Barroso notes signs of recovery in Irish economy
European Commission president warn governments not to derail fragile recovery
European Commission president Jose Manuel Barroso addresses the European Parliament during a debate on the State of Union, in Strasbourg, today. Photograph: Reuters
European governments must remain committed to reforms as economic growth begins to return to the continent, European Commission president José Manuel Barroso has said.
With economic recovery within sight, Mr Barosso warned there was “no way back to business as usual”.
He said the economic crisis of the past five years was a structural one and “we have to shape a new normal”. First and foremost, he said, banking union needs to be delivered. “It is the first and most urgent phase on the way to deepen our economic and monetary union.”
Video: Barroso's State of the Union address 2013
The biggest risk to recovery in Europe is a lack of political will among individual member states, he told MEPS during his “State of the European Union” address in Strasbourg this morning.
Five years since the start of the financial crisis, EU measures are starting to yield positive results, Mr Barroso said, but he added that significant challenges remain.
The rate of unemployment, at 26 million, was “economically unsustainable, politically untenable, and socially unacceptable”.
He said countries that wavered from implementing economic reforms would inevitably suffer.
Mr Barroso, whose term as president of the Commission ends next year, noted the economies of bailout countries were improving.
Referring to Ireland, he said the country has been able to draw money from capital markets since 2012, the economy is expected to grow for the third year in a row, and industrial employment is on the up. “One swallow does not make a summer” but “it does prove we are on the right track,” he added.
“Now is the time to rise above truly national interests and parochial values,”he said. “In this phase of the crisis, a government’s job is to provide certainty and predictability that markets still lack,” he continued.
“Over the last years we have seen that anything that casts doubt on a government’s commitment to reform is instantly punished.”
He said that the continent still needed to win the trust of its citizens. With the European Parliamentary election coming up in eight months, Mr Barroso implored the MEPs to convince the electorate of the positive work of the EU.
He told MEPs that when he attended the recent G20 meeting he did not receive lessons from other parts of the world on how to deal with the crisis—as he had at previous summits.
Instead foreign leaders offered “appreciation and encouragement” for what the continent was doing. He said because of the efforts of the European institutions, countries now pay less to borrow money, stock markets are in a healthier position and industrial output has increased.
Fine Gael MEP Mairead McGuinness said the state of the union report was balanced. “It reflects a sense of stability which has been restored after the tsunami of the economic, banking and fiscal crisis,” she said.
She said Mr Barosso was “right in pointing out that delivering reforms is the duty of the member states not the EU.” She said Ireland was delivering in this regard, having already implemented “significant and difficult reforms”.
Fianna Fáil MEP Liam Aylward said the address “struck a positive note in terms of focusing on economic recovery and growth, including the reference to consecutive growth in Ireland”.
But Socialist MEP Paul Murphy said Mr Barosso’s comments about Ireland were “fanciful at best”.
“The reality is GDP has fallen for the last three quarters, investment is continuing to fall and figures for both consumer spending and exports are down,” Mr Murphy said.