Preparation of the European Council, including the situation of the global financial system (continuation of debate) 
José Manuel Barroso
President of the Commission. - (FR) Madam President, Mr Jouyet, ladies and gentlemen, allow me first of all to make an assessment of the role of the French Presidency of the Council.
As Mr Jouyet has just said, in the midst of the French Presidency of the Council, first there was the crisis between Russia and Georgia and now there is an unprecedented crisis, this global financial crisis. It is a crisis that did not originate in Europe - it came from across the Atlantic - and it is a crisis for which we do not yet, and I stress 'yet', have the necessary rules in Europe that would enable us to give a typically European response. I can bear witness to the tremendous efforts the French Presidency and Nicolas Sarkozy have made to find a European response to this emergency.
The gravity of the financial crisis is clear to all of us and it is absolutely right that it should be at the core of the European Council meeting next week.
Addressing this crisis is an important test for the financial sector, for the Member States, for Europe and its institutions and for the international financial institutions. There is a wide variety of players involved - banks and other financial institutions, supervisors, the ECB and other central banks, the national governments, the Commission - so we need coordination. And events are moving very quickly - so we need speed.
Last week I called for a coordinated European response, because I am convinced that, without it, it will be much harder for Europe to overcome this crisis. Today I am encouraged by the determination of Member States to work together, as demonstrated by the statement of the 27 leaders of the Member States and myself on Monday, the Eurogroup and the Ecofin meetings. But I am not yet satisfied - we can and we must do more.
In particular I urge Member States to make a real effort at coordination - to improve cooperation amongst themselves and with European institutions. Yes, public intervention has taken place - largely at national level because this is where the money and competences are. This reflects the fact that we are a union of states, not one single state, with situations different at least to a certain degree. Member States' actions have in most cases been effective. But Member States need to act on the basis of common principles and within a commonly agreed framework and to take into account the cross-border effects of their actions.
I take this opportunity to welcome the measures announced today by the United Kingdom, which are in line with the set of principles agreed yesterday at Ecofin.
Of course, there are also many things that we are doing and we still need to do at the level of the European institutions, both in the short and in the medium to longer term. The proposals I have in mind are concrete, practical and realistic.
Let me be clear: tempting as it may be, this is not the time or the place for political posturing and grandstanding, for announcing grand initiatives that have no chance of being followed through. Markets would penalise this sort of behaviour immediately and the costs will be borne by economic operators and mainly by taxpayers. This is the time for ambition combined with realism and responsibility.
In this context let me pay tribute to the ECB, which has shown itself an assured and effective global player, with the euro a key steadying force.
The Commission has played its role to the full. State-aid and competition rules have been shown to be essential to give guarantees of a level playing field. The risk of action in one Member State spilling over with negative consequences for another makes these rules more essential than ever. At the same time the Commission has shown that it is fully capable of acting at speed and with the necessary flexibility. I welcome the fact that this beneficial role of state-aid rules and the way the Commission is applying them is recognised in the Ecofin Council conclusions. The Commission will shortly issue guidance setting out the broad framework within which the state-aid compatibility of recapitalisation and guarantee schemes could be rapidly assessed.
In the legislative area, we will come next week with two proposals. Firstly to promote the convergence of deposit guarantee schemes. Strengthened and more common rules here will be an important part of the exit strategy from the crisis. I am encouraged by the Ecofin Council, which has followed our proposal to at least double it, setting the common minimum threshold at EUR 50 000, with most Member States even going up to EUR 100 000.
Secondly, we will come with a proposal to make sure that European financial institutions are not disadvantaged vis-à-vis their international competitors in terms of accounting rules and of their interpretation. Last week I had a meeting with the representatives of the European banks, who were unanimous in telling me that this was a serious problem for them. The Commission role has been to promote awareness of the need to act and to create political momentum, and it seems that, now, the obstacles raised by some Member States have finally disappeared.
Then there is the medium and longer term: the measures needed to bring stability and sustainability back into financial markets. I have said it before and I say it again: apart from liquidity, we need also to inject credibility into the current economic situation. Fire-fighting is not enough. Here Commission work has been under way since the start of the crisis a year ago.
Member States need to show that we have learnt the lessons needed to build the right regulatory framework to minimise the risks of crisis. Progress on the Ecofin road map agreed last year will need to be closely monitored.
Let me highlight in particular three issues. First I would like the Council and Parliament to give real priority to our proposal of last week on capital requirements. Second, we will come next week with the proposal we announced on rating agencies. Again, I know I can rely on your support to fast-track work on it. Third, we will also review our December 2004 recommendation on executive pay, which unfortunately was ignored by Member States - or, to be fair, only one Member State decided to follow to some extent the recommendations that the Commission put forward in December 2004. This is a good illustration of the kind of resistance we have been facing in this area in the last few years.
The last point is of a more systemic nature. We also need to have a further look at European-level supervision in the single financial market. There are more than 8 000 banks in the European Union, but two thirds of total European Union bank assets are held in 44 cross-border institutes. Some operate in as many as 15 Member States. This is the single market at work - but cross-border banks have to deal with different systems of supervision in each Member State, and national supervisors are not able to address the entirety of the banking activity beyond the national borders. It makes sense to remove the mismatch between a continental-scale market and national systems of supervision. When a cross-border bank is under pressure, finding rapid solutions with several national supervisors in parallel is possible, as the past weeks have shown - but, honestly, it is not easy.
I know that we will face an uphill struggle with some Member States on this. The current debates in the Council on the Solvency II Directive show the large degree of resistance that any attempt at improving cross-border supervision still faces.
What we have proposed in Solvency II and in the Capital Requirements Directive is the strict minimum we need. Indeed, I am convinced we will have to go much further.
So it is important to underline this point. When the Commission speaks in favour of a common approach to supervision in Europe, we do not do it because there is any agenda for grabbing more competences. We do it because there is a reality - and the reality is that almost two thirds of the banking assets in the European Union already have a trans-border dimension. That means a European dimension, and we need to respond to this European dimension with a true European solution.
So we need to launch a reflection process in order to build common ground. That is why I will be setting up a high-level group to look at the right architecture to ensure that financial markets are suited to the realities of the single market and that supervisors can work together to meet the challenge of cross-border banks. I am proud to announce to you today that Jacques de Larosière, former Managing Director of the IMF, Governor of the Banque de France and President of the EBRD, has accepted my invitation to chair this group, which will be independent and will consist of high-level experts in the subject matter. I believe their ideas could feed into a general reflection process, hopefully with some solutions for the long term.
The current crisis has shown that we need comprehensive rethinking of our regulatory and supervision rules for financial markets - which include hedge funds and private equity, as highlighted by Parliament. So we will come back to these questions. I only hope that Member States will show - all of them - the same level of willingness as Parliament and the Commission.
Let me recap. In the short term we need to ensure that rescue operations and other public intervention take place in a coordinated and consistent European framework. The speedy application of state-aid rules by the Commission injects confidence between Member States, and we will hence come very rapidly with guidance. We will come next week with proposals on deposit guarantee schemes and on accounting rules.
For the medium term, there are three measures to highlight: last week's proposal on capital requirements, our forthcoming proposal on rating agencies and a review of our 2004 recommendation on executive pay.
And, in the longer term, the high-level group that I have announced should lay the ground for building consensus on cross-border supervision.
All these measures, together with Member States acting in a coordinated and consistent manner, will show a European Union addressing the real problems. The effect on confidence will be all the stronger if the institutions can show a resolution and a determination to act quickly.
As far as the Commission is concerned, I would like to inform you that I have decided to set up, inside the college, a permanent steering group on the financial crisis, composed of Commissioners Almunia, McCreevy and Kroes, which I will chair myself. I want to keep open lines with Parliament on these questions. I know that Parliament has already signalled its openness to fast-tracking proposals, and I hope that we can work together on this very important and sensitive issue, because financial stability is a public good. We have a duty to show our common determination to face this very difficult and urgent situation.
In all of this, the international dimension is critical, as was just now highlighted by the President of the Council. We need to come with solutions in Europe, but we need also to work with international financial institutions.
I particularly welcome President Sarkozy's proposal for an international conference. It is the right way forward. The more that public authorities can act in tune, the more effective our action will be, and the less the chance that action will undermine fair competition and the acquis of European integration.
The focus is on the financial crisis, and rightly so. But it would be a mistake to see European grinding to a halt as a result. There are two other areas where we must make decisive progress this autumn. There are in fact many other points but, because of time, I will just concentrate on two issues very briefly: the climate-change and energy package, and the Lisbon Treaty.
First the climate-change and energy package. Those who think that this is not the policy for an economic downturn are making a mistake. The package is central to Europe's future prosperity. Without it there will be higher costs later, we will be more vulnerable to energy shortfalls, and we will lose the chance of exploiting some big new markets. Of course industries are worried that change will bring extra costs. This is completely understandable. But I am also convinced that we can find ways to reassure industries that they will not be put at a competitive disadvantage.
I will be urging the European Council to press on and to keep up with the timetable being followed by Parliament and being maintained so effectively by the French presidency - I welcome the remarks made just now by the President-in-Office of the Council. Yesterday Parliament took an important procedural step forward. Of course we are only at the beginning here of the interinstitutional negotiations. The Commission is ready to engage constructively in order to arrive at an agreement meeting with the largest possible support both in the Council and in Parliament's plenary.
Finally, the Lisbon Treaty. Now is not the time to prejudge the precise way forward. But it is a time to recall that the last few weeks and months have shown again how Europe needs the Lisbon Treaty. Honestly, can we, in the future, deal with crises like the one we have witnessed between Russia and Georgia with the President of the Council changing every six months? It is obvious that we need more stability. It is obvious that we need more coherence. It is obvious that we need more efficiency in the decision-making process of Europe. We need a more effective Europe, a more democratic Europe, a Europe with a clear voice on the international stage. That is why I think we should keep our commitment to the Lisbon Treaty ratification.
These are not ordinary times. These are unprecedented times, which require all of us - Commission, Council and Parliament - to rise to the occasion. Together we must call and work for a European response to the financial crisis. We owe it to our citizens.
(Applause)
Joseph Daul
on behalf of the PPE-DE Group. - (FR) Madam President, President-in-Office of the Council, President of the Commission, ladies and gentlemen, the financial crisis that has suddenly struck our economies is very worrying. It is worrying for our economies, worrying for our jobs, and above all worrying for the millions of people who, having worked hard and saved to make sure they will have a pension and can leave a small inheritance for their children, are finding out that the fruits of their efforts have suddenly melted away or evaporated. The black Monday that all world stock exchanges experienced this week once again demonstrates that the markets can lose all connection with reality and that the financial system has become difficult to control.
There are many reasons for this crisis. The European Commission is right to insist that a large share of the responsibility lies with the US authorities. We must ask them for an explanation. The Commission is right. However, Europe must act too, to deal with the crisis and learn lessons from it.
At this difficult time, the first reflex of Member States is to think of themselves. However, as European leaders, our absolute priority must be to combine our efforts to prevent the financial crisis from having too great an impact on the real economy. We must at all costs prevent the crisis from having too severe and too lengthy an effect on finance for businesses, particularly for SMEs. President of the Commission, President-in-Office of the Council, I am afraid small and medium-sized enterprises will disappear with this crisis and nobody will care. We need a support plan for SMEs.
We need to make sure that our fellow citizens maintain confidence in the banking system and do not give in to this tide of panic, which would only precipitate a downward spiral. I am therefore calling on the Member States to act in a coordinated, resolute manner to prevent the crisis from affecting pensions, jobs and growth in Europe.
