Informal European Council, 30 January 2012
It is not enough to focus on financial stability and economic discipline alone
Updated 1 February
On Wednesday President Barroso presented in the European Parliament the conclusions of January's Informal European Council. "Firstly, the European Council was a first but a significant step of Heads of State and Government in recognising that it is not enough to focus on financial stability and economic discipline alone," started the President and explained that "by bringing to the table concrete proposals to tackle youth unemployment and to finance SMEs, the Commission broadened the perspective towards the issues that are of greatest concern to our citizens – jobs and growth, sustainable growth."
Furthermore he stressed that the main message coming from the discussion on growth and employment on Monday was the need to do much more to unleash the potential of the Single Market, Europe's "crown jewel". President Barroso also highlighted the Commission's determination to maintain the role of the European Union institutions and of the Community method in the new Treaty. He said: "We are now entering into a new phase of economic governance, based on the European Semester, where governments recognise that even matters under their national competence, such as employment, should be dealt with at European as well as national level." He went on calling for an urgent response from Member States and made concrete proposals to halt the youth unemployment saying: "Each Member State will prepare a national job plan, centred on a youth guarantee to ensure that all young people are either in a job, in training or in education within four months of leaving school."
President Barroso concluded that the "contracting Member States agreed to respect the Commission's central role in delivering the Agreement's objectives in line with the Lisbon Treaty and the Community method. And they agreed to keep the Treaty open to all and compatible with the community method, respecting this European Parliament."
Updated 31 January
President Barroso on Tuesday sent letters to the leaders of eight member states with youth unemployment levels significantly above the EU average: Spain, Greece, Slovakia, Lithuania, Italy, Portugal, Latvia and Ireland. In the letter he outlined the proposed steps to be taken, including: the nomination of a contact person by national authorities, a visit by the Commission team in February, and the identification of the necessary elements of a youth employment plan and the support schemes for SMEs which could be accelerated or benefit from funding not yet committed from within the national Structural Funds allocation. The objective is to develop by mid-April targeted plans to be included in the National Reform Programmes in which each member state outlines its economic policy priorities in the context of the European Semester.
Updated 30 January
"We are making a root and branch reform of our budgetary and economic policies."
"Today we had a very detailed discussion on how to boost our economy And this was part of delivering what we have set out to do right from the start: to create financial stability, at the same time to put in place a basis for sustainable growth," said President Barroso at the press conference after the Informal European Council. He underlined that "the Treaty establishing the European Stability Mechanism is now ready for signature and the objective is that it enters into force in July 2012."
In his statement the President explained that the meeting today concentrated on discussing growth and employment, namely the programme against youth unemployment, the problems of our SMEs and the problems of the Internal Market. He said: "I have proposed also some concrete policies on fight of youth unemployment, the single market and small businesses. And some of these proposals can be done quickly and make their impact felt rapidly." He later on exhaustedly presented the National Job Plan to tackle youth unemployment and stressed that "to support the small businesses, which form the backbone of our economy, we also must do more internally, with the market access in our single market, but also abroad what they can gain in terms of market access also to reduce the red tape they face and also how to get easier access to finance, because this is one of the main problems SMEs in Europe now face."
President Barroso concluded stressing the importance to "keep the course, to be determined, to be coherent, to be persistent." "The reality is that many of our member states are making impressive reforms, but of course some of those results take time to appear. I believe that if we keep this line we will gain back the confidence, not only of the markets, but mainly, and this is the most important of all, the confidence of our citizens," he said.
Ahead of the informal European Council of 30 January 2012, President Barroso made the following remarks:
On growth and smart fiscal consolidation:
"Growth is and has always been at the centre of the Commission's comprehensive response to the crisis. That is precisely what the structural reform agenda is about. But since structural reforms can take time to make their benefits felt, we have also put forward many ideas to stimulate growth in the short term, for instance by using EU funding more effectively to ease the credit squeeze on small businesses. I will propose to Member States to redeploy structural funds to boost growth and job creation even further."
"We cannot resort to fiscal stimulus to boost growth at the present time. The current fragility of our economies stems from a lack of confidence in Member States' ability to pay their debts. That is why smart fiscal consolidation is crucial in our crisis response: not an end in itself, but a means to achieve sustainable public finances, without which there can be no lasting recovery. But I emphasise it must be smart: countries which cut in the very areas they need to nurture for future growth will pay a heavy price down the line. This is not a choice between fiscal consolidation and growth. We need both!"
On youth unemployment:
"We cannot accept that almost a quarter of Europe's young people are unemployed! I will be proposing the creation of joint 'action teams' with the Commission, Member States and national social partners, to come up with targeted plans by April to help tackle youth unemployment. I also want Member States to commit to a 'Youth on the Move' pact to ensure that all our young people are either in a job, in education or in training within four months of leaving school."
On support for SMEs:
"Small businesses are the backbone of the European economy – and they need our help. We must do more to help them through this crisis. The Commission has put proposals on the table to free up available funding, reduce the burden of red tape and address decisively the problem of late or non-payments of outstanding invoices, which are responsible for a quarter of all bankruptcies in Europe. These must be agreed and implemented swiftly."