and the clearance between the initiatives taken in the euro area and those pursued in the European Union as a whole.
I will also insist on the role of the European Parliament in monitoring the convergence and competitiveness pact because the Commission, of course, will fully inform the European Parliament.
The pact must also remain open to other Member States which might wish to take part in it and that are not members of the euro area. I think it is important to avoid any kind of stratification in our Union; that stratification will go against the very principles of solidarity that are at the core of our common project.
To justify such a pact - which involves national measures - it must contribute added value to what has already been laid down in the context of economic governance proposals put forward. I would remind you that under Article 121 of the Treaty, Member States must coordinate their national economic policies. Such a pact must also take care not to affect adversely the integrity of the single market and should even help to enhance it. In addition, it must respect social dialogue and link measures on competitiveness to our central goals, which are growth and jobs, exactly as we have stated in the Europe 2020 agenda.
Competitiveness is indeed an essential element for our economies. It is a necessary condition for entrenching job-creating growth. It is therefore important to ensure that this pact delivers real added value and does not take us away from the essential goals of growth and employment. My bottom line is growth and employment. That is why I emphasise growth, the sort of inclusive sustainable growth which lies at the heart of the Europe 2020 strategy.
That is why I insist so much on the social dimension, since the efforts required must be shared fairly. On this point, the Commission continues to work on a proposal for the taxation of financial activities. Similarly, if budgetary consolidation and structural reforms are essential for competitiveness, investment in sectors of importance for the future like research and innovation is just as necessary.
We should also bear in mind that this pact is but one part of our overall response to ensure the stability of the euro area. Progress must be made in all the other areas of our response, that is to say, in enhancing the effective financing capacity of the existing European Financial Stability Fund and broadening its scope, in preparing the establishment of a permanent mechanism as from 2013 and in implementing over the coming months tighter stress tests for banks. All of this will contribute to greater transparency, greater confidence and greater credibility.
The convergence and competitiveness pact could thus make a significant contribution if we interpret it as one measure among others within the framework of all the efforts which have been undertaken to ensure the stability of the euro area and which we hope will start to take effect as of March.
It could constitute a major additional effort towards fair and sustainable growth in Europe if it is coherent with the Community system of governance. If that is the case, if this measure is effectively carried out following a Community approach, as is the wish of the Commission and this Parliament, then I believe that the convergence and competitiveness pact will deliver added value and could help to strengthen the economic pillar of economic and monetary union. That is what this Parliament and the Commission want. The Commission will spare no effort to that end. I thank you for your attention.
Joseph Daul
Madam President, Mr Barroso, ladies and gentlemen, what lessons have we learnt from the financial crisis?
The lesson we learnt from the Second World War was that our nations should work together and stop tearing each other apart.
From the fall of the Berlin Wall, we learnt lessons about authoritarian and communist regimes and we were able to reunite our continent around the values of freedom, democracy and the social market economy.
From the terrorist attack of 11 September, we learnt that we had to strike a new balance between security and freedom.
From this financial crisis, the lesson we must learn is for our Member States to stop treating as a taboo subject any cooperation in the budgetary, fiscal and social fields. I know exactly how far we have come. The establishment, this year, of cooperation between the 27 on their budgetary priorities constitutes, in itself, a major shift in attitude. The regulations that we have provided ourselves with to make the financial markets more ethical are, also, exemplary, but they do not suffice.
My group would like to call for an agreement to be reached between Parliament and the Council, before the summer, on strengthened economic governance. My group would also like to call for efforts to be pursued on the coordination of social and fiscal matters. That is the thrust of the competitiveness pact, the initial version of which has already been revised to be in greater accordance with Community values. However, we must go even further still and ensure that both Parliament and the Commission exercise all the prerogatives that they enjoy in this respect, and in this, we are counting on the President of the Commission.
The Group of the European People's Party (Christian Democrats) welcomes and supports these proposals as did the national leaders of the party in Helsinki.
Ladies and gentlemen, how can we explain to our fellow citizens that, at the same time as we are in a delicate financial situation in mid-July each year, most of our Member States should continue to spend as if nothing were amiss? How can it be that the over-indebtedness of our States is more acceptable, more tolerable and more bearable than that of households or businesses? I have witnessed this at company level. The crisis has led to job losses and family trauma; the least we can do is to learn lessons from this and tell things as they are.
The first lesson is that we should no longer treat lightly the obligations placed on States - whatever their size - to respect budget limits.
The second lesson is this: European solidarity can only operate if, and only if, our social and fiscal regulations are at least comparable. They do not necessarily need to be identical - just comparable. At the moment, this is far from being the case.
The third lesson is that Europe must provide itself with a European stability mechanism to protect our social market economy.
The fourth and final lesson is that even in a storm, Europe is standing firm and European integration is becoming stronger.
Our American and Japanese partners have debt ratios far in excess of ours, without, it must be said, being excessively worried by it. However, that will probably not always be the case. For our part, now is the time to consolidate our economy and our competitiveness. Now is the time to work on creating jobs for the future. Now is the time to tell things as they are. Let us not miss this opportunity!
