Conclusions of the European Council meeting (28-29 October) and economic governance (debate) 
President
The next item is the key debate on the conclusions of the European Council meeting (28-29 October) and economic governance.
I would like to welcome to the Chamber the President of the Council, Mr Van Rompuy, and the President of the Commission, Mr Barroso. Also present with us are representatives of the Belgian Presidency and the Commission. We will begin with the information which will be given to us by the President of the Council, Mr Van Rompuy.
Herman Van Rompuy
President of the European Council. - Mr President, the European Council meeting of 28/29 October focused on the economic governance of our Union, in particular with the report of the Task force on economic governance. The report which it endorsed and the events since then, and I refer in particular to Ireland, have illustrated the importance of the subject in general and of the need for the rapidly deployable financial mechanism we decided on in May, in particular.
I pay tribute to the speed of the action of the Finance Ministers over the last week and I underline that this illustrates the level of determination of our concern to safeguard the stability of the euro.
'EU and euro-area financial support will be provided under a strong policy programme which will be negotiated with the Irish authorities by the Commission and the IMF, in liaison with the European Central Bank. [...] Given the strong fundamentals of the Irish economy, decisive implementation of the programme should allow a return to a robust and sustainable growth, safeguarding the economic and social cohesion.' I am here quoting the Eurogroup and ECOFIN Ministers.
The task force was not an intergovernmental conference, but it was a review of our working methods, priorities and procedures in this field. We sought to get the right balance between, on the one hand, laying down an overall European framework regarding the need to avoid excessive fiscal deficits and economic imbalances inside the Union and, on the other hand, allowing national governments freely to choose what they want to tax and how they want to spend, in accordance with their national political procedures and European law.
We want to ensure that each Member State fully takes into account the impact of economic and fiscal decisions on its partners and on the stability of the European Union as a whole. At the same time, we want to strengthen the capacity of the Union level to react when policies in a Member State present a risk to the rest of the Union.
These recommendations, like the others by the task force, are also extremely close to the Commission proposals. I also discussed these issues twice with the group leaders in the European Parliament and with the chairs of the competent committees, in accordance with the format you requested.
One clarification. Some people claim to be disappointed that there is not more automaticity in the decision making. Well, more automaticity is exactly what we propose. The Council - and it was the Council under the treaty - will decide on sanctions on the basis of a so-called 'reversed majority'. This means a Commission proposal for sanctions stands unless a qualified majority vote against, whereas until now a majority had to approve the sanctions.
Only a few weeks ago, some Member States were very reluctant about the reversed majority. It really is a breakthrough; and furthermore the task force proposed a whole series of other measures aimed at strengthening the Stability Pact, such as more policy coordination - the European semester - sound statistics and independent fiscal councils.
Member States should feel that their policy decisions affect all their partners and the Union as a whole. This is the big lesson from the crisis. A general remark: the task force was a political framework aimed at rapidly generating consensus. All the breakthroughs we achieved now need to be translated into legislative texts. The work needs to be done by the Commission, the Council and Parliament. I trust all the institutions will keep up the momentum. It is a vital responsibility.
Regarding the third and final main element of the task force, this also brings me to the follow-up of the task force. We recommend a robust and credible permanent crisis mechanism to safeguard the financial stability of the euro area as a whole. All the Heads of State or Government agreed on that need and on the fact that it requires a limited treaty change.
Before concluding on this point, I would like to underline that the work on the Stability Pact is not simply about being punitive to Member States or about rectifying past mistakes. It is important to look at it in a wider context. We must not lose sight of the wider challenge of improving Europe's structure and sustainable growth rates and a general economic performance.
This was the focus of the EU 2020 strategy agreed by the European Council earlier this year. The answer to those who fear that fiscal retrenchment will cut economic growth rates is to focus better on the underlying structural factors that hinder our economic performance and to remedy them. That will be the main objective of the European Council meetings of February and March next year.
The European Council also had a brief discussion on EU budgetary matters, stimulated, among other things, by the speech of your President at the opening of our meeting. We agreed to return to this in December.
In the meantime, our conclusions simply said, and I quote, 'It is essential that the European Union budget and the forthcoming Multiannual Financial Framework reflect the consolidation efforts being made by Member States to bring deficit and debt into a more sustainable path. Respecting' - and I stress this - 'respecting the role of the different institutions and the need to meet Europe's objectives, the European Council will discuss at its next meeting how to ensure that spending at the European level can make an appropriate contribution to this work'.
Let me reassure you that we acknowledge the new role of Parliament in line with the Treaty of Lisbon. We did not, of course, take a position as the European Council on the 2011 budgetary procedure, as this is a matter for the Council of Ministers and Parliament.
As President of the European Council, I appeal to all parties concerned to continue their consultations in order to reach a compromise on the 2011 budget with the shortest delay possible. In a compromise the various concerns have to be taken on board, while of course respecting the treaties.
This European Council also served - as will be the case for all European Councils - to prepare common positions for the European Union ahead of major international events. In this case, our attention focused on the preparation of the G20, the Cancún climate change conference and a number of bilateral summits.
On the G20, which has, of course, now taken place, we agreed on the priorities, which were then promoted by the representatives of the Union and by the EU Member States that are members of the G20. These included securing approval of the Basel III Accords on capital requirements and on the reform of the IMF. Concerning the latter, I would like to emphasise that this landmark reform was made possible by the open and constructive approach by the Europeans. We gave up two seats in order to reach the final agreement, thus bearing a large part of the adjustment effort.
Concerning the question of imbalances in the global economy and exchange rate policy, discussions were tense in the run-up to the G20 meeting. The summit made a right analysis and agreed on a process. We welcome the decisions to establish a set of indicators on imbalances and the assessment that will made in 2011. What is now crucial is to agree on policy conclusions and, if need be, corrective action on the basis of this assessment.
On Cancún, the European Council also prepared the EU position for the negotiations starting at the end of this month. Since Copenhagen last year, numerous talks have taken place - formal or informal - but they are slow and remain very difficult. Cancún will probably only be an intermediate step towards a global framework on tackling climate change. The European Union regrets this of course.
