Joint Parliamentary Meeting A New Deal for European Economic Recovery? Summary
Tuesday 17 February 2009 9.30 - 12.30 Paul Henri Spaak Building (PHS) - Hemicycle European Parliament - Brussels
Plenary Session Summary
Co-Presidents Mr Hans-Gert PÖTTERING, president of the European Parliament Mr Přemysl SOBOTKA, President of the Senate, Parliament of the Czech Republic Mr Miloslav VLČEK, Speaker of the Chamber of Deputies, Parliament of the Czech Republic Mr José Manuel GARCIA-MARGALLO, MEP Mr Lubomír ZAORÁLEK, MP, Chamber of Deputies of the Parliament of the Czech Republic Ms Carina ADOLFSSON ELGESTAM, MP, Swedish Riksdag Mr Allan LARSSON - Chairman of Lund University Mr Mirek TOPOLÁNEK, President of the European Council Mr José Manuel BARROSO, President of the European Commission
Guest speaker Representatives of the European Institutions
The second day of JPM was opened by introductory words of the President of EU Parliament Mr Hans-Gert PÖTTERING and of the President of the Czech Senate, Mr Přemysl SOBOTKA.
Presentation Working Groups Reports
WG I Mr José Manuel GARCIA-MARGALLO, MEP (EDD-ED), stressed that the current economic crisis is severe and more global than expected. It is a structural crisis. The rapporteur supported statement of President Pöttering that the social market economy is something which we have to look after. In order to function the market properly, it is indispensable to restore credit markets. Key of the functioning of the Euro zone is an independent central bank. The banks in European Union should lend money; we have to see a functioning of the bank system. At the international area, we have to revise our institutional architecture and to give new tasks and role to International Monetary Fund. As regards the various national plans that are tackling with the crisis, it is essential that the Commission will decide with national plans are correct to solve the economic problems in the internal market. We have to face with the problem of outsourcing the jobs, in contrary to the US, where they were able to recreate these posts, in the EU we are unable to do so. WG II Mr Lubomir ZAORÁLEK, MP, Poslanecká sněmovna Czech Republic, stressed that actions must be taken in all EU countries in order to limit impacts of the financial crisis. This will ensure that the impact of crisis to labour market will be limited as much as possible. Currently, we are unable to estimate the end of recession. We are unable to estimate the amount of toxic assets. The participants of the second working group agreed that a quick ratification of the Lisbon Treaty and strong EU leadership could help Europe to tackle with the economic challenges. As regards the Lisbon Strategy, those countries who have fulfilled the conditions of the strategy are now placed in a better position to tackle with a crisis. It is important to stress that crisis is interfering to the most vulnerable parts of society. We have to focus to solve them urgently. The participants argue in favour of reshaping the European economy by issuing the Eurobonds in a similar way as the Federal Bank of the USA. Securing the internal market should remain priority. Protectionism is not a solution. The financial crisis does not concern economics, but also social elites and values.
Ms Carina ADOLFSSON ELGESTAM, MP, Swedish Riksdag, stated that the
participants of the 3rd WG agreed we have to identify threats of the current crisis. Europe should set objectives in climate protection. In the light of present situation we have to study the US objectives. Europe must maintain its leading role. There is a need to reinforce investment to our flats and houses. The houses must become more energy efficient. We need to keep warm in our houses in the northern part of Europe and in to ensure circulation free conditions in the warmer houses in the southern Europe. It is the task for every EU country what economic drivers we have opted for. Any public investment must be tackled in a sensitive way. In the working group no. 3 we discussed on boosting confidence and on investment making. The participants agreed hat the US sense ¨feel good factor¨ we need also in the EU. Every individual country has to deliver its own results based on own merits. Among one of the most pressing objectives is the common EU energy market. We should support the alternative energy sources and energy saving.