Martin Schulz
Madam President, ladies and gentlemen - the few of you who are still here, for weeks, we have been discussing a paper from Chancellor Merkel and President Sarkozy that, apparently, never existed. Despite the fact that the paper was non-existent, a press conference was held on the subject during the European Council summit. We now know for sure that the paper did exist and made for some interesting reading. In the meantime, however, the content of the paper has somehow got lost. The key elements of this paper will never see the light of day. Nonetheless, in the end, we shall have a result, namely, an expansion of the safety net. So, a non-existent paper with elusive content, presented at an artificial press conference, has led to an expansion of the safety net. This is great. However, the situation is Kafkaesque to put it mildly. This is no way to rescue the euro.
I would like to tell the President of the Commission that I found his statement to be good. It was good because you have revealed the lack of social balance in these proposals. I am sometimes a little surprised: Germany with its Chancellor, like President Sarkozy, France's prince of the opinion polls, is demanding measures that Germany itself has never taken in this form. The Greek budget, and in fact all budgets, wherever they may be, are to be cut. Are you in agreement with this, Mr Rehn?
What did Germany do in its hour of deepest crisis? It came up with a so-called scrapping premium, in other words, it used the national budget to finance a scheme to stabilise the automobile industry. The subvention for reduced working hours, which helped keep unemployment in Germany under control, was an interventionist measure by the state. Why should other states be prevented from implementing similar measures to deal with their specific situation?
Rating agency Moody's recently downgraded Greece to a ranking below Belarus and Egypt. One really does begin to wonder whether there are any signs of green shoots in the economy. I do not know. The country is ranked even lower than Vietnam. This particular drama is always played out three days in advance of a European Council summit. Something like this always happens three days before a European Council meeting. However, people listen to what Moody's has to say. Do you know what Moody's says? It says it is going to downgrade the country because it is no longer able to invest as a result of the cuts and therefore cannot generate economic growth.
So what we are talking about here is a 'hair cut'. If you look at me, you will realise that I am well qualified to tell you that a hair cut will not solve every problem. Quite the opposite in fact, because what actually happens as a result of the hair cut? The aim seems to be to improve a country's credit rating by telling those who are to provide the credit that they will lose all write-downs. Where will this eventually end? In the safety net, of course. That is why it makes sense to increase the safety net and to do everything that we can to stabilise the euro. That is why the pact itself makes perfect sense. However, an imbalance exists there. Commissioner, if your ideas are incorporated in this pact, and the economic and social balance is restored as you suggest, then the pact will be on the right path again. That is why I welcome the excellent proposal you have brought forward.
I do not want to spend any more time talking about the issue of the institutions. In institutional terms, the entire concept was wrong from the start. If it is now restructured in such a way that all operational decisions will be made by the appropriate responsible authority, in other words, the Commission, ensuring democratic legitimacy through the involvement of the European Parliament, then all is well and good. So, although we got off to a bad start and there have been a few alarms and excursions along the way, the safety net is to be extended, which is wonderful. The German Free Democratic Party has also come onboard, which is welcome news. Madam President, I am sure that your party in Germany will also support this pact, so that we have also gained ground here. If we can now succeed in giving the pact an appropriate name, namely the 'Pact for the Euro', then we may perhaps finally have achieved something worthwhile.
Guy Verhofstadt
Madam President, first of all, I think that we can now say that after years of not accepting the idea of economic union, we are finally accepting the idea of an economic union alongside monetary union, which does represent a step forward. Naturally, this is not the case for Mr Farage, but for everyone else, it does represent a step forward.
Nevertheless, Madam President, I do not think that the term that has been used is the right one. What does the word 'pact' mean? A pact is an agreement between States. An agreement between States is not what we need. What we need is a Community act, an initiative at the level of the European Union, and not a pact between Member States, which is, by its very nature, an intergovernmental pact. Therefore, this is not the right term to use as it is misleading.
Secondly, there is the approach. There is no need for anything at intergovernmental level. Intergovernmentalism has never worked within the European Union. The Lisbon strategy was intergovernmental and it failed. When Germany and France failed to respect the rules governing the stability pact in 2003-4, this proved that the intergovernmental approach was not the right one. We must use the Community approach.
Thirdly, I believe, Mr Barroso, that what is on the table is not enough or it focuses rather on very specific measures. Mrs Merkel and Mr Sarkozy's competitiveness pact comprises six specific measures. For example, in the case of pensions, it focuses on pension age. However, the pensions system is much more complex than that. It is not only a question of pension age, there is also the number of years of pension contributions, pre-pension schemes, and the existence or not of a second pillar.
Therefore, what we need are not six specific measures in an intergovernmental pact, which will never come into being or work. What we need is broad economic governance (pension schemes, labour market, wage policy, fiscal policy) within the European Union which is decided upon by the Commission and which, through a convergence code - that is the term you used - is provided to Member States so that they can apply the rules from the convergence code. That is what we must do as quickly as possible.
My request is a very simple one. I saw the paper of 25 February that you prepared with the President of the Council. I think that it is now for the Commission to prepare its own initiative. This must be done now. There is still time in the weeks to come for you to prepare these Community acts for economic governance and convergence and to table them at the Council and the European Parliament. It will then be up to us to decide and to support you in this respect. However, what I think we are doing at the moment is being reactive. In this document of the 25th - I have it here - I can read that
'monitoring by the Heads of State and Heads of Government', 'the concrete commitments undertaken by the Heads of State and Heads of Government'.
