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27 February 2012

Speech by President Herman Van Rompuy to the Interparliamentary Committee meeting on the European Semester for Economic Policy Coordination


President Van Rompuy described the interdependence as being "more clear than ever", and likewise co-responsibility: the co-responsibility of the governments and institutions to overcome the crisis, and the co-responsibility of national parliaments.

"Via national leaders and governments, national parliaments have also become more implicated than ever in the day-to-day business of the eurozone. Just think only of the negotiations of the most recent Greek package. National tax payers' money was and is at stake. Given the relatively limited size of the central European budget, this was the only instrument available. And all the while the European institutions play their essential role. The European Parliament was decisive in keeping its line in the discussions on the six-pack. There is no zero-sum game here.

Decisions by one national parliament -- be it in Germany or Ireland, in Slovakia or Portugal -- are watched all over Europe. Maybe not formally speaking, but at least politically speaking, all national parliaments have become, in a way, European institutions. This is political interdependence: the decisions of one affect all. Fiscal irresponsibility put the eurozone in danger. A lack of solidarity could have produced the same result. Debtor and creditor countries have to work together. And in general, the economy of non- eurozone countries also depends on the eurozone. We carry a common project, especially those in the eurozone, even if the choices are made nationally. Forgetting this in our actions undermines the common good.

When I say the crisis put Europe’s national leaders face to face with co-responsibility, two reasons spring to mind why it fell upon them, personally. First of all, as I said: there is a lot of money at stake. The public debt crisis, like the banking crisis in 2008, requires taxpayers’ money (albeit also in loans and guarantees). Given that the central EU budget is relatively small (ca 1 per cent of GDP), the EU institutions as such cannot act decisively on their own. It is therefore essential for the Member States to step in. And the amounts are such – 500 billion, or more than 5 per cent of the GDP of the eurozone - that within countries the decision can only be taken at the highest political level. Secondly: in times of crisis, we reach the limits of institutions built on attributed competences. When we enter uncharted territory and new rules have to be set, the European Council, bringing the 27 country leaders, the President of the Commission and the President of the European Council around the table, is well placed to play its part.

The Commission has received unprecedented supervisory power. The Court of Justice will control the transposition of the debt brake. The European Parliament was decisive in designing the new budgetary and macro-economic surveillance, the so-called "six-pack", which is the backbone of the whole enterprise. In the three major recent efforts by the Union to give itself a better economic governance – the Task Force which I chaired on economic governance, the Euro Plus Pact, the Fiscal Compact – I worked hard together with the Commission to bring the results within the normal EU framework.

This year is the second time the European Semester is in place. But it has already been much strengthened since last year. The basic calendar remains the same: from the Commission's Annual Growth Survey (this time already in November 2011), via the National Reform Programmes and others, to the June European Council which closes it. But along this process, our tools have been strengthened, in particular thanks to the entry into force of the so-called "six-pack" for budgetary and macro-economic oversight. I should like to underline that this doesn't apply to the same extent to non-eurozone members; for them the new sanctions do not apply. In the framework of the European Semester, the Commission also assesses macro-economic policies (beyond fiscal issues). For instance, it recently decided to do extra reporting on imbalances for 12 countries, including countries with surpluses on the balance of payments (Sweden, Denmark). The Council can make recommendations to Member States to correct imbalances; when these are not followed, sanctions will ensue."

Full speech



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