Speech by President Juncker at the European Parliament Plenary session on the Economic and Monetary Union

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Speech by President Juncker at the European Parliament Plenary session on the Economic and Monetary Union

Author: European Commission.

Sehr verehrter Herr Präsident, Herr Präsident der Eurogruppe, Herr Vizepräsident der Kommission, meine sehr verehrten Damen und Herren, liebe Kollegen,

Dies ist eine wichtige Debatte, wie der Präsident zu Recht ausgeführt hat, was auch die massive Präsenz in diesem Plenarsaal zur Genüge belegt.

I have always said, Mr President, that the European Parliament is the Parliament of the euro, and I say it again today.

The euro is a political project, and that means it requires political supervision and democratic accountability. You are the Parliament of the European Union but you are also the Parliament of the euro, and this is why I wanted President Schulz to contribute to our roadmap for the Economic and Monetary Union – the Five Presidents’ Report we presented last June and Jeroen was referring to.

Our Report makes it clear that the legitimacy of the euro is paramount, at least as important as its economic significance and its stability on the financial markets. In the years to come, as we will need to develop and strengthen the common institutions that a single currency demands, that legitimacy will acquire only greater importance.

This has nothing to do with institutional power grabs or federal dreams. This has to do with the pressing reality of the European Union, where so many people are still unemployed, and where our economic recovery is still fragile. From my perspective,
the crisis is not over and there should be no complacency: even if we are helped by the action of the European Central Bank,
we only have a short window of opportunity to press ahead with our agenda for reforms, investment and responsible public finances, with social fairness at its core.

This crisis has also been a crisis of legitimacy – at all levels. Economic governance is not about legal rules or numerical percentages: it is about people and it is about political decisions that affect them. It is about political responsibility and political accountability.

The Five Presidents’ Report makes clear that the Parliament should play a central role, starting with its power to legislate, but also its power to hold accountable. The Commission is the natural ally of this House to make sure this is the case, even more so in the future.

And we are not starting from a blank sheet. Already today, the Parliament plays a new and growing role in the economic governance of the EU and the euro area, and that is how it should be.

The European Semester of economic policy coordination is more transparent and more accountable now that the Parliament is more involved. When the Parliament organises its economic dialogues with Member States and with the European Commission, the President of the Eurogroup, who is present here, I am greeting him with the deepest respect,, the President of the ECB, it helps to shape the agenda and delivers parliamentary oversight, and that is vital for our democracy.

Vice-President Dombrovskis, sitting beside me today, was once a Member of this Parliament. As you know, he was also a Prime Minister of his country, where he pursued a successful programme of national reform. If there is one person here who understands why the euro demands democratic legitimacy, it is he. This is why I entrusted him with this particular job. And for the conduct of the European Semester, he is working closely with Marianne Thyssen and Pierre Moscovici, also two former Members of this House.

This year, Vice-President Dombrovskis came to debate with you during the preparation of the Annual Growth Survey. I remember that this was a request both from the President of this House and by some Party and Group leaders like Philippe. And he put this forward years ago, but he had to wait until this Commission to have the chance to participate in these kinds of debates. But it was the first time that the Commission was discussing, debating with the European Parliament the Annual Growth Survey before the adoption of that important document. Together with Commissioner Moscovici, Valdis Dombrovskis came to debate and report on the Greek programme with you. And again last week, the two of them, together with Commissioner Thyssen, attended a joint meeting of the ECON and EMPL Committees to present the priorities we see for 2016. When you invite us, we come.

And by doing so, we keep improving the way our economic and fiscal surveillance works: making more predictable and making it more transparent; giving more time for discussions and debates; and creating more opportunities for engagement at all levels.

For countries that are experiencing financial instability, I also believe the monitoring is now stronger with this Parliament’s participation. It is this Parliament that can host an open political debate on a country’s adjustment programme.

Before I took office last year, I made it clear that I recognised the shortcomings of the so-called “Troika”. I was determined to do things differently, and under this Commission we have done and are doing precisely that. We have made a new start also in that respect together with the President of the Eurogroup.

Today, if a country needs to pursue an adjustment programme, we will see more transparency and more accountability.
The Commission is for instance conducting social impact assessments so that we can from the outset design measures to support the most vulnerable and ensure a fair adjustment. And we will report to this House on progress with the programme.