(FR) That is not how it is going to work. The States and the Prime Ministers are not going to regulate themselves! It has never worked in the past, and it will not work in the future!
Finally, and this is my last point, I also think that it is time, Mr Barroso, to present, at the earliest possible opportunity, an initiative on a crisis mechanism for banks, not at national level, as stated, but at European level. You have the right to do so as you are, in effect, the guarantor of competition rules within the European Union and you are in a position to suggest such an initiative.
Rebecca Harms
on behalf of the Verts/ALE Group. - (DE) Madam President, ladies and gentlemen, I no longer feel compelled to say anything about the somewhat embarrassing history of the competitiveness pact. It was quite bizarre to hear that the paper does not exist, even though this paper was distributed in the corridors of Council Headquarters in Brussels. As I have already stated in Brussels, the way in which the facts have been disputed in the Council's buildings bears all the hallmarks of a socialist or communist regime in its dying days.
From my point of view, the fact is that for months now, we Europeans have been experiencing more than a currency crisis, but also a crisis in the capabilities of our national governments to accept shared responsibility for the problem and to follow a joint strategy that could lead us out of these difficulties.
If we now make the crisis mechanism permanent, however we may have achieved it, then we will have taken one step forward. However, if one looks at Greece, then I would say that we may be deluding ourselves if we believe we have the crisis under control. It is equally clear in Greece that the one-sided nature of the measures, exclusive concentration on austerity measures and cuts, is not working. The country must also be in a position to make investments. When a country like Greece cuts expenditure so radically, then it needs to know where its income is to come from.
I am annoyed by the fact that, in advance of this week's meeting of the European Council and in statements relating to the Council meeting in 14 days' time, we are hearing from Germany that it will not be prepared to discuss conditions for Greece or for necessary changes. The same old mistakes are being made again: this unilateralism and insistence on a single method. If we are to follow the model described by Mr Verhofstadt, as well as decisions in relation to specific consolidation measures, economic union also requires a readiness for genuine solidarity. Hence, Greece should expect more from us than we have given so far.
I completely agree with Mr Schulz and the previous speakers and I would like to state clearly on behalf of all those in my group who have been working on this issue for many months: the Community method is something special. We need genuine, understandable decision-making processes in Brussels, so that citizens from Greece to Denmark, in Germany and in Spain, trust in us. If we really were to establish this 'closed shop' proposed in the competitiveness pact as contrived by a small number of Heads of Government, we will lose the debate about trust in the European Union. This is really what the crisis is increasingly about. I can only hope that we will be delivered from this stupidity and that this Council meeting will show more sense.
Since you mentioned sustainable growth, Mr Barroso, let me add one more thing. I cannot understand why a Commissioner for Energy in Brussels would say that ambitious climate protection targets would mean deindustrialisation in Europe. The German Minister for the Environment was in Brussels 14 days ago and presented a study that predicted six million jobs for the European Union if we set a 30% climate target. This would mean sustainable growth. Mr Barroso, you must stop Mr Oettinger.
Vicky Ford
on behalf of the ECR Group. - Madam President, in a crisis, one sometimes has to act quickly - and it is clear that the eurozone is not out of its crisis - but one also has to act intelligently. The UK restored market confidence by reforms to control spending and reduce national debt. These are now core suggestions under the competitiveness pact.
Parliament's procedures do not allow it to make rapid decisions, but there are suggestions tabled by MEPs that perhaps the European Council could find helpful. On the Irish interest rate, those of us who have lent another country money deserve an interest rate which reflects the risk, but we also want our money back. I have suggested a pre-payment incentive, a bonus to reward early repayment. Under the economic governance package, Member States will have to be more transparent with their own budgets. I would suggest the same thing should happen for taxpayers contributing to the EU's budget.
I hope that despite this crisis, our national governments will be able to listen to suggestions from this House and work together in a constructive manner.
Lothar Bisky
Madam President, Mr Barroso, I was pleased to note that you have appreciated the social dimension of this issue and have supported a social settlement. This will certainly be necessary. There is no need to repeat much of what my fellow Members have said as I am in complete agreement with them.
I am extremely sceptical of the pact that has been presented by Chancellor Merkel and President Sarkozy. Why is this? Because their reasons for presenting it are not very clear. The fact that it has no validity is quite a different issue. They are both clever strategists. I cannot accept their claim that things simply happened this way. I believe that they mean things precisely as stated there. This is the point I would like to return to once again. I believe that this is a very serious issue. Although they believe that this clause on the indexation of wages and salaries is the right answer, I am not so sure. In black and white terms, increasing the pensionable age can also be described as a reduction in pensions. It will be extremely hard to reduce debt. After all, even countries like Germany find this very difficult. I can imagine that Ireland or Greece will find themselves in huge difficulty here.
I am a little sceptical about what the proposed solution is supposed to achieve. I expect transparency in this matter. You will receive support from Parliament if you play your part in promoting greater transparency and ensuring that games like this are not played out behind Parliament's back. If these people want to make social security cuts, they need say so clearly, rather than taking countless detours to reach an objective that you, Mr Barroso, do not share and that we certainly do not share.
