The preparation of the Spring European Council - Statement by State Secretary Janez Lenarčič on behalf of the EU Council

Dear President Pöttering,

Dear President Barroso,

Distinguished Members of the Parliament,

• It is with great pleasure that I present to you today the main topics of tomorrow’s meeting of the European Council. Following the tradition of the Spring Summits, this meeting will also focus on economic issues, Lisbon strategy in particular, as well as on energy and climate change and financial stability.
• The Presidency is looking forward to the exchange of views with the European Parliament, and I can assure you that we will take due account of the positions adopted by the Parliament with regard to the topics on the agenda of tomorrow's meeting.
• As we are all aware, these are the times when the EU has been facing new challenges. Globalisation offers new opportunities, not only economic, but also social and cultural, and the Union is already benefiting from them. We also acknowledge that globalisation requires the Union and its Member States to adapt and find the right responses. And this will be the focus of this European Council.
• The global economic environment is going through challenging times. We have witnessed turbulence on the financial markets. Now we can observe global economic performance deteriorating as a result of a slowdown of economic activity in the United States and higher oil and commodity prices. Although the fundamentals of the EU economy remain sound, we may not halt and must remain focused on reforms.
• In this context, the European Council will take stock of the implementation of the Lisbon Strategy for Growth and Jobs. It will welcome the positive results and hopefully confirm that the renewed strategy works.
• In that spirit, the European Council will launch the new cycle of the renewed Lisbon Strategy for the 2008-2010 period by stressing the need to focus on implementation. We need to continue the work on the priority areas agreed in 2006, namely investing in knowledge and innovation, unlocking business potential, investing in people and modernising labour markets, and climate change and energy.
• In the field of knowledge and innovation, the European Council will add new momentum to our endeavours and establish the so-called “fifth freedom” that would remove existing barriers to the free movement of knowledge. This will enhance the cross-border mobility of researchers, as well as students, scientists and university teaching stuff. The "fifth freedom" will spur the EU's transition to an innovative, creative knowledge economy.
• It will also enhance the competitiveness of EU business, in particular Small and Medium Enterprises, through actions that will allow them to operate and grow more effectively. Those should provide the SMEs with an easier access to finances and strengthen the support for more innovation. High priority will also be given to the progress on the better regulation agenda.
• Great attention will also be paid to the social dimension of the Lisbon strategy. The European Council will call for additional efforts to be made in addressing demographic challenges, skills shortages and further policy actions geared towards greater social cohesion. The Spring Summit will also call upon the Member States to progressively implement the agreed common principles on flexicurity through their national arrangements, providing balance between flexibility and security on the labour markets.
• Allow me now to touch on another item of major importance which will be addressed by the European Council: the challenges of the climate change and energy. Last year, historic commitments on climate and energy policy were made, this year the focus is on delivery.
• This goal therefore represents an economic as well as an environmental challenge of fundamental long-term importance. If we answer ambitiously, we can write not only an economic success story by stimulating our economy to innovate and adapt, but also an environmental success story.
• The Commission's legislative package is currently under discussion within the Council and the first debates have re-confirmed the commitment of all Member States to an ambitious response.
• However, it would be too early to expect agreements on all aspects to be reached at the upcoming summit. We anticipate that an understanding on principles and guidelines for the future work on the package could be reached. The Heads of State and Government are likely to express their wish that overall balance is preserved, while paying attention to the complexity of the package with regard to its economic and financial impact.
• The European Council will emphasize the importance of an early agreement on the package. The goal is to adopt it as early as possible in 2009, in any event before the end of the current European Parliament's term of office.
• Should all the major partners tackle the challenges of climate change together, our efforts will be successful. When the Climate Conference in Copenhagen convenes at the end of 2009, Europe should be the driving force in the negotiations on an ambitious and comprehensive post-Kyoto agreement. It is therefore also this global dimension of our work which makes the conclusion of this agreement by early 2009 necessary.
• I should like to touch briefly on other issues related to energy questions. An effective fully-functioning internal energy market is an essential prerequisite for secure, sustainable and competitive supply of energy in Europe. In this light, the European Council is expected to call for a rapid agreement on the third internal market package for gas and electricity. It will pay additional attention to further measures focusing on the security of supply and external energy policy.
• The European Council will also place the climate and energy policy endeavours in the context of developing new technologies and increasing technological investment, as outlined recently in the Strategic Energy Technology Plan. This would further contribute to enhancing the competitiveness of our business.
• The Heads of State and Government will also address the conclusions of the joint report from the Secretary General/High Representative Solana and the Commission on the impact of climate change on the international security. The complex nature of climate change demands more comprehensive policy coordination and the European Council will call for an extensive follow-up to the report.

Dear Presidents,

Distinguished Members of the Parliament,

• I would finally like to touch upon the third major item on the agenda of the European Council: the exchange of views on the recent developments on the global financial markets.
• Conditions in the international financial system remain uncertain. To manage the risk of a spill-over to the real economy, EU economic and financial policies should be geared towards ensuring macro-economic stability and pursuing the structural reform agenda.
• The Union's response has been developed by Finance Ministers and some adjustments have already taken place in financial markets since last autumn. The European Central Bank, national and EU authorities and financial institutions have taken several actions to stabilise the situation. But the primary responsibility for managing risk is and must always remain with individual financial institutions and investors.
• The current situation has highlighted the need for further strengthening of the financial stability framework through enhanced prudential supervision and improved tools for financial crisis management. The European Council is expected to call for action in four areas:
  1. enhancing transparency for investors, markets and regulators;
  2. improving valuation standards;
  3. reinforcing the prudential framework and risk management in the financial sector;
  4. and improving market functioning, including the role of credit rating agencies.
• Allow me to say a few words on the issue of Sovereign Wealth Funds. The Sovereign Wealth Funds play a useful role as capital and liquidity providers with long-term perspective. However, the appearance of new players with limited transparency as regards their investment strategy and objectives has contributed to concerns about non-commercial practices.
• The recent Communication from the Commission on the Sovereign Wealth Funds is a valuable contribution to the debate. The European Council is expected to agree on the need to develop a common EU approach, in line with the five principles proposed in the Communication.
• May I stress again that cooperation with the European Parliament on the said questions will be of vital importance.
• I would like to conclude my opening remarks by saying that the Spring European Council, beginning tomorrow, will be about delivery. The Presidency would like to advance our work on making Europe the most competitive economy. Equally, we are faced with a major task of securing additional sustainability through our climate and energy policies. In view of all these future challenges, we also wish for genuinely constructive cooperation with the European Parliament. If we make progress together, the European citizens will have the possibility to understand that the EU is here to take care of their future. Our exchange of views today and the discussion with the President of the European Parliament at the European Council are undoubtedly important factors in fulfilling this goal.

Thank you for your attention.