Like the Council Presidency, which we applaud for its determined action, our group believes that a unilateral approach is not the way forward in a global crisis. Clearly, the supervision of the financial markets is not working. That is why we need to set up a European control system. Once again, Europe must set an example for the rest of the world. The current lack of supervision poses an extremely serious problem, and the inability of credit rating agencies to act in the general interest and publish the real solvency levels of the main players in the global financial markets can no longer be tolerated.
I would add that, in this period of uncertainty and precariousness for millions of our fellow citizens, my group feels it is absolutely unacceptable that directors who have led their institutions to bankruptcy should not suffer the consequences. Here too, people must face up to their responsibilities.
I would just like to reiterate what Mr Jouyet said: it is time for action. We need concerted action; we need courage and solidarity from all twenty-seven Member States to inject confidence into our economy again.
Madam President, ladies and gentlemen, the European Council will also discuss the Lisbon Treaty, and I would like to call upon all Member States that have not yet ratified it to do so as quickly as possible, so that each country can express a definitive opinion on the question. I know there are people in this room who cannot see the value of it, but I do not share their opinion.
We understand the situation Ireland is in and we understand that its government needs time to respond after the vote of its citizens, which we respect. However, although the European Union is prepared to demonstrate patience and understanding, the status quo is untenable in the medium and long term. I therefore call upon the European Council to demonstrate the political will necessary, after examining the situation in October, for a road map like the one you proposed along with a definite timetable to be adopted in December.
I also call upon the European Council to take responsibility for its decisions: either the Treaty of Lisbon will eventually apply, and it will apply to everyone, or the Treaty of Nice applies, and does so for all institutions. Of course, the European Parliament will have fewer seats and fewer powers than with the Treaty of Lisbon, but the European Commission will also have fewer Commissioners than Member States. The Treaty of Nice currently applies. That is also the reality. All political decisions come at a price, and if Europe wants credibility, it has to take responsibility for its political decisions, whether they concern the financial crisis or its institutions.
I would like to add, Madam President, President of the Commission and President-in-Office of the Council, that regarding the energy/climate package on the table at this difficult time, we need to proceed carefully, to keep the general orientations but not make businesses afraid, so that investment can continue.
To those who do not agree, I will simply say that I managed a very serious crisis: mad cow disease. For one and a half years, we had uncertainty; we have to reassure, accept and go on with the system, for the environment, for our planet, but we also have to accept what is happening financially. If we need another year, we will take another year to get where we need to be in order to save the planet and provide a future for our children and grandchildren.
Martin Schulz
Madam President, I would also like to begin with the referendum in Ireland - that is, the Treaty of Lisbon. You are right, Commission President - we need the Treaty more than ever. Therefore, I am of the opinion that we also need a stable foundation in order to put it into effect, and that includes persuading the Irish people and Irish voters to vote in favour of this Treaty.
If the Irish Government cannot manage to do this before the European election, then we will decide the composition of the next European Parliament and the Commission on the basis of the Treaty of Nice. The matter will continue after that, however, because we need these reforms. We need them for enlargement, we need them to deal with crises, as we are currently experiencing once again, and in the time remaining until a new referendum is held in Ireland, we have sufficient time to find out exactly which sources the anti-Lisbon campaign is getting its funds from - the CIA, military-industrial powers in the United States, or whatever.
(Heckling)
Listen: the people I was talking about are already interjecting. We know where they get their money from. We will investigate this much more closely, you can be sure of that!
Commission President, you gave an accurate description of the crisis that we are currently experiencing, but there are several further comments to be made about what you said. Do not be angry with me, but I must say that even though much of your speech was good, one thing alarmed me, and that is the composition of the steering group you are putting together to deal with the crisis. It is a matter of course that you are a member, and it is also appropriate for a commissioner as well qualified as Mr Almunia to be part of it. However, now you have told us that Mr McCreevy is someone you want to include in this steering group to deal with this crisis. If ever there was an apologist for misleading market radicalism in this House and in your Commission, it is Mr McCreevy.
(Applause)
With the best will in the world, you cannot make arsonists into firefighters! It simply will not work. As far as Commissioner Kroes is concerned, you mentioned that we had 8 000 banks in Europe. Why not ask Mrs Kroes what she thinks of the public banking system in the European Union. In my country there are public banks that have less in the way of state guarantees than private banks are now being given by various states. In my country, your Mrs Kroes has just done away with savings banks - with the help of the government of the state of North Rhine-Westphalia, what is more! Trusting the cat to guard the cream is not the way out of this crisis!
For years here we have had to listen to the neoliberal dogma that the market would sort everything out. For years we have been told that the effects generated by the market would 'trickle down' and that in the end, everyone would benefit. What has actually happened is that those who were supposed to benefit from all this, the taxpayers, are having to foot the bill. In a crisis like this, that has to be said.
The house is on fire, so the fire must be put out. The measures are the correct ones - and you are right, they must be coordinated throughout Europe - because we need to establish confidence and regain trust, because we need to conquer fear, otherwise this fear will become a self-fulfilling prophecy and merely accelerate the collapse that we are trying to avoid. We support these measures, too, but let me add this: the house that has just burnt down cannot be rebuilt just as it was before. The new house must be different. It must be built on a firm foundation, a foundation with clear rules.
The President of the Kiel Institute for the World Economy, Dennis Snower, who is not a member of the radical socialist movement, put it well in an interview when he said that the regulation of the financial markets had been neither sufficient nor appropriate and that was why the system did not work. Yes, he knows what he is talking about. However, those who for years have been asking to be allowed to create regulations have had to put up with being told by those of you on the right-hand side of this chamber that we were stuck in the 19th century. 'The voice of the past,' Mr Watson said of my demands in a recent debate here, when I called for regulation and transparency and when I talked about rating agencies and rules to achieve that. Well, the voice of the past has something to say: the rules of the past are the necessity for the future. That is the unequivocal answer that we give to counter this neoliberal mainstream, which has fallen apart in the classic way.
(Applause)
The difficulties that we are now facing will not be so easy to overcome. It will take a long time. During this long time, we must avoid one thing above all: a repetition, in the future, of what led to the current very serious developments. Therefore, when formulating the rules, we need to think very specifically about legal prohibition of certain types of speculation.
Nobody can tell me to what extent it is morally justified to bet on food shortages in international financial forums so that food prices will rise, because investing in the facilities of food companies brings high returns. A shortage of food creates hunger, but one man's hunger is another man's profit. That is a perverse system. There must be legislation to prevent such things. Commission President, perhaps this topic is something that the High Level Group on the architecture of the financial markets that you are putting together could consider.
To close, I would like to congratulate you. It is a good decision. I also want to say, however, that Parliament asked you to do this three years ago, in the Muscat report. You have ignored that request for three years. You are coming late to the matter, but at least you are coming, and for that, many thanks.
Graham Watson
on behalf of the ALDE Group. - Mr President, I would say to the President-in-Office: At next week's European Council you must move forward discussions on the Lisbon Treaty. You must be constructive, yet be considerate to the countries which have yet to ratify. You must adopt the European Pact on Immigration and Asylum - though we must still search for schemes to seek skilled newcomers and manage migration - and you should discuss progress in combating climate change.
But no one can mistake the most pressing issue facing this Council. A storm is battering global finance markets, and its effects are being felt across Europe - in jobs lost, pensions eroded and savings under threat. Our citizens are worried. The challenges we face may be the gravest for generations, and they are evolving at lightning speed. It is at moments like this that our Union is defined. We need a collective response. We cannot sustain a situation in which Member States surprise one another through unilateral decisions with multilateral implications. Europe needs coordinated and consistent policies to stem the flow of financial losses, to establish transparency and good practice and to prevent future woes.
There are some who think they can now tap-dance on the grave of capitalism; but solutions will not be found in closed markets and command economies. They only ever short-changed Europe's citizens. If you build your house there, Martin Schulz, it will be a house built of straw. What we are witnessing is not the failure of the market economy. Rather it is the excesses of unfettered, ineffectively regulated markets. Financial markets currently owe less to Adam Smith than to the Cincinnati Kid. The greed of individual bankers, traders and short-sellers is certainly to blame, but so too is the failure of governments to ensure transparency and honesty in their dealings.
Liberal Democrats have long warned of the dangers which caught the Council unaware and the Commission wrong-footed. Last May my friend Otto Graf Lambsdorff, together with Jacques Delors and others, signed a letter to the Slovenian presidency of the Council. It highlighted the profound danger of economic collapse posed by recent banking practices. In that letter they wrote, 'Decent capitalism needs effective public policy. Profit-seeking is the essence of a market economy, but when everything is for sale, social cohesion melts and the system breaks down.' Europe was slow to heed such worries. It must now do what it can to put that system back to business.
Liberals and Democrats hope that the conclusions of the Ecofin Council will form the basis for agreement at the European Council. They are not an overnight cure, but they will help to remedy the underlying sickness. It is right to raise deposit guarantee protection to a EUR 50 000 minimum across the Union. Family savings will be secure and capital flight discouraged. We also look forward to hearing the Commission's proposal to promote convergence of deposit guarantee schemes, just as we support rapid adoption of your ideas for improving capital adequacy. When you look at credit rating agencies, look at who pays their fees and at how they are supervised.
But we also need to strengthen the links between national financial regulators. Representatives from the euro-zone central banks sit together in the Governing Council of the ECB. Similarly, we need a pan-European financial services authority to maintain order and transparency between financial institutions. The European Council should ask whether the European Union budget might be used to allow the European Investment Bank and the EIF to give credit guarantees for small businesses. They, after all, provide the jobs on which Europeans rely. It is those people who now need speedy and specific action, who need all parties and all Member States to work as one, who expect common solutions to a common challenge.
Pierre Jonckheer
on behalf of the Verts/ALE Group. - (FR) Madam President, President of the Council, President of the Commission, Mr Almunia, the European Verts Group - the group I have been asked to represent this afternoon - has approved the decisions of yesterday's Ecofin Council. I think the only thing that should concern us, and which is of concern to you, is the reaction of the markets today, which do not seem entirely convinced that the proposals are correct. I hope the markets are going to pull themselves together again and I hope the European authorities will continue to act in this sense.
I would like to share with you three comments, or three messages. The first message concerns Europe itself. Parliament is in fact divided, in part. Many people have wanted to point out that Europe was absent from the management of the banking and financial crisis. We, the European Verts, would like to point out that the banking crisis particularly reveals the inadequacy of common European rules and that, in this area as in many others, there is a need for more of Europe, not less of Europe.
The second message concerns the responsibility of those involved. I have heard and I understand that Mr Barroso in particular believes that the time has come for action, certainly, but I also think the time has come to identify where some of the responsibility lies. It would be all too easy for me to point the finger at the Council, the governments that make up the Council, or the Commission, since some Commissioners believed that better lawmaking meant self regulation, not lawmaking at all. To take a concrete example, let us look at the directive on deposit guarantee schemes: in November 2006, the Commission submitted a report which said that no further legislation was needed in this field. I am not sure you would uphold this position today.
However, it is actually Parliament I am addressing. A week ago, in this Parliament, we voted for a report by Mr Rasmussen. The first version was excellent and we supported it. Parliament had to secure a majority vote by lowering the requirements expressed by the rapporteur himself.
We are experiencing the same thing today with the Lamfalussy report on the structure of supervision of the financial markets. There again, everyone needs to take his own share of the blame. I believe the PPE Group and the Liberal Group, Mr Watson, have a particular responsibility for the watering down of the report that we will be voting on tomorrow.
Next, I would just like to say a few words about the crisis. This is a message to you, Mr Barroso, since you are the one setting up another reflection group (there are many, but a new one is perhaps welcome), notably on the link between the financial crisis and the environmental crisis. The financial crisis, as you have said yourself, does not erase the environmental crisis. From that point of view, I think what this banking crisis shows in the medium term is that there is a real problem with the allocation of savings in the European Union. What I would like - what the European Greens would like you to put on the agenda of this group - is reflection on the instruments that the European Union might have at its disposal. I am thinking in particular of the European Investment Bank, which should be charged with providing long-term finance so that the energy/climate package and the investment it represents are effectively guaranteed. I think this is essential.