We are prepared to discuss the concept of coordinated European economic governance with you provided that this economic governance is worthy of the name, in other words, that it is democratic in structure and that it will help establish a sustainable, socially responsible European community. We are also willing to discuss amendments to the Treaty, for example, in relation to a social progress clause. However, we expect more detailed and earlier information and consultation. This is the only way that Parliament can monitor this process. It cannot be done without information!
Nigel Farage
on behalf of the EFD Group. - Madam President, I enjoyed Mr Barroso's view of the world today, but it was perhaps rather more ironic than he had intended.
He talked about the events in Egypt and elsewhere, saying that it is wonderful that people are rising up seeking democracy. I would remind him that democracy is a method whereby you vote for people who govern you and then, if you do not like what they do, you can get rid of them, turf them out and put somebody else in. It was ironic because his next sentence was 'and that is why in Europe, facing the euro crisis, we must reinforce the Community method'.
For the public watching in on this - which increasingly they do - the Community method means that laws are proposed in secret by unelected bureaucrats - people like you, Mr Barroso. I know the European Parliament voted for you, but you were the only candidate that was offered to us. That is not democracy!
So Mr Barroso is saying, on the one hand, that democracy is good, but on the other hand, that we cannot have it in Europe. That was reinforced by Mr Verhofstadt, who comes from Belgium and who thinks all nation states should be abolished - well, perhaps his own will be very shortly. He is saying that we want an economic union. Nobody has voted for that. Nobody has been asked whether they want it. He may vote for it but the peoples of Europe have not voted for it.
What should be discussed at the summit on Friday is Portugal. After the bailouts in Greece and Ireland, it is pretty obvious that the markets are sending a message - 'Come in number 3, your time is up'. Portuguese bond yields hit 7.6% on Monday. Mr Barroso knows that himself. It was when yields reached 7% that Ireland had to be bailed out. In April, we also have a massive rollover of Portuguese debt - another EUR 20 billion that has to rolled over. Let us remind ourselves that, in the last six months, 80% of Portugal's debt has been purchased by the European Central Bank.
We cannot go on as a European Union buying our own debt. If we do, the next debt crisis will not be in a country, but will be a debt crisis of the European Central Bank itself.
(The speaker agreed to take a blue card question under Rule 149(8))
Martin Schulz
(DE) Madam President, I am assuming that you will not know the answer, Mr Farage, but I have question for you. You constantly refer to Belgium as a non-existent nation. You have said this to Mr Van Rompuy and now you have mentioned something similar to Mr Verhofstadt. Do you know on what basis the Belgian state was founded?
Nigel Farage
Madam President, I am pleased that Mr Schulz has asked me that.
The difficulty is that when you form an artificial state that has within it more than one language group - which is clearly the case in Belgium - you may, for a period of time, be able to hold it together, but whether it is Belgium, whether it is Yugoslavia or whether it is the European Union, if you have entirely different languages and cultures, it will not hold together. The reason you are so upset about Belgium, and Mr Van Rompuy got terribly upset about it and Mr Verhofstadt never likes it, is that - is this not the truth, Mr Schulz? - Belgium is a microcosm for the whole European project.
Martin Schulz
(DE) Madam President, I will only be 30 seconds. It is interesting that the representative of a party which calls itself the United Kingdom Independence Party does not know that the Kingdom of Belgium was founded at the suggestion of the United Kingdom.
Proinsias De Rossa
(Blue card question to Mr Farage under Rule 149(8)) Madam President, I hope Mr Farage is not offended by a question from a citizen of the Irish Republic. Could I ask him what is the basis of the United Kingdom? I understand it consists of the nations of the English, the Scottish, the Welsh and the Northern Irish. Is this not a Union of nations? A very proud one, I might add?
Nigel Farage
Madam President, that is a good question. Mr Schulz, you are quite right that Belgium was a British invention, and a British mistake. We have made many over the years. We have got some things right and some things wrong, just as your country, Germany, has. Germany's history has not been whiter than white, I think you might agree.
You are quite right. Actually, holding together the United Kingdom has been something that has been deeply troubling. Indeed, Ireland went its own way, back in 1921, I think, when independence for Ireland was established. You are right. It is very difficult to hold together different cultures. I do think that the Union of England, Scotland, Wales and Northern Ireland works, at the moment, because it has consent. If it did not have consent, then there would be popular calls for referenda and those nations would be able to break away. But my point is that in this European Union, nobody is being given that opportunity.
Corien Wortmann-Kool
(NL) Madam President, the Council wants to see more ambition so that we can strengthen competitiveness and increase convergence. That is only to be applauded, of course. I would like to join in the tributes paid to President Barroso for the way in which he has picked up the gauntlet and come here to give us an explanation about the competitiveness pact, something which has even managed to keep Mr Martin Schulz sweet today. That should not go unmentioned. You have picked up that gauntlet, together with President Van Rompuy.
