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13 March 2012

Remarks by President of the European Council, Herman Van Rompuy, at the European Parliament


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Mr Van Rompuy said there can be no complacency in facing the enormous economic challenges that still remain before us, and that sustained effort on several fronts remains necessary.


"As you know, the Semester is our annual policy coordination tool, running from the release of the Commission's annual growth survey to the June European Council, which will adopt country-specific recommendations, a key moment in the semester.

Of course, some of the supply-side measures take time to have an effect, we have fiscal consolidation as a more immediate dampening effect on demand, but we may be able to avoid an overall contraction in credit. I hope banks will take advantage of the ample liquidity support provided by the European Central Bank to pass on some of these resources to businesses and households. The action taken by governments and the ECB is also helping to stabilise sovereign debt markets in the countries under pressure. It is crucial for countries not to relent in their efforts and to stick to their commitments under the Stability and Growth Pact and the new Fiscal Stability treaty.

Alongside this monetary policy, the overall policy of restoring confidence in the eurozone at different levels will contribute to restoring confidence by consumers and investors, and will in that way contribute to growth and jobs. Our strategy is starting to work. We have reached a turning point in the crisis, while being fully aware of the remaining vulnerabilities.

We need a short- and a longer-term strategy for growth. The latter is embodied by the EU 2020 strategy, now also closely monitored in the Semester, but we need also a specific employment policy especially for young people. Even if the main responsibility lies with the Member States, the Union can give guidance, as we have done in the European Council Conclusions. We look forward to the Commission's forthcoming "employment package" to take this work further.

We also talked about the situation in Greece and we welcomed the progress made on the new Greek programme. The aim is to put the Greek economy back on a sustainable footing, both in terms of debt sustainability and competitiveness. Eurozone leaders support the efforts undertaken by Greece. And may I just underline, for those who claim that the European Union is "imposing" austerity on Greece, that, in fact, eurozone countries and the IMF are providing another €130 billion, on top of the first package of €110 billion, of long-term low-interest loans to Greece, and have helped it secure a write-down of 70 per cent of the net present value of its debts to private banks.

Overall support to Greece represents more than 100 per cent of the GDP; without all this, Greece's situation, difficult as it is, would be far, far worse. But we do also need a strong growth-agenda for Greece mobilising European funds, foreign investments and maximising the growth potential of the Greek economy. The Commission was asked to step up its technical assistance to Greece to achieve this. Eurozone leaders also confirmed their commitment to reassess the adequacy of the overall ceiling of the EFSF/ ESM firewalls by the end of the month, via the Eurogroup. In addition, they agreed to accelerate the payments of the pending capital for the ESM."

Full speech



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