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25. 3. 2009 18:00

Speech delivered by DPM Alexandr Vondra in the European Parliament in Strasbourg

Speech delivered by Alexandr Vondra, Deputy Prime Minister for European Affairs of the Czech Republic, on the occasion of a mid-term review of the Czech Presidency of the EU Council at the Conference of Committee Chairmen in the European Parliament Strasbourg, 25 March 2009

Dear Chairman Galeote, dear Chairmen,

I am addressing you today, almost exactly three months after our last meeting in December. At that time, I introduced to you our key presidential priorities - the three E´s (the Economy, Energy and EU in the World) covered by the motto a ‘Europe Without Barriers’. I also promised that I would come back to report on the state of play of the Czech Presidency – to take stock of what we have achieved so far and which goals we will pursue in the three months to go.

Before I go into detail, let me comment on the news of the day: yesterday my government lost the vote of confidence in the Czech Parliament. Although the EU has already seen governments fall during their Presidency , this time it is particularly bad news for all of us. We are amid the most severe economic crisis since the 1930´s and no effort should be spared to respond to it. This is no time to pursue particular interests and a spirit of cooperation is needed more than ever, both on the European and the domestic political stage.
Despite the blow that we have received, I would like to assure you that the Prime Minister, myself, as well as my fellow ministers remain fully committed to the task of presiding over the Council in these troubled times and the new situation will not jeopardise the good functioning of the Presidency. Our country is leading the Council for the first time in its history, 20 years after the Iron Curtain stopped separating us from the world of freedom and prosperity, incarnated also by the EU. The responsibility that we feel while doing so is as strong as the feeling of privilege stemming from the fact that we are members of the club. The government will remain in office until the end of the Presidency and you have my assurance that we will do our job “comme il faut”.

Now back to the mid-term review of the Presidency. Given the rough start that we were granted by the two G´s - Gas and Gaza and an exceptionally difficult current economic and political setting in the EU, you will agree with me that our Presidency ranks among the most difficult ones. What have we so far achieved?

The current priority number one is getting the European economy back on track. This is where the Czech Presidency has invested most of its energy during the last three months.

1) Good progress has been made in the implementation of the European Recovery Plan, identified as the main vehicle for restoring growth.
• Three months after the adoption of the Recovery plan, a fiscal stimulus of over EUR 400 bn (around 3.3% of EU GDP) has been injected into the European economy – more than double our initial target.
• The adoption of 3 revised regulations allowing for advanced payments from the structural and cohesion funds is imminent, to be confirmed by the vote of your plenary on 2 April.
• Agreement has been reached by the ECOFIN Council on reduced VAT rates on a voluntary basis in labour-intensive sectors of the economy after several years of debate. This will contribute to the protection of employment in the most vulnerable sectors. It will also help pay the much needed attention to SME´s endangered by the crisis.

• The European Council has also reached agreement on the Community part of the Recovery Plan in support of projects in the field of energy, broadband and CAP Healthcheck related measures - the 5 billion package. After 2 months of tough negotiations, we have reached a geographically and financially balanced compromise. In order to allow for this response to the crisis to be implemented as swiftly as possible, political agreement with the European Parliament needs to be concluded by the end of April 2009 at the latest. Here I would very much like to call on the European Parliament to help the Presidency to bring the process to a successful end – we must carefully use the very thin space left for compromise, and all amendments should be weighed in the light thereof.

2) On the Lisbon Strategy, the internal market, coordination and the threat of protectionism. While we have taken due care of the short-term measures supposed to boost demand, save jobs and help restore confidence that are to be implemented, I would like to underline the Presidency´s strenuous effort to keep these short-term measures in line with our long-term goals – continuation of structural reforms and fiscal sustainability, which are the main recipes for prosperity in the long run.
• In this respect the Spring European Council underlined the importance of the Lisbon Strategy and the Presidency will continue the discussion on the shape of the post-2010 Lisbon Strategy. The meeting of the national Lisbon coordinators on 22 April will be a good opportunity for that.

• The Presidency has also been a fierce supporter of the principles of the internal market, which plays a crucial role in making our way out of the crisis. Since the first signs of the global economic downturn, we have been warning against the growing threat of protectionism looming large all over the world. I am therefore glad that at the extraordinary March summit in Brussels the Presidency managed to rally the support of all Member States to give a clear and firm answer to this temptation. This was reconfirmed by the Spring European Council. I am also grateful for the support of the Commission, which has answered the Presidency´s call for issuing guidelines on measures to support the automotive industry that has defined a European framework for action within the internal market.

• The Council keeps paying attention to the internal market: the March Competitiveness Council adopted the revision of the internal market strategy, the Presidency organised a conference on the future of services within the internal market, as well as the conference “5 Years After”, which evaluated the overall positive economic effects of enlargement.

Another urgent need identified in relation to the crisis is the increased supervision and regulation of financial markets, much needed for restoring confidence and preventing a recurrence of the financial crisis.
• The Spring European Council agreed that the report from the High Level Group on financial supervision chaired by Jacques de Larosiere is the basis for action. The Council is instructed to examine the report, as well as the proposals from the Commission, on strengthening EU financial sector regulation and supervision with a view to making the first decisions at the June 2009 European Council. More detailed legislative proposals will follow in the autumn. The discussion on the reform of the supervision over EU financial markets will be one of the most important issues addressed by the informal ECOFIN on 3-4 April in Prague. The ECOFIN Councils in both May and June will prepare a report for the June European Council.

