And that is followed by a second time-lag: between the resumption of economic growth and improvements in employment. We must focus all our efforts on shortening those time-lags! In other words, speeding up the recovery and speeding up the rebound in employment. We must examine all ideas and proposals to that end and implement all those that are feasible.
Simply waiting for the recovery to bring them down without further effort is not enough. Special measures and programmes are needed. We made a start at European level with the Compact for Growth & Jobs adopted by the June European Council. Many Member States have taken extra measures at national level.
In general, we need more structural economic growth - beyond growth recovery in the short term. Raising our competitiveness is key in this... Of course, the ultimate goal of our stabilisation efforts is employment and growth and therefore in itself social. But we must never lose sight of the specific social dimension of our policies. In this context I would like to draw attention to the fact that the December European Council asked me, in collaboration with the President of the Commission, to come up with specific proposals regarding the social dimension of our Economic and Monetary Union.
While we work together to rebuild growth and employment, the European Union and particularly the euro area are also involved in another large-scale project that is closely linked to those efforts. It is a longer-term project, but its impact is already being felt. I am, of course, talking about strengthening our Economic and Monetary Union. The crisis has reminded us, in the clearest possible terms, that having a genuine economic union involves far more than merely sharing the same currency. To resolve the problems behind the current difficulties, we need closer alignment of our financial frameworks and our economic and fiscal policies.
This project, launched in June, and marked by my three successive reports to the European Council [for the sake of convenience, these were all called "Towards a Genuine EMU"!], is making determined progress, step by step. The plans for banking union, which will enable us to assess the risks of bank failures better and reduce the cost to Europe's taxpayers, through the Single Supervisory Mechanism and a common resolution mechanism, have already reached an advanced stage. In December, at the last European Council meeting, we also agreed to explore ways of coordinating our economic and fiscal Council meeting, we also agreed to explore ways of coordinating our economic and fiscal policies even more closely, for example through ex-ante coordination of major economic measures in our Member States and through contracts between Member States and the EU on structural reform measures.
Indeed, the biggest lesson we have learned over the past years is the degree to which, whether we like it or not, we are all interdependent. Economic decisions of one Member State have an enormous impact on the fortunes of other Member States. Within the euro area, risky economic behaviour -- by governments, banks or others -- in any part can jeopardise the stability of the whole.
The challenge we all face is how to jointly manage that interdependence and assume our co-responsibility. We want to preserve as much as possible the ability of Member States to make their societal choices, whilst having the level of joint policy-making necessary for the common good.
That is why meetings such as this one are of particular importance. Bringing into a common discussion the national sensitivities of each, together with a sense of common purpose engendered by working together, is fundamental to what we need to do. And I am also acutely aware of the need to ensure that all our procedures are democratically accountable - and visibly so. In this, the role of parliaments is vital. The European Parliament and national parliaments are not rivals - they are two sides of the same coin. While each have responsibilities at their own level -- which will be reinforced - cooperation between the two levels, expressly foreseen in Article 9 of Protocol No 1 attached to the Lisbon Treaty and in Article 13 of the Fiscal Stability Treaty, is also important.
For my part - and I'm sure that is the same for the President of the European Commission - I stand ready to cooperate with you as you establish your new procedures and mechanisms, or reinforce existing ones, to ensure the highest standards of transparency, accountability and parliamentary scrutiny in our deepened Economic and Monetary Union.
All this is even more important if the markets are calmer, because then it will be institutions that will have to maintain the pressure for economic and social reforms and for growth and employment. The European Semester is a key instrument in maintaining this pressure. In this, your role in this is vital!
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