Brussels, 29/10/2008 (Agence Europe) - The European Commission president acknowledged without any difficulty that “the EU as it is, does not have the miracle solution” to the current financial crisis. The special meeting of the College of Commissioners on Wednesday 29 October will have, above all, facilitated an examination of the instruments available for guiding future action and attempting to reduce the impact “on jobs, spending power and citizens' prosperity”. José Manuel Barroso explained to the press that the communication adopted at this meeting, “From financial crisis to recovery”, therefore provides a “general framework for a coordinated response between member states and the European Commission”. Barroso also highlighted the difference between the Community dimension and the remit of national bodies. The main instruments are in the hands of member states but it is necessary to act together at a European level. On 26 November, the Commission will therefore present “a complete EU recovery plan based on the framework we have approved today”. This plan will, without falling into protectionism or economic populism, “include targeted short-term actions to add to the medium-term reform agenda under the Lisbon strategy for growth and jobs”.
The Commission will strive towards increasing the efficiency of the European Globalisation Adjustment Fund and promoting a reprogramming of European Social Fund financing to enable a return to work for those out of work. Mr Barroso repeated that “on the real economy, as on the financial markets, we must swim together or we will sink together” and urged member states to take measures to support demand (either by reducing inflation or by supporting the most vulnerable sections of society). He added that “our energy efficiency agenda, our climate change agenda, our environmental agenda are part of the solution”. He would also like to improve use of the €350bn available for cohesion policy during the 2007-13 period. The Commission will therefore explore with member states the scope for accelerating investment projects and for bringing forward payments to member states. Mr Barroso stressed that this will not involve new funding and they will remain within the framework of multiannual financial perspectives because so far there have not been any proposals at all from member states to increase the Community budget. New funding for transport, energy and hi-tech networks will be examined (such as the strengthening of public-private partnerships). The Commission will also propose that member states increase the European Investment Bank's (EIB) capital before the planned 2010 deadline.
The idea raised by Mr Sarkozy (see other article) to increase the ceiling for funding available under the Community's medium term financial support mechanism (Article 119 of the Treaty as determined by Regulation 332/2002) will be the subject of a Commission proposal. The latter wants to move from the current €12bn to €25bn. Although Hungary is the only member state with which discussions took place but which has not adopted the euro, Mr Almunia indicated that “the institutions are prepared to provide support to other countries experiencing difficulties”.
The Commission will also continue to apply rules on competition, state aid and the internal market, as well as those from the stability and growth pact (SGP), with the necessary diligence and flexibility required. Mr Barroso emphasised that “we have the right EU policy tools. Now we need to put them at the service of this European recovery”. Mr Almunia repeated that with the crisis, the budgetary positions of member states are likely to deteriorate rapidly but the SGP had sufficient leeway for handling the situation intelligently. Although some member states will be able to fully use the margins of manoeuvre they have, the Commission for economic and monetary affairs intends to sanction any slippage that does not result from the economic cycle but from budgetary errors. He insisted that they had to respect the “red lights” because they cannot impose too high a burden on future generations. He also alluded to the functioning of the SGP in good economic times. If a country is at risk of having a deficit that is over 3%, the Commission will see whether criteria on exceptional circumstances in the SGP apply (this is the case in the event of sharp economic slowdowns). To benefit from SGP clemency, however, any disparity has to be close to the 3% reference value and slippage has to be temporary. If excessive deficit is, nonetheless, identified and a procedure is opened, the adjustment deadline agreed will also take into account certain specificities. This flexibility will be welcome for many countries, on the condition that they do not allow their deficits to completely veer off. (A.B./transl.rh)