Finally, regarding our bilateral summits, the European Council discussed our priorities and strategies for the forthcoming summits, namely those with the United States, Russia, Ukraine, India and Africa. This is extremely useful for President Barroso and myself and ensures that on such occasions we are speaking not just for the Brussels institutions, but for the 27 as a whole. I intend to make this a regular feature of the European Council meetings.
Colleagues, that concludes my summary of the most recent meeting of the European Council, which took place nearly a month ago. I will, in any case, continue my practice of briefing the leaders of your political groups immediately, within a couple of hours after the end of each European Council meeting. I am looking forward to hearing your views.
José Manuel Barroso
President of the Commission. - Mr President, honourable Members, if a week is a long time in politics, a month can seem an eternity. A lot has happened since the last European Council, not least the recent events in Ireland. The action intended is a further, crucial step to safeguard the financial stability of Ireland, the euro area, and the European Union as a whole. The two instruments we set up in May are effective tools that can do the job they are designed to do. Ireland has very specific issues to address, and these instruments are able to respond to that. This intervention should now allow the Irish economy to get back on the path to sustainable growth, drawing on its fundamental strengths.
The past few months have been a challenge. We have come a very long way, but the work is not yet complete. Our economic governance is being transformed. The Task Force chaired by President Van Rompuy has presented its results, which are very positive. Benefiting from significant inputs from the Commission, it has managed to achieve broad convergence on the Commission's legislative proposals, and also covered some other very important aspects of economic governance.
Crucially, stricter fiscal rules and broader economic surveillance - both cornerstones of the Commission package - have been preserved. I have stressed many times before the importance of having the new framework operational as soon as possible, so I was pleased that the European Council backed our idea for a 'fast track' approach, and set itself the objective of agreement on the Commission's legislative proposals by summer 2011.
It is notable that the questions voiced last September about the Commission putting legislative proposals on the table have now turned into a desire to fast-track those proposals. Now the normal legislative procedure must run its course over the coming months. I count on the Community method to work as well as it has always done, and help us strengthen economic governance in the euro area and in Europe.
It is my belief that we will end up with tough rules, based on adequate incentives for compliance, semi-automatic implementation and an effective framework to deal with broader macro-economic imbalances. We need reinforced and rigorous economic governance to achieve stable and sustainable growth, which is critical for the employment and welfare of our citizens.
A permanent crisis resolution mechanism for the euro area is an essential piece of this jigsaw. The temporary mechanism currently in force will expire in 2013, so it is vital that something credible, robust, lasting, and grounded in the essential technical realities is put in place by then. That is why the Commission has already started its preparatory work on the general features of a future new mechanism for the euro area. This mechanism, which we are preparing in close consultation with the President of the European Council, should be seen in the context of the overall effort to reinforce economic governance in the European Union and euro area.
I would like to make clear that even if the mechanism is funded from national budgets, it will remain a 'European' initiative, and will of course be able to draw on the expertise, independence and impartiality of the Commission to make it function. The mechanism will have three main components: a macro-economic adjustment programme, a financing arrangement, and private sector involvement. The latter can take many forms, but first and foremost I want to make clear that, whatever is decided on private sector involvement, it will only apply after 2013.
The Heads of State or Government decided unanimously that treaty change is required to establish this mechanism. When we concluded the Treaty of Lisbon last year, nobody imagined someone would be proposing new changes so soon. We all know that this is never an easy process, and we all understand the risks. That is one of the reasons why I explained - during the European Council and even before - that we should not accept a revision of the treaty that calls into question the voting rights of Member States. I am happy that this argument was accepted, and that any revision will be a limited - indeed a surgical - one.
It also makes sense for us to have as straightforward a process as possible. That is why I would caution against the temptation to start linking this to other, unconnected subjects.
All this action is not taking place in a vacuum. The European Council, the G20 summit, the EU/US Summit in Lisbon last weekend: all are staging posts, part of our larger plan to restore Europe to stability and growth. We will speak about the G20 summit in the next debate in this House, so let me for now concentrate very briefly on the very important EU/US Summit in Lisbon.
The atmosphere at the summit was intimate, friendly, and focused. Together with President Van Rompuy, we agreed with President Obama on the need for a transatlantic agenda for growth and jobs, including regulatory convergence and early consultations on issues like competitiveness and global reform. We have tasked the Ministers and Commissioners with moving this concrete work forward, notably through the Transatlantic Economic Forum.
The global economy, the G20 and emerging economies were also very much on the agenda. My point is this: the European Union will only be able to achieve its objectives if we activate all policy areas; if we capitalise on the relationship we have with all our key partners; if we use the leverage available to us in an integrated way at all levels - at national, European and global level. One thing is clear: we will have more influence on the outside if we are capable of reaching agreement among ourselves, within the European Union. In this respect, I am concerned that some of the more recent positioning has not contributed to the focus and coherence of our joint action.
I think that the progress that we have achieved so far on economic governance is an indication that we can, with sufficient political will on all sides, make Europe a stronger force in the world for the benefit of our citizens, but for this let us be clear that we need political will and we need a sense of common purpose, not only from the European institutions, but from all our Member States. That is an appeal I want to make today: more coherence, more convergence, more common purpose.
Joseph Daul
Mr President, ladies and gentlemen, an opinion poll I read yesterday in a newspaper states that 70% of French people believe that they are still in the midst of a crisis and that it has not yet been resolved. I am sure that a broader survey in Europe would generate the same results.
We must therefore address our citizens' valid concerns. They are living in difficult times and cannot tolerate the slow and complex decision-making process at European and global level. Many of these people have also asked me what we are doing and what Europe is doing for them and their family. People are scared. At the same time, I see that more and more politicians and more and more countries, even in this House, are using, manipulating and exploiting this fear and this anxiety and do not have any proposals.
This populist approach, which is corrupting our policy, is serious, and I should like to mention here that this is not the way to resolve the real and serious problems facing our countries and Europe in the world. I believe that it is up to the political parties and the parliamentary groups that are against such populism and demagogy to speak out more.
No, the answer to the crisis is not to shy away from it or resort to protectionism. No, there is no fast or easy solution to the crisis we are facing. No, it is not possible to turn our back on solidarity or on efforts to strengthen all our countries in the face of globalisation and then realise, in the end, that we need partners when times are tough.
