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In Europe's approach to the crisis, restoring trust and confidence – for consumers and investors – has been key. We always knew, after the double shock involving first the banks and then the currency zone, that it would take time. As a Dutch proverb says: "Confidence leaves on horseback, and returns on foot." Indeed. But even on foot, it is coming back now. And we must be mindful not to squander that by backpedalling on domestic and European reforms!
These last years, we experienced again that when confidence is lost, when demand is in free fall, governments become the spender of last resort. In 2008, Americans and Europeans applied the lessons of the New Deal of the 1930s, with a huge fiscal stimulus (worth 1.5 per cent of EU GDP), which helped us avoid the worst.
Clearly, the flipside of being able to intervene with force in stormy weather, is to build up the fiscal space to do so while the weather is fair. We know the damage that comes with unsustainable debt. This is why fiscal consolidation is such an important element of Europe's strategy.
To reach sound public finances, for each country the challenge is finding the right pace, the right balance, also between short- and long-term. For instance moving faster on the reforms with the biggest immediate impact on growth. Or being mindful to lighten the weight of public spending, rather than increase the tax burden.
The flexibility in our common fiscal rules allows precisely such choices. Before the summer we've shown, for instance in Portugal, in Ireland, that we can be flexible on nominal targets as long as structural efforts are there. Other countries, like France, in exchange for more structural reforms, have also been given extra time – time that should not be wasted, but used.
This should also leave space for targeted short-term support to growth and jobs. This is something which the European Council has asserted many times, from the June 2012 Growth Compact to our latest summit before the summer, where we pushed for instance for ambitious initiatives against Youth Unemployment and for easier credit access for SMEs. It's key to maintain social cohesion and stability.
Beyond these measures, reinforcing the foundations of the monetary union is a key part of our growth strategy. It means more financial, economic and budgetary integration - significant steps also politically, as leaders are well aware. This was at the heart of my reflection on the way towards a genuine economic and monetary union, in the Reports I presented last year to the European Council. For a stronger eurozone, I will make sure this work moves forward.
To conclude, Europe can find and nurture sources of growth and jobs – new ones, sustainable ones, for young people, for the next generation. And we should not forget some fundamentals.
Europe is a unique continent, privileged in the world. An alchemy to be treasured: our prosperity, freedom and security, and the solidarity embodied in our social models. It’s a proud achievement, one that can motivate us to renew and adapt, remaining true to ourselves in the new world.
I know the European idea is under pressure in a lot of our countries, if not all. For the very first time, we need to defend Europe, politically and at all levels, to really convince public opinion. But we will finally convince people, not with rhetoric and words alone (even if words are needed), but with results, with growth, with jobs.
In the past few years, we have weathered a storm by thinking ahead. It is true for most Member States and for us collectively, as a Union. In all the immediate action for ‘survival’, we never lost sight of the long term. See our efforts to build a stronger monetary union, see our insistence on structural economic reforms, see how we carefully avoided to fight this crisis by sowing the seeds for the next one. We will come out of this more resilient. It is not an easy road, but one that will reward us in time.