Brian Crowley
on behalf of the UEN Group. - Madam President, first of all I want to pay tribute to the Council and congratulate them for their efforts, particularly with regard to Russia and the situation in Georgia. It took a lot of strength and courage and great diplomacy to find a peaceful solution to the difficulties which we faced. It proved - if anybody needed further proof - that collectively and with strong leadership we can achieve an awful lot more than mere military might or economic wealth can bring to us, simply by the example that we give and the tactics that we employ.
Secondly I think it is important to make sure that bringing the Euro-Mediterranean Partnership to life is on the agenda for the upcoming Council. Never at any stage in our history is it more required that we bring together our partners at the Mediterranean level to guarantee that we can bring about not just economic development but also the peaceful coexistence of nations. In particular we should follow the example of the Egyptian Government in their ongoing peace negotiations with regard to Sudan, Chad and other areas.
I have two further points. It would be wrong of me not to mention the situation with regard to Ireland and the Lisbon Treaty. Member States have already given Ireland a period for reflection - for which we are thankful - but this is no different to the period of reflection which both France and the Netherlands got when they rejected the Constitutional Treaty. It takes time to put forward proposals and ideas as to how these difficulties can be resolved. It behoves us in Parliament to ensure that we do not try to put the gun to any country's head regarding whether or not it will ratify the Treaty - in particular because it requires a democratic vote of the people to guarantee the ratification of that Treaty.
Secondly, regarding the present financial crisis, I do not blame or point a finger at any particular person. I congratulate the Council for getting their act together and taking decisive action. I once again congratulate the Commission for actually standing up and saying what needed to be said before the Council acted and for ensuring that credibility was put into the market by saying that we are capable, able and willing to take action, either through the ECB, Ecofin, individual Member States or whatever else.
But let us not make the mistake of saying that everything that went on in the last two weeks is wrong and that everything that comes in the future is going to be right. Our history must teach us that, over the period of time that we have been living in this world, there have been alterations and changes. Those alterations and changes bring horrors of hardship on people.
We must first of all guarantee to protect the ordinary person. The banks have got a bail-out. The banks have got a guarantee. With that guarantee also comes the responsibility for banks to now start lending to businesses and to people, to allow the economies to pick up again. It is not only about cutting the wages or salaries of executives; it is about ensuring that the economic cycle can get back to where it is supposed to be. The deposit guarantee is only a small aspect of this.
Francis Wurtz
on behalf of the GUE/NGL Group. - (FR) Madam President, President-in-Office of the Council, President of the Commission, for several weeks now we have been watching global panic and unbearable losses, against a dizzying background of billions of spiralling euros and dollars.
This has been generated by a system in the name of which European leaders have for years been recommending moderation on pay and caution on social expenditure, and have allowed inequalities to soar. These same leaders are now flying to the rescue of the banks to refloat them, before putting them back in the private sector, while announcing a long period of recession and sacrifices for the general population.
Many people following these events, totally stunned, cannot help but see a lesson in them, not about excess, Mr Watson, but about the very essence of capitalism in all its injustice and brutality, whatever the phenomenal transformations it has undergone over the last few decades. I think European leaders are going to have some explaining to do to our fellow citizens. Consider your responsibilities rather than seeking to challenge universal suffrage in Ireland, or anywhere else.
Today, I just want to make three immediate, good-sense proposals to deal with the most pressing issues while opening the way for a real change of political orientation. In the first place, I think we should not skimp when it comes to reassuring small and medium savers who are legitimately concerned about their modest assets. The announcement about this was, I think, late, timid and woolly. On 15 October, the whole of the European Council needs to formally provide an absolute guarantee for deposits throughout European Union territory.
Secondly, a rudimentary awareness of ethics as much as a simple concern for effectiveness should prevent sorcerers' apprentices from profiting now or in future from the public intervention made necessary by the collapse caused by their irrational exuberance. That is why every government should, or in any case should be able to, compensate for the aid given to financial institutions in peril, through the lasting nationalisation of their healthy assets. The purpose of this would be to set up a public financial sector, in the future, devoted entirely to financing socially worthwhile investment, particularly the kind that creates jobs.
Thirdly, and more generally, the real economy must be assisted with an ambitious new credit policy. This concerns the EIB as much as the ECB. The EIB, to start with, should be given the responsibility and resources for achieving the task of guaranteeing SMEs access to all the credit they need to develop production, provided that real, properly paid jobs are created and the rights of their employees are respected. In this regard, the decision taken to assist SMEs by providing EUR 30 billion within three years is worthwhile, but I feel the amount is too low and the timescale too long. In France alone, SMEs need EUR 60 billion a year, and there are twenty-seven countries in the EU. Furthermore, it is now that they need the oxygen in many cases. Later may be too late.
As for the ECB, surely it is now or never that we must ask it to adapt its role to the vital needs of the economy and our companies by directing money not to the financial markets, but to the real economy? It has an instrument for doing this, and we do not understand why it is adamant about not using it. The instrument is selective credit, which is very expensive if it is used for financial operations, but is very accessible when it encourages jobs, training and all the worthwhile investments.
I am aware that some of these proposals are not very orthodox. So what? Instead of orthodox politics in a collapsing EU, I prefer the idea of reactive, creative politics serving the renewal of Europe and a life of dignity for Europeans.
Nigel Farage
on behalf of the IND/DEM Group. - Madam President, what a funny old European Union it is, isn't it? Last Saturday afternoon, after a jolly good lunch at the Élysée, the European leaders stood on the steps and they talked with fairly weak smiles about solidarity. The smiles were weak, of course, because President Sarkozy's US-style bail-out plan had already collapsed into the dust. But nonetheless, 'United we stand' is what was said. And yet, with almost comic hypocrisy, the German Chancellor decided that German interests come first and European interests come second, and she acted - and, perhaps for the first time in years, she got loud applause from her own electorate.
Of course it was the Irish that started this trend the week before by going their own way, and my admiration for Ireland grows by the day. But I think the last week is going to prove to be the watershed moment for this entire European project. You see, the only way to stop countries acting in their own national interest is to take that power away from them - to form a treasury department, there in Frankfurt, that has power over tax, and power over government spending. Indeed I have heard some of the EU extremists this afternoon effectively call for that. Yet you cannot do it, because it will not command public support. In fact to do that would be even more unpopular than your hated Lisbon Treaty.
No: it is more likely that what has happened in the last week marks the beginning of the end. The markets are saying it already. Italian government bonds now yield 1% more than German- or French-issued government bonds. The markets are saying that economic and monetary union will not last. And I am not surprised, because it never was an optimal currency zone. One interest rate could never fit all these different countries, and you have never had proper public support.
But it must be one thing or the other. It is either a full EU state that controls everything, or it is disintegration and back to national control. The credit crunch is hitting and hurting all of us, but I see a speck of light at the end of the tunnel. I see a dividend: possibly the beginning of the end of this whole mad and unwanted project.
Jana Bobošíková
(CS) Ladies and gentlemen, the representatives of the Commission and of the Member States of the Union should resist two temptations next week. Firstly, they should accept that the Lisbon Treaty is dead and that any pressure on the Irish citizens to make them change their opinion is unacceptable, and they should halt the ratification process. Secondly, all senior politicians should realise that there is no such thing as a free lunch. Right now they should stop acting as Messiahs who will save the Union's economy, while playing roulette with market freedom and taxpayers' money. The shareholders and bank managers should pay the price for bankers' bad management.
Ladies and gentlemen, at this moment all politicians are offering guarantees to bail out irresponsible bankers. By doing so they create a moral hazard. By offering State guarantees they are laughing in the faces of taxpayers and the much vaunted small and medium-sized enterprises. They send just one message to the major investors: you have the right to expect fat profits and in doing so you bear no risk and, in particular, no responsibilities. In exchange for this assistance, however, the politicians will expect a heavy price to be paid in return, and that will be market regulation. This will not prevent the crisis. This will merely postpone it. In addition, by abandoning the rules of fair economic competition we will be creating a jungle.
Ladies and gentlemen, we are facing recession and growing unemployment. At the same time, the political elite are facing a difficult test: whether or not to succumb to the lure of populism that always offers easy solutions. In the 1930s Europe did not weather the storm and failed. I firmly believe that we will weather the storm today.
Jean-Pierre Jouyet
President-in-Office of the Council. - (FR) Madam President, President of the Commission, ladies and gentlemen. I will be brief. I just want to tell you, having listened to you, that the first lesson I have learned from the first part of the French Presidency is that one crisis does not make the other crises go away.
The financial crisis does not make the external affairs crisis go away, with Russia and Georgia and in other parts of the world; the financial and external affairs crises do not make the food crises and environmental crises go away. All these challenges have to be faced, even if we have to adapt in order to maintain our priorities.
There are three types of priority. You highlighted the first in your speeches; it is the return of confidence - as the President of the Commission said - so that our fellow citizens feel more protected in relation to Europe and to prevent a gulf opening up between the European Union - the idea we all have of Europe - and our fellow citizens.
The second priority is to adapt our institutional system so we have a more involved Europe, a better organised Europe, a Europe more capable of deciding - and deciding quickly - because we know that none of these challenges can be dealt with individually or at national level.
The third priority is to move towards a development model that is more sustainable, more focused on the long term, and towards the equitable management of resources, while taking account of the very sudden slow-down in our economies that, as we well know, we are going to be facing.
I fully support what the President of the European Commission said. We need to be fair, we have to make up for lost time and review certain dogmas. I think the Commission President has understood this and the proposals he is making are headed in the right direction. We clearly need to move towards greater integration and better financial supervision at European level.
I will not go back over the various measures listed, but obviously it is up to the Council and the Member States to shoulder their responsibilities and it is up to this Parliament to assume its responsibilities in relation to the proposals on the table - which are very necessary - concerning standards, the credit rating agencies, capital to credit ratios, directors' pay and the pay of others working in the banking sector (there is also traders' pay, which is not often talked about but it also seems to me to be an important problem). From this point of view, I believe that setting up the high-level group is an excellent initiative. I would just like to say, however, on behalf of the Presidency, that I would prefer it if its composition was more diverse and as broad as it could be while remaining effective. As the President of the Commission said, what is a liquidity crisis today should not turn into a credibility crisis tomorrow.
Mr Daul highlighted perfectly what changes should be made in relation to the objectives that remain, particularly as regards the energy/climate package. It is also very important, as he pointed out, that we have a dimension that supports SMEs, that the European Investment Bank really takes strong action. Consequently, the finance package that has been agreed is important and it needs to be implemented very quickly as regards support for small and medium-sized enterprises.
I agree with what Mr Schulz said. We need much more coordination. We need an action plan. We also need an action plan to support business. That is what Mr Schulz said and I go along with it entirely. He knows we will support him on this. As he already has good contacts with Mr Steinbruck, I think he will also be able to convince him.
Concerning what Mr Watson said, I agree with him that we do not need more regulation, but better adapted regulation. That is what is important. We are not dogmatists regarding regulation, either. As many of you have said, it is clear that to regain confidence, we need regulation in the areas mentioned, and it should be better adapted, more reactive regulation. There again, it is up to the Member States to shoulder their responsibilities in this regard.
Finally, as pointed out by Mr Wurtz, we must ensure that the European Investment Bank has an active role to play in the current context. The European Council will also be speaking about this, and we must take the measures necessary to ensure we have an institutional framework suited to financial groups, financial players that increasingly operate across borders. That is the real hiatus we have to face in this crisis: that really, the way we are organised remains totally national, while the challenges are trans-European. Together we must find measures that enable us to change the method of regulation rather than over-regulating, and we must make sure Europe unites to make its voice heard in the forthcoming international meetings so that, unlike in the past, we do not have the rules of others and disorder of others imposed on us, for which we have to bear the consequences, but rather we can move towards a more stable international order, one that is more in keeping with the challenges we have to face on a global level.
