Toespraak Van Rompuy bij plenaire zitting Comité van de Regio's over (en)

Speech by Herman Van Rompuy, President of the European Council, at the Plenary Meeting of the Committee of the Regions

It is a pleasure to speak here today. I remember our very interesting debate of last year and also the meetings I have had with your President, Mercedes Bresso i and the Bureau

Today, I would like to pursue our discussions. I will mainly focus on the challenges for growth and jobs in the Union. I would also like to discuss what role local and regional authorities can play in tackling the challenges

With regard to the latter question, I think that there are important opportunities. First, opportunities offered by the Lisbon Treaty. It strengthened recognition of the regional and local level in European governance: regional and local self-government has been recognised and the principle of subsidiarity now explicitly applies to the regional and local level as well

However, more important than the life of institutions on paper, is how institutions develop in real life. In the interplay with other institutions. Almost as living beings. Institutions are more than the sum of men and women working for them: they have a continuity over time, a life of their own. Yet without people they are nothing: institutions have to be embodied by men and women to act. In the end it is only through the hard work of many people on a daily basis that institutions can bring their value to the life of our society

The economic and financial crisis resulted in a real demand of intervention and action by public authorities. When people's basic needs are at stake — their jobs, their savings, their pensions — politicians should be able to give the answers. Both those from the capitals, and those from the communes, cities and the regions

Dirk De Backer - Spokesperson of the President - ( +32 (0)2 281 9768 - +32 (0)497 59 99 19 Jesüs Carmona - Deputy Spokesperson of the President - ( +32 (0)2 281 9548 / 5150 - +32 (0)475 65 32 15

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This is why at last year's Spring Council, the Leaders recognised the role of the Committee of the Regions in the EU 2020 governance process. Today I am glad to see that local and regional authorities are actively involved in the process. Through the EU 2020 Monitoring Platform, you are following the EU 2020 process closely

I retain some positive conclusions from the Monitoring Report on EU 2020, which was published in December 2011:

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  A huge effort by EU cities and regions is under way in virtually all policy fields related to Europe 2020
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  The flagship initiatives are seen as being potentially helpful by local and regional authorities across the EU
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  The 2012 European Semester is seen by the Committee as an opportunity to root local and regional authorities more firmly in the economic governance framework. It is your firm ambition to contribute to all stages of the policy cycle, from the Annual Growth Survey to the adoption of the National Reform Programs and country-specific recommendations

Apart from your continued contribution to the policy debate, you play a role in raising public awareness of the issues at stake. Being so close to the 500 million Europeans, you are a vital part of the European democracy. Discussions about solidarity and responsibility in the EU are not only discussions in Brussels; no, they concern our communes and cities. And the same is true for the current debate about restoring economic growth and jobs

I know how engaged the Committee is in many of the challenges faced by the European Union, including those that arise from the economic crisis. I think you should continue to play this role

But let me start with giving you some insights about the challenges at stake

The objective is clear and shared by all: Europe must remain this very attractive continent in which to live and work, create wealth and spend it, for all citizens. And for that we need growth — 'quality' growth! And an environment of social dialogue, cohesion and fairness!

Our efforts to deal with the banking crisis and the sovereign debt crisis has overshadowed, in the public eye, the ongoing work on growth. Today, the growth debate is taking centre stage all over Europe, and rightly so. In fact, it was never absent, simply less visible. It was even the main theme of the very first European Council I convened in February 2010. This year, we already devoted two European Council meetings to growth and jobs

On average, the recession Europe is facing today is mild, but with large differences between Member States. Eurozone GDP is projected to contract by 0.3 percent in 2012, and return to growth next year. A number of European economies are growing, both outside and inside the Eurozone. Price stability - a condition for economic and political confidence - has been maintained

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Our macro-economic policy margins are limited. Debt and deficit levels in most Member States leave hardly any room for continued fiscal stimulus, even if some countries do have a have more fiscal space to let automatic stabilisers play. It strikes me that we sometimes face schizophrenic demands, with people telling us one day that a lack of fiscal discipline undermines market confidence, and the next day that fiscal consolidation kills growth!

Let me put it clearly: fiscal consolidation is not an objective in itself, but it is a necessary condition for growth and jobs when the debt dynamic turns vicious. When that happens interest rates increase, demand falls and growth suffers. And that's precisely the situation in some countries today. The issue is how to do the consolidation, which is unavoidable, in an intelligent way, in a way that restores confidence and creates the conditions for growth to resume

Structural reforms are therefore the main lever at our disposal. Most countries have engaged in deep structural reforms to raise competitiveness, investment and employment. We have learned that those which did most to improve their competitiveness already in the past (such as Germany a decade ago and Sweden two decades ago), withstood the crisis more easily than others

The crisis has revealed pre-existing structural challenges that concern us all. Systemic challenges, both for the Economic and Monetary Union and for individual countries

Obviously, when speaking about reforms, our focus is always on the road ahead. It may seem steep, but just look how far we have travelled already. This should be a source of encouragement

Courageous decisions have been taken across Europe. Going against vested interests, of all kinds: in the financial world, in the energy sector, in the labour market, in the sheltered services. Social fairness can only be achieved when the efforts and sacrifices are spread evenly

At Member State level many major reforms have already undertaken

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  Finland and many others have shifted tax away from labour
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  Poland has cut red tape for start-ups and companies
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  Spain and Portugal have made their labour markets more flexible
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  Greece and Italy have opened up more than 100 closed professions each
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  The Baltic States, who were among those hardest hit worldwide, took drastic measures. Today, growth is back and nowhere in Europe are employment levels rising faster than in Lithuania, Latvia and Estonia!