Statement Guest Speaker
Mr Allan LARSSON, Chairman of the Lund University. Member of the President and Commission's High Level Group on Energy and Climate Change Mr Larsson pointed out the need to indentify the huge challenges facing Governments and Parliaments in the European Union. 1. Rescuing the financial system and reforming regulation 2. Restarting the economy 3. Rebalancing the global economy, tackling the huge imbalances between Asia and the US in saving and consumption. 4. Restructuring the global energy systems for long term sustainability As regards European policy processes, Mr. Larsson recommended to coordinate three main EU strategies: the Lisbon Strategy, the Strategy for sustainable development and the current strategy for recovery to get back economic growth.
Mr. Vitas MATUZAS, MP, Seimas - Lithuania, stressed that we should focus on the budgetary stability in the EU. The Baltic countries will face challenges on this respect as well as challenges of energy supplies after closing the nuclear station in Ignalina. Mr. Matuzas called on the European Commission, ECOFIN and the European Parliament to reallocate funds in the area of energy supplies. Mr. Luděk SEFZIG , MP, Senát - Czech Republic, turned its attention to Mr. Kok report on mid term achieving of the Lisbon Strategy. Instead of new conclusions, we 3
should focus on results of our discussions at previous Joint Parliamentary Meetings on Lisbon Strategy. Mr. Sefzig underlined the need to fight against protectionism. We should not let the politicians to use the protectionist's slogans before the European Parliament and national parliaments' elections. Mr. Bernard WOJCIECHOWSKI, MEP (IND/DEM), asked the participants to seriously taken into consideration the topics discussed at JPM. In this respect he mentioned the OECD report that individual countries of the EU have individual economic problems, e.g. Poland has a high labour costs. It takes 30 days to establish private company and the costs of registering costs huge money. Ms. Carina ADOLFSSON ELGESTAM, MP, Swedish Riksdag, focused on the need to enhance equal opportunities and equal rights in the EU. Mr. Malcolm HARBOUR, MEP (EPP-ED), pointed out that a component on a new deal is based on public investment, new energy policies, broad band internet and not on cutting taxes. Recent recession in Europe showed that the banks are out of problem because they have financial sources, but there is a black hole in the financial system. Solution is in the public actions as e.g. by creating toxic banks. Mr Serge POIGNANT, MP, French National Assembly, welcomed the meeting and conclusion from the working groups. We should ensure that we have coordinated actions in medium and in a long terms. We should say no to back to protectionism. Some national decisions on economic actions such as the French one will bring profit to other parts in Europe. The European Union must be proactive in terms of fighting the climate change or social cohesion. Mr Udo BULLMAN, MEP (PES) appealed to all colleagues to recognise that that competitiveness is a part of Lisbon Strategy. Despite the fact we made a progress, the core problem remains in a financial crisis, caused by the lack of regulation and by the speculative financial companies. We need to ensure that the promises proposed by the Commission will be reached. Mr Daniel GARRIGUE, MP, French National Assembly welcomed the actions of the European Central Bank. It would not be possible for the ECB to abandon bank as we have seen in the US by abandoning the Lehmann bank. We should reflect how important for the European Union is the Euro zone and the European Central Bank. There is no doubt we need to continue to construct social market economy. We need much better integrated research policy. Mr Eryk SMULEWICS, MP, Polish Senate, stressed that the parliamentary debate is useful and varied. The issue is a complex one. The coordinated actions at the EU and the national level are inevitable. The EU must maintain its course on competitiveness and innovations. However, the jobs have to be created at a local level. We need to realise why the Community was set up and to we have to set up links between regions, cities, nation and the whole Union. Mr Elias KALLIORAS, MP, Vouli ton Ellion - Greece, stressed that the present crisis is unprecedented and it is a first time phenomenon rather than a usual cyclical crisis. To tackle it, it is necessary to take political measures and these policies have to have "social face", because European social model is strong. It is also important to pay attention to different economic situation in various Member States.