However, the pact seems to be having some difficulties getting off the ground, because Parliament, in particular, is having to deal with a sizeable legislative package. This is the first time Parliament has found itself in the role of colegislator when it comes to economic governance. That is why it is so important to link things together, because there is some overlap. In this House, ladies and gentlemen, we have tabled 2 000 amendments and, if we look at this, we will find almost all the matters covered by the competitiveness pact reflected in those amendments. This Parliament also wants to see more ambition and that is the very thing that worries me. How are we going to link the competitiveness pact with the EU 2020 strategy? Moreover, President Barroso, are you going to use our right of initiative actively, to establish a link between the competitiveness pact and the legislative package? If you fail to do that, then this House will pick up that gauntlet itself, in its role as colegislator.
Elisa Ferreira
(PT) Madam President, I come from a country that has existed for eight centuries and, despite this, is interested in the existence in this globalised world of a strong Europe and a Europe that is capable of dealing with China, India and the United States on equal terms. The crisis that we are living through is not a crisis in the euro area: it is, as someone was saying, a crisis of the euro area. This is because a single currency can only function when there is reliable and persistent work on convergence between the various areas comprising it, in terms of growth rates, of yields and of employment; when there is real convergence. Until now, we have been working on indicators of nominal convergence, which is in no way the same thing.
As such, Europe urgently needs to finish what it started. To finish what it started - the single currency in particular - it in fact needs to create a robust Stability Fund: a fund that enables countries in difficulty to undertake this convergence with interest rates that are acceptable and not prohibitive, and does not force them to cut the strategic investment enabling this convergence, so that they can use their growth to pay back what they borrow in times of crisis.
Mr President, we need a Commission that is active; a Commission that participates in building this Stability Fund, but also in the Eurobonds, and that listens to the message that Parliament has given it again today via the new source of own resources, which will have to be an effective reinforcement of a budget that is clearly insufficient. We have just adopted the Podimata report, which clearly advocates a financial transaction tax. In order to survive, Europe has to change course now. It needs a strong Parliament, but it also needs a Commission capable of acting rather than simply reacting: of taking the initiatives that we are awaiting anxiously, so that this experiment is not lost and so that this experiment bears fruit.
Sylvie Goulard
(FR) Madam President, Mr Barroso, Commissioner, much has been said with which I agree. I should just like to use three words.
The first word is 'respect': it was not this Parliament that made the European Parliament colegislator with regard to economic governance. It was governments that decided this in the Treaty of Lisbon. As rapporteurs, we do not think it is right to be informed of important discussions relating to the governance package through Google or the English-language press. The first thing that I would ask of you, Mr Barroso, and I also ask it of Mr Van Rompuy's colleagues present in this House, is to respect us and to let this Parliament get on with its work.
The second word is 'democracy'. Never, since the eighteenth century, have we seen a democratic system deny the separation of powers in the way that the European Council is doing now. In the separation of powers, there are those who decide and those who control. The Council, with your collusion, Mr Barroso, is currently taking upon itself the right to both decide and control, in other words, basically to do nothing.
The third word is 'effectiveness'. If we continue to water down the content of our proposals, we will arrive at the lowest common denominator and we know what that is. That is the Lisbon strategy! That is the 10 years that have led us nowhere.
We will get on with our work. This Parliament demands to be respected and will defend democracy and effectiveness.
Miguel Portas
(PT) Madam President, two weeks ago, the international press analysed your declarations on the possibility that Portugal would turn to the European Financial Stability Facility (EFSF), and interpreted them as constituting, or having constituted, encouragement. As President Barroso is certainly the person in the Commission who best understands the reality of Portugal, I would put three questions to him for three frank answers.
The first question is what does Portugal gain through recourse to the EFSF, and the International Monetary Fund, as it currently exists.
The second question is what changes to the EFSF do you consider indispensable to prevent the repetition of the shameful situation that occurred in Ireland? A loan at prohibitive interest rates, with decreased salaries and continued fiscal dumping in terms of large companies.
The third and final question is how do you think we will get back to a situation of trust when all monetary policy decisions - and the last obvious ones by the European Central Bank - continue to damage the most vulnerable countries by mortgaging growth?
Jean-Paul Gauzès
(FR) Madam President, Commissioner, ladies and gentlemen, I cannot but endorse what has just been said by Mrs Goulard on the basic presuppositions that mean that while we are well aware of the need for effectiveness and speed in the decision-making process, it is essential for Parliament to be involved. This is the only way in which our fellow citizens, of whom we are the elected representatives, can understand what is happening and explain it to them.
I would like to raise one very specific point. We are buffeted, on a daily basis, by the financial markets, these financial markets, which stand for everything and for nothing, are most often inhabited by young people who have moved from Game Boy to computer without thinking too much about it, and yet who strike fear into the hearts of our countries. The way to bring the markets under control is not to eliminate them. I do not belong to a group that seeks to abolish the markets. However, what do the markets seek? They seek to avoid risk and the rule of the game in the markets is to pass risk on to someone else. This means that an operator will never feel happy as long as there is risk.
I feel that if we are to have an impact on these financial markets, Europe must be able to draw some very clear lines, not change direction every other day, and not bubble with hosts of ideas which are never, subsequently, put into practice.
If we want to bring this financial aspect under control, and this is vital for the economic stability of our countries, we need to be able - and it is your role, Mr Barroso, to provide this impetus - to set clear goals, clear measures and to show a clear determination in regard to good economic coordination.