It helps to learn from each other. All colleagues are now well aware that the failure - or the success - of one country, can change the outlook for all. This gives the discussion among leaders at the European Council a new intensity. And I consider it my duty, as its first permanent President, to make the most of the continuity provided by my mandate, and remind colleagues — gently but constantly — of their individual pledges and collective commitments

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But, equally, some of the work to provide a growth-friendly environment we can only do together, at EU level

Take patents, key to turn ideas into products. For the moment the cost of filing a patent in Europe is 20 times higher than in the US or Japan. We are closer than ever to an agreement on the much-awaited European patent: it should reduce these costs by 80 %

Its launch will come as a big relief to everyone!

Or take the Union's work on the single market, our unrivalled achievement, where we can still achieve more through integrating our energy, service and digital markets

Take trade, securing new markets for our companies abroad. Provided it takes place on a level playing field, international trade is a vital engine for growth

Take mobility and training: despite high unemployment, there are more than 2 million vacancies in the Union. We should do to work, what "Erasmus" has done to studies!

And take finance, a key for growth in the longer term, but also in the short term. Here Europe can contribute decisively. The Union's regular budget, even if it represents only about 1% of our GDP, does amount to around €1 trillion over seven years, which can have huge effects in terms of leverage. It enables investments with a Europe-wide growth potential which otherwise would simply not be possible

We also have our own investment bank, the European Investment Bank, the biggest multilateral bank in the world. It isn't very well known by the wider public, although I suppose many of you do know it as a partner in developing important infrastructure projects. With a€10bn increase in the capital, we could expand the Bank's overall lending capacity by €60bn of new loans in the next three years, to support new investments up to €180bn

As I said in my introduction, I believe that regional and local authorities can play a significant role in tackling these challenges. Regions are often very important economic players. For instance, just those European regions with legislative powers spend in their budgets around €800 billion a year

That is why implementing fiscal consolidation, also at your level, is essential. Common European rules constraining national levels of deficit and debt are likely to affect regions. National governments which define these EU level rules must ensure that their internal regions are involved ahead of decision taking, just as they will be in implementation

Secondly, regions must ensure that fiscal consolidation is carried out in a growth-friendly way. In Europe, we should preserve those investments that are drivers for growth, such as in education, energy and innovation. These are investments close to the daily needs of the citizens. Often such decisions are also taken by regional or local governments in Europe. Local job programs or energy efficient cities for example. I have seen that at the Summit of regions and cities in Copenhagen last month, the transition to a carbon-free economy was addressed. The Union can boost this process. This is why in my letter to the Heads of State and Government of last week, I have called for more sense of compromise in order to reach an agreement on the energy efficiency directive soon

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Thirdly, the 23 million SME's are the backbone of our economy. We need them to restore employment and growth. Often, they are closely involved with communal or regional authorities. These solid partnerships between regions and SME's are very valuable

Fourthly, local and regional authorities are joint managers of the EU cohesion policy. In the discussions about the future EU Budget, cohesion policy remains very important. The Commission proposes that its budget for 2014-2020 reaches EUR 336 billion. This would be complemented with EUR 40 billion for the Connecting Europe Facility. Even though the allocation for the cohesion policy would be frozen compared to the current period, its share in the EU budget would grow. In times of economic difficulties we have to do more with limited resources by investing in a smarter and wiser manner

The cohesion policy should become a central tool to deliver the objectives of the Europe 2020 strategy and focus better on boosting growth and supporting employment in Europe. Its performance needs to be improved and its rules should be simplified. You, regional authorities, are very well placed to provide ideas for making it simpler and more effective

Lastly, in Europe, our governments are taking difficult measures to restore growth and competitiveness. These are often not easy for the people. Local and regional authorities can certainly help in explaining the necessity of certain reforms. Of course, this is a joint mission, for all those that bear political responsibility

Some create the impression (or the illusion) that a growth policy is easy. This is not at all the case. We have to shape change, otherwise it will be imposed on us. It is an exercise in making the right, future-oriented choices. Cuts and taxes need to be fair. Even a growth policy needs choices and sacrifices, but these should not be borne by one social group or generation

And, of course, reforms take time. Their effects are not immediate, nor can they be, but they will make a difference and create jobs in due course. We must tell the truth. There are no magic formulas. Reforms take time to produce results

For that, we need a positive language on Europe. There is enough criticism. There is enough fear. We need a language of hope. Hope can help shape change

I believe that all of you can help to spread this message, through our communes, cities and regions in the Union

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