José Manuel Barroso
President of the Commission. - (FR) Madam President, I would just like to underline two or three points that seem important at this stage in the debate. Broadly speaking, I have noticed that there is nevertheless a consensus on the general lines we should be following.
It is necessary to understand that this is a highly unusual situation we are in, and that we have a mainly national framework with which to be dealing with a transnational crisis. The truth is, the supervisory authorities are national authorities. The Commission and the European Central Bank do not have powers of financial supervision.
Regarding the Commission's powers, particularly as regards State aid, we have put in some work on this, and I can assure you that there is excellent cooperation between our services and the governments, which were keen to be in contact with us early on. I can also tell you that cooperation with the European Central Bank has been excellent, and once again I have witnessed the extraordinary effort the French Presidency has had to make in order to achieve a European approach, against this difficult background of fragmented supervisory systems, though still with a European dimension. Anyway, I would applaud, in this context, the decision the European Central Bank has taken today to cut interest rates, a decision taken in coordination with other central banks.
As regards the points you underlined in your speeches, I would just like to highlight two things. One, raised by Mr Daul, concerns the issue of the real economy and SMEs. It is now certain - it is a recognised fact - that the crisis is already having consequences for the real economy, and that we have more difficult times ahead. I believe we should find targeted measures, within the framework of all the reforms being put in place by Europe, to adapt to a much more difficult context of competition and to find ways of helping SMEs in concrete ways. This is also the reason why, within the framework of these initiatives, the European Investment Bank has been encouraged to put measures in place for SMEs. The whole of this dimension, the dimension of the real economy, must be followed very closely over the next few months.
Another point raised by Mr Schulz concerns the problem of those outside Europe, the problem of the very poorest. I believe it is also my duty to draw your attention to an important problem here. We are talking at the moment about 'financial rescue', but we must not forget 'human rescue'. This year, according to World Bank figures, 75 million more people will be victims of starvation. Next year, they are predicting 100 million more.
That is why, while recognising that our problems in Europe have multiplied, we must not forget the problems in developing countries. We must not forget the tragedy in Africa. We must make the effort to respond positively to the request we recently received from the United Nations Secretary General and the President of the World Bank, in a letter addressed to all heads of State and government, and also, I think, to the President of the European Parliament, namely that the European institutions, that is Parliament and the Council, should approve the Commission's initiative concerning the implementation of an emergency plan to support farming in developing countries.
We must not forget, as Mr Jouyet quite rightly said, that all these crises are linked: the financial crisis, the world food crisis, the energy crisis, important aspects as regards the geopolitical crisis. I would very much like to see Europe take part in a constructive approach, not just for us, as Europeans, but also for the rest of the world.
We contribute to a new order in globalisation, which we want to be fair, not by shutting ourselves off, not by questioning the concept of the market economy, but by trying to apply fairer principles and rules in the market economy. As has been said, the current problem is also a problem of incapacity, not so much of the market - though many market operators are using unacceptable behaviour - but more of the competence of certain political or public authorities, which have not found suitable solutions for a market situation in terms of regulation.
To finish, I can tell you that in our daily contacts with the governments I am seeing a recognition of the need for this European dimension. For example, as you no doubt know, until now, Europe and even the euro zone did not really exist as such for the international financial authorities. It was only a few months ago, after many years' insistence, that the European Commission finally won the right to a seat, to a presence at the Financial Stability Forum.
It is an undeniable fact that, until now, even with the Stability and Growth Pact, even with a European Central Bank, the external representation of the EU in international financial bodies has fallen far short of the actual importance of Economic and Monetary Union and what the European Union project represents. Therefore, even at the heart of the crisis, I see opportunities. If we demonstrate wisdom, if we understand what we can and must do, I can see an opportunity for developing our idea of a Europe at the service of our citizens.
Philip Bushill-Matthews
Madam President, the current financial crisis is not just affecting banks and investors. Manufacturers, retailers, importers and exporters are all finding it more difficult to get the working capital they need, and there is a real risk that the major trade slowdown may intensify. So maintaining the free flow of goods - not just within Europe but also to and from the developing world, as President Barroso has just said - is therefore of particular concern.
That is why - and this is the first of my two related points - the rapid appointment of a new trade Commissioner is so important at this time. Colleagues in the House may recall that we all supported Peter Mandelson across most parties and delegations at the time of his appointment. Even the British Conservatives supported him. I would hope that this may yet be the case with his successor, but I should share with the House that a number of colleagues from different delegations have already raised real concerns about her apparent lack of experience for the important trade portfolio.
So I strongly suggest that it would be in her interest, as well as ours, for her hearing to be brought forward from 10 November, if at all possible. One month is a long time to wait and a long time for further doubts to develop. There is another reason: I have just been passed an e-mail saying that the Transatlantic Economic Council, scheduled for 16 October, has had to be postponed because the outgoing Commissioner has 'outgone' and the incoming Commissioner has yet to be confirmed. So please can we get the show on the road. It is all our interests.
My second point concerns SMEs, a point passionately mentioned by my good friend and colleague, Joseph Daul. When the Council talks about the big picture, please can they talk about the little picture as well? I noticed the other day that the end of August was the closure date for consultation on the Late Payments Directive. I think that timing was unfortunate. Whatever companies may have said up until the end of August, they would have a more powerful message now. Could I please ask for that consultation period to be reopened just for a further couple of months, because I think the fresh message about the lack of working capital is something that we really ought to take on board. I am not convinced that a Late Payments Directive review would solve the problem, but I do think this sort of analysis would contribute to an understanding of the problem.
Pervenche Berès
(FR) Madam President, President-in-Office of the Council, let me say what a pity it is that the minister responsible for the Ecofin Council is not here. She is the President of this Council and is calling for strong European cooperation. I think her rightful place today was among us.
President of the Commission, I hear you and I am not going to copy those who say it is all just words, but all the same, when have I really seen you mobilised on these issues since the crisis began? You have come here on occasion with proposals, when you felt that within the Member States, particularly the largest (I am thinking of France and Germany on the issue of sovereign wealth funds), there might be trouble. You came with a proposal drawn up within your own cabinet, independently of the Commissioner in charge, Mr Charlie McCreevy.
However, since then, I have not really had the impression that you are particularly mobilised. Anyway, I wanted to ask you something: where today have you hidden the Commissioner responsible for the state of the financial markets? I am wondering why he is not at your side. I am pleased to see our friend Joaquin Almunia beside you, but I find it a little strange that the Commissioner responsible is not here.
As for the Commissioner responsible, in July 2007, when all his services were mobilised, what did he do about informing us that the situation for the European banks was going to be dramatic, that the aftermath of this crisis for the European economy was going to be dramatic? Your services were told. That was the moment, Mr Barroso, to come with proposals that would have made it possible to reassure European savers on the deposit guarantee, on how we were going to manage these difficult situations. Where was your Commissioner then?
You are delighted that the Commission - listen to me, Mr Barroso - was invited to sit on the Financial Stability Forum. Did you know that when the Forum met last Monday, your Commissioner, Mr McCreevy, did not go because he was in Dublin? What did he say when the country he comes from decided to go it alone on the question of deposit guarantees in the sector for which he is responsible in the Commission?
You tell us there is resistance within the European Council, but do you really need to await orders from the finance ministers to set up a deposit guarantee scheme or to look at how accounting standards will be applied at European level?
Mr Barroso, it is your political responsibility today to demonstrate courage, leadership and initiative. Up to now, I have seen no such thing.
Wolf Klinz
(DE) Madam President, ladies and gentlemen, events are happening very fast; the markets are in free fall. Nobody knows whether it is due to the loss of confidence that has set in everywhere or whether perhaps speculators are at work, trying to find out whether, and to what extent, they can still bring the market to its knees.
In a whole-day workshop in February this year, the Group of the Alliance of Liberals and Democrats for Europe already attempted to identify the causes of the crisis and determine concrete measures that we should vote in to avoid a repetition of this crisis in the future.
Blaming individual market participants achieves very little. Basically, we must admit that we have all failed: the investment banks in which products were developed that were ultimately so complex that nobody understood them, the mortgage banks that waived credit assessments, the rating agencies that generously disregarded conflicts of interest, and the supervisory organs that did not work closely enough with each other or with the relevant central banks and did not make the effort to achieve true transparency of special purpose vehicles that were not required to report individually on their balance of accounts.
Nothing has been done for far too long! The Commission, which we asked years ago to look into the rating agencies to give us some clarity about their activities and to improve transparency in other areas, waited far too long before taking any measures. Now, measures that would have been unthinkable a few months ago are being taken practically every day: the G7 on Saturday, the 27 Member States on Monday, the Ministers of Finance on Tuesday, the measures by the British Government today, and at the same time, a coordinated initiative by the central banks and a reduction in interest rates! Good; I hope that these measures will help, but they could also be misunderstood by the markets and seen as an expression of a pervasive panic - and that must certainly be avoided.
The house has 27 rooms, flames are billowing out of the roof, but what are the 27 residents doing? They are acting individually, each one fighting the fire in his own room, instead of working together.
Hélène Flautre
(FR) Madam President, with this financial crisis, the European Pact on Immigration and Asylum will fade into the background. Perhaps that is no bad thing. Perhaps that is where it should have always been. We were actually wondering how this Pact on Immigration and Asylum differs compared with the policies followed for years by the European Union and by Member States.
Well, it is true! With this new Pact, what will change for migrants who are the victims of police violence, of human trafficking, of absurd red tape? Does it sanction their human dignity, their rights? Will it sanction the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families? No!
For the victims of poverty, war, natural disaster, the increasing restrictions on the right of asylum, what will change? Will people start to question how ridiculous it is having to apply for asylum in the first country of refuge? Will there be an end to summary examinations and the unreliable, shall we say, lists of safe countries? For migrants who are legally employed and who are a real part of our economic and social life, will this mean that they are officially recognised? No!
What about migrants, including minors, who are imprisoned or expelled, even to countries where they will be mistreated, where they have no family, where they do not speak the language; will this change? Will we abandon readmission and transit agreements in countries where there are human rights violations? No!
You realise that people all over the world are booing asylum and immigration policy. You can no longer go to an international conference without hearing about the massive rights violations suffered by migrants due to European asylum and immigration policy. I believe that this has to change. We need a policy based on pragmatism and not on hypocrisy, which is the trademark of the European Pact on Immigration and Asylum.
Cristiana Muscardini
(IT) Madam President, ladies and gentlemen, we fully agree with what President Sarkozy said in Evian: that only the coordinated action of central banks and governments will make it possible to curb the systemic risk.
This does not take away the fact that, notwithstanding today's interesting debate, we still have some worrying doubts over why the European Central Bank did not lower rates sooner in the light of events in the US market, in the global markets and in the financial markets, particularly in some EU countries.
We question this because there has been no clear position on the issue of derivatives, when we know that these products caused major public institutions and authorities in Italy and Europe to run up massive debts.
We question it because the consolidation policy of banking institutions has continued, on many occasions creating idols with feet of clay without taking into account the real system that exists in our countries, and the reason why consumer credit has been uncontrolled, leading to huge debts being amassed both by individuals and, as a knock-on effect, banks.
In short, we are asking for Europe to have the courage today to review the Stability Pact, which now belongs in the last century. With an exponential number of new crises emerging, we need swift and sure-fire decisions. Since we were talking about small and medium-sized enterprises earlier, we also need the Council to be clear about the fact that the Commission has a duty to introduce further cuts in fuel costs.