We must learn some lessons from what is happening in Ireland, and this is not a criticism of Ireland, President of the Council, President of the Commission. We must learn lessons, because the difficulties that that country is facing are due not only to the banks but also to the current government's fiscal and economic policy over the years. The Celtic Tiger, which was solely responsible for its own growth, with an atypical tax system, minimal banking regulation and an investment code unlike that of any other country in the European Union, is today witnessing a collapse of its property bubble, household debt, record unemployment and a crippled banking sector. The Irish Government has guaranteed the whole banking system, committing EUR 480 billion, or three times its GDP, which increases its public deficit to 32%.
Today, the Irish Government has called for and rightly obtained European solidarity. I welcome this and, as Commissioner Rehn said in this very Parliament on Monday, the aid Ireland should soon receive will safeguard the stability of the whole euro area. Yet has this European solidarity, which Dublin is rightly receiving today, as it did when it joined the EU, been shown over the years by the Irish Government itself?
How many times have Member States tried to align taxation - a prerequisite, as is all too evident today, for good governance of the euro? And every time the same few countries oppose it.
I am not pointing the finger at anyone, but I believe that it is time for us to learn from such behaviour for the future. As I have said several times in this House, a crisis signifies an opportunity for change, and we must not be afraid to change some of our customs, which have not had the positive effect we were counting on.
Ladies and gentlemen, the measures adopted by the European Council a few weeks ago and the guidelines agreed at the G20 in Seoul represent a step in the right direction, but they do not go far enough. In other words, there needs to be an awareness of the need for cooperation in Europe and among major regional blocs in order to address the instability of financial markets and trade imbalances and also to avoid a currency war.
We all know that, on all these issues, our countries alone will be unable to find a viable long-term solution to meet the expectations of the 500 million Europeans, who, as I said at the beginning, are expecting their politicians - that is to say all of us here and back home in our capitals - to make forward-looking decisions.
President of the Council, if the crisis has taught us anything, it is that yesterday's solutions are not necessarily those of tomorrow. We are paying a high price realising this in a time of crisis, but we will pay an even higher price if we continue to ignore it. I call on the European institutions and the governments of our Member States to change, to learn political lessons from the crisis, and to stop seeking solidarity only when it is too late.
Mr President, I would like to add one last thing. This is not a question of the Council and Parliament fighting against one another; it is a question of implementing the treaties, of showing solidarity, and of working hand in hand. This is the message I should like to get across to you so that we might overcome the crisis for the sake of our fellow citizens.
Martin Schulz
Mr President, as I listened to the President of the European Council, I heard a different tone to that of the President of the Commission. The President of the Council has given us a report, and Mr Van Rompuy, if I allow myself to succumb to its spell then I can really only come to the conclusion that everything is hunky dory. If I listen to Mr Barroso, however, I get more of an impression that - and I quote - 'some of the more recent positioning has not contributed to coherence'. That is what the President of the Commission said about the Council, which you are telling us is in complete harmony.
No, the reality in Europe is somewhat different. The reality in Europe is that the EU is divided into three parts: the German-French decision makers, the rest of the euro area and the remainder that does not belong to the euro area, with a special position for the United Kingdom. That is the reality in Europe.
The United Kingdom's special position also needs to be looked at in particular. The German-French Merkel-Sarkozy decision-making partnership has done a deal with Mr Cameron. Everyone knows that and it also needs to be said openly. The deal goes like this: 'I need a revision of the treaty for the Stability Pact'. 'OK', says Mr Cameron, 'that is not easy for me because I have backbenchers in the House of Commons who do not want this, but then I will get a different budget'. Mrs Merkel and Mr Sarkozy then say 'good, let us do that'.
That is the reality in Europe. Not only does that have nothing to do with Community spirit, it is an approach that will destroy the coherence of the European Union, and in the long term it will also destroy the European Union. I fear that there are some people who want that to happen. They applaud this enthusiastically. These Members are sitting over there.
(Applause)
If we do not want these people to call the shots on this continent in future, we must take Europe in a different direction.
(Heckling)
I will attempt to continue. Mr Langen is always very excitable. The reform of the Stability Pact in the EU is being made dependent on the agreement of a country that does not even belong to the euro area. Mrs Merkel is consenting to a revision of the treaty at a time when no one in this House can predict what will happen in Ireland. Moreover, I do not know whether the revision of the EU Treaty will be accepted in Ireland as smoothly as it would seem from your report on the European Council.
Mrs Merkel says that the private sector must be included. I would just like to put a question to you, Mr Rehn, regarding the private sector in Ireland. How was it actually possible for the Irish banks to pass the stress tests? Could you explain that to us?
What Mrs Merkel is doing constitutes a stress test for the euro. I will tell you what is going on: the involvement of the private sector is a good thing, and it is right for it to be involved. In the European Parliament - and I stand by this - we decided, with broad consensus, on a way of involving the private sector, namely the introduction of a Europe-wide financial transaction tax.
(Applause)
This was briefly discussed at the G8 summit, and then they said: 'no, we do not want a financial transaction tax'. We then said 'OK, we will forget about it then'. In the afternoon over coffee, the financial transaction tax was buried. If there was a way of involving the private sector that would actually have an effect on this private sector then this would be it. People are now saying that the United Kingdom does not want it. Does the United Kingdom actually decide everything in Europe? What if we started with a financial transaction tax in the euro area first, for example, and said that we would collect dues from the private financial sector within the euro area in this way.
(Heckling)
I will just repeat what he said so that the interpreter can say it: 'one people, one empire, one leader'. That was what this man said.
I am almost finished. It is just that when this Member walks through the Chamber and shouts 'one people, one empire, one leader', I have only one thing to say: the people who said that in Germany are people whose way of thinking is one that I am fighting to combat, but I believe that this gentleman's views are closer to this way of thinking than mine are.
Joseph Daul
(FR) (addressing Mr Bloom) I cannot accept what you said. We live in a democratic age and under a democratic system. I would ask you to make an official apology, or else we are going to make a formal complaint. There are people who have said less than that - it is not right.
(Applause)
He very nearly added that concentration camps were being set up to resolve the issue.
President
Dear colleagues, we must go ahead. I will take it into account. Let me read you Rule 152(1) of the Rules of Procedure: 'The President shall call to order any Member who disrupts the smooth conduct of the proceedings or whose conduct fails to comply with the relevant provisions of Rule 9'. I will ask you, colleague, to apologise to the Chamber.
