Transcript of the speech by Mirek Topolánek in the European Parliament

Good morning, let me welcome you to the regular report of the European Council President after the European Spring Council.

Mirek TopolánekFirst of all, I would like to apologise for not being able to stay throughout the entire plenary meeting as is the custom – in the second part after the speeches of the representatives of the political groups, Deputy Prime Minister Vondra will stay here on my behalf. The reason why I have to return to Prague is, as Hans-Gert Pöttering already mentioned, an unprecedented obstructive attitude of the Socialist party, which, after all, we have been faced with since the very beginning of the Czech Presidency and I have never made a secret of it. The fact that our Government will have to resign will certainly not jeopardise the Presidency; the fact that the Socialists do not take into consideration the Czech Presidency of the European Council and refuse to cooperate, be it only on the basic level, is most detrimental to the Social Democratic Party itself. There should be no harm done to the Presidency, because I am fully confident that we have undoubtedly managed to deliver on what I said in my opening speech in the European Parliament – I said that we will make an effort to be good moderators of the discussion and to reach compromises - and the Spring European Council is a clear example of this. In my country, it is customary not to interrupt the speaker but here the customs may be a bit different. So much for the introduction, then.

Let me now move on to the reason why I am here today – and I will now be following the conclusions of the European Council very closely – let me explain some of the steps taken at the European Council, but before that, let me first comment on the events that took place before. Now I am speaking about the “tripartite summit” – the summit with the social partners. The meeting brought together a number of high-level leaders – in addition to me and European Commission President José Manuel Barroso, it was attended also by the Prime Ministers of the next two Presidencies, both Prime Minister Reinfeldt from the Kingdom of Sweden and Prime Minister Zapatero from the Kingdom of Spain. The meeting impressed me in a very positive way and I was much surprised by the consensus reached by the social partners, not only as far as the agenda of the Presidency is concerned, but in general as regards responses to the situation which is or may be faced by employees or possibly the unemployed due to the global financial crisis and economic recession. If some of you are interested, I will speak about the tripartite summit at greater length, but – to sum up – we have agreed on three fundamental principles. i.e. to ensure a much greater flexibility of the labour market and mobility of the labour force and to work much harder in order to increase the level of education and skills of workers so that they can assert themselves on the labour market.

Although the Spring European Council was already the second meeting of Heads of State led by the Czech Presidency, it was the first formal, regular summit.

The first key issue, which perhaps attracted most attention, was the current economic crisis and ways of tackling it.

First and foremost, I must strongly reject all the allegations saying that we are not doing enough and that we are staying on the surface of things. I will give only one figure - 400 billion euros. The 400 billion accounts for 3.3 % of the EU’s GDP. It is an unprecedented step and the sum will complement the automatic stabilisers which the EU has, unlike for instance the USA. I think that the example given by José Manuel Barroso is a very instructive one – when jobs are cut at Saab in Sweden and at General Motors in Chicago, the workers’ social standards are completely different; the approaches of their respective governments are completely different, too, and it is the automatic stabilisers that multiply the sum of 400 billion euro and increase it significantly, giving us in this way an undeniable advantage over the USA. The mainstay of the agreement of the EU-27 is the reiterated validity of the Lisbon Strategy, which is one of the four pillars on which the entire consensus is built. I am sure that yesterday, Gordon Brown had the opportunity to speak to you about the approach of the EU-27 and the mandate for the G20 summit. We have agreed that all the short-term measures must be of temporary nature and have also been conceived as such. The medium-term and long-term priorities and tendencies of the Lisbon Strategy have been confirmed and the short-term ones must be in keeping with them.

In all frankness, I must say that when Timothy Geithner, the US Secretary of the Treasury, spoke about “permanent action”, it was much to the European Council’s dismay.

Not only is America repeating its mistakes from the 1930s – the large-scale stimuli, the protectionist tendencies and appeals, the “Buy American” campaign… - all these steps, their combination and, worse, the initiative to establish them as permanent, are a road to hell. We have to return to our history books, which so far have only been gathering dust. I consider the resounding “no” to this policy and to this short-sighted approach as the greatest success of the Spring Council meeting.

