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17 January 2012

Press remarks by European Council President, Herman Van Rompuy, following the meeting with Spanish President, Mariano Rajoy


Mr Van Rompuy said that the consensus reached in Spain on Golden Rule is an example of the determination of the Spanish democracy to act to solve the debt crisis.

Mr Van Rompuy said that they were both convinced that restoring confidence in the eurozone is key to bringing the whole of Europe back on the path of economic growth, and that the euro area has taken decisive action on all fronts to rise to the challenge posed by this crisis.

"The recent EU decisions, combined with action by the ECB, have been instrumental in easing tensions in sovereign bonds markets. In this context, I should like to commend the important decision taken by Spain when adopting, by overwhelming majority, the so-called "Golden Rule" to keep future budget deficits to a strict limit.

"It is now important to implement two recent decisions taken by the European Council in December: the fiscal compact treaty and the crisis mechanisms. We will agree on the new fiscal compact Treaty at the end of this month and we will sign it early March.

"Furthermore, our crisis mechanisms will be strengthened. The European Stability Mechanism will enter into force in July 2012, a year earlier than planned. We will also reassess the adequacy of the European Financial Stability Facility and the European Stability Mechanism (ESM) sizes at the European Council of March.

"We are working with our international partners to increase the resources of the International Monetary Fund; euro area Members have already announced a contribution of €150 billion. Restoring financial stability is key. But President Rajoy and I fully share the view that a reform agenda based on fiscal austerity alone is not enough. We need to focus also on growth and job creation. Growth-friendly consolidation and job-friendly growth are what we need.

"We must urgently put in place an anti-recession strategy, mobilising means and efforts at the Union level and at Member States level. The Single Market is a key driver to Europe's economic growth. We should fully use its potential, across all sectors: products, services, energy, digital economy, and therefore deliver on the Commission proposals by the end of this year.

"Equally, we must avoid a credit crunch for our enterprises. Recent measures from the European Central Bank on a long-term lending facility for the banks were and will be essential in this context, but we also need to mobilise all available EU financial resources in  the most effective way to contribute to the proper financing of our economies. We have to improve the environment in which small and medium-size enterprises operate. They are the backbone of Europe's economic performance and a key provider of employment.

"We also need to stimulate demand. Restoring confidence in the eurozone will strengthen consumer confidence, which is key to enhancing private consumption. Recent exchange rate developments for the euro will help our competitive position and our exports. Our foremost concern should be combating unemployment and creating jobs. Many of them are young, as in the case in Spain.

"In the European January summit we will focus our decisions on youth employment and lifelong learning. The recent ‘Youth Opportunities’ Commission initiative offers perspectives for skills, training and job placements.

"I am pleased that Spain will fast-track a reform of the labour market. In a country where around 22 per cent of the active labour force is unemployed, this is not only a necessity, it is an emergency! In general, I will propose that we ask each Member State to establish a "job plan", which will be subject to an enhanced monitoring.

"I welcome that the measures you announced are being rapidly and consistently transforming into reality. You explained to me a new package to promote growth and employment. Your determination and the strong popular mandate you enjoy bodes well for the success of this endeavour. We share the same agenda, in Madrid and in Brussels. Spain is acting in the right direction."

The European Council on 30 January will emphasise a two-pillar approach: fiscal consolidation on the one hand, and a positive agenda for growth and jobs on the other hand.

Full statement



© European Council


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