Godfrey Bloom
The views expressed by Herr Schulz meet the case. He is an undemocratic fascist.
President
Colleagues, we expected something quite different. We do not want our discussion to be disturbed in such a way. I will call you, colleague, to a meeting with me and we must take a decision on the next steps.
It is impossible to hold our discussions in such an atmosphere. Colleague, as you see, the Chamber is protesting very deeply against your behaviour. I shall read Article 152(3) in my mother tongue.
Guy Verhofstadt
Mr President, firstly I believe that what has happened is very serious. I also believe that the political groups must respond today with a common position on this issue and I hope that all the political groups, excluding, of course, the group of the Member concerned, are very clear in supporting the steps that you have taken to prevent this from ever happening again.
(Applause)
I believe that what Mr Daul said about Ireland - because he has fully analysed Ireland's situation - is completely true, but I should nonetheless like to say to him that, if at the beginning of the financial crisis we had established a European rescue plan for the banks in October 2008, as was tabled by the Commission but rejected by the Member States, Ireland would never have faced the problems it is facing today. That proposal was rejected in October 2008 with the words, 'No, it is unnecessary. We in Germany have enough money to resolve our problems ourselves.' Well, we saw what the outcome of that was.
Secondly, I should like to address the current issue, because there is still tension surrounding it. As far as I am concerned, I hope that the euro will stabilise again tomorrow or the day after tomorrow, because it has yet to do so. I therefore believe that what the President of the European Central Bank and Mr Rehn said yesterday must be taken very seriously.
I believe that what Mr Trichet said during yesterday's debate - there were not many people present during the debate - is very significant. He said that the package was not enough to restore stability in the euro area. We in Parliament therefore have a special responsibility because we are joint decision makers in all these areas. This must be taken seriously. In fact, what exactly is the problem? Nowhere in the world is there a currency that is not supported by a government, a single economic policy, a strategy, and a single bond market. We believe, in the euro area, that it is possible to act with 16 governments, 16 bond markets, and 16 different economic policies; I believe that this is the basis on which we must act and the conclusion that we must reach. We must go beyond the Council's decisions. Mr Rehn, I even believe that we must go beyond the Commission's proposals, and we must support Mr Trichet.
If Mr Trichet, who is, after all, responsible for the stability of the euro, calls on Parliament and the other European authorities to strengthen the package, the only decision we can make for the financial markets is to strengthen the package, communitise, introduce fully automatic sanctions - which are not in place at the moment - and create a bond market in euros. The differences between Greece and Germany and between Ireland and Germany are not going to disappear if there is no single bond market. A truly effective additional sanction could also be introduced for countries failing to adhere to the stability pact.
Finally, I should like to say that we need the kind of real economic governance that stimulates investment, and if the German Government calls for Article 136 of the treaty to be changed for this purpose, then let us change it, but let us also do what is necessary and include real economic governance and fully automatic sanctions in Article 136 in the future. Let us turn these changes to the treaty before us into a real opportunity to prepare the euro for the future, that is to say by establishing economic governance in the euro area and in the European Union.
(The speaker agreed to take a blue card question under Rule 149(8))
William
Mr President, in the event that the Commission gets the economic governance which it is seeking and which you are seeking for it, is it then your contention, Mr Verhofstadt, that the Commission would always make the right decisions?
Guy Verhofstadt
Mr President, I think I have more confidence in the intention of the European Commission to take measures against countries that do not apply the Stability Pact than in the Council itself where the Heads of Governments are. I spent nine years in the Council, and I have never seen a country pointing the finger at another country and saying 'you are not applying the Stability Pact'.
We saw it in 2004 and 2005 with France and Germany. They did not apply the Stability Pact, and there was no sanction against either country. That is the reason why the European Commission, which is the communitarian institution and really follows the method of Monnet and Schuman, has to take the lead in this.
Barry Madlener
(NL) Mr President, that is right. I was unable to intervene when you excluded from the Chamber our fellow Member from the UK Independence Party (UKIP), but I should nevertheless like to object to the biased implementation of the rules. Mr Schulz called my colleague, Mr van der Stoep, a fascist here in this Chamber and you did nothing; no apologies were forthcoming. No action was taken against Mr Schulz. What Mr Schulz is doing now is exactly the same ...
(The speaker continued but his microphone was switched off)
President
I must bring this conversation to an end. If you have any doubts about what has taken place, you can come to me about it. I am willing to talk with you. We will talk about it together.
Rebecca Harms
on behalf of the Verts/ALE Group. - (DE) Mr President, ladies and gentlemen, it is rather difficult to speak in this highly-charged atmosphere. It is also to some extent a demonstration of the situation in which the European Union could find itself if we do not once again formulate European policy in a more careful and more resolute way. My view, Mr Schulz, is that the problem is not the small changes to the treaty that Germany wants and needs - because the financial crisis is not a natural disaster. Rather, the problem is that, in this crisis, the European Council, and in particular the representatives of the large countries in the European Council, are no longer in a position to ensure that a positive spark from the Brussels meeting spreads out into society within the Member States of the European Union. I find it truly bizarre how quickly this pro-European spirit has been lost. I also find it bizarre that Germany of all countries, which benefited so much from solidarity in our distant and more recent common past, is no longer able to lead us away from a debate that is today characterised by egotism and small-mindedness and towards a discussion of why it is right that the Member States in Europe have linked their fate so closely with one another and why the Council and you too, Mr Van Rompuy, no longer succeed in explaining to citizens, whose uncertainty Mr Daul described so well, why it will only be possible to overcome this crisis if we work together rather than competing against one another. The complete absence of this spirit is one of our problems.
The second is that there has been no honest political statement about the fact that we are not rescuing all the Greeks or all the Irish people, we are rescuing the banks in each case, and that Ireland is not only an Irish crisis, it is also a German crisis and a British crisis, even if this is a message you may not necessarily want to hear. I believe that this honesty will provide the basis for persuading citizens to actually support what is decided in Brussels during these times of crisis.