Proinsias De Rossa
Madam President, deliberate avoidance of economic governance and of banking regulation at both national and European level has delivered us into this crisis, and the crisis is obvious to everybody in terms of jobs, lack of growth, pensions lost, etc. So, President Barroso, and indeed Commissioner Olli Rehn, you do not have to convince me that economic governance is necessary, that it must be strong, and that all Member States, and particularly those in the eurozone, must buy into it. But we must convince the people of Europe that it is necessary, and the way we will do that is by ensuring that it is legitimate. We ensure it is legitimate by refusing to accept any proposals which are not based on the Treaties and not based on the Community method.
It will not be acceptable if it is perceived to be in the interests of one, two, three, four or five economically powerful States. That is the reality. And so it is extremely important for the future of this Union that what is agreed at the informal Council on 11 March, and what is agreed at the end of March, can be supported by the public at large in Europe.
The Irish Government that has just been elected in Ireland has a strong mandate. I quote from the programme which it has just agreed: 'We must step back from the edge of national insolvency (...) the EU-IMF Programme of Support has - to date - failed to restore confidence in the Irish economy (...) this reflects uncertainty over the affordability of the rescue package'.
I want to conclude on this point if I might. It is an important point. The failure of the programme contributes to the wider eurozone financial instability.
(The President cut off the speaker)
Sharon Bowles
Madam President, every week, the press is filled with news of a new or modified proposal from a country, the European Council and the President of the Commission. I commend the President of the ECB because he has paid heed to the discussions and reports in the Parliament and recognises our direction and determination.
The competitiveness pact and its evolution is a case in point. We already have a richer tapestry of ideas in our amendments to the economic governance package, so we will have little difficulty in moving into codecision to merge the outcomes of the positions that we take in Parliament and Council.
But we should not cherry-pick from the single market, nor continue to get it wrong. The single market is not about a fortress with a level playing field inside. It is about the external competitiveness that a large single market can generate, so it is intimately mixed with the recovery side of economic governance.
We also need a permanent financial stability mechanism capable of evolving over time, subject to governance and priorities. To the German people, convulsed with the 'transfer union' issue, I say 'look at what accompanies the demands of your own government - recapitalisation of banks and purchase of sovereign debt in a secondary market'. Germany's banks will take ten years to recognise their impaired assets from the crisis, and that includes sovereign debt. Germany's banks will not meet new international rules for bank capital, so transfer to German banks should also be the issue on your lips. That is why you need the mechanism, like all the eurozone.
Finally, on interest rates, there is a balance that has to be struck between sustainability and moral hazard.
(The President cut off the speaker)
Diogo Feio
(PT) Madam President, difficult times require brave political decisions. That is exactly why we do the jobs we do, and also why I would congratulate President Barroso on the ideas he has told us about here. The European Parliament has also already taken clear positions in a number of reports on the issue of the euro and the need for stability, as well as on the problem of growth. We cannot just look at one side of the argument.
Emerging from the crisis requires, for example, that the workings of the permanent fund take into account the specific situations of Member States that are currently paying increasing interest rates on their public debt. This is a policy that must also be committed to competitiveness, to better credit, to a tax policy that can be positive for attracting investors; in essence, to anything related to wealth creation. However, it is also for this reason that we need more European institutions. The European Parliament's positions have been set out clearly and not via the media. This is not the time for ideological decisions, but to think of the public. What they demand of us is sensible and quick decisions.
Jacek Saryusz-Wolski
Madam President, what we are facing is not a crisis of the eurozone, but a crisis of public finance in some Member States who happen to be in the eurozone - it could equally well be Hungary. Why then is there to be an exclusive meeting of eurozone Heads of State - 17 of them - without others being invited? Why create unjustified dividing lines, which we abolished six years ago through enlargement, and why create a two-speed union?
The European Commission under you, President Barroso, is the guardian of the Treaty. What is the Treaty basis for this exclusion? Why exclude the willing and able? Why not apply Articles 5 and 121 to deepen fiscal and social policy? Why not apply Treaty-based enhanced cooperation within the Treaties, with a central role for the European Commission?
The single market includes 27 Member States, as does the challenge of competitiveness. The President of the Council and the European Commission should be a leader of the EU of 27 and not the secretariat of a select group of Member States.
Roberto Gualtieri
(IT) Madam President, ladies and gentlemen, yesterday evening, the Committee on Constitutional Affairs, by a large majority, adopted Parliament's opinion on the amendment to the Treaty to introduce a stability mechanism.
The text proposes a change to the amendment to the Treaty of Lisbon, setting out a procedure which, while safeguarding the intergovernmental nature of the fund, justifies the inclusion of the rule in the Treaty. It also contains some clear proposals regarding the operation of the mechanism, designed to make it compatible with the duties that the Treaty assigns to the European institutions and with the need to have real economic governance, which simply would not work if it were intergovernmental.
To use a metaphor which you, Mr Barroso, used in the last debate, Parliament proposes putting this intergovernmental wagon on the rails in a Union train and giving the Commission its due role in running this train.
How does the Commission view Parliament's proposals? Is it willing to help push them in the negotiations over the coming days?
