01 October 2013

VP Rehn: Building Europe's recovery, rebuilding its monetary union

I am well aware that these achievements do not yet constitute the final stage of the Economic and Monetary Union 2.0. However, with the important reforms undertaken so far, the options for further fiscal integration have been exhausted under the current EU Treaty.

We live in a paradoxical situation where EU Member States have given the European institutions more responsibility in a context of greater economic and fiscal integration – and yet at the same time they criticise us for our well-grounded economic policy recommendations. This suggests that a deep fiscal union will not be created overnight. It can only emerge through a profoundly democratic process, both at national and at European level. In view of this week's budgetary drama in Washington, I am sure that our American friends are sympathetic to that.

The essential guiding principle for us is that any step towards increased solidarity and mutualisation of economic risk is combined with increased responsibility and fiscal rigour – that is, with further sharing of sovereignty and deeper integration of decision-making…

Europe’s road to recovery will continue to require difficult choices and persistence, as well as tapping external sources of growth. That’s why I strongly support the talks on a Transatlantic Trade and Investment Partnership, with its goal of removing barriers to trade and investment between Europe and the US…

In the meantime, we must continue reforming the European economic and social model. Not nostalgically clinging to the status quo, since that would only lead to a permanent economic decline of Europe. Not dismantling the European model, because we believe in the combination of a stability culture, entrepreneurial drive and social justice. But instead, genuinely reforming and modernising Europe’s social market economy, for the sake of sustainable growth and job creation.

Full speech

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