State of the Union: Acting as One Union to Restore Confidence

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José Manuel Durão Barroso, President of the European Commission

State of the Union conference, Florence – May 9, 2013

The crisis has amplified the urgent need for a stronger cooperation and governance at European level and bold reforms at national level. And the role of the European institutions is not simply to reform themselves but to support reform in Member States, both in the public and the private sector.

This is why our response to the crisis is a comprehensive one addressing its root cause that is a dangerous combination of private imprudence, public indulgence and economic inefficiency. The aim is to have a financial sector at the service of the real economy; government policies promoting competitiveness and sound public finances; a strengthened social dimension.

The choice we have to make should not be austerity versus growth. The choice is unsustainable short term stimulus that will lead to a short-living relaunch of growth versus sustainable long term reforms that will make a difference over time. And our choice is clear. It is about investing in lasting sustainable growth while immediately addressing the most urgent issues and first of all unemployment, which has reached intolerable rates.

It is indeed necessary to have balanced public accounts and to consolidate reforms in order to ensure competitiveness. But in order to attain sustainable economic growth it is also necessary to invest in the sectors that will allow us to rise to the challenge of globalisation.

Confidence is key for the economy. It is important for banks to be able to lend; companies to be willing to invest and consumers to be willing to spend. Reforms and adjustment must be pursued with determination, without overlooking the important aspect of social justice.

Subsidiarity is indeed an essential democratic concept and should be practised. We should concentrate European action on the real issues that matter and can best be dealt with at the European level.

We have to capitalize on our collective strengths and tap together the full potential of our single market and of our trade policy, which are powerful drivers of growth. We have also everything to gain from making the necessary reforms and investment in education, research and innovation in order to keep our collective competitive edge.

To sum it up, I believe that to restore confidence we have do a better job. Indeed we should not spare any effort to deliver more concrete results to European citizens and show them that when we act as one Union, wherever it is necessary, we can bring a big difference in their daily life.

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