My third point is that I think Mr Verhofstadt is absolutely right. Economic governance is what needs to take shape now. We all know that. No matter how often the Council or the Commission declare that they want to take the necessary steps as soon as possible, alarm bells ring with me, because it is precisely this lack of a pro-European spirit of solidarity that will mean that these necessary and logical steps for integration will not be taken. It is one thing to talk now about tax dumping in Ireland. Something needs to change here. How this is to be done is another question. When, and within what timeframe, is yet another one. Overall, however, the Member States need to coordinate their tax policies, otherwise things will not continue to go well in the European Union.
There is one discussion that we should take seriously because it has also been given prominence: the involvement of creditors, the restructuring of debt, including among those who were the direct cause of the crisis. I have to tell you, it is extremely difficult for me to judge what is right and what is wrong in this regard. We know that the countdown has begun for Spain and Portugal. We know that it is only a matter of time until they will also be looking for solidarity and crisis management. I do not know whether we would be doing ourselves a favour if we now involve the creditors or whether it would not now be better in fact to say that we want this economic governance, we want strict regulation of the banking sector, we want the financial transaction tax or capital levies for those who are profiting from the crisis. This is something that we need to weigh up together. There is absolutely no point in acting as if no decision needs to be made here. Thank you for your attention.
(The President cut off the speaker)
Kay Swinburne
on behalf of the ECR Group. - Mr President, for once the two main topics being discussed by the European Council and the media back in my Welsh constituency are one and the same. Firstly, how will the EU cope with the situation in Ireland and secondly, how to resolve the impasse of the EU budget. In Wales we fully appreciate the EU funds received and all my constituents appreciate the need for a stable eurozone. However, the differences between the way the two topics are discussed in Cardiff and in Brussels are pronounced.
In Brussels within the European Parliament, we take the two issues and discuss them separately. The European Parliament's response and that of the Council to save the euro is that we need improved economic governance, more rules for national governments and enforcement via fines and sanctions.
In Cardiff, my capital city - and I am sure in Dublin - while for the budget we conclude that there is a need for Member States to stop being selfish and put more Europe over the needs of their own countries, it all comes back to how and where taxpayers' money should be spent. People know that austerity packages are necessary. They are told just how indebted their countries are every day. They know tough decisions have to be made, but they also want to decide how their hard earned money gets spent. Being asked to give up even more money to funding EU projects through an increased EU budget at a time when they are being asked to give up a slice of their public sector pensions, or even in some cases basic welfare provisions that they have come to depend on, is for many constituents a step too far.
When the EU itself recognises that it has not done a good enough job at enforcing its own rules and standards within the eurozone, it hardly gives citizens much incentive to give it even more money. During these times of strict public spending, and as we review rules on economic governance for Member States, we within the European Parliament need to respect the pressures that Member States are under and accept that all non-urgent projects of EU institutions should be deferred to allow the setting of an EU budget that reflects our troubled economic times.
(The speaker agreed to take a blue card question under Rule 149(8))
William
Mr President, does the speaker appreciate that the so-called EU funds which she referred to as having been received by her constituents are simply the UK's own money being returned, but being returned only in part and after the European Union has skimmed off its croupier's share? Does the lady appreciate or understand that?
Kay Swinburne
Mr President, as the gentleman knows, I fully appreciate where the money comes from and who the net payers are to the EU budget. However, my constituents in Wales just see that they get investment in crucial projects when they actually have a GDP lower than any other region in the UK. So I will defend the EU's spend in my constituency every day.
Lothar Bisky
on behalf of the GUE/NGL Group. - (DE) Mr President, if the Heads of State or Government have agreed to create a permanent crisis mechanism to safeguard the financial stability of the euro area, I can only welcome that. The results of the work, lasting several months, of Mr Van Rompuy's Task Force on economic governance leave a great deal to be desired - although my views on them vary. The attempt is being made to carry out as stringent a control on the budgets as possible in order to avoid long-term deficits, but the cautious recovery from the crisis will immediately be put at risk again by the radical cutting of public expenditure. That is not only completely counterproductive, I also think it is absurd. It seems that we have learnt nothing from our past experience with the Stability and Growth Pact. You cannot impose additional monetary penalties on a country that is already heavily in debt. The bail-out ban and the Stability and Growth Pact destroy the solidarity between the States in the monetary union.
Does the economy dictate our policies? Once again, the consequences of the crisis will be borne by the people. We can expect wage dumping and social dumping, cuts in the education sector and a rise in unemployment. This will further increase the burden of the countries affected and make their recovery more difficult. It makes absolutely no sense to increase the pressure on countries like Ireland, Greece or Portugal. Rather, the large economic disparities in Europe should be reduced, in other words we need economic governance. We want a social and fair Europe, built on the principle of solidarity. The precedence of policy over economy must be retained or restored.
Nigel Farage
on behalf of the EFD Group. - Mr President, Mr Van Rompuy has been in office for one year, and in that time the whole edifice is beginning to crumble. There is chaos. The money is running out. I should thank Mr Van Rompuy. He should perhaps be the pin-up boy of the Eurosceptic movement.
But just look around this Chamber this morning, Mr Van Rompuy. Just look at these faces. Look at the fear. Look at the anger. Poor old Barroso here looks like he has seen a ghost. You know, they are beginning to understand that the game is up and yet, in their desperation to preserve their dream, they want to remove any remaining traces of democracy from the system. It is pretty clear that none of you have learned anything. When you yourself, Mr Van Rompuy, say that the euro has brought us stability, I suppose I could applaud you for having a sense of humour. But is this not really just the bunker mentality?
Your fanaticism is out in the open. You talked about the fact that it was a lie to believe that the nation state could exist in the 21st-century globalised world. Well, that may be true in the case of Belgium - which has not had a government for six months - but for the rest of us, right across every Member State in this Union (and perhaps this is why we see the fear in the faces), people are increasingly saying: 'We don't want that flag, we don't want the anthem, we don't want this political class, we want the whole thing consigned to the dustbin of history'.
We had the Greek tragedy earlier on this year, and now we have the situation in Ireland. I know that the stupidity and greed of Irish politicians has a lot to do with this. They should never have joined the euro. They suffered with low interest rates, a false boom and a massive bust. But look at your response to them. What they are being told, as their government is collapsing, is that it would be inappropriate for them to have a general election. In fact, Commissioner Rehn here said they had to agree their budget first before they would be allowed to have a general election.