Frank Vanhecke
(NL) Madam President, a little modesty never goes amiss, and this includes politicians. Let us make this clear from the start: the institutions of the European Union are scarcely more than utterly powerless onlookers, and the European Parliament barely more than an utterly powerless talking shop, in the global financial crisis.
I shall therefore start by discussing a few other things for which we do bear responsibility. Originally, the summit was to be dominated by the Irish question and the moribund Treaty of Lisbon. However, recent statements by leading eurocrats give me a very strong feeling of déjà vu. One example is Commissioner Wallström, who stated just this week that the Irish referendum actually had very little to do with the Treaty itself, but more to do with ethical issues and taxation. It boils down to the fact that, in the eyes of the Commission, the Irish 'no' was in fact a 'yes'. The reason I have déjà vu is that identical statements were also made by members of the European establishment following the French and Dutch referendums back then. The people say 'no', but the eurocrats hear 'yes'.
Such contempt for basic democracy is evidently a structural feature of this Europe. A certain European politically autistic elite, screened off from the people, goes ahead and takes decisions in spite of the people and then looks on utterly powerless when real disasters occur, as is the case now.
Another example is as follows. Recent surveys have shown that opposition to the accession of Turkey is stronger than ever among the citizens of our countries - but what do we do? We further accelerate the process of negotiating this accession. The Europe we see now is the exact opposite of anything related to democracy. In addition, we cannot solve this problem of citizens' mistrust by now acting out a play, pretending we are making a significant contribution to tackling the financial crisis.
Jacek Saryusz-Wolski
(FR) Madam President, Minister, Commissioner, my message to the Commission and Council is this: in the midst of this financial crisis, let us not forget the follow-up to the extraordinary Council meeting of 1 September, and particularly the Georgia and Belarus question.
Georgia lost the war but should win the peace, and we have to do our utmost to make this happen. It means two things: helping Georgia with strong financial support for reconstruction and helping to consolidate democratic reforms.
The European Union was quicker and more efficient than our American friends in handling the Caucasian crisis, and our response was coherent and based on a common approach - and thanks and congratulations to the French presidency for that.
We have to take into account the impact of the Georgian crisis on the whole region and on the European Union itself. It is more necessary than ever to set up our relations with eastern neighbours, namely through eastern partnership at a higher level. We need a strong democratic Georgia, as Georgia needs us. There is also our common European interest, and I mean here energy security and the availability of a Caucasian corridor for alternative transit of oil and gas. We expect from the Commission and Council that they ensure the protection of existing pipelines and develop further the dramatically missing common foreign policy on energy.
Now on Belarus: the situation there is slightly improving and there are the first signs of liberalisation. Elections were not democratic. We need to respond with a new policy to end the isolation of Belarus, but with a measured opening, based on strict conditionality and a gradual give-and-take approach. That means the following elements: selective application of European neighbourhood policies and human rights instruments, selective suspension of visa sanctions for officials, lowering by half the cost of entry visas for Belarusian citizens, re-establishment of political dialogue, support for opening more economic cooperation with the European Union, protection of civil society, NGOs, national minorities and free media, and all that in close consultation with those representing the democratic position in Belarus.
Enrique Barón Crespo
(ES) Madam President, President-in-Office of the Council, Commissioner, ladies and gentlemen, the message that I think we should send to the forthcoming European Council meeting is the need to restore and bolster the confidence of European citizens in our project.
The reason is that we have decided to create an economic and monetary union, which is under construction but is not yet complete. For a week, due to being infected by the US epidemic, we have run the risk of either a stampede or a mass exodus, which I think has been corrected. It has been demonstrated in time that the European institutions work: specifically, in the case of the Ecofin meeting yesterday, and also with the coordinated drop in interest rates today.
What we need is to be able to help our production system; in this respect, besides the Community initiatives, I will mention, for example, the case of my country, where yesterday it was decided to launch a EUR 30 billion fund, because what we need to do is to help businesses to function.
The second area in which it is important to bolster confidence is the ratification of the Lisbon Treaty. I also had the opportunity to have a discussion with Minister Martin. He made an accurate diagnosis of the situation, but a diagnosis without a prescription for medication does not work. What we need, therefore, is for our Irish friends, having reflected and thought things over, also to be aware that this is not a neutral exercise, in other words, that in a Union based on solidarity, it is also costing us, and it is going to cost us dearly if the Lisbon Treaty is not adopted before the elections.
The only positive aspect of non-ratification is perhaps that it will make the European elections the centre of attention. However, it is important to fight and work to have the Lisbon Treaty in force by the forthcoming European elections, so that the Union might be stronger and more cohesive.
Sophia in 't Veld
(NL) Madam President, citizens are currently looking to Europe to provide protection and stability and to show unity. A strong Europe is more important than ever at this time. Everyone agrees that intervention was needed, and it is good that the action has been swift. This was unavoidable.
There are a number of developments that I nevertheless find worrying, and I also sense a degree of ideology behind some of the action that has been taken. Some people in this House have already been celebrating the death of capitalism. To be frank, however, politicians are not bankers. Emergency measures are one thing, but I have also noticed that some operations amount to the common-or-garden nationalisation of banks. To be frank, there are a number of bankers who are clearly no longer to be trusted and to whom we cannot entrust our savings. Ask yourselves, however, whether you would entrust your savings to politicians acting as bankers. To Mr Schulz, for example. I for one would not.
The crisis must not be seized upon to circumvent, weaken or even abolish the rules. I find the call for flexible application of competition policy or the Stability and Growth Pact extremely worrying. These are the very rules that have made Europe robust.
I have a specific question for the Commission - and, incidentally, I note with regret that Mr Barroso evidently does not consider the debate absorbing enough to stay until the end. This afternoon the Dutch Minister for Finance stated in the debate in the lower house of the Dutch Parliament that the purchase of Fortis and ABN-AMRO - not only the bank, but also the parts not of systemic relevance, such as insurance - had not been declared as State aid. Therefore, I should like to know how the Commission intends to deal with this kind of case in the coming period. After all, Commissioner Kroes stated last Monday - and I totally agree - that the competition rules and the Stability and Growth Pact continue to apply in full. How do we deal with this kind of case? What will happen if it is subsequently found that there has been an infringement of the rules on State aid?
Ryszard Czarnecki
(PL) Madam President, the main challenge facing Europe today is most definitely the economic crisis. Despite the quite recent assurances by German politicians and European Commission officials, this crisis is starting to hit Europe in a big way. The question is not whether it will reach us, but when. Last Saturday the self-appointed leaders of several of the European Union's largest countries failed to agree on any common tactic in this regard.
Moreover, from the example of the deposit guarantees announced by states such as Greece, Ireland and Germany, in contrast to other EU Member States, it is obvious that there is not a single common tactic to deal with this. If a common strategy on this is not worked out at the forthcoming EU summit, it will be a very bad signal for citizens of the EU Member States, because it is precisely in times of crisis that the people of the EU most need to feel that the EU is standing by in case of need and that it is there not only during the good times, but also when there is a problem.
Werner Langen
(DE) Madam President, unfortunately, the President of the Commission is no longer here. He said - I noted it down at the time - we do not yet have the rules that allow a European answer. In that, he is truly right. Mrs Berès told us why he is right - because the commissioner responsible, Mr McCreevy, might as well have been dead for the last four years! He consistently ignored Parliament's suggestions in at least 10 different reports. That is the reality, not neoliberalism, but remote control from Dublin and London by the commissioner responsible for the financial markets. If the President of the Commission had any backbone, he would take this role away from Mr McCreevy and give it to Mr Almunia, where it belongs, but he does not have the courage to do that. Instead, people keep talking here as if 'zero hour' were just beginning. All I can do is shake my head in puzzlement at what the President of the Commission has done. He will not be able to talk his way out of joint responsibility that easily.
I say this so emphatically because we cannot just sit here quietly and wait. We must act quickly. The issuing banks have acted; the finance ministers have acted. All that has become necessary because the crisis has now reached exactly the proportions that we have been afraid of all these years.
Where is Mrs Kroes? She is waffling around with her competition rules and also compromising security in the area of stability of the banks that are still functioning. She is setting deadlines instead of thinking about whether Ireland can allocate 200% of its domestic product as guarantees exclusively for Irish citizens and for future loans. Who has said even one word about that?
If the Commission does not have the courage to make suggestions with regard to a European supervisory authority, even if doing so means going against the will of the Member States, then everything will just collapse. If a European solidarity fund is then established before the rules are harmonised, that would be outright socialism.
Jo Leinen
(DE) Madam President, listening to Mr Langen, one could almost speak of a grand coalition, because I agree with what he said.
A crisis in Georgia, a financial crisis, a crisis with energy prices - everything is crying out for a strong Europe. Therefore, as chair of the Committee on Constitutional Affairs, I am delighted that, apart from the anti-Europeans, everyone here has declared their support for speedy ratification of the Reform Treaty, and I thank the French Presidency for persisting with this matter. This must not be postponed indefinitely and I expect next week's summit to send a clear signal and produce a timetable for completion of ratification.
Sweden and the Czech Republic are to ratify the Treaty by the end of this year, and I still have not given up hope that ratification is still possible in Ireland before the European elections. Ireland's Foreign Minister, Micheál Martin, told my committee on Monday that there was a change in awareness taking place in Ireland and that people were recognising the value of the EU. In politics, six months can be a very long time!
Now to my second subject: we also need to explain to citizens why we need the EU. I am pleased that we will adopt a joint political declaration on the EU communications strategy at the summit. Here I would like to thank the French Presidency, which managed to bring together all three institutions. This now needs to be tackled for the referendum in Ireland and for the European elections. The EU is not the cause of numerous problems, but the solution to many! That should be made clear outside the EU.
Mario Borghezio
(IT) Madam President, ladies and gentlemen, Europe has not protected people from financial speculation. Even the New York Times printed the prophetic saying by Ezra Pound that 'with usura hath no man a house of good stone'. Today the Federal Reserve and the US Treasury would like to paper over the cracks by lowering rates. It was this solution - easy access to credit - that caused the speculative bubble in the first place.
In 1933, a group of economists in Chicago came up with a plan: to re-establish an exclusive state monopoly on issuing currency, prohibiting banks from creating counterfeit money, and imposing an obligation on banks to have a 100% reserve. This made fractional credit fraud impossible and put an end to the financial games that were ruining ordinary people, hurting savers and crippling the real economy.
Nobel Prize winner Maurice Allais has always been openly critical of innovative finance, securitisation, derivatives and hedge funds, much beloved of the finance gnomes in a certain part of Europe's financial sector. He quite rightly calls - as we have been for some time - for derivatives to be made illegal. Let us adopt the Chicago Plan, the Allais Plan: reserving the creation of money for governments.
Enough of Europe being unsure of what to do. Even the Pope has issued a warning that wealth means nothing.
Tunne Kelam
Madam President, the Council also has to draw conclusions from the invasion of Georgia. In order to prevent such aggressions happening again, the EU has to make sure that the idea that 'might makes right' will prove absolutely disadvantageous for the invader. By invading a sovereign state, Russia, as a Security Council member, has shattered not just the regional but the international security and stability paradigm. If there is no setting of limits, the way will be open to further demonstrations of force against Ukraine, Moldova and others.
What we need today is a more efficient eastern partnership and a strong and democratic Georgia. Unfortunately, even before Russia has met its commitments, some socialist leaders visiting Moscow have declared that the EU and Russia need each other more than ever and that Russia and the EU have to cooperate in filling the possible security gap left by the weakening USA. There seems to be a dangerous confusion about who our real allies are and who is really interested in weakening and splitting Europe.