Mr Allan LARSSON agreed on the nature of the crisis, on the need to avoid protectionism and to invest in research. He stressed that it should be seriously taken into account what is the cost of non-action and what would be the revenue for action. Since this is the worst crisis of out times, there is no expertise in this field therefore there is need for new ideas.
Statements on National Economic Recovery Plans
Mr Pierre LEQUILLER, MP, French National Assembly, underlined that we need to continue with determination to face the crisis as under French Presidency. In his opinion, it is unfair to accuse France of protectionism for the measures used. He claimed that French President never called for car factories to be returned inside the country and that strategic choices of French authorities are meant to prepare for competitiveness. He also stressed that steps that are undertaken by all 27 Member States together and the European Commission will benefit all. In his opinion, only if we act together and the solidity of the euro is ensured, it will be possible to avoid the collapse of 1929. Mr Lars ELINDERSON, MP, Swedish Riksdag, presented the Swedish reforms of 2009 e. g., increased earned income tax, large public investments in infrastructure, focus on environment and climate. Lot of these reforms are undertaken in order to tackle this crisis, e.g. new law on the government's credit support at short notice, establishment of the Stability Fund and various other new initiatives for banks. Swedish aim is to seek growth and prosperity in the long run and their plan is among the most expansionary in the whole EU amounting to 4 billion EUR per year.
European Council President The President of the European Council, Mr Mirek TOPOLANEK, reminded that the Czech Presidency on 1st March is organising an informal meeting of the Heads of State and its most important task will be dealing with the effects of the global crisis. He underlined that all the 27 Member States are all the same "boat", but there exist different "decks" - first, second, third class and this demonstrates clear lack of solidarity. Protectionism is like adding fuel to make the boat sink - it serious damage to the single market. He underlined that it is important to have more frequent meetings. Sectoral councils, especially ECOFIN, are effective, but since the current crisis is also a major political crisis, there is need for political agreement. Single market and competition rules have to be respected. Economic and social aspects of the crisis have to be discussed in two separate meetings - the former will be discussed in March 1st meeting, while the latter - in the May 2nd meeting. Banks need more guarantees for the future. Toxic assets should be cleaned, stability on the inter-bank marked restored. Banks have to resume lending. Regulation of
banking sector and flexibility of the labour market has to be improved. We have to return to the long-term fiscal objectives. We cannot stop the crisis, but we can limit its effects and prevent it continuing. Politicians should not create mistrust and breach the European project. no undeliverable promises should be made. We have to resist protectionism and respect the common set of rules - this is out shared responsibility.
European Commission President
The EC President José Manuel BARROSO: Financial and economic crisis demands the mobilization of all our energy to protect the EU and reduce the secondary effects on the countries outside the EU. As soon as the crisis is global, it also showed the necessity to put in place the new global governance. The European Institutions were quick to react to the crisis. Interventions were coordinated and guided by the Commission. In future, financial markets should come back to their initial function and start serving the economy, first of all, to create jobs. Financial markets are global, so the solution to the problem should also be global. During the spring Council it is expected to reach clear coherent positions on the matter. The European Commission foresees a fiscal stimulus from 3,3% to 4% of GDP. However, price paid for the recovery should not be too high for the future. Stimulus can not come from the member-states alone. National recovery plans should be coordinated on the EUlevel. Commission should implement structural and cohesion spending to key energy infrastructure projects which will boost the economy and increase energy security. The main priority is to secure people from the crisis. The employment summit will serve this task. Three key points: 1. Keep people in jobs. Short-time jobbing and re-education should be promoted. 2. If people loose jobs they should be reintegrated into the labour market as soon as possible. 3. A quick entry into the labour market should be provided for young people so that they do not loose their qualification. Structural reforms and medium to long term strategies are needed. Economic nationalism and protectionism only aggravate the problem. There should be respect for the rule of law and especially to the own law within the own economy. JPM is also an important day in his calendar.