Just who the hell do you people think you are? You are very dangerous people indeed. Your obsession with creating this euro-state means that you are happy to destroy democracy. You appear to be happy for millions of people to be unemployed and to be poor. Untold millions must suffer so that your euro-dream can continue.
Well it will not work, because it is Portugal next. With their debt levels of 325% of GDP, they are the next ones on the list. After that, I suspect it will be Spain. The bailout for Spain would be seven times the size of Ireland's, and at that moment, all the bailout money will have gone. There will not be any more.
But it is even more serious than economics, because if you rob people of their identity, if you rob them of their democracy, then all they are left with is nationalism and violence. I can only hope and pray that the euro project is destroyed by the markets before that really happens.
Angelika Werthmann
(DE) Mr President, ladies and gentlemen, in order to overcome the present financial crisis we need fundamental changes to economic responsibility in Europe: an increase in financial discipline, monitoring of economic policy and an improvement in the coordination of crisis management. Strengthening the Stability and Growth Pact would inevitably lead to an increase in economic responsibility.
Successive sanctions could come into play at an early stage in the budgetary surveillance process and account would be taken of the deficit criterion and public debt. Finally, a new crisis mechanism means, among other things, that banks and insurance providers, for example, can be held accountable. I call on these institutions to be more responsible towards taxpayers.
I would just like to say one more thing regarding Cancún. The EU wants to speak with one voice. These difficult times in particular provide an opportunity to invest in renewable energies and energy efficiency, for example, and in so doing improve the environment as well as our growth policy.
Marianne Thyssen
(NL) Mr President, Mr Van Rompuy, Mr Barroso, ladies and gentlemen, what with the banking crisis, the economic crisis and the crisis situations in public finances, we have really learned, and experienced more than ever, what crises are in the last two-and-a-half years. To date, the reactions by the authorities, especially at European level, have been good. The existence and resistance of the euro and also the precise action of the European Central Bank have prevented the situation escalating. 'Strength in unity', we have learned in Europe, and solidarity works. However, the current state of affairs proves that we must continue to make structural adjustments and that we really need to move towards economic governance. Even if the euro lulled us to sleep quite a bit, President of the European Council, let us see the seriousness of this crisis as a wake-up call to make full use of our European strength in future. Strict rules and sufficient enforcement mechanisms are needed for the financial sector, the public budgets and the debt, and also for the correction of macro-economic imbalances. They are needed in order to restore confidence, boost competitiveness, promote economic growth and increase opportunities for jobs and prosperity. I hope that no one is deterred by stringent measures for fear of the European Union being depicted as the bogeyman by the Member States, as the truth is that Member States need external pressure, possibly even a bogeyman, because they cannot cope with the task alone in the age of globalisation. President of the European Council, the conclusions we have read, which are the work of your task force to a very great extent, will put the Union on the path towards the necessary structural adjustments, and in that respect we welcome them. I have two questions, however. The first is that more than half of the governance package must be decided on using codecision, yet you are asking for fast-track procedures to be used in the decision making. I wonder, then, whether you are leaving the Economic and Financial Affairs Council (Ecofin) sufficient scope to negotiate with Parliament and to allow Parliament to play its role to the full, as that is what we want. Secondly, and finally, the European Council opposes automatism in the system of sanctions: no treaty amendment, no opening of Pandora's box. On the other hand, however, you yourself are proposing to amend the treaty to enable the creation of the permanent crisis mechanism, a mechanism we need. Where does that leave Pandora, I ask myself. Thank you in advance for your answers.
Stephen Hughes
Mr President, I am sure one thing we can all agree on is that Heads of State or Government are extremely busy men and women. I find it extremely puzzling, therefore, that they come together every three months or so and waste a tremendous amount of time and money to decide very little in the face of a crisis which is doubly underlined by what has just happened in Ireland.
Just look at the idea of a financial transaction tax. It was on the agenda of the March summit, the June Summit and the October Summit, with each Council batting it on to the next Council. It has now been batted on to the December Council and presumably beyond that, way on into the future. We urgently need a leap forward in economic governance; we need vision and action, mutual solidarity and close coordination. But instead, all we are getting is confusion, hesitation and mutual mistrust, which leads to permanent instability instead of stability.
Some things are clear. First, a further tightening of the Stability and Growth Pact will not be enough. Worse still, there is a considerable danger that the new system as proposed will end up being procyclical and therefore counterproductive for growth and jobs. Second, economic and monetary union needs to be made far more effective through truly balanced and effective economic policy coordination, not just surveillance and sanctioning. Third, in one way or another, there needs to be a system of common debt management for at least a share of public debt - maybe up to 60% of GDP.
The economic benefits of such a system of eurobonds are huge and clear. President van Rompuy, you are on record as having said that you are not fond of politicians with a vision. I think you prefer practical action: I understand that. But I think you can now begin to move to bring the two together. I hope the path is clear and that the FTT and a balanced system of economic policy coordination are beyond mere surveillance and common debt management. I think it is time, President van Rompuy, for vision and action.
Alexander Graf Lambsdorff
(DE) Mr President, there is one thing that it is important for citizens, too, to understand: the European Union is not in debt. We are talking here about a debt crisis in our Member States. The European Union is the only political level in Europe that is debt free. I would also like it to remain that way. However, we are joined together in a shared destiny by the euro. In this regard, Mrs Harms and Mr Schulz rightly lamented the lack of European spirit. Deauville was a mistake. Germany and France have been blackmailed by the United Kingdom. The Commission must impose the sanctions, not the finance ministers. Mr Van Rompuy, the automatic nature of the sanctions during the preventive phase was sacrificed in Deauville. The finance ministers must take the decision again here. These are the ones who were previously responsible for triggering the financial crisis and the debt crisis in the Member States.
What is economic governance? Everyone is talking about economic governance, but what does it actually mean in specific terms? Do we really want the European Union to interfere in the details of our labour market and social policy? There is a big question mark here. Setting the legal framework for entrepreneurship, stimulating growth, they are all well and good, but above all putting public finances in order once again in the Member States - that is the challenge. That is why the European Semester is so important, and that is why it must be implemented.