Finally, the EU has to react to the ongoing distribution of Russian passports abroad. This means artificially creating new Russian citizens to be defended according to Medvedev doctrine, so preparing new international hotbeds of crisis. Our reaction should be to deny visas for those new citizens, especially for the leaders of the new Russian protectorates. Finally, we should rapidly provide Georgians and Ukrainians with more generous visa facilitation than Russian citizens have been granted.
Proinsias De Rossa
Madam President, it is my view that, sooner rather than later, the Irish Government must seek to resolve the Irish roadblock to Lisbon, and should do so by maintaining Ireland as a full member, not as a semi-detached member, which opt-outs would relegate us to.
We need Lisbon now more than ever to strengthen Europe globally and to respond effectively to citizens' concerns. The financial crisis is yet another market meltdown. It has happened again because most governments bought into the fairytale that global markets could be self-regulating, and failed to apply democratic controls to the market.
The euro is an example of what Europe can achieve when it seriously shares sovereignty. Certainly, if Ireland had opted to keep the Irish pound it would have disappeared, sunk without trace by now.
President Barroso has admitted he got little cooperation from Member States in producing a coordinated response to the crisis. He is silent, however, about Commissioner McCreevy's continued resistance to re-regulation. Commissioner McCreevy is incapable of abandoning his neo-liberal ideology and I am therefore very concerned that he is being included in the three-person body that President Barroso is establishing.
Could I just make one final point? I propose to put Mr Farage's speech today in this Parliament on my website, because I believe the more Irish people hear what he has to say about Ireland and about Europe, the more likely they are to vote 'yes' for the European Union.
Cornelis Visser
(NL) Madam President, the question is whether this financial crisis will lead to further European integration or whether the reverse will be true. In my view, a crisis of this magnitude can be tackled only at European level - which must lead to further European integration. This requires leadership, however; not only by Member States but also, in particular, by the Commission. Up to now, the reaction to the financial crisis has been provided mainly by Member States - which I welcome, for example when action was taken in the Fortis crisis - whilst the Commission has remained silent.
In my opinion, the financial crisis has been caused by the rapid innovation in the financial sector over recent years. Banking products have been packaged such that rapid profits are possible, but also great risks. However, these risks were not transparent, and in some cases they still are not. It is terribly complicated for experts to make a proper appraisal, and thus to assess the value of these new financial products.
Therefore, the Commission must now present measures to increase the transparency of financial products and to improve bank governance. It must also present measures to improve supervision, and proposals to reinforce cooperation between central banks themselves and other supervisors. Parliament will express this opinion in the report on the Lamfalussy follow-up and the future structure of supervision in the financial sector, which we are discussing next.
Incidentally, I deeply regret the abstention in the parliamentary committee, on such an important report, by the Socialist Group in the European Parliament. I wonder whether it will do so again tomorrow. The crisis demonstrates the importance of Europe. If the European authorities act individually in this connection, State aid and also discrimination against foreign savers, customers and investors can result. Only Europe can offer a rounded approach to the crisis, and that is why the Commission must take the lead, starting today.
Józef Pinior
(PL) Madam President, just as the situation in the Caucasus this summer presented the European Union with a new geopolitical challenge, so today the crisis in the financial markets in the global market is presenting a challenge linked to the global economy, and the European Union is having to face up to this. Everyone is agreed that at this time we must put together a coordinated response from Europe in relation to these challenges. How can we do this without the Lisbon Treaty, though? It is not possible, surely. This is why ratification of the Lisbon Treaty is absolutely fundamental - 'to be or not to be' for the European Union, a serious response from the European Union in the current global order. President Barroso said that the EU institutions, and the European Commission, too, are not properly represented in the global financial architecture. This is yet further evidence of the need to ratify the Lisbon Treaty as soon as possible in those countries that have not yet done so.
Another matter I would like to raise today is that the market is fine as long as it is a regulated market. A capitalist economy that bears the human factor in mind. This is a completely fundamental question. That, after all, was Europe's response to the crisis of the early 20th century. Europe built up its strength precisely for that reason.
One final matter - let us salvage the shipyard industry in Poland. I am addressing the European Commission on this - in view of the current crisis, what good to us are a further 100 000 unemployed?
Jerzy Buzek
(PL) Madam President, the most important matter today is overcoming the financial crisis, but the main threat posed by the financial crisis is an economic slowdown. We cannot concern ourselves with finance alone, because in the end it always comes down to the competitiveness of the economy, growth, and jobs. The adoption of the wrong legislative solutions as part of the climate and energy package could worsen the prognosis for a way out of the financial crisis. We wish to act on a fundamental principle - a 20% reduction in greenhouse gases by 2020. The President-in-Office of the Council spoke of flexibility in the climate and energy package, and of the balance that must be maintained in its adoption. What does this mean? It should mean a capacity to adapt the package, and particularly to adapt the emissions trading system, to the current situation, and this situation is completely different to what it was a year ago, six months ago or even two months ago.
This same aim - a reduction in emissions - may be achieved through various methods. We know the results of the voting on this Emissions Trading Directive that took place yesterday in the European Parliament in the Committee on the Environment, Public Health and Food Safety. We have taken note of them. What lies before us now is a very difficult trialogue, as regulation is adopted here subject to numerous reservations.
We have not had enough time in Parliament to discuss all the problems linked to the Directive on Emissions and Trading. I am therefore appealing to the French Presidency and to the European Commission to bear in mind the conclusions and amendments of the minorities as well, despite the fact that some of these amendments were unsuccessful in the majority voting in European Parliament committees. If we wish to find a good solution, we must be guided today by common sense, and by the situation, which is constantly changing and is steadily deteriorating where economic forecasts are concerned.
Othmar Karas
(DE) Madam President, Commissioner, ladies and gentlemen, I will start by saying that I find it very disappointing that it always takes a crisis for us to find the right sense of determination, the right choice of words, the right dynamics for finding common ground and European responses. Action by Europe and European rule are an essential part of the solution. They are not only an answer to crises but also necessary to prevent crises in our globalised world.
We need both short- and long-term measures. These crises show us how dependent we are on one another, how global, how interwoven the financial world is these days. I have here a collection of requests by the European Parliament since 2002, only a fraction of which have been answered by the Commission, and many of which have been frustrated by the Member States, which impedes us from finding European solutions.
Ladies and gentlemen, we need legislative suggestions in the areas of European supervision, capital for receivables, rating agencies, the granting of credit, crisis management models, and minimum standards for all forms of investment.
In the same breath, I would stress that we must not misuse the crisis in the financial markets to create disproportionate regulations. This is not about condemning the market and demanding nationalisation. It is about creating as much market as possible and putting in place the amount of regulation that is required in the global world. Everyone needs regulation - we must not exclude anyone - but this regulation must be in proportion to the risk and must relate to the product. That is what I am asking for and I hope that the Council will implement this.
Colm Burke
Madam President, at next week's European Council summit, nothing new will come from An Taoiseach Brian Cowan in relation to the current Lisbon Treaty impasse in Ireland. Instead he will make an intervention similar to that of his colleague, Minister Micheál Martin, where only an analysis of the results was communicated on Monday to the Committee on Constitutional Affairs of the European Parliament. Nothing concrete will be proposed until the December Council summit, where a clear road map ahead is expected to be outlined.
In order to expedite moves towards this road map, I would like to expound my idea on how to now move forward. First, in my view, there cannot be a second referendum for at least 12 months, in order to allow adequate consultation with the Irish electorate. A second referendum should be called during the autumn of next year, possibly in October. This means that Parliament elections will have to take place under the Nice Treaty, but this is the lesser of two evils in my opinion.
As to the nature of the second referendum, I would propose an extended plebiscite on the Lisbon Treaty in Ireland, where we would have a constitutional referendum on yes or no to the Lisbon Treaty while, on the same day, polling consultative referenda on key opt-in, opt-out issues such as the EU Charter of Fundamental Rights and European security and defence policy.
If in the extended referendum Irish voters were to opt out of either of these two areas, the Irish Government could then seek a separate agreement at the European Council to be signed by all 27 Member States. This move would be similar to the precedent of the Edinburgh Agreement sought by the Danes at the Council meeting in December 1992, which granted Denmark four exemptions to the Maastricht Treaty. This allowed them to ratify the Treaty overall.
With this plan, Member States who have already ratified the Lisbon Treaty would not have to do so again. This extended plebiscite would offer the Irish electorate a choice as to the extent of the role that they want to play within the European Union.
Gunnar Hökmark
Mr President, I have three points to begin with. Regarding Russia, we must maintain a policy of being open and firm at the same time, never accepting Russian claims to any interests in other countries, be they 'near abroad' or far away. This will be of fundamental importance in the years to come.
Secondly, the budget review must aim to open up and deregulate European agriculture, creating more opportunities for farmers in Europe, as well as in other parts of the world - though with fewer subsidies - aiming for a global, functioning agricultural market to meet the new demands for food all over the world.
Thirdly, the actions regarding climate change must start now, in spite of the financial crisis, so that we can benefit from a long-term process; in this way we can fight climate change and be prepared to meet the other changes it will bring about.
Regarding the financial crisis that we have been speaking about today, many of the speakers have forgotten that we are now at the end of a long-term process, unique in human history - that of global growth that has brought prosperity in a way that we have never seen before. We are now at the end of that. I did not hear anything about this from Mr Schulz earlier today. Of course, we have a number of problems, but they do not only concern the market. No one can say that the sub-prime loans in the USA are the result of market forces. They are the result of decisive political interventions.
What we need now is to ensure that we have transparency, accountability and supervision that covers the modern markets as they are. They are both European and global, and we need to ensure that we can catch up with the reality of the financial markets. Then we can also be constructive regarding the development of a real economy.
Piia-Noora Kauppi
(FI) Mr President, instability spreading like wildfire is typical of today's world. This is especially true of the financial markets, which these days are among the most global of all business sectors. Irresponsibility, over-zealousness and failure to regulate on one side of the world will potentially hit the pockets of ordinary consumers everywhere. I too welcome the Commission's initiative to set up a standing working group to deal with the financial crisis in the Commission. As the Commission's President, Mr Barroso, said, we can and should do much more.
I think, however, that the Commission has been saddled with too much responsibility here. Responsibilities need to be kept clear. The European Central Bank is there to make sure that prices and the value of money remain stable. The ECB has acted effectively to ease the crisis. Today's coordinated interest cuts are a good indication of this. On the other hand, Community institutions - the European Commission and the European Parliament - are responsible for ensuring that the single market remains open and that legislation is in place. Market actors must comply with the law, control their risks and encourage households which owe them money to seek appropriate solutions. Finance groups must attend not just to their own business but also take wider social responsibility. The main responsibility, however, lies with the finance ministers, because most of the instruments for growth and solutions to the crisis are in their toolkit, and are not to be found at the ECB or among the European legislators or market actors.
The financial ministers have shown initiative. In October 2007 they adopted clearer rules to prevent crises in the financial markets. Considering how long-term this job is going to be, the 13-point list from yesterday's Ecofin is pretty pathetic. I am not against the proposals, but I think that the action programme is inadequate. It is not enough to do something: we also have to do the right things, and it is even more important to know how to do nothing, when legislation is not the right solution to the problems. We should not allow room for all populist pressures.
Zsolt László Becsey
(HU) Thank you, Mr President. And I would ask the interpreters to forgive me for speaking off the top of my head. The key words here are solidarity, supervision and security. We continually assert that solidarity is of particular importance in the current financial crisis, especially coming as we do, as I do, from a country which is brimful of bank branches, affiliated organisations and subsidiaries, so what is essential here is how the head offices in their key positions, and their supervisory bodies, react to the problem facing us.
