Thank you, Madam President, for this first invitation to a discussion with your committee. (…)
The EU is going through a difficult economic crisis which is having major consequences on the lives of our fellow citizens – particularly through unemployment – but which is also reflected in the rise of populist movements in different manifestations: the election of Beppe Grillo not far from our country, the emergence of the True Finns party in Finland, the passing of constitutional laws in Hungary that don’t reflect the spirit of the EU treaties, and heads of government threatening to resort to referendums to decide whether or not their countries should remain in the Union. I won’t mention them, but there are also a lot of French political leaders who have recently made remarks about Europe that tend to scapegoat it for our national difficulties. A year after the elections, the democratic parties must take care not to contribute, through their own arguments, to this strategy of eroding links within Europe: they will be the main losers.
GROWTH/BUDGETARY RESPONSIBILITY/FINANCIAL REGULATION
We want to change the direction of the European enterprise in order to regain a purpose, say clearly that we reject austerity as the only future for Europe’s peoples, put growth and employment back at the heart of Europe’s action, and continue with the regulation of finance. This threefold principle – growth, responsibility and financial regulation – must be the driving principle behind the construction of tomorrow’s Europe.
Budgetary responsibility is necessary, first of all at national level, not necessarily in relation to Europe. I say this to nip in the bud the suggestion gaining ground in our country that good budget management would be imposed by a European decision. Good budget management is a necessity, including with regard to the currency market, because if by any chance our deficit were to deepen by unacceptable proportions we’d have to pay the price in the national arena, independently of the targets the EU sets for us. Today, a percentage point increase in the rate at which we borrow – which may result from concern by the ratings agencies and the financial markets in the face of the deterioration in the budget deficit – means €2 million in cash per year for a short-term loan and €7 million for six-year loans.
The necessary budget responsibility must be associated with a message on growth and employment. In the past 10 months, you’ve debated measures that have been taken, like the €120 billion for the growth compact endorsed in June 2012. Others will follow with the Commission’s new proposals to the European Parliament linked to the Multiannual Financial Framework 2014-2020, like the creation of a €6 billion budget provision devoted to training young people in regions with high youth unemployment rates, or the creation of a financial transaction tax to give the whole of Europe, or just the Euro Area, new own resources. So it’s clear that strict management of our budget doesn’t entail, at EU level, being deprived of new tools that can lead us towards growth and employment.
Of course, our national budgetary prospects may prove tougher than expected: growth, which wasn’t up to scratch in the final quarter of 2012 in the EU countries as a whole, means less revenue for our country; a military intervention we didn’t anticipate also means public spending we must take into account; the Commission’s proposal for the Multiannual Financial Framework – which could be manifested in some €50 billion more spending for the 2014-2020 period than for 2007-2014 – also has repercussions for budget management in France. The good thing about this proposal would be to make it possible to reinforce structural policies and create employment by initiating major projects. But the European Parliament is setting preconditions for its adoption. Because it wants to be sure that what is endorsed in the budget is well spent, it’s calling for a review clause half-way, in order to refocus unspent appropriations. A second condition is the introduction of flexibility, on the one hand between [budget] headings and on the other year-on-year, likewise to ensure budgets are properly spent. On these first two points, France has said she’s open to dialogue with the Parliament. (…)
On a third point, regarding the possibility of Europe one day having own resources in the budget, there’s no clear prospect. (…) However, that’s not where the real difficulty lies: it lies in the amended budget, which is expected to settle the bills of the past in order not to compromise the 2014-2020 package. The Commission estimates at €121.2 billion the additional payment the EU countries should make to pay for the expenditure of the ESF and the ERDF. This money won’t come out of nowhere: we’ll have to get it from our coffers. For our country, that’s additional budget expenditure of €1.8 billion which wasn’t included in the calculation of the 3% deficit target set by the EU. France didn’t oppose a categorical refusal, but in exchange she asked the Commission to take this new factor into account and agree to delay the 3% target to 2014. This request met with a rather positive response, due to the structural reforms embarked on by France over the past two years, which put her on the right track. Having said that, not all the EU members take the same position, particularly small countries, whose contribution would nevertheless be much smaller than France’s: in the order of €200 million to €300 million.
Economic and Monetary Union must be the follow-up to the progress endorsed over recent months through the establishment of a genuine Euro Area banking union. The Cypriot experience has shown how necessary and positive this progress is: after all, that progress enabled us to respond to a major crisis in a country, and it seems to me this has been rather quickly forgotten. The negative view of it that statements on the subject have helped give is entirely regrettable. We must now move forward on the question of whether the crisis could have been avoided thanks to certain prevention mechanisms. Insofar as we recognize the European Central Bank’s ability to support states, it’s clear that we must push further and directly support banks, in order to avoid a deterioration in the quality of states’ sovereign debt. France upholds the agreement we’re moving towards on the direct recapitalization of banks. It so happens that Coreper is meeting today to agree on the practicalities of banking supervision. We must always bear in mind that progress on economic tools must be accompanied by political progress tangible to our fellow European citizens. While we move forward on making banks secure, we must find solutions for protecting their customers who are savers, establish mechanisms that protect savings and mechanisms that deter speculation, and finally ensure, through banking supervision, that money is indeed used for the real economy and not for financial speculation. Those are the projects under way at the moment.
Several of my visits, including a two-day visit to the European Parliament, have given me the opportunity to discuss the fight against fraud and tax evasion. Out of bad comes good: the efforts made since November in the Council, at France’s initiative, aimed at establishing transparency mechanisms without barriers between the EU members, will no doubt bear fruit, and this can only come about through a realization that enough is enough, that we’ve reached the end of what’s acceptable: within our own EU perimeter, we weren’t managing to achieve transparency of accounts, while certain EU members which are currently tax havens agreed to that transparency in relation to third countries, particularly the United States. Under pressure, Luxembourg and Austria – small countries in size and population but significant in their banking networks – have agreed to make concessions. (…)./.