Mr President,
Ladies and Gentlemen,
We are now approaching the tenth anniversary of the historical decision taken by the European Council in mid-May 1998 to introduce the single currency, the euro.
This decision has shaped the European Union’s development over the past decade. Today, both within our borders and beyond, the euro is a symbol of European integration and is used every day by 320 million citizens in fifteen Member States.
As we mark the end of the first decade since this important political decision was taken, the Commission has agreed that, since we have completed a full economic cycle, we should take stock and consider the challenges which economic and monetary union will be facing over the next ten years.
This is the aim of the communication adopted by the Commission this morning which I now have the honour of presenting to you directly.
The communication is based on an extensive report drawn up by the Directorate-General for Economic and Financial Affairs and containing a detailed analysis of the functioning of economic and monetary union and the impact of the euro during these ten years.
The conclusion of this work could not be clearer: the euro is an undisputed economic and political success.
Thanks to the euro, we Europeans today enjoy greater macro-economic stability, lower interest rates and more modest price rises than in previous decades, despite the recent rise in inflation.
Thanks to the euro, the European Union, and in particular the euro zone, is much more integrated economically, with more trade between countries, greater opportunities for business and employment and more efficient markets.
Thanks to the euro, our economies are better protected against external shocks and have become more important and influential on world markets.
This has all produced many tangible benefits for citizens, of which the greatest is undoubtedly the creation of 16 million jobs.
Thanks to the euro, Europe today is stronger, in a better position to withstand turbulence of the kind we have been experiencing during the last few months and has a stronger basis on which to maintain our social model in the future with an ageing population.
However positive our judgment may be, though, this does not mean that all the hopes pinned on the single currency have been met.
Firstly, economic growth during these ten years has been lower than expected.
Secondly, differences continue to exist between the euro zone economies due to a lack of sufficient incentives to make all the necessary structural reforms.
Thirdly, we have still not built up a solid, uniform external presence enabling us to bring our weight to bear worldwide in keeping with the size and scale of our economy.
Lastly, the public image of the euro, which is widely associated with the image of the European Union, does not reflect all the objective benefits which it brings to citizens.
This diagnosis serves to confirm that much still remains to be done. However, we must also take account of the new challenges facing us in future.
With a bigger Europe, and in an age of faster social and technological change with far-reaching underlying trends such as globalisation, an ageing population and climate change, we must update the fundamentals and vision which provide the inspiration for the economic and monetary union project. It was clearly not easy to foresee this new situation nearly twenty years ago when work on the Maastricht Treaty began.
On this basis, we must now work to achieve a more solid economic and monetary union, one which is more efficient internally and projects itself more uniformly to the outside world.
That is why the Commission, in its Communication, does not restrict itself to reviewing what has been done, but instead proposes a debate on what should be improved with an eye to the future. As an initial contribution to the debate, we would put forward an agenda based on three pillars.
The first pillar relates to the internal functioning of economic and monetary union. Interdependence between the economies of the countries of Europe is greater than ever. We should fully acknowledge that and, for the good of the Union as a whole and of each Member State individually, move forward with determination towards genuine economic policy coordination.
How do we achieve that? By strengthening the budgetary surveillance process – provided for in the Stability and Growth Pact – to aspects relating to the quality of public finances and their long-term sustainability; by extending its scope to cover macroeconomic aspects beyond the merely budgetary matters; and by establishing a closer link between monitoring the development of structural reforms and the fiscal consolidation strategies.
The second pillar relates to the external agenda. We can proudly state that the euro has become, in an extremely short time, the second world reference currency. However, by the same token, it makes no sense that we should refuse to act together more cohesively in the light of this new status.
This significant international status achieved by the euro in the last ten years brings with it undoubted advantages as the best way of protecting ourselves from external shocks. There have been critical moments in the last ten years in which this protective role has been put to the test. However, the status of the euro also brings with it responsibilities and risks.
Europe must play its full part in the pursuit of greater global economic stability. In order to do this, it must set out a strategy in keeping with the interests of the euro zone and defend it consistently abroad. There is no doubt that the best way of ensuring such consistency is by having a single representation for the euro abroad.
Finally, the third pillar in our agenda for the future is the improvement of the governance of economic and monetary union. The set of institutions and instruments which govern that Union are the most appropriate ones, in particular in view of the specific provisions made for the euro zone by the Treaty of Lisbon. It is therefore a matter of using those instruments to the full.
The best governance will be born of a full association of Ecofin with the affairs of economic and monetary union, a strengthening of the agenda and the debates of the Eurogroup, in particular as to policy coordination to which I referred in the first pillar, and a much closer dialogue between the Commission and the Parliament and between the Eurogroup and the Parliament.
Moreover, the coming years will see the composition of the Eurogroup increasingly mirroring that of ECOFIN. As recently as this morning, the Commission adopted the convergence report, which paves the way for Slovakia joining the euro area as of 1 January 2009. This would bring to 16 the total membership of the area. I shall of course have an opportunity to discuss this specific question with you in the coming weeks.
Communicating with the public on matters relating to economic and monetary union also needs to be a concern of both our institutions, so that citizens can increasingly view the euro in the light of the objective benefits it brings.
In closing, Mr President, Ladies and Gentlemen,
let me say that we are called upon to discuss a topic of the greatest importance, which fully merits being the subject of this initial debate. I cannot, in the time I am allowed today, cover every detail of the analysis set out in the report drawn up by the Commission, but rest assured that I will be more than willing to discuss it with you in the coming months.
The Commission's objective is, as I said, to build a strong political consensus around the steps to be taken to ensure that economic and monetary union can deal with the huge challenges we face. We feel that these, above all else, are the issues that we need to address.
The leaders who drew up the Maastricht Treaty and decided ten years ago to give the go ahead to economic and monetary union were equal to the task, succeeding in creating an instrument that has brought citizens the protection and benefits the latter were demanding. The hardest part of the work has been done: the euro is now a reality and, what is more, it is a success. We can thus look forward to the next stage with both confidence and optimism, but also with determination and a realisation that what is good for economic and monetary union is also good for the European Union as a whole, for its Member States and for its citizens.
Thank you very much.