On the subject of solidarity, I can mention here that the Common Agricultural Policy came into being five years after the creation of the European Economic Community and now, almost five years after enlargement, it is time for a Common Energy Policy, too. I am glad that the Minister has said that this was a good idea but it still had to be achieved. But what I can also say, this business of deposits, here it is about solidarity. This is possible, and it is a time when we are able to present a positive picture of the European Union in central European countries; if we do not hang about one after the other, but say together that indeed in a case of crisis we will give a guarantee for the entire population's deposits. For up to six months, or a year. We can decide, and the sooner we do this the better, as we are talking about people here, people in parlous circumstances, who we must rescue as quickly as possible. I do not believe that this will cause such very long-drawn-out problems.
The second question is solidarity and our defencelessness. It is really about supervisory authority and that will be the next point. I understand that we wish to establish chambers, or colleges, and I believe it is important that we move towards some centralised supervision, just as we transfer certain key matters in competition policy to the appropriate EU body or to the ECB, the European Central Bank, but it is very difficult to comprehend how we could build up confidence in each other in a collegiate system. Thank you.
John Purvis
Mr President, I would say to you, and to Mr Jouyet and Mr Almunia, that it is absolutely essential that the interbank market is restarted. The only sure way to achieve this is to have sovereign state guarantees for wholesale interbank deposits, as indeed Ireland and Denmark have done in their domestic markets.
Admittedly the contingent liability is enormous; however, when the interbank market restarts, the banks will stop hoarding, they will start lending again to businesses and individuals and householders, interbank rates will return to normal levels, and it is an absolute certainty that those guarantees will not need to be used.
I agree with Mr Jouyet that this has to be done on a global basis. It is the proper role of the IMF, as he said, to coordinate this action, and only with such a bold move, on a global basis, will we put out the fire and start to rekindle confidence.
Csaba Sándor Tabajdi
(HU) The most important thing to be done here, and I quite agree with the French presidency, is to find some kind of a solution for Ireland and the ratification of the Lisbon Treaty. As for the financial turbulence, I would remind Parliament that in February 2008 the Hungarian Prime Minister Ferenc Gyurcsány proposed a single European supervisory authority and a single supervisory rule book, in view of the crisis in the international financial markets. Unfortunately, there was no majority vote for this at the Council's March sitting. I think that this proposal should be revisited at the next sitting. The Hungarian Prime Minister will propose it again as, without it, without a European financial supervisory authority, global problems will occur again and again. I would ask the French presidency and the other Member States to support this. After all, a solution to this problem is in all our interests.
Marios Matsakis
Mr President, the fat cats of the American banking industry, together with the corresponding fat cats of Europe, have for the last few years embarked on an orgy of fraud, embezzlement and corruption at the expense of ordinary people. Yet those authorities such as the central banks, finance ministers and EU Commissioners, whose duty was to protect the citizens, have in essence done nothing to stop them.
After their conspiracy of silence, negligence and cover-up, these authorities now have the nerve to commit taxpayers' money so that the same fat cats can get even richer. This is outrageous, scandalous and shameful. This is not justice. Those to blame for the current global economic catastrophe and those who offered them a cover-up should have their assets seized and should be sent to prison. This is true justice and this is the type of justice that the EU should be about. This is the bald truth about what EU citizens think.
Marie Anne Isler Béguin
(FR) Mr President, a question first of all to the Council. What about the High-Level Conference on Georgia proposed by the French Presidency, and how the current EU Presidency plans to defend the territorial integrity of Georgia, when two separatist regions, Abkhazia and South Ossetia, are recognized by another country? It is a shame that Mr Barroso is not here, because his speech lacked conviction. Perhaps because he himself is not convinced by his own proposals. I believe that the financial and economic situation is much more serious than he described. Even today, I think anyone on the internet can clearly see that stock markets are continuing to collapse, despite all the intervention. I see this as a real meltdown of the current system, a system which is completely obsolete, a system which has led to bankruptcy, which has led to the land being completely exploited and suffocated by greenhouse gas emissions, which has led to underdevelopment in the South, and underdevelopment in our towns and cities.
(The President cut off the speaker)
Konrad Szymański
(PL) Mr President, in today's crisis we are dealing with the subject of public aid for threatened economic sectors. The German Hypo is being rescued by subventions to the value of EUR 50 billion, aid for the British Bradford & Bingley is a further EUR 35 billion, and the Fortis rescue is EUR 11 billion. The European Central Bank has meanwhile pumped a further EUR 120 billion into bank deposits to keep them liquid.
Meanwhile, Commissioner Kroes is bringing about a political crisis in Poland through the repayment of around half a billion - let me emphasise, half a billion - euros in public aid for three Polish shipyards. I am curious to know how the European Commission would like to explain to Poles a situation in which hundreds of billions of euros are flowing into banks in the old Europe, while half a billion euros may not be transferred to three shipyards that may fail as a result of the Commission's actions. I suggest that we remember this when decisions on further cash injections for the financial sector come up during the next session of the Council.
Ioannis Varvitsiotis
(EL) Mr President, a French Prime Minister, Édouard Balladur, issued a statement to the effect that complete freedom in the market was tantamount to the law of the jungle. He added that our society, democracy and institutions could not allow the jungle to take over. In spite of this, we now find ourselves in a jungle and are paying for the complete market freedom that used to reign in the United States.
If you consider that for each dollar of actual investment, the US banks were lending USD 32, as against the European banks' paltry USD 12, you will understand the unaccountability that was rife in the US banking market. I now fear that neither Mr Paulson's measures nor those of the US Government will bring the world out of this crisis. Considering the future, I think that strict rules need to be applied from now on.
Victor Boştinaru
(RO) Mr President, Mr President of the Council, Commissioner Almunia, honoured colleagues, over the past few years there were important leaders, especially socialists, who talked about the need to reform the world's financial system, some sort of a post-Bretton Woods, able to face the challenges of globalisation. Unfortunately, nothing happened.
This is why I salute the recent interventions of president Sarkozy and of the French presidency as well as of other European leaders who have referred to the need to make such a reform. Today I was happy to hear the words of the President of the European Commission, Mr. Barroso, who spoke about the need to look beyond the financial crisis and beyond Europe.
Therefore I suggest, Mr. Barroso, that the European Union and the European Commission make an explicit commitment to the need to reform the world's financial system together with other major actors such as the United States, China or Japan to provide mankind with the necessary instruments to govern the financial aspects of globalisation.
Jean-Pierre Jouyet
Mr President, Commissioners, ladies and gentlemen, since I have already spoken, I will be brief.
Regarding the management of the financial crisis, I am very sorry that my being here is not enough for Mrs Berès, but I am glad that she is satisfied with seeing Mr Almunia here. More seriously, the speeches by Mrs Berès, Mr Karas and Mrs Kauppi, in particular, show that what we need - as has already been said - is to make sure that we effectively adopt the Commission's proposals which are on the table and which cover all aspects of the supervision, regulation and modification of accounting rules.
This will be in the sense of an adaptation of existing regulations, of an adaptation of the rules rendered necessary by the present situation, and not in the sense of overregulation. As we have already said, in this area we need more of Europe and we need to adapt our regulations to the interdependency of financial institutions and the interdependency of our rules for financing the economy. We need to get up to speed very quickly in this area and regain the momentum we had a few years ago - you will be discussing this - in order to finalise the organisation set up as part of the work carried out by Mr Lamfalussy.
It is also important for the Commission to have competencies - to have a role to play in this respect - and the Commission is perfectly right to insist on that point. We need to be logical about this. If we want more integration, if we want to implement the solutions that we have seen work for others, we need to create an organisation can meet the financial challenges that we will have to face, and we need to act swiftly. The French Presidency, as I said, will do everything within its power and devote all of its energy to increasing the necessary coordination and adaptation of rules in this area.
We clearly need there to be - as there indeed is - coordination between the European Central Bank, European finance ministers and the Commission in this area. This is more important than ever. We need to find concrete answers and we also need to anticipate the consequences that this crisis will have on the financing of the economy, and on the economy itself. We can already see the first signs of this. Here too - and this is an essential part of building confidence - we need to adopt major groundbreaking measures, particularly for SMEs.
In terms of external relations, elements of which were raised by Mr Saryusz-Wolski and Mrs Isler Béguin, I would like to tell Mr Saryusz-Wolski that the priority of the European Council, as I mentioned earlier, is to define precise strategies and to issue guidance for energy security and solidarity. One crisis should not mask another. Three months ago, we had an energy crisis. This still exists. Countries were dependent on other countries for their energy supply. That is still the case. We must have a European energy policy with substance, and here too we have fallen behind and need to move swiftly.
Concerning Belarus, I wanted - we will be debating this in more detail shortly - to tell Mr Saryusz-Wolski that there will be a troika during the General Affairs Council and that we will meet with the Belarus authorities then. As you know, and Mr Saryusz-Wolski underlined this, we have expressed our concerns in terms of the election process, which we are not satisfied with. We will be open about this, but, at the same time, the Council is considering a possible relaxation of certain sanctions, particularly the visa restrictions imposed on some Belarus officials affected by the sanctions. The Council is still reflecting on these developments.
I liked the expression you used, Mr President, concerning the conflict between Russia and Georgia. We must restore peace and ensure that there is peace in Georgia. This allows me to answer Mrs Isler Béguin. We will hold a High-Level Conference on 14 October, in the evening, and on 15 October. On 14 October, foreign ministers will meet with Bernard Kouchner, and on 15 October there will be a meeting of senior officials and leaders in order to find appropriate solutions to the situation in Abkhazia and South Ossetia, recognition of which - I must say this to Mrs Isler Béguin, although she is well aware of it - remains extremely isolated, which is fortunate as this unacceptable act was strongly condemned by the European Union and by the Presidency.
In terms of the European Pact on Immigration and Asylum, I would like to answer Mrs Flautre - although I have no doubt that Mrs Isler Béguin will let her know what I said - by saying that the difference with this Pact is that there is better coordination; harmonisation, if you will, particularly in terms of asylum applications and in terms of applications made by migrants. The Pact actually clarifies the status of migrants, which represents progress for them. We would actually prefer a more pragmatic vision, a more balanced approach, an approach that can be interpreted in the context of the enlargement of the Schengen Agreement. The demographic crisis, the demographic challenge, is also one of the challenges that we must face under the French Presidency.
Finally - and this point is crucial, because everything boils down to this - these crises are interdependent. These crises are interlinked. The economic and financial crisis is the most visible. However, three months ago, it was the energy crisis. In any case, we still face a food crisis, we still face an external crisis. I will say it again, to respond to these crises, to respond to these challenges, there needs to be more Europe, more coordination, greater capacity for decision-making, more visibility and more responsiveness. The answer to this is more institution, and the way that we will have more institution is through the Treaty of Lisbon. We must ensure that the treaty comes into force soon. We must find a solution with our Irish friends. We will use our best efforts so that, by the end of the year, we have a political solution to this institutional problem, which, when we look at the challenges that we face and that we have debated all afternoon, must be resolved as a matter of urgency.
Joaquín Almunia
Mr President, Minister, ladies and gentlemen, I will start with the end of Mr Jouyet's speech. As President Barroso said in his opening speech, the entry into force of the Lisbon Treaty is essential in order for us to move forward with European integration, especially at a time like this. Some of you have mentioned aspects of external action and the common foreign and security policy: Georgia. The Lisbon Treaty will enable us to increase the effectiveness and the intensity of our action in such important matters for our own security and defending our values outside our borders as in the case of Georgia and other countries.
Some of you have quite rightly mentioned the importance of the debates on energy and climate change that are going to take place in the European Council. The French Presidency supports the Commission's ambitious package of proposals, which we hope will be adopted and implemented. The Lisbon Treaty will give the European institutions - not just the Commission - increased powers to tackle this very important challenge.
Some of you have quite rightly mentioned immigration, the immigration pact, a commendable initiative by the French Presidency, along with some other Member States. The Commission has also made proposals during recent times on immigration, which have been discussed and adopted, or are being discussed and adopted by the Parliament and the Council. Once again, the Lisbon Treaty will enable the European Union to move forward towards a common immigration policy, which is essential.