(The speaker agreed to take a blue card question under Rule 149(8))
Martin Schulz
(DE) Mr Graf Lambsdorff, you are, of course, a member of the Federal Executive Committee of the Free Democratic Party. Is your assertion that Deauville was a mistake also the opinion of the leader of your party and the Vice-Chancellor of the Federal Republic of Germany, or is it your personal opinion? May we take that as the opinion of the FDP or just as the opinion of Mr Graf Lambsdorff?
Alexander Graf Lambsdorff
(DE) Mr President, of course I am happy to answer that. Mr Schulz is, of course, also a member of the Bureau of the Social Democratic Party of Germany and will also occasionally make statements here which are probably not entirely congruent. There is, however, one thing I would like to say, and it is that, if Mr Schulz can show me who from the FDP was present in Deauville, I would be grateful to him. We made a relatively clear statement on this at the end of the summit.
I believe that the key point, namely actually relinquishing the automatic nature of the sanctions in the preventive phase, was criticised by us in no uncertain terms. If we get the change to the treaty, this will be rectified retrospectively. However, the decision made in Deauville was clearly a mistake.
Philippe Lamberts
(FR) Mr President, for the past 25 years, too many Member States have been living with an economic growth model that is essentially based on debt - both public and private debt. The problem is that this debt primarily funded financial speculation and consumption rather than investment, at the very time when the rest of the world, such as China, Brazil and India, was beginning to invest. Perhaps history books will describe this as the moment when Europe really lost its way.
It does not have to be like this, however. Of course, we need strong European economic governance, but first we need to deal with the havoc caused by this debt. If we believe that we can resolve the problem by simply cutting back on public spending, then we are not facing up to reality. We will not overcome this crisis without restructuring and rescheduling the debt where it has exceeded sustainable levels and the debtors cannot realistically pay it back.
We need to be clear here. The debtors and the creditors are both responsible for the accumulation of debt. Indeed, the debtors borrowed beyond their means, but the creditors loaned irresponsibly in the hope of making substantial, risk-free profits, since the taxpayer would, of course, always be there to see them through.
Thus, the debtors and creditors alike will have to participate in these efforts, and if we do not ensure that this happens, we will condemn ourselves to a Japanese-type scenario, that is to say a slump in the European Union. I believe that the citizens of this continent deserve much better than that.
Vicky Ford
Mr President, this is a debate about economic governance. Across Europe many countries, including my own, face difficult economic times. This weekend, the EU and the UK extended support to our friends across the Irish Sea. This is not a time for the European Parliament to indulge in name-calling or finger-pointing, but it is a time for learning from our mistakes and making better decisions in the future.
Last week, in the middle of November, Greece amended its December year-end accounts for the third time. I hope we have finally drawn a line under those accounts. If there was ever a good reason for countries to ensure better accounting and forecasting, that was it.
The European Council has gone a long way in their detailed plans for sharing of information during the European Semester. It needs to be put into practice. Yes, we should share good practice between different countries, but also recognise that not all countries are the same and good economic governance can be achieved in different ways but for the benefit of all.
Bairbre de Brún
(GA) Mr President, with the IMF, the European Central Bank and the Commission introducing onerous conditions, it is clear that billions of euros of cutbacks are being introduced in Ireland. Jobs will be lost, public services will be significantly curtailed, and income tax will be raised for people on low wages. The banks will keep their profits while the poor, the sick, pensioners and other vulnerable groups will be the losers in all of this. Aid from Europe this is not, and therefore we strongly oppose it.
Instead of seeking a mandate to introduce these cuts, after the IMF and the EU had examined the account books, the Irish Government decided that there would be no election until this budget had been enacted. There was another way to go, and the Irish Government chose not to go that way. They decided to act for the benefit of their friends in the banks and not for that of the plain people of Ireland.
Mario Borghezio
(IT) Mr President, ladies and gentlemen, the ears of the President of the European Central Bank, Mr Trichet, must really be burning as this debate continues. If we were in the ancient Roman senate, a senator would surely stand up in his toga and say to Mr Trichet: 'Quousque tandem abutere, Trichete, patientia nostra?' - how long are you going to try our patience, Mr Trichet?
In effect, we must ask ourselves whether the right road is to avoid the dissolution of the euro - a very difficult task - or instead prevent the rescue of the euro from ruining the economies of our Member States after the europhile policies of Mr Prodi and so on have destroyed our industries, particularly small and medium-sized enterprises, in Padania for example, bringing only redundancies and unemployment benefit.
Why should the countries which are surviving the crisis be bled dry to the tune of almost EUR 100 billion to save Ireland which, with its policy of 12.5% business tax,, has until now been competing unfairly with the other countries?
Where was European governance if, one month after passing its stress tests, the Anglo Irish Bank plunged to a deficit of EUR 8 billion? Where was Mr Trichet? Are we sure that the Irish bailout does not violate the Treaty of Maastricht? Fortunately there is a constitutional court in Germany that will declare that the absorption of another country's deficit onto Germany's books is unconstitutional. So it is time to say bye-bye euro, bye-bye euro.
Werner Langen
(DE) Mr President, I have heard a lot of criticism of the Deauville decision here, but everyone knows that, at the start of the last meeting of your Task Force, Mr Van Rompuy there were still 20 items outstanding. As they are subject to the principle of unanimity, a solution had to be found. Everyone knows that. Everyone also knows that the two largest Member States, Germany and France, are the ones who sinned against the Stability and Growth Pact in 2004, although at that time, as we also know, there was a Social Democrat/Green federal government in Germany. Mr Schulz's scolding is therefore completely uncalled for.
If we are saying today that the Stability and Growth Pact should have more bite, the first prerequisite for this is that the Member States finally abide by this Pact. What is the point of it having more bite if no one sticks to it? There has been a lack of compliance here. We have six legislative proposals, two of which are Council regulations and four are joint regulations of the Council and the European Parliament. I just do not understand some of this complaining. We will have our say in the codecision procedure. On behalf of my group, I can say that we will support the Commission's proposals in this area. Then we will negotiate on this matter again with the Council. This is the reality. Why are we so unassuming and insult third parties who are part of this legislative process instead of exercising our own rights.
