06 February 2012

The discovery of co-responsibility: Europe in the debt crisis - speech by President Herman Van Rompuy at the Humboldt University

"First the economic and political interdependence of our countries, which was accelerated by the euro. Second the new awareness of co-responsibility among Europe’s leaders which it has provoked.

I further believe, and all my work is directed toward this end, that this awareness of  co-responsibility needs to grow further, in order for our Union to live up to its deepest political vocation: bringing peace and prosperity for the peoples on our continent, acting strongly on the global stage.

Co-responsibility hit the Union’s 27 Heads of State and Government almost by surprise. Many of my colleagues would actually have been quite happy to take a less prominent role in solving this crisis! However, since the start of the Greek crisis – almost two years ago to the day, and it is not over yet – the events forced such momentous decisions upon us that Heads of Government had to step in, together. They are particularly well-placed to assume the responsibility needed to carry these decisions through, to convince parliaments and voters across our Union of what has to be done when the future of our common currency is at stake.

I am not one to underestimate the obstacles on our way. Getting to grips with the crisis takes time because there is real social and political resistance that needs to be overcome, in all Member States. [There is] Deep-seated resistance both in countries with weaker economies who have to reform and reduce their public debt and deficit, and an understandable reluctance in stronger countries to step in with loans for the others, when these loans by themselves do not solve the underlying problems. Moreover, both sides worry that the end is not yet in sight.

In view of these obstacles, what we did manage to achieve in the past two years is actually quite remarkable. Stronger self-control by the Member States (the debt brake). Stronger surveillance on budgets, bubbles and banks. Better means to enforce the rules. Conditional rescue loans to three countries in difficulty. A permanent firewall against contagion in the making. In fact, two years ago, nothing of all this existed. Building a lifeboat in the middle of the storm has taken time and energy.

When I say the crisis put Europe’s national leaders face to face with co-responsibility, two reasons spring to mind why it fell upon them, personally. First of all: there is a lot of money at stake. The public debt crisis, like the banking crisis in 2008, requires taxpayers’ money (albeit also in loans and guarantees). Given that the central EU budget is relatively small (ca. 1 per cent of GDP), the EU institutions as such cannot act decisively on their own. It is therefore essential for the Member States to step in. And the amounts are such – around €212 billion for Germany in commitments to the rescue fund EFSF and ESM – that within countries the decision can only be taken at the highest political level. Many prime ministers would prefer this issue to stay in the hands of their finance minister… The need for national money and therefore the involvement of national leaders and parliaments is simply a fact.

Secondly: in times of crisis, we reach the limits of institutions built on attributed competences. When we enter uncharted territory and new rules have to be set, the European Council, bringing the 27 country leaders, the President of the Commission and the President of the European Council around the table, is well placed to play its part. It is one of the reasons the European Council was founded in the 1970s. A formal institution since the Lisbon Treaty, the body still combines the force of the Member States with the qualities of the older institutions."

Full speech

© European Council