I have to strongly oppose the words of the Chairman of the European Socialists, Poul Nyrup Rasmussen, who said that the European Council had done little to combat the crisis and that we were waiting for the USA to save us. Not only because the path chosen by the United States has been disproved by history, but also, as I have already said, the quality of social security and the functioning of the social networks in general are very different, and on a much lower level in the USA than in the EU. This is why the US approach is dangerous - in order to finance its social stimuli, the US will need liquidity – and will have no problems in obtaining it since there will always be a buyer for US bonds. However, this will jeopardise the liquidity of the markets; it will withdraw liquidity from the global financial market and other treasuries, perhaps European bonds, and certainly Polish and Czech ones, will face difficulties finding a buyer and then there will be no ready money in the system. This approach gives reason for some unease and in my opinion will also be discussed at the G20 summit. The G20 summit will be one of the opportunities to talk about this issue and the debate may continue at the subsequent informal summit of the EU-27 with the US Administration and Barack Obama in Prague. I am confident that together with the USA we will find a common solution because in no way do I want to set the USA and Europe against each other. Today – as the crisis has shown yet again – there is no such thing as an isolated economy; the rate of inter-relatedness is very high, which, at a time of crisis, means that we are all facing a problem, but also that we can only solve it together.

The preparation for the G20 summit is the second pillar of our agreement as regards the ways to tackle the current crisis. The material prepared by Gordon Brown and his Cabinet is excellent and you had an opportunity to learn more about this text yesterday. The three-pillar approach, i.e. the responses concerning the financial sector and the fiscal stimuli, regulation and rectifying mistakes within the system and the restoration and liberalisation of world trade, which means pressing for the resumption of talks under the Doha Round in the context of the WTO, as contained in the third pillar – all this is precisely what, in my opinion, constitutes a set of solutions proposed and unanimously agreed upon by the European Council. I also want to highlight the fact that we have agreed finally on a specific sum for the increase of the available financial capacity of the International Monetary Fund - we have decided to pledge 75 billion euros. Ahead of the G20, the EU-27 has a single position, one voice and a common goal. I consider this to be the greatest success because the entire European Council meeting was a test of European unity, European solidarity, European values and the internal European market. If any of these fundamental qualities were undermined, we would in fact be weakened by the crisis, but if we stick to them, as I think we will, we will be strengthened.

There is therefore no reason to be pessimistic ahead of the G20, as Poul Nyrup Rasmussen fears. I think that we all understand that we need to express our solidarity and work together, as Graham Watson from the Liberal Democrats Group put it.

As we all have said, the current crisis is a crisis of trust. The third precondition that is essential if we are to overcome the crisis is to restore trust. It is not enough just to pour money into the system – we have tried this and the banks still refuse to lend money. It is necessary that they start lending money and they won’t unless they trust their customers. The liquidity they have at their disposal has not solved the problem. Trust cannot be ordered nor bought. In order to restore trust we have taken another step to reinforce it – we have doubled the guarantee framework to cover the needs of the countries outside the eurozone to 50 billion euros. We have agreed that it is necessary to treat each bank and each country individually. At the moment, we consider the one-size-fits-all approach dangerous, since the markets are nervous and react immediately, negatively and with undue intensity to every gesture. That’s why we need better regulation, and I stress the word “better”. And we need to introduce regulation in those countries which have lacked it so far. This is where you, the MEPs, come into play. We would like to reach agreement, and there are signals that we might be successful, on legislative acts corresponding to our vision of better regulation which concern rating agencies, the solvency of insurance companies, capital requirements for banks, cross-border payments, e-money etc. I would very much welcome it, if you adopt these acts during your parliamentary term, so that they may be implemented immediately. I and the others also welcome the de Larosière report, which is brilliant in its analytical part and contains clear instructions concerning the implementation of measures; in this respect the European Council has drawn clear conclusions.

Perhaps the most important task of the Spring European Council was to assess the implementation of the Recovery Plan so far, as set by the December Council. The Recovery Plan has aroused much criticism and many comments, which I consider unjust. It has been labelled as insufficient, slow, lacking ambition... I would like to use this occasion to set things right. EU fiscal measures have reached 400 billion euros, which is approximately 3.3% of GDP. This amount doesn’t include the funds for recapitalisation of banks and guarantees, representing more than 10% of GDP. This is something the European Union can afford at the moment, nevertheless it will have a substantial impact on the Growth and Stability Pact, on public debt, on the rectification of the situation during the period of the so-called day after, i.e. after the crisis has ended, if I may put it this way. I believe that even the 5 billion euros is just a small amount out of the huge sum of 400 billion euros. It was finally approved after difficult negotiations, having to face criticism by many countries. They claimed that these funds cannot be considered a crisis measure if they are not drawn in 2009 and 2010 (it is true that the project evaluation system is not transparent), that the list of the projects is not well drawn up with some projects missing or being excessive. In the end we have managed to reach agreement on the 5 billion euros, after complicated negotiations and thanks to the dominant role of the Czech Presidency, sending the proposal to the European Parliament to deal with it.