Allow me to say something about the necessity of amendments to the treaty. In my opinion, the treaty was stretched to its limits on 9 May. A justification of the rescue package in accordance with Article 122 is required. The fact that the Member States do not want this because the Commission and Parliament could then possibly get involved is, in my opinion, a mistake. It will not be sufficient to amend Article 136; rather we need a solid legal basis for the rescue package and then all the other issues will resolve themselves.
Elisa Ferreira
(PT) Mr President, let us be frank. The solidarity mechanism for sovereign debt has not worked and does not work, the price of Greek debt has not fallen, Ireland is in economic turmoil and contagion has not been contained. When a process was set up it was done too late. It is intergovernmental and should have existed in another format from the time that the euro was initially created.
The President of the Commission is now proposing a consolidation of this system. However, the involvement of the private sector is suggested for a third of the instruments that are proposed. We had already heard that proposal made to Chancellor Merkel, and the markets soared as a result of that premature and untimely announcement. Parliament will use all its powers and the greatest responsibility and spirit of cooperation in the codecision process accompanying the legislative package on economic governance, but it will not do so by sacrificing urgency and speed, putting quality in second place. To be clear, therefore, Parliament will actively participate, but a matter as serious as resolving sovereign debt cannot be decided as a marginal issue or without the involvement of the European public and its representatives; the two elements go hand in hand.
Lastly, we Europeans need a clear European vision in this time of crisis. There needs to be a European mechanism for consolidating sovereign debt. Eurobonds need to be issued and the euro area must be protected in a sustainable way through European, not intergovernmental, systems. The European budget needs to be strengthened, as we cannot continue with 1% of the level of the European budget, and growth and real convergence should be at the heart of Europe's political priorities. The Commission and the new President must uphold this agenda. The President of the Commission cannot be beholden to the Ecofin Council. This is what we need to show the European public.
Mirosław Piotrowski
(PL) Mr President, the crisis in the euro area is a fact. Testimony to the seriousness of the situation are the efforts which are even being made to change the provisions of the Treaty of Lisbon, which was adopted amid such great opposition. On the one hand, it is easy to understand the position of Germany and France, which do not want to pay for the crisis in Greece or Ireland and perhaps other countries. On the other hand, attention should be drawn to the precedent related to the entry into force of the Treaty of Lisbon. In principle, it was supposed to improve the operation of the European Union. Quite clearly, the exact opposite has happened.
Since, however, we are forced to amend the Treaty of Lisbon, this should concern not only issues related to the euro area, but also issues related to other institutional mechanisms which are experiencing difficulties. Many economists are saying that the Greek crisis would not exist on a European scale if Greece had retained its own currency, whose exchange rate would then have been reduced significantly. This shows that national currencies would have given the Union more stability than the euro area has done.
Mario Mauro
(IT) Mr President, ladies and gentlemen, I should like to make a political assessment of what has been said during this debate.
Quite rightly, we the members of the main European political families criticise Eurosceptics because they do not believe in Europe. However, I believe that the real problem is that perhaps we do not believe in Europe ourselves, so we cannot blame the Eurosceptics for what is really our own responsibility. We are the main European political families and we have always held strong, ambitious European ideals. It is a fact, however, that all the governments that are an expression of our political families put spanners in the works every day, so that these grand political projects can be realised. In many cases, then, what they say they want to do in the daytime is undone overnight.
This places further responsibility upon us, because if we are incapable of steering the implementation of particular projects through debate, from Eurobonds - to be specific - to issuing European Union bonds, it will be very difficult to explain to our citizens that we are the same parties that back at home blame Europe for everything and say that we will only be able to emerge from the crisis when Europe has cut back its expenditure.
I believe that this is a principle of basic responsibility, which, if forgotten, results in the very nature of the European project being lost, and we will lose credibility in exchange for only empty chambers and deserted ballot boxes until only 40% of our citizens take part.
Anni Podimata
(EL) Mr President, if there is one basic conclusion to be drawn from the decisions taken by the last European Council, it is that they failed to persuade the markets, they failed to appease the markets. With the markets nowadays having the first and the last word, we need to ask ourselves why.
Is it perhaps because, over and above the very stringent rules of budgetary discipline, the markets understand that we are widening rather than addressing the economic and political cohesion gap within the euro area?
Is it perhaps because the treatment which one group of states reserved for what was, all other things being equal, the right idea of creating a permanent crisis management mechanism appeared to cancel out the added value of such a mechanism in practice, thereby sending the wrong message to the markets and putting us at risk of ending up with a mechanism that was a self-fulfilling prophecy of controlled bankruptcy?
If we really are determined to involve the private sector, to apportion the burden, why do we doggedly refuse to go ahead and adopt a transaction tax at European level?
Finally, why can we not understand that there is an important gap between tightening up the rules of budgetary discipline and a permanent crisis management mechanism? A gap that we could plug if we were to decide to seriously consider the creation of a joint mechanism to manage part of the Member States' debt by issuing Eurobonds.
Danuta Maria Hübner
Mr President, to start, let me say that long-term conditions of competitiveness in individual Member States will differ for years to come. Structural causes of imbalances will therefore continue while economic governance will still be rather weak as a process in the making.
In this context, it is of the utmost importance that the Commission urgently tests, with the first annual growth survey at the launch of the European semester 2011, as many elements of new economic governance as possible, in particular the relevance of the scoreboard and its operational ability.
Second, I understand that a system of fully automatic sanctions would require a treaty change and the proposed system can take us only as far as we can go within the confines of the treaty. That is why I trust that the Commission and the Council will do their utmost to avoid additional stages in the treatment that would unnecessarily delay the procedure.
Third, the EU's economic health is not a simple sum of national situations. Additionally, as the system is based on identifying individual Member States who do not behave, fixing their poor behaviour can have negative externalities.
In particular, the treatment of imbalances can have an impact on other Member States of the eurozone and the rest of the Union. These potential effects should be accounted for in individual treatments so that the economic health of the Union as a whole improves.
Last, I understand that a complete and in-depth impact assessment of the economic governance blueprint would require time we do not have. What helps here is that over the last two years the Commission has acquired substantial and in-depth knowledge and understanding of the 27 economies, so I would like to ask for two actions now. Ensure comparability of all elements and relations between internal and external imbalances.
(The President cut off the speaker)
