European Council of Brussels: common press conference by José Manuel Barroso, Herman van Rompuy and Thomas Wieser, Director-General for Economic Policy and Financial Markets at the Austrian Ministry of Finance

Type: Complete press conference   Reference: I-073871   Duration: 05:01:12  Lieu:
End production: 29/06/2012   First transmission: 29/06/2012
On 29 June 2012, Herman van Rompuy, President of the European Council, José Manuel Barroso, President of the EC, together with Thomas Wieser, Director-General for Economic Policy and Financial Markets at the Austrian Ministry of Finance, participated in a press conference on the European Council, in Brussels. On this occasion, they presented the decisive actions taken by the European Council in order to address financial market tensions, restore confidence and revive growth. At the end of the press conference, they held a questions/answers session.

Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
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TIME DESCRIPTION DURATION
04:41:10 José Manuel Barroso, President of the EC, and Herman van Rompuy, President of the European Council, at a press conference on the European Council, in Brussels 00:00:03
04:41:13 Soundbite by Herman van Rompuy (in ENGLISH): We discussed this evening starting from eleven o'clock two things; the report on the Economic and Monetary Union, so the long term vision, and then, we had a meeting at the level of the euro area on short term measures in order to stabilise markets. So, on the report on EMU, we agreed on a procedure to go forward and the reports towards a Genuine Economic and Monetary Union presented by the President of the European Council in cooperation with the President of the European Commission, the Eurogroup and the European Central Bank (ECB), set out the four essential building blocks for the future of the EMU; an integrated financial framework, an integrated budgetary framework, an integrated economic policy framework and strengthened democratic legitimacy and accountability. So we agreed on those four building blocks. As a follow up, the President of the European Council is invited to develop in close collaboration with the President of the Commission, the Eurogroup and the ECB, a specific and time bound roadmap for the achievement of a genuine Economic and Monetary Union. We will present a first report in October 2012, for this procedure, we will work in close cooperation also with our Member States. Not at the end of the process but during the process as a whole. Also we will consult the EU Institutions, not to mention the European Parliament. So there is a difference between the drafting of the report which was amended given to the four of us and here the drafting of the final report with concrete proposals and that we will do as we did in the Fiscal Compact Treaty together with our Member States. So it will be quite a job to get this ready before the end of October but the Council wants that we speed up the work and that we can show the first results of our work already in October. So this was the first part of our discussions, of course, this is extremely important that we agree not on the report itself but on a clear vision about what has to be done, working on the four building blocks and the aim is of course to make the euro a irreversible project. And then, we devoted also quite some time in the eurozone Summit on the short term measures. So, the text on which there was an agreement is as follows: We affirm that it is imperative to break the vicious circle between banks and sovereigns. The Commission will present Proposals on the basis of Article 127(6) for a single supervisory mechanism shortly. We ask the Council to consider these Proposals as a matter of urgency by the end of 2012. When an effective single supervisory mechanism is established, involving the ECB, for banks in the euro area the ESM could, following a regular decision, have the possibility to recapitalize banks directly. This would rely on appropriate conditionality, including compliance with state aid rules, which should be institution specific, sector-specific or economy-wide and would be formalised in a Memorandum of Understanding. The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally. We urge the rapid conclusion of the Memorandum of Understanding attached to the financial support to Spain for recapitalisation of its banking sector. We reaffirm that the financial assistance will be provided by the EFSF until the ESM becomes available, and that it will then be transferred to the ESM, without gaining seniority status. We affirm our strong commitment to do what is necessary to ensure the financial stability of the euro area, in particular by using the existing EFSF/ESM instruments in a flexible and efficient manner in order to stabilise markets for Member States respecting their Country Specific Recommendations and their other commitments including their respective timelines, under the European Semester, the Stability and Growth Pact and the Macroeconomic Imbalances Procedure. These conditions should be reflected in a Memorandum of Understanding. We welcome that the ECB has agreed to serve as an agent to EFSF/ESM in conducting market operations in an effective and efficient manner. We task the Eurogroup to implement these decisions by 9 July 2012. So these are the decisions we have taken as well on the report on the EMU as on short term measures in order to get more financial stability in the eurozone. 00:10:06
04:51:19 Soundbite by José Manuel Barroso (in ENGLISH): The President of the European Council presented in a very detailed way our decisions. I will not repeat of course its comments. Let me just underline that this is indeed a very important set of conclusions because it shows substantial commitment to further action. As you know before this European Council and this euro area summit we mentioned that it would be important to have decisions on growth and we have taken these decisions today but also decisions for the future of the European Economic and Monetary Union and if possible also the possibility of some short term stabilization measures. And we have indeed achieved that. Because not only the leaders of the European Union Member States have generally agreed to pursue the work that has been prepared by the President of the European Council together with me, the President of the Eurogroup and the President of the ECB in terms of the genuine EMU but already today a fundamental decision was taken by the euro area. And this decision is no more than to have a single supervisory mechanism for the euro area. In fact one of the points that was highlighted in that report: the need to have an integrated supervision for the euro area and in fact the Commission will make appropriate proposals as a matter of urgency. We'll deliver swiftly a proposal for a supervisory mechanism for the euro area in accordance with Article 127(6). Of course this means that the ECB will be fully able to play its part in this euro area financial supervision. But not only we have taken this very important decision on the euro area level but also there are other measures that are now possible in terms of short term stabilization for some countries that are now feeling special pressure and there is concrete reference here to the case of Spain. A memorandum of understanding that we hope that will be now concluded as a matter of urgency for the financial support for the recapitalization of the Spanish banking sector with an important decision that is that when the European Stability Mechanism (ESM) becomes available, this financial assistance that is now going to be provided by the European Financial Stability Facility (EFSF) will be transferred to the ESM, without gaining seniority status. This was in fact one of the main points in terms of market confidence in this operation and also some other decisions that are possible for other countries that are fully complying with the country specific recommendations and also the European Semester, the Stability and Growth Pact and the Macroeconomic Imbalances Procedure. All this of course under conditionality. And the conditionality is highlighted in all the elements namely when we'll have this European supervision reinforced it is stated that it will rely on appropriate conditionality, including by the way, formalised in case of action through a Memorandum of Understanding. So if there is the need for a direct recapitalisation of banks. So it means that not in the distant future direct recapitalization of banks will be possible under very strict conditions. And also in the other process this conditions have to be applied. So I think these are quite ambitious decisions and that shows once again the commitment of the Member States, namely those in the euro area, to the irreversibility of the euro and I think this will be recognized by all. Thank you. 00:04:35
04:55:55 Questions/answers session with Herman van Rompuy, José Manuel Barroso and the intervention of Thomas Wieser, Director-General for Economic Policy and Financial Markets at the Austrian Ministry of Finance 00:05:16
05:01:12 Herman van Rompuy and José Manuel Barroso leaving the press conference 00:00:08
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