I need to mention that the Recovery Plan has its Community level, with approx. 30 billion euros available at the moment, and a national level, with each Member State implementing its own fiscal incentives. I consider as essential that the European Council has agreed upon the validity of the Stability and Growth Pact. If the Union is to get through the crisis unhurt and even stronger, we have to respect our own rules. Introducing new packages without having implemented all national and Community actions, understanding their impact and knowing whether or not further fiscal incentives are necessary would be the biggest mistake. The European Council has also agreed upon that. If necessary, the European Council may adopt other measures, but at the moment we are not sure whether to proceed this way. No one knows the bottom of this crisis, its end. So without knowing the impact of the 400 billions worth of fiscal incentives it makes absolutely no sense to adopt further measures. The Plan is ambitious, diversified and complex and deals with both growth and employment in individual countries, as well as problems related to the economic situation.
The climate discussion. The negotiations and preparations of the Copenhagen conference have already begun. Denmark, which will host the conference, but also Sweden, during whose Presidency it will take place, and the Czech Presidency are already working intensely. We are not only trying to reach a common European position, but are also beginning to negotiate with the biggest players whose participation is required if the Copenhagen conference is to be a success. They are the USA and, of course, Japan, China, India and other big countries and major polluters. The most important discussion, which I would like to say at least a few words about, was whether we should already now establish not only mechanisms but also the contributions of the individual EU Member States to the funds that we intend to give the developing countries and other third countries to help them fulfil their obligations in the fight to protect the climate. The decision we have made is the right one. In a situation where we negotiate with all the big players, who so far have talked more than they have acted, it would be a tactical blunder and a very bad idea if we established our own barriers and limits which the others wouldn’t respect. Our negotiating position is much better if we have free hands. That is what was decided by the countries that tabled the latest proposal, i.e. Sweden, Denmark, the Netherlands, UK and Poland. Referring to the attitude adopted by Poland, both the interests of the countries that are a little reluctant about the mechanisms and the interests of the leaders in terms of climate protection are respected. What is left for us to do, is to find a concrete mechanism, the key and the right wording. This should be done sufficiently in advance of the Copenhagen conference by an agreement between all the countries, also those that have made it their absolute priority.

Thirdly, there is the issue of external relations. The European Council formally adopted the Eastern Partnership initiative as a supplement to our foreign policy or the neighbourhood policy. If there are icebergs to the North and we have the Atlantic to the West, our neighbours live to the South and East. They are countries which could potentially threaten not only our economy but also our social situation and our security. The Eastern Partnership has been one of the goals of the Czech Presidency and I am very glad that it has been adopted and that a clearly defined sum - 600 million euros - has been made available. I anticipate your question about whether Belarus should take part. We are considering this - Belarus is part of the project. Belarus has made certain progress and the suspension of the ban on issuing visas to representatives of the regime has been prolonged. The doors are opening for Belarus, but no decision has been made. If the Member States do not reach agreement, and the decision should be made by all 27 countries, then we will not invite Mr Lukashenko, even though both the opposition and the neighbouring countries recommend us to do so. I think it is a question that I cannot answer if you ask it right now, and therefore I anticipate it.
I have also informed the European Council that on 5 April there will be an informal summit meeting with President Obama in order to fulfil another priority - our transatlantic ties. The organisational arrangements are still not in place. You will all be kept informed in detail. The issues to be addressed at the summit will be concentrated around three main themes – an initial discussion of the results of the G20 summit, cooperation on energy and climate change, an area where both the EU and the US want to be key actors. And the third item of debate will be external relations, i.e. the geostrategic area from the Mediterranean to the Caspian Sea, Afghanistan, Pakistan, the situation in Iran and the Middle East. The summit with the US is important, nevertheless it seems that we shouldn’t have too high expectations. No Messiah has come. The USA has a number of domestic problems to solve and that is why it is a good thing that Barack Obama will make one of his decidedly fundamental speeches of the year in Prague in which he will naturally want to send a message to the citizens of Europe about the general attitudes and objectives of the new American Administration. I think that there were a number of other details at the European Council that I am willing to answer questions about. If I left something out, we will cover it during the discussion after the contributions of the chairmen of the political groups. We will probably not meet again in this composition because you will soon go and start your election campaigns. I would be glad if you did not start campaigning right here today. I hope that the struggle for the seats in the European Parliament will be fair and that you will meet again after the elections to continue your work. Thank you for your attention.

Last update: 16.8.2011 15:40

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