Despite much anticipation, the European Commission president’s yearly speech on the state of the Union today (11 September) failed to meet expectations, as MEPs told José Manuel Barroso that he offered an overly optimistic snapshot of the EU.
Speaking in Strasbourg, Barroso said recovery was within sight. “That proves we are on the right track. On the basis of the figures and evolutions as we now see them, we have good reasons to be confident,” he said, adding that Europe had to get out of the structural crisis by "creating a new normal".
“If we are where we are today, it is because we have shown the resolve to adapt both our politics and our polices to the lessons drawn from the crisis,” he said. But he warned recovery was still fragile and political leaders must "keep up our efforts".
Barroso added that all the EU's economic efforts must be focused on growth to solve "today's most pressing problem: unemployment”. With 26 million people unemployed across the union – was "economically unsustainable, politically untenable, socially unacceptable".
MEPs challenged Barroso’s optimism and stressed that the eight months before the end of the legislature should be used to make sure Europe is put on a sustainable path for growth.
The real barometer of the EU's response to the crises during the president's five-year tenure will come next year when citizens head to the ballots to nominate their next representatives in the European Parliament.
"We see some early signs of recovery. But these are proof that we have hit the bottom of the recession. So rather than the end of the crisis, these figures may just indicate the start of a new phase of the crisis. We risk entering a period of stagnation, of slow growth, a period of high and long term unemployment,” said Liberal (ALDE) leader Guy Verhofstadt.
"We need to fundamentally reform our economic and political governance if we are to avoid such a Japanese-style winter,” he added.
Verhofstadt has drawn this parallel before. In a recent op-ed for the International Herald Tribune, Verhofstadt said that after Japan’s financial crisis in the early 1990s, Tokyo had failed to sort out its banks quickly. The consequence was lackluster economic performance lasting for more than 10 years.
Only with a bold European plan for its banks and the setting up a European financial regulator, would the European Union be able to prevent a Japanese winter and another crisis, he argued.
Hannes Swoboda, president of the Socialists and Democrats Group, also slammed Barroso’s optimism by saying that he brushed over the fact that Europe was still in the midst of a crisis.
“With unemployment stabilising and statistics showing minor economic growth, there are some signs of recovery in the EU. But it is an incredibly feeble recovery. This recovery is a numerical one and the struggling people in Europe have not yet seen improvement,” he said, adding that austerity measures were still increasing the rift between rich and poor and the continent's North and South.
The Greens criticised the exit strategy of the EU executive. “You could have done better by pursuing different policies,” said co-chair of the Greens Rebecca Harms.
We live in a different Europe from Barroso, said Takis Hadjigeorgiou, the Cypriot vice-chair of the United Left.
Case for Europe
Barroso's political affiliates, the centre-right European People's Party, backed the Commission president by stressing the crisis was not due to Europe. “If anything it is because of Europe and the euro that we have survived,” said EPP president, Wilfried Martens.
Barroso avoided pushing for a federation of nation states as he did in last year’s state of the union. But he said that Europe still lacked the power to do what was asked of it.
Perhaps with an eye on the 2014 EU elections campaigns, the Commission chief called for greater coordination among the EU institutions to explain to citizens that Europe had not grabbed too much power.
“A fact that is too easily forgotten by those, and there are many out there, who always like to nationalise success and Europeanise failure,” he said.
“Now it the time to make the case for Europe,” he said.
Speaking during a press conference, European Parliament President Martin Schulz said that todays differences in the European Parliament would become more evident during European election campaigns.
The European Parliament launched its information campaign yesterday under the slogan "this time it's different".
The election debate risks to be heavily polarised between pro- and anti-Europeans. Eurosceptics have been vocal in calling for a new Europe.
Rather than reacting to Barroso’s speech Martin Callanan, chairman of the European Conservatives and Reformists group, used the floor to urge people to use the European elections as a fresh start for the European Union. “Wanting a new type of EU does not mean being anti-European.”
Banking Union now: All agree
Barroso called for EU countries to deliver on the banking union proposal, a priority for the president before he finishes his term.
MEPs concurred. "We must use the time we still have, to forge ahead on two fundamental points. The first concerns the banking union, more precisely, the setting up of a European resolution fund. The second concerns the completion of our internal market, namely the Digital Agenda,” said Verhofstadt.
"It is vital that we establish a banking resolution fund as a matter of urgency as one of the pillars of the Banking Union that will re-establish confidence and stability in the banking sector. The Commission made a solid proposal in July. We must push for an early agreement with the Council on this text and thereby restore healthy lending to small businesses and support growth in the real economy," added Verhofstadt.
Sealing a banking union, however, would also depend on member states ability to find a consensus.