(The President cut off the speaker)
Pat the Cope Gallagher
Madam President, my country, Ireland, is a small open economy with a heavy concentration on foreign direct investment. The twelve and half per cent corporate rate is critical to supporting our economic recovery, retaining our jobs and employment growth. As a result of establishing a low corporate tax rate, eight of the world's top technology firms are based in my country. Any move towards converging or harmonising the rate of company tax in the European Union would substantially damage Ireland's ability to attract foreign direct investment and hence, our ability to grow to economic recovery.
It is important to remember that Ireland, like indeed other smaller countries, is geographically and historically a peripheral country in Europe and a low tax rate is a tool, a tool to address the economic limitations which come with being a peripheral country. I want to pose a question to the President. Can he confirm that under Lisbon, tax competence is a matter for each Member State?
Ilda Figueiredo
(PT) Madam President, today, whilst commemorating International Women's Day, everyone said fine words about women's rights. However, now, when we are talking about economic and financial matters, what is predominating is financial interests in so-called economic governance, with its insistence on deepening the criteria of the Stability and Growth Pact, never taking into account each country's specific characteristics, the profound economic divergences, social inequalities, unemployment or poverty.
Therefore, what we will have with such a competitiveness pact is the worsening of all the existing social problems. However, you will also be faced by the struggles of the workers, of women and of young people, as is already planned in Portugal for the coming weekends, in particular, the demonstration by the General Confederation of Portuguese Workers (CGTP) in Lisbon on 19 March. That is the hope that we will have the necessary change.
Jaroslav Paška
(SK) Madam President, I would like to begin by reminding my colleague, Vice-President Verheugen, that the EU was created through an agreement between independent sovereign states which voluntarily decided to transfer some of their powers to a new institution - the European Union - which they established together for the common coordinated administration of selected powers belonging to the sovereign states. If the European countries therefore decide that they want to create a common economic administration within the framework of EU regulations, it must be their free and voluntary decision, and not a directive from Brussels.
If we are talking about a pact, and therefore an agreement between sovereign states concerning further cooperation under the aegis of the EU, then everything is in order. If there is to be some form of closer cooperation in the area of economic management, it should quite naturally be attempted first and foremost by the euro area countries, which have made a commitment to use the common currency.
However, ladies and gentlemen, let us have no illusions. Economic regulations and tax laws differ between these countries, and this process will therefore be very complicated ...
(The President cut off the speaker)
Franz Obermayr
(DE) Madam President, thank you, in particular, for being so fair as to announce the list of speakers in advance. Alongside a uniform retirement age, the proposals for fiscal union require sales tax rates and wage policies to be harmonised. This is a further step towards economic governance and represents a major intrusion into the tax sovereignty of the Member States. It is made all the worse by the fact that the European Parliament will have nothing to say on these matters and that it was possible to fall back on Article 136 of the Treaty of Lisbon. Mrs Merkel and Mr Sarkozy are likely to be able to force their proposals through, despite opposition from other countries in the euro area.
On the subject of reinforcing the rescue package, it is clear that speculators will continue to be able to exert pressure on the failing countries in the euro area without bearing any of the resulting risk. If there is a crisis, the rescue package will be made available. Profits will be privatised and losses will be borne by the public and circulated throughout the entire euro area. Mr Barroso, you said that growth must be distributed more fairly. I would like to ask you: What is the situation with financial liabilities? The rescue package will result in the burdens being distributed even more unjustly. In addition, it will cause social problems and wantonly put the prosperity of the net contributors at risk.
José Manuel Barroso
Madam President, there were some specific questions about Portugal, which I will answer. Whether or not Portugal should resort to the European Financial Stability Facility (EFSF) is a decision for the Portuguese authorities. It is a sovereign decision for Portugal precisely because it has to do with sovereign debt. What I can tell you, obviously, is that recourse to the EFSF and to International Monetary Fund aid was seen to be a last resort: ultima ratio. It is obvious that if a country can avoid recourse to this mechanism, it should do so, as recourse to these rescue funds has costs, and not only in terms of reputation. Therefore, if a country is able, it should be avoided. However, I would repeat that it is a decision for the national authorities whether or not to resort to this rescue fund, or at least to request its activation.
Secondly, as regards what I would like to see in the EFSF, it is not a question of liking, it is a question of policy: we in the Commission are actively working with the Member States, specifically those in the euro area, to reinforce the EFSF's capacity for lending in order to expand the scope of its activities, including greater flexibility. Some of these issues are extremely sensitive from the point of view of the markets, so it does not seem prudent to me to be announcing intentions that have not become definite, but it is a work in progress in terms of the euro area. Furthermore, as you know, the Commission has clearly set out its proposal for reinforcing the EFSF and expanding its activities, specifically in its annual growth survey.
As to whether this policy should or can be changed, I am telling you now that it cannot be changed with regard to the most vulnerable countries. It would be absolutely irresponsible for countries with such a level of public or private debt to water down their efforts at budgetary consolidation and structural reforms at the moment. When a country has such a high level of debt, the markets' confidence has to recover, because if not, its economic situation becomes untenable. Therefore, if we want to help the countries that are currently most vulnerable, we must not offer them mirages or something unrealistic: on the contrary, we must support any sensible efforts that they might make toward budgetary consolidation and structural reforms. That is the only way to have the markets' trust. Naturally, this is not just the effort of the country in isolation, which needs a joint effort from the euro area. That is what is being developed with, obviously, different levels of contribution from the various parties involved.