Mr Bernhard THEMESSL, MP, Nationalrat - Austria, said: when I recall the discussions of yesterday and today I have the impression as if we were talking about possible measures to prevent a looming crisis - but we are right in the middle of it! Thousands of working places are being lost every week, but we are doing nothing. Obama has been in power since only one month, but already put in place a 5% of GDP-programme. With regard to speaker Almunia the day before he called for a
decision on a 1,5 % of GDP-programme with a volume of 200-300 billion Euros now in the fist quarter of 2009. With a reference to the EC President Barroso´s contribution Mr. Themessl estimated the date for a high level summit on employment in May was a bit late. Mr Tadeusz IWINSKI, MP, Seijm - Poland: The modern crisis is the second great depression, it is the crisis of the near liberal capitalism. It is important not to loose time while learning on mistakes. National responses to the crisis differ greatly. Focus should be done on science and technology like in France and on jobs. The role of the ECB is vital in control and supervision. There is no clear European plan. He asked Allan Larson to reflect on whether individuals should also bear the burden. Ms Maria STENBERG, MP, Swedish Riksdag, focused on the human and social aspects of the crisis. Referring to household economy Ms STENBERG pointed out the need for bank supervision, especially when it comes to credit. We should take into account the families' indebtedness during the current crisis. Mr Edmund WITTBRODT, MP, Senat - Poland: We need urgent but considered measures, greater openness, solidarity and trust. The direction we take is vital. The time has come to implement the plan worked out during the French Presidency and climate plan. Education, especially in the primary and secondary school should be pro-environmental. Mr Raffaello VIGNALI: MP, Camera dei Deputati - Italy, Public finances should be put under control. It is important what we are doing, but more important is how we are doing. There should be more trust to assure the economy. Entrepreneurs should be encouraged by simplifying the ways for companies. Great attention should be paid for renewable energy. Ms Rosário ÁGUAS, MP, Assembleia da República – Portugal, focused on the crisis of ethics and values and on the consumer society. Ms ÁGUAS pointed out that we must change our point of view on economy in order to save the social security system. A new vision on social security focusing on education and civic society is the best solution for the current crisis. Ms ÁGUAS concluded by saying that protectionism is the source of inefficiency but we still tolerate some forms of it within Europe. Mr Richard YUNG, MP, Sénat - France, stated that he doesn't share the optimism of the meeting and shares Mr THEMESSL views. Mr YUNG defended an economy based on consumption and investment, mentioning that the Commission's approach is lacking in that respect. Financing infrastructures is a good goal but how could we overcome the limited European budget? Mr YUNG concluded his statement by defending a euro-obligations market. Mr Petr KRILL, MP, Poslanecká snemovna - Czech Republic, pointed out that we should find a long-term solution based on the Lisbon strategy, in order to encourage a more competitive Europe within the global market. During the next couple of years the EU should become the most competitive economy in the world apart from the American and Asiatic competition. Mr KRILL concluded by saying that a 2010 post Lisbon strategy has to be build on long-term perspective.