We are implementing these new methods in the new programme with Greece, which for the first time is done under the European Stability Mechanism, our European financial firewall.

And this is the first programme for which a full social impact assessment was published, as promised, and presented to the Committees of this Parliament.

I know that – for some of you – all these various innovations do not go far enough. And some of you wanted to re-open and revise the six-pack and the two-pack legislation before the ink was dry.

However, if the Five Presidents adopted the approach you find in our Report, it is because we were convinced, and I know the large majority of you is equally convinced, that out first task is to implement what was agreed by Parliament and Council, and focus on what we have just put in place. Rather than create new uncertainty, let us fully use our newly agreed tools and make them work to best effect. And we know the provisions of the six-pack and two-pack legislation, which are in force for just a few years, are both far-reaching and useful in terms of Parliament’s involvement.

All this is part of our pragmatic yet ambitious approach to completing Europe’s Economic and Monetary Union.

As we promised in the Five Presidents’ Report, we have already launched the Stage 1 of the roadmap, the one which is expected to last until mid-2017. We are “deepening by doing”, which means we are using existing powers and tools to work towards Economic Union, Financial Union, Banking Union and Political Union. It is pragmatic, but it is ambitious.

And it is in this stage where we, the Five Presidents said: we will make use of all the possibilities, including legislative, within the existing Treaties. This is why I associated your President to this Report. Because we need this Parliament as our strong partner during this phase.

One concrete example is the recommendation for the economic policy of the euro area that we have for the first time issued already in November, as promised, at the start of the new European Semester.

This is something I had committed to in my State of the Union speech, to create scope and time for an in-depth debate, including in this House, of the priorities for the euro areas as a whole, before discussing priorities for individual Member States later in spring.

And we are also coming forward already now with legislation wherever this is needed, for instance to complete our Banking Union or deepen our Capital Market Union. Just think of our proposal for a European Deposit Insurance Scheme. What could be more urgent than protecting the savings of our citizens and reinforcing their trust in the banking system?

It is not for the Commission to say how the Parliament wishes to organise itself but let me share today a few thoughts on how we might deepen the cooperation between our Institutions under Stage 1. Now, as we are moving towards Stage 2, which we plan to initiate in spring 2017 on the basis of a White Paper.

First, I think it is good practice that the Commission would seek the views of the European Parliament before we adopt our Annual Growth Survey, as we did this year. I would also hope that priorities for the next European Semester could be debated in as many Committees as possible.

Second, the Commission is fully committed to making the European Parliamentary Week, which is organised under your steer, Mr President, a key moment in our economic governance, also to bring national Parliaments into the process. In our view, these exchanges would best take place at the start of each year, to shape the European Union and euro area priorities ahead of national discussions on Member States’ programmes.

And third, when a Member State is pursuing an adjustment programme, we should make full use of the practice of the Commission reporting to Parliament after each review of the programme’s implementation. And I know there are further reflections ongoing within this House as to how this could be best done, and I will be happy to consider these in due time.

These arrangements should be part of a new practice between our two Institutions, based on reinforced political dialogue. Our two Institutions have a common interest to succeed for our citizens. I believe everything which strengthens the Parliament will also strengthen the Commission. And I believe the Parliament should be vigilant to preserve the role of the Commission in all these discussions.

As you know, there are some who want to weaken the role of the Commission in the management of our common economic and fiscal rules. Some even call for transferring the tasks we have under the Treaty to an agency of technocrats. I am sure I can count on this Parliament to agree with me that decisions on budgetary priorities, the balance between revenues and expenditures, the level of taxation, the performance of public administrations and social systems, these are all political decisions which require a political Commission which can account for its role and action before this Parliament.

As foreseen in the Five Presidents Report, I believe we should test and improve these new practices we are now developing to progressively agree upon a broader inter-institutional agreement among our institutions, in full respect of the distinctive role of them.

Herr Präsident,

These practical and institutional steps we are discussing today are all necessary to complete our EMU. They are a means to an end: jobs and growth, fairness and democratic change.
This is what our mind and energy have been focusing and should remain focus on.

The ideas I presented to you this morning are faithful to the Political Guidelines I presented for this Commission, as well as to the Five Presidents Report I co-authored with the President of this House. I put them to you in a spirit of good will and with an open mind. I hope they will produce an honest and useful debate.

Vielen Dank, Herr Präsident. Bedankt.

Copyright European Commission.