Finally, the majority of the speeches have focused, naturally enough, on economic and financial matters, which we are particularly concerned about at the moment.
I agree with you, with the Presidency, and, of course, with the President of the Commission in his opening speech, that we need to step up the concerted action of all of us who have responsibilities in Europe. There are responsibilities in the Commission, without any doubt, there are responsibilities in the Council, there are responsibilities in Parliament, there are responsibilities in the Member States, in the supervisory bodies and in the central banks.
We all need to act in a coordinated way, each according to our responsibilities. For a year, since the beginning of the crisis, the Commission has been developing initiatives to tackle the future of our financial system, with a medium-term vision, as discussed and adopted a year ago by the Council and the Commission, in the informal Council meeting in Oporto and the Ecofin meeting in October last year.
However, the Commission is also actively participating in the short-term, urgent, essential measures that are part of the conclusions of the Ecofin Council yesterday, including a commitment to improve deposit guarantee schemes, which are seriously affected, not by the insecurity of deposits in financial institutions, but by some unilateral initiatives with negative impacts for other countries.
The Commission is cooperating and also working to develop and apply the principles established yesterday in the Ecofin conclusions, which are essential in terms of the way in which the difficult situations in each of the financial institutions should be tackled: through recapitalisation and, in some cases, through other instruments.
The Commission is working, as President Barroso has said, to move forward more quickly than we have been up to now in terms of supervision at European level, at cross-border level, which we obviously need. We have all had experience in recent days of the need for these mechanisms.
The Commission, like the Council and Parliament, is satisfied with the speed with which the European Central Bank and other central banks have acted today, with a coordinated reduction in interest rates, which should relieve some of the tension in the market.
I fully agree with Mr Purvis on the need to adopt measures, each within our responsibilities, to facilitate the recovery of the interbank market. This is essential. We cannot contemplate only having the central banks as a source of liquidity in the functioning of the financial system in the future and, of course, the Commission - and I am responding in particular to a speech by Mrs in't Veld - said in front of the Heads of State and Government in Paris on Saturday, and said again yesterday at the Ecofin meeting, that when it comes to regulating State aid, the Treaty has sufficient clauses and provisions to deal flexibly with compliance with competition rules and the rules on State aid in a situation such as we are facing now.
Either today or tomorrow, my colleague, Commissioner Kroes, is going to publish, as she announced yesterday in the Ecofin Council, guidelines on how the Commission considers that the margins for flexibility in the Treaty can be used on this specific point, while avoiding discrimination between different solutions and different types of aid.
She will also refer - and some of you have also mentioned this - to the implementation of the Stability and Growth Pact. We revised it in 2005 and from then onwards, as I believe I also said here the other day in another debate, the consensus on the implementation of the revised Pact has been total, one hundred percent. Yesterday, again, the Ecofin Council, as on Saturday in the meeting in Paris, unanimously agreed to say that the current Pact, as revised in 2005 - and Parliament also took part in that debate and in that consensus - has sufficient room to manoeuvre to deal with the situations that are beginning to occur and are unfortunately going to continue to occur, such as the increase in public deficits. This can be done within the framework of the established rules, not by putting them aside.
This was clear on Saturday in Paris, it was clear yesterday at the Ecofin meeting, and it is clear here, in today's debate, and I assure you that the Commission is going to ensure that it is clear from now on, even though we are going to experience very difficult circumstances, not only in the financial system but also in the real economy.
Tomorrow we are going to Washington, to the Annual Meetings of the International Monetary Fund. The IMF's forecasts have once again been revised downwards. Our forecasts in a few weeks are going to be revised downwards. This is not just an exercise in economic forecasting, a theoretical exercise; unfortunately, it means less growth, less employment, greater tension in the employment market and, along with the inflationary pressure that we are still suffering from, although it has calmed down in the last two months, it means a loss of purchasing power and difficulties for real citizens.
However, this should not cause us to forget the medium term. It should not cause us to forget the lessons we learned in past crises. I think that, with this spirit, the vast majority of the speeches that I have heard this afternoon reinforce, support and agree with the consensus that we reached yesterday - which I think was a very positive consensus - in the Luxembourg Ecofin meeting.
President
The debate is closed.
The vote will take place during the next part-session.
Written statements (Rule 142)
Jean-Pierre Audy  
in writing. - (FR) I would first of all like to congratulate the President-in-Office of the Council, Nicolas Sarkozy, for his pragmatic and effective measures, and the excellent work of the French Presidency, represented today by my friend Mr Jouyet. The European Union was formed amid the suffering caused by war.
It seems destined to continue amid suffering and crises. These crises - the Caucasus crisis in Georgia, the financial crisis, the failure of the WTO - show how much we need the new-look institutions that the Lisbon Treaty gives us, and particularly a permanent presidency of the EU.
On the subject of the financial crisis, the ECB has just decided to cut interest rates, and I welcome this decision. It has finally awakened from its indifference; it should learn a lesson from the failure of its monetary policy, since nothing would be worse than increasing rates again once economic growth returns. There is a growing need for the Commission, based on Article 105(6) of the EC Treaty, to refer the matter to the Council so that it can give the ECB a policy mandate for the prudential supervision of credit institutions with a view to establishing a European banking regulator.
Sebastian Valentin Bodu  
in writing. - On 24 September I was asking in a written statement if Europe is prepared to absorb the shock induced by its indissoluble link with the US market and if the EUR 36.3 billion injected into the market by the ECB and Bank of England is enough to make the danger disappear. A few days later Fortis Bank and Dexia Bank were also caught in the stream of the financial crises. Furthermore, Iceland's banking system hit the ground (culminating with acquisition by the government of Glitnir Bank) and the UK Government announced further money infusion (GBP 200 billion) in its economy.
The events that have occurred so far provided an answer to my question that was posted as a rhetorical one. Now, what is going to happen next? We know by now the financial institutions that were hit. The big ones. What we do not know is who else was hit and keeps the thrash hidden. What about the dozens of regional US banks who were involved in lending easy money in the housing sector? What about the European banks who could not stay far from investing in all kind of US exotic financial instruments that invaded the markets this decade?
Ilda Figueiredo  
Despite the somewhat emotional words on the financial crisis and related crises, basic measures to deal effectively with these crises are still not forthcoming. Even when some ad-hoc measures that were rejected only a few months ago are accepted, such as the nationalisations of banks that have gone bankrupt due to poor management on the part of their administrators and some of their main shareholders, who have pocketed the substantial profits and gains and left the general public to deal with the damage, this is always done in defence of big business, without really taking into account the interests of workers and the least well-off. They do not tackle the root of the issue. They do not abolish tax havens. They do not scrap the false independence of the European Central Bank. They do not do away with the Stability Pact. They do not adopt a Solidarity and Social Progress Pact.
The ECB lowered its own base rate too late, after a short-sightedness that has already cost the more fragile economies and those who are in debt to the banks dearly.
In this way, the issues that are on the table are of prime importance and call into question the neoliberal policies that gave utmost priority to free competition, worsening exploitation of workers and multiplying the problems of micro, small and medium-sized enterprises. There needs to be a clear break with these neoliberal policies at the next Council.
Petru Filip  
in writing. - (RO) Apart from its trans-national character, the current global financial crisis risks creating a state of major panic very rapidly, not only in the financial, banking and economic sectors, but also at the level of the ordinary European citizen. I believe that, even more than the severity of the economic phenomenon which must be kept under control both financially and economically, the danger of having European citizens being stricken by panic is much more difficult to measure and its effects will need a much longer time to heal.
Therefore, I am making a public appeal to you, in your capacity as presidents, and ask that you, whatever steps you take to directly, immediately and efficiently solve the current economic and financial crisis, make sure that such steps are transparent to European public opinion, so that citizens feel protected by the European Union, whose aim was precisely to provide a protective framework in cases of grave emergency.
If we do not manage to strengthen European trust and solidarity now, we face the danger of seeing everything that we have consolidated with difficulty over the past 50 years disappear.
Filip Kaczmarek  
We should not count on a single meeting of the European Council solving the problems of the financial markets. The Council's aim should rather be to look for ways of making European banking systems more secure. There is no doubt that the current involvement of national governments is necessary at this time, but it will surely not replace joint actions at the level of the EU as a whole.
What is of particular importance today is the avoidance of any populist auction of promises and protection of citizens from the extreme cynicism of certain politicians. This cynicism is based on peddling pessimism while calling on other politicians to do something. If the dark prophecies are fulfilled, the cynics will say: did we not tell you so? If the worst-case scenarios do not come to pass, the pseudo-saviours will say: we wanted to be cautious; in situations like this it is better to blow cold.
Now the cynics are rubbing their hands with glee at having come up with a no-lose stratagem. This glee is evidence of extreme irresponsibility and a denial of fundamental values of democratic policy - prudent care for the common good. It may even be that the greatest danger to Europeans' wallets is this very cynicism. It is also interesting that this fake concern for the future of citizens is proclaimed by those who are making efforts to block the new European Treaty and do not like the idea of a common currency. I hope there will be no false prophets at the Council meeting. Thank you very much.
Mairead McGuinness  
in writing. - The global financial crisis will rightly top the agenda of the October Council. The crisis is man made - from the USA to the EU and beyond, the meltdown in the banking and financial sector is as shocking as it is real.
There is a sense of disbelief that the unthinkable - namely the collapse of the banking system - is now upon us. The demise of individual banks and dramatic intervention of governments to shore up the fragile financial sectors has resulted in great public unease about the ability of politicians to protect them against such eventualities.
Banks do not want regulation, and it is now clear that regulation was weak and ineffective in protecting not just the banking customers but the very institutions themselves.
Yet, when times got tough for the banks, they ran to the politicians to rescue them. So it is up to us to seize this moment and place the power back where it should always have resided, and that is in the political system, rather than in the financial markets.
Esko Seppänen  
in writing. - (FI) The United States of America has gone down with mad money disease. Its symptoms are bank collapses, the socialisation of banks and insurance companies, and a junk bank used for the socialisation of debts and as a landfill site for bank waste. The crisis shows that capital needs the state for purposes other than just going to war in far-off foreign lands: in America's case, Iraq and Afghanistan. The good side to the crisis, caused as it was by cheap 'funny' money, is that the United States cannot now afford new wars.
It looks bad when a superpower is flummoxed because its esteem in the eyes of others slumps. That is how it has gone for the United States: many are of the opinion that, as a superpower, it has suffered the fate of the Soviet Union.
All of America's political and economic resources will be needed to extinguish the fire at the bank that was ignited with cheap money, debt and speculation. This is no longer just a matter of the economy, however: the giant that stood on a pile of securities has seen its authority collapse. Preening America, winner of an ideological struggle, is no longer credible in the victor's role.
Georgios Toussas  
The statements of the Council and the Commission, and the positions adopted by the political representatives of capital during debates in the run-up to the EU Council summit, signal a stepping-up of the anti-popular policy on management of the capitalist economic crisis. The crisis is spreading inexorably through EU Member States and developed countries generally, laying the EU's reactionary nature even barer.
These statements, the state-monopoly interventions announced by Ecofin and the bourgeois governments of the EU Member States, as well as the bailing out of the debt-ridden banks and other monopoly business groups with public money, are measures to support EU capital in a bid to shore up the monopolies' economic and political dominance. This proves that capitalism has no answers when it comes to the peoples' interests.
Faced with the risk of crisis, the EU and the bourgeois governments of its Member States are intensifying their attack on the working class and the masses.
The peoples of Europe have nothing to expect from the EU summit conference. The only way ahead for the workers is to disobey and break with the anti-popular policy of the EU, and the bourgeois governments of its Member States.
