Brussels, 14/09/2011 (Agence Europe) - The situation is serious, but not desperate. The president of the European Commission, José Manuel Durão Barroso, is calling on all political forces that back the European project to mobilise to deal with the economic and social crisis and the challenge to political confidence, which make up the worst crisis that Europe has ever faced. He was speaking at the European Parliament on Wednesday 28 September, in his State of the Union address. He said that further European integration is only possible using the Community method and promised a single, coherent system for expanding the integration of economic coordination based on the changes to the Stability and Growth Pact endorsed that same day by MEPs (see separate article).
Barroso said the situation was serious, but Europe had a future ahead of it. He said the EU had not managed to respond to the challenges of competitiveness, and while some countries had lived beyond their means, others were baulking at showing solidarity. Is Europe capable of acting in unity, he wondered. During his speech, attended by all the EU commissioners, he called for a European revival to get the EU out of crisis, based on the March 2007 Berlin Statement celebrating 50 years since the signing of the Treaty of Rome.
Greece. The president of the Commission said that Greece was now, and would remain, a member of the eurozone in the future. Financial aid will continue if it meets all its budget and economic commitments on time. The Commission will help Greece absorb €15 billion available for it in the EU Structural Funds, and a mechanism for helping Greek banks raise credit is being looked into. Wanting the eurozone bailout fund to be as strong and flexible as possible, Barroso said that his staff were looking at how the cash available under the fund (€440bn) could be used most effectively. He called for the European Stability Mechanism to be brought in more rapidly than planned (it is due to replace the EFSF in July 2013), an idea that even Germany is already considering.
Economic governance. The only way to make the eurozone credible is to increase integration and discipline, said Barroso, wanting to see economic union alongside monetary union. Over the next few weeks, the Commission will unveil a single, coherent, economic cooperation system, which will include the Euro Pact Plus signed by more than 20 countries. The Commission should lead the process, he said, and because the European executive is accountable to the EP, it is the EU's economic government. No new institutions are needed, he argued, because the Commission is the prototype economic government. This was greeted with applause by the MEPs.
Future proposals will respect countries that are not in the euro, and will not endanger the single market. Once economic discipline and integration have become a reality, the issuing of joint bonds to pool debt will be seen as natural, he added. Before the end of the year, the European Commission will unveil various options to this end, some of which would require changes to the EU Treaty. Barroso said that strengthening economic governance in Europe would entail changes to the Treaty, and called for the unanimous voting requirement to be removed because it means that the slowest member state dictates the speed of the EU as a whole.
The president of the Commission set out various current and future initiatives to get Europe out of crisis. Approved the same day, the draft legislation to introduce a tax on financial transactions is the highest profile item of new legislation on the cards (see separate article). Likely to raise some €56 billion a year, it would force the financial industry to pay some of the cost of bailing it out and along with 29 other items of draft legislation (with more to come on banks in crisis and credit rating agencies), the EU will be the first legal system in the G20 to meet its share of the G20 pledge to alter the international financial system.
Reaction. Speaking on behalf of the EPP, Joseph Daul of France said that the measures thus far went in the right direction, but arrived late, were badly explained and characterised by intergovernmentalism, and he called for a Big Bang in economic, tax and social convergence along with harmonisation of company tax rates, the retirement age and the length of the working week. Worried about the fate of future generations, the chair of the Social Democrats, Germany's Martin Schulz, slammed member states' politicians for bad management of the crisis. Belgian Liberal Guy Verhofstadt urged Barroso to go further and put forward at the European Council next month a Big Plan, including a new European finance minister (a new name and new powers for the EU economic and monetary affairs commissioner) and a plan to re-finance European banks. Czech Conservative Jan Zahradil asked whether the general public was ready for more integration, explaining that they weren't in the Czech Republic, where 75% of the population is against the euro. Explaining that the number of people committing suicide has shot up in Greece alongside the debt crisis, Greens/EFA co-president Rebecca Harms of Germany said that it is not possible to focus on austerity measures alone. German GUE/NGL MEP Lothar Bisky hoped that the EU, which he described as an idea that had come from the Left, would not fall victim to speculators and see countries navel-gazing rather than taking a joint approach. Nigel Farage (EFD, UK) said it was not the State of the Union, but the Union that was in a state. Laurence J.A.J. Stassen (NI, the Netherlands) said that law-abiding Dutch people shouldn't have to pay the bills of Greeks who had cheated the system, and eurobonds would only pave the way for more crises in the future. (MB/transl.fl)