Remarks Mr TOPOLANEK said that Mr GALAZEWSKI was right in saying that the actual crisis is a threat, especially if we think about deflation. On the other hand we must be cautious when attributing money; Mr TOPOLANEK pointed out the next spring summit as the turning point for European measures. We should avoid overburdening companies; a good way to tackle the issue is by improving green projects. Mr TOPOLANEK recognized that the current crisis is a systemic one and so, and therefore stability in the Eurozone must not be jeopardised. Mr TOPOLANEK concluded his statement by pointing out the current confidence crisis that should be faced with prudence and control. Mr BARROSO declared that, in comparison to other similar crises, there are new elements to this one; this is the first financial crisis of the global era so, it affects global demand and the confidence between producers and consumers. Mr BARROSO presentend two steps that we must follow: 1) a European agreement that relies on twenty-seven realities and 2) implementation that should provide for a simple approach. Mr BARROSO stated that the promotion of renewable energies is a good start for relaunching a totally new market and creating jobs and investment opportunities. The MPs should ask their governments to increase state-aid and promote optimism. Ms Ofélia MOLEIRO, MP, Assembleia da República – Portugal, said that we should support SMEs rather than big companies. Ms MOLEIRO pointed out a case of xenophobia in the UK againts workers as an example of the failure of the labour market. In conclusion Ms MOLEIRO proposed the establishment of a transatlantic parliament to reinforce the strategy on energy between the USA and the EU. Mr Stefan SOFIANSKI, MP, Narodno Sabranie – Bulgaria, spoke in favour of the cooperation between ECB, EIB and ERBD in order to help the infrastructure industry, for example in renewable energies (concerning solar energy there is a lot of Japanese and Chinese hardware on the European market). In agriculture we must find a balance between production and consumption. Mr Stefan SCHENNACH, MP, Bundesrat – Austria, affirms that we are in the middle of energy and climate crisis. We should relay on the local investments in renewable energies by supporting municipalities. Green industry can provide export possibilities and create three hundred thousand new jobs. On the other side we should also decrease VAT to promote investments. Mr SCHENNACH commented on MR GALAZEWSKI statement by saying that the restriction of the free movement of workers in Germany and Austria is a type of protectionism. Mr Lubomir ZAORÁLEK, MP, Poslanecká snemovna – Czech Republic, stated that the people are afraid of a fragmented European response to crisis. Keeping in mind the Japanese recession during the 90’s that lasted 15 years we must not stop investment, in order to stabilize economy as soon as possible. Mr ZAORÁLEK concluded that we must make our resources available to the world.
Mr Přemysl SOBOTKA thanked president PÖTTERING and the EP in general for making the meeting possible to be held. Mr SOBOTKA also thanked the participants, the working groups and the rapporteur for their work and suggestions. Mr SOBOTKA underlined that these meetings are very crucial and allows developing better knowledge of central issuesi. Mr SOBOTKA noted the general agreement on the rejection of the ideas of protectionism and economic nationalism in any guise. Mr SOBOTKA declared that it is now incumbent to NPs and the EP to contribute solving the problems of the current crisis on a legislative point of view. Finally, Mr SOBOTKA affirmed that EU MS should not "water down the Maastricht criteria" and run up per debt at the expense of future generations. Mr Miloslav VLČEK declared himself satisfied with the fruitful debate that and cooperative spirit which occurred at the JPM. Mr VLČEK expressed concerns with regards to the deepening of the economic crisis and to different MS attitude which gives plenty of debates. Mr VLČEK made reference to the conference of speakers which will be held in Paris on the subject of "Europe and crisis management". Mr VLČEK deplored that the EP and NPs will not be able to meet more than once during the Czech presidency due to European elections and expressed his believes that the links between NPs and the EP will deepen in the future. Mr VLČEK concluded that the economic crisis is not like the spring flu and will not just be over form one day to the other and wishes the Swedish presidency all the best.. Mr Hans-Gert PÖTTERING concluded the debates by making statements on three points: this crisis is one like Europe has never seen before so there is no ready made solutions to it but the important thing for the EU is to act united to find common answers on how to supervise banks in the future. Mr PÖTTERING stated that some basic principles should underlie EU actions especially the principle of social market economy. The single market is one of the greatest achievement of the EU. Creating protective measures would destroy this single market and would be the foundation for a disaster which could prevent the EU to be able to maintain its competitive edge. The common currency: the EU must maintain the stability of the euro and thus MS need to avoid increasing public debt and deficit which could undermine the common currency. If not, the MS would return to their national competing currencies and lose the EU competitive edge.
Mr PÖTTERING thanked the keynote speakers, especially President BARROSO which has always been available for the EP. Mr PÖTTERING also warmly thanked Mrs Přemysl SOBOTKA and Miloslav VLČEK for the good cooperation he had with them. Mr PÖTTERING finally encouraged the Czech parliament to vote massively in favour of the Lisbon treaty which is one instrument to help getting out of the crisis.