By Jean-Claude Juncker, President of the European Commission
This March, the European Union marked its 60th anniversary in Rome. It was a moment for us to come together and look back at what our Union has helped us achieve. But it was also a time to look forward at how Europe can keep delivering on its promise for generations to come. This was the thinking behind the European Commission’s White Paper on the future of Europe and the debate that it started.
An important part of that discussion is how we can collectively draw the lessons from the last decade. While the global financial crisis that struck ten years ago did not start in Europe, it did expose significant weaknesses – both in the way our financial system worked and in the institutional set-up of the euro area. And it resulted in the deepest and longest recession in living memory.
As we look to our future we cannot leave ourselves exposed in the same way. Together, we must build better economic and social structures that provide more stability and security for Europe's citizens.
The timing is now right to do just that. Thanks to determined efforts, the EU's economy has now been expanding for several years in a row. Unemployment, while still unacceptably high in some countries, is at its lowest level since 2008. Public finances are getting back to order and investment is picking up. EU banks have almost doubled their capital ratios, non-performing loans are on a steady decline. We have new rules in place to ensure that tax-payers are not called upon to pay for banks in difficulties. Confidence in the euro is at its highest point ever.
As the old saying goes, the time to fix the roof is while the sun is shining. We now have a window of opportunity – and a duty – to make our economy and society more resilient and robust.
It was in this spirit that the European Commission presented a Roadmap charting the path for more unity, efficiency and democratic accountability in the EU’s economic governance. It builds on years of work and aims to strengthen growth, support convergence and improve macroeconomic stability for the benefit of all citizens.
The euro has always been a unifying project. It is the single currency of the EU and is now the second most used currency in the world. A strong euro area is good for the Single Market and for the EU as a whole. This is especially true when you consider that all but two of our Member States are legally required to join the euro once they fulfil the conditions. With the departure of the United Kingdom, euro area economies will represent 85% of the total EU economy. When we chart the way forward, we must do so with everyone in mind.
As part of the Roadmap, we have already put forward proposals to complete the Banking Union and the Capital Markets Union – to reduce remaining risks in the banking sector, to diversify sources of financing for the real economy and to make sure that private risks are better distributed.
Last week, the European Commission tabled further initiatives, delivering on the commitments I made in my State of the Union address in September. These include establishing a European Monetary Fund in order to provide financial stability support to countries in urgent need and to protect tax payers against the cost of failing banks.
We also proposed to bring the Treaty on Stability, Coordination and Governance into EU law. This will help simplify the legal framework and consolidate existing rules for sound public finances, including the flexibility that they foresee.
We put forward new budgetary instruments to support national reforms, a convergence facility for Member States on their way to joining the euro and a stabilisation function to preserve investment levels in the event of large economic shocks.
To tie all of that together, we proposed that a European Minister for Economy and Finance could coordinate these various tasks and make sure the EU's economic governance is simpler, more coherent and more efficient.
27 EU leaders will hold an initial discussion on our ideas at this week’s Euro Summit. It will be the first of its kind to be held in such a favourable environment and to gather both euro and non-euro EU leaders. It will help pave the way for concrete decisions to be taken in 2018. I am confident that we will take up our collective responsibility of turning the page of the crisis and not wait for another storm to strike.