What I can tell you is that the Commission has been doing everything in its power to suggest greater ambition. However, as the honourable Members know, the Commission makes suggestions, but in the end, the decision belongs to the Member States, specifically those of the euro area, particularly as regards matters that are strictly national competences, such as those not provided for in the Treaty, such as the EFSF.
(FR) In any case, I would like to say to the entire Parliament that many of the criticisms that I have heard here today - even though most supported the Commission's general approach - have been addressed, if I have understood correctly, to specific governments or specific Member States. Consequently, it is not up to me to speak on their behalf.
What I have to say is that the Commission has presented a package of proposals for economic governance. We have pushed to the limit our governments' ambitions. Even in the case of the governance package that my colleague, Mr Rehn, and I presented, the Member States were not willing to accept the initial level of ambition. That is the truth of the matter, for we submitted legislative proposals.
Now what has emerged is a new idea, namely, the competitiveness pact which we are trying - and here I wish to be very transparent and show my respect for Parliament - to fit as well as we can within the Community approach.
I have reported to you, in complete transparency, the Commission's efforts to make this idea regarding the impact of competitiveness useful and create added value, either in respect of growth and employment - which, as I have already said, remain a priority for the Commission - or even to strengthen the system of governance. Of course, I do not need the Commission to be reminded of its role as guarantor of the Treaty. We have unfailingly demonstrated this, be it in relation to issues of the internal market, competition or non-discrimination. I can guarantee to you once again that the Commission would not hesitate to resort to all the means at its disposal if we were to believe that any principles or rules of the Treaty were being compromised by decisions taken either by the European Council, or by any other institution.
That is why the work we do is long-term in nature and, of course, it is serious work that we carry out with a sense of responsibility. Obviously, this is an extremely delicate time for us, as you know, a time when the first thing that governments look at in the morning is the spread in their public debts.
Therefore, what we are saying does matter. The hopes that we are creating do matter. The Commission therefore owes it to itself to be ambitious and, at the same time, to be responsible in making its proposals, while knowing that they have, at least, a chance of coming to fruition, that it is not merely the case of a publicity stunt followed by a feeling of disappointment. That is what I want to avoid and that is what the Commission must avoid. We must avoid disappointment, or purely division, whether within the euro area, or even throughout the European Union.
That is why I can assure you that the Commission will keep its ambitions high. The Commission is currently telling all governments that Parliament must be involved in this competitiveness pact. The Commission is currently telling governments that it must retain a central role in this competitiveness pact, not out of institutional loyalty, not out of institutional egotism, but because I believe, needless to say, that the Commission, along with the Community approach, are a guarantee if we want to avoid divisions between the euro area and the rest of Europe. They are the guarantee if we want to avoid attacks on the integrity of the single market, or if we want to avoid calling into question other mechanisms such as the Stability and Growth Pact. They are the guarantee, indeed, that we remain European within the framework of the European Union with European solidarity.
Therefore, I was extremely frank and extremely open. The Commission carries out its work in utter transparency, constructively of course, trying to save an idea that, if it is well presented and carried out within a Community approach, could contribute added value to our efforts at governance, unlike what some of you have said. Indeed, the efforts that our governments have intensified, efforts to bring about economic political coordination, have always been part of the Commission's general approach and that of most members of this Parliament.
This therefore gives us an opportunity. If Heads of State or Government are now willing to become involved in the coordination of economic policies, and even in certain domains that were hitherto considered to be of national competence alone, I think that this should be welcomed insofar as it contributes added value to growth and employment, and insofar as it respects systems of Community governance. That is what is at stake.
I think that, from this point of view, the debate has been very useful. Furthermore, I believe that the message from this Parliament has reached the European Council. President Buzek passed it on the last time he was at the European Council. I think that on essential matters, both the Commission and Parliament will be firm in the defence of the Community approach, convinced that this is the only way for Europe to achieve the objectives we have set for ourselves in the euro area, for stability and also for growth and employment throughout the Union.
President
The debate is closed.
Written statements (Rule 149)
João Ferreira
The drama that we are once again seeing unfold before our eyes is becoming painfully repetitive and revealing of the essence of this European Union: of who makes the rules in the end, and on behalf of which interest groups. In this drama, as usual, there is no shortage of main characters, secondary characters and mere extras. The so-called 'competitiveness pact', which was drawn up by Germany and France as a despicable imposition on all the other countries of the euro area, and which was initially denied by its creators, is now being presented and advocated in the European Parliament by President Barroso of the European Commission. This after President Barroso had weeks previously criticised Chancellor Merkel for failing to acknowledge the role of the Commission. It is now clear what, in the end, the role of the Commission and its President is. The aforementioned pact, which President Barroso is now telling us not to separate from the goal of employment and growth, is a veritable revanchist crusade against labour and social rights through attacks on wages, through an increased retirement age, through attempts to destroy collective bargaining and through the levelling down of social rights. It is also an attempt to impose a veritable sentence of economic dependence in the colonial style on countries like Portugal.