• The Council has also approved the legislative acts on credit rating agencies, on cross-border payments and on the solvency of insurance companies and other measures that set a regulatory framework for financial markets and institutions. We are eagerly expecting the result of today’s trialogue on the Capital Requirements Directive, as well as the results of the Coreper on Solvency II. The Presidency will strive to find a viable compromise on the problematic issues, such as group support or the treatment of equity risk . We very much hope for an early agreement on this legislation with the European Parliament and that it will be adopted before the recess, even if review clauses regarding the supervisory regime will have to be introduced in all of these acts.

Honourable members, there is still a lot of work to be carried out in this field. Seeing that the parliamentary recess is coming soon I would like to ask for your support and constructive cooperation which is vital for getting the European economy out of the crisis.

The January gas crisis was a real trial by fire for our incoming Presidency as well as a tough test of unity for the Union as a whole. In this respect, I deeply appreciate the responsible approach of all the EU players – despite the serious situation in some Member States, we managed to speak with one voice – an attitude that finally made the Russian Federation and Ukraine solve their controversy.

However, a new crisis similar to the one in January can easily crop up at any time. This is why we must concentrate on the urgent development of short-, medium- and long-term measures strengthening the energy security of the whole of the EU territory. Diversification of suppliers and supply routes, an interconnected and liberalised energy market as well as crisis mechanisms enabling us to cope with potential supply disruptions showing true solidarity belong to the important tasks of the Presidency. What has been achieved so far and what remains to be done?
• As I already mentioned earlier, the European Council has agreed on a strategic response to the gas crisis – the so-called 5 billion package – which will enable us to invest EUR 3.980 billion in infrastructure projects improving our energy security. I particularly welcome the allocation of EUR 200 million to the Nabucco project, which sends an important political signal about the EU´s commitment to diversify.

• An integrated and fully liberalised internal market is indispensable for a common energy policy to take shape, which again is a tool for increasing our energy security. Finalisation of the 3rd energy package belongs to the top priorities of the Presidency. We very much welcomed the constructive approach of the EP during Monday´s trialogue. The negotiations produced a balanced text which will contribute to energy market integration, liberalisation and greater regional cooperation. The position of the energy regulator was significantly improved as to its independence and powers and duties. Consumer protection was strenghtened, while leaving a lot of space for subsidiarity and decisions by the Member States. We will do our best to have the agreement confirmed by Coreper on Friday so as to have the package voted on – with your help - before the recess.

• Promotion of energy efficiency can make a major contribution to energy security. Energy efficiency will be boosted by the revision of the regulation on ERDF, which will provide for covering investments in energy efficiency and renewable energy sources in housing. We have reached an agreement in the Council and we are eager to finalise the process with the European Parliament.

• We have finalised the debate on the priorities of the 2nd Strategic Energy Review, but a lot of work remains to be done, be it by bringing measures related to energy security proposed by the February TTE Council into being, or the work on several other pieces of legislation, such as the ecodesign directive, the EPBD directive and several others. We very much welcome the European Council conclusions calling for a perfected crisis mechanism ensuring the preparedness of all actors, including the energy industry, to cope with a potential disruption of gas supplies.

• At the same time we cannot omit our global responsibility concerning climate issues. Bearing this in mind, the Czech Presidency will continue its efforts with a view to reaching a comprehensive climate agreement in Copenhagen at the end of this year.

EU in the World
In the current situation of increasing international economic and political instability, the EU must live up to its global responsibility. In this respect, it has a particularly important task within Europe – with regard to its neighbours. Eastern Europe, along with the Western Balkans, are the most important areas of our interest. This is the reason why the Presidency has invested a great deal of effort in the project of the Eastern Partnership, which was recently endorsed by the European Council and will finally be set in motion at the launching summit in May.
As for the Western Balkans, we believe that it is important that this region is not forgotten in the shade of the economic crisis – to which it is more vulnerable than anyone else – or of our institutional debate. Reaching progress in the accession negotiations with Croatia is the Presidency´s priority, as well as (in case of Serbia) creating conditions for a quick ratification of the Stabilisation and Association Agreement and defreezing the implementation of the Interim Agreement - both conditioned by Serbia´s full cooperation with the ICTY. I am aware of the importance of this question to the European Parliament. Currently, the reasons for the delay in handing the SAA over to the EP for assent is due to political, not technical reasons. To wrap up the question of the Western Balkans, I would like to mention that the Presidency pays special attention to the worsening economic situation in the region, which could easily lead to its destabilisation. This topic will therefore be the main theme of my breakfast meeting with the ministers of the Western Balkan countries, invited to the Gymnich that takes place this weekend.

While taking care of its neighbourhood, the EU must – at the same time – forge a partnership with its most important natural partner and strategic ally, the United States of America. With the new President in the White House, the EU and the US need an ambitious common agenda allowing them to cope together with the most pressing global challenges. The Czech Presidency will allow for the debate on that agenda to be kicked off at the first meeting of President Obama with all the EU leaders at an informal summit in the beginning of April in Prague. The topics that we would like to deal with include energy and climate change, the Middle East, Afghanistan, Iran, as well as – to a limited extent – economic cooperation.


Honourable members, a considerable amount of work has already been done in the past three months. There is, however, still much more to do, and this applies especially to our cooperation in the legislation process. The upcoming month will not be easy for any of us. But I would like to ask you to help us do our best. We must act strongly and decisively in these hard times and this is also what the people of Europe expect of us. They certainly deserve it and we cannot let them down.

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