09 May 2013

Speech by President Barroso at the State of the Union conference: Restoring confidence

Since the beginning of the crisis, what is coming to the surface all too often is a feeling of doubt. The crisis has unleashed uncertainties about Europe’s political and institutional capacity and durability. I do understand the anxieties and even the pessimism of European citizens faced with a fast-changing, interdependent, competitive and unpredictable world. But we have to confront discourses that call for an inward-looking - sometimes nationalist - approach. Indeed as we are striving to strengthen the foundations of the euro and improve the sustainability of our economies and thereby restore trust and confidence, a resurgence of populism is precisely corroding trust and confidence.

The point is certainly not to demonise such discourses. The point is to demonstrate that our policies go in the right direction for the long term, that the European alternative is the best one, the one to be trusted most. Of course, this is not easy because the populist discourse manipulates anxieties and pretends to bring simple solutions to complex problems. But we should not shy away from exposing the complexity of the issues we are dealing with.

Let me take just one example. According to some of these discourses, Europe and the euro are the cause of the problem. Let's be intellectually honest and let's spare no effort to explain again and again that while known as the 'euro crisis', this is not a crisis of the euro itself. The euro remains a credible, stable and strong currency. This is an economic and financial crisis in individual countries that impacts on the rest of the euro area. And the financial crisis was also not euro-specific, for it affected countries in the eurozone and outside, inside the European Union and outside, as the case of Iceland clearly shows.

This crisis was the result of the combination of irresponsibility of a significant part of the financial sector with aggravating unsustainable public debt and the lack of structural competitiveness in some Member States. The monetary union absorbed some of the shocks – as it was intended to do - but was itself severely shaken as a result. It is therefore appropriate to say that while this is not a crisis of the euro area as such and was certainly not created by the European Union, it has posed very specific challenges – economically but also institutionally and politically - to the euro area and implicitly to our European Union.

And although we are not yet out of the woods, the existential threat to the euro is essentially over. The doom-mongers that have been predicting the implosion of the euro have been proven wrong. I believe it is fair to say that there is no longer a perception of the risk that the euro area will fall apart. Investors have realised that when we say that we will do everything possible to safeguard the financial stability and the integrity of the euro we mean it.

I am not suggesting that all the problems have been solved. I do not ignore the economic and social difficulties being felt in so many European countries. We must not be under any illusions and refrain from creating false expectations in the short term. There is still some way to go from economic downturn to economic turnaround. Reforms and adjustment must be pursued with determination, without overlooking the important aspect of social justice...

We should be careful not to let our key achievements be unravelled. On the contrary we have to capitalise on our collective strengths and tap together the full potential of our single market and of our trade policy, which are powerful drivers of growth. In this context, the Transatlantic Trade and Investment Partnership that we will launch with the United States is of critical importance. We have also everything to gain from making the necessary reforms and investment in education, research and innovation in order to keep our collective competitive edge. Indeed we should not spare any effort to deliver more concrete results to European citizens and show them that when we act as one Union, wherever it is necessary, we can bring a big difference in their daily life...

To sum it up, I believe that to restore confidence we have do a better job to explain what is at stake and to be more effective in delivering concrete results to our citizens in areas where acting as one Union really makes a difference. This is a responsibility that lies not only with the European institutions but with all the Member States because Europe is about collective leadership and ownership by all stakeholders. And this is also increasingly about ownership by the citizens.

The crisis has not only highlighted Europe's increased economic interdependence. It has also underscored that the question of a political union can no longer be swept under the carpet. But this can only be achieved through a fundamental public debate on how far we want to go with our political integration and how far we are willing and able to go in reforming our political institutions.

We are at a point in time when European integration must be pursued openly, transparently and with the explicit support of the citizens of Europe. The times of European integration by implicit consent of citizens are over. Europe has to be ever more democratic. Europe's democratic legitimacy and accountability must keep pace with its increased role and power... From the outset, European integration has been much more than an economic integration project. It is fundamentally a political and cultural project based on strong values. We hold its future in our hands. It just depends on us, on our confidence, on our efforts. We just cannot spoil it!

Full speech

© European Commission