Tagged: PolicyBudget

Frequently Asked Questions: End of milk quotas

Why and when were quotas established?

Milk quotas were introduced to address the structural oversupply on the EU market of the late 1970s and early 1980s that had led to the infamous milk lakes and “butter mountains”. EU dairy farmers were guaranteed a price for their milk (considerably higher than on world markets) regardless of market demand. Despite different efforts in the 1970s to slow down EU production, it continued to rise much faster than domestic demand. The system was also having a negative impact on world market prices, as the EU frequently subsidised exports on to the world market.

In July 1983, the European Commission proposed to introduce milk quotas, and this was agreed by the Council on March 31, 1984. The regime required a quota being fixed for each individual producer or purchaser, with a levy (“superlevy”) payable for those who exceed their quota. Subsequent changes have meant producers only have to pay the levy when the Member State also exceeds its national quota.

Do quotas cover all milk, such as sheep and goat’s milk?

No, only cow’s milk. Other milks represent only a tiny share of the EU milk market.

Have quotas achieved their purpose?

The system of quotas – and the threat of levy – helped to cap the expansion of EU production. The butter and skimmed milk powder “mountains”, which had exceeded 1 million tonnes, fell steadily. However, there have been other important changes to the Common Agricultural Policy which have led to a much more market-oriented sector. Successive reforms of the CAP have seen a reduction in guaranteed prices, with a range of policy tools aimed at stabilising farm revenues, notably the system of direct payments, primarily decoupled from production.

Why remove them now?

Milk quotas were originally introduced for 5 years, but the expiry date has been put back several times. The final date was decided in the 2003 CAP reform, and reconfirmed in 2008 with concrete steps to provide a “soft landing” by the end of March 2015. The primary reasons for deciding to end milk quotas was that there has been a considerable increase in consumption of dairy products in recent years, especially on the world market – projected to continue in future – while the quota regime is preventing EU producers from responding to this growing demand. For example, EU exports of dairy products to Korea have more than doubled between 2010 and 2014 from €99mn to €235mn. This corresponds to an increase in the EU’s share of Korean dairy imports from 28% to 37% over the same period. With close to €55bn, the dairy sector represents 15% of the total EU agricultural output. Milk is produced in every single EU Member State without exception in around 650 000 dairy farms. On top of that, there are about 5 400 dairy processing companies in the EU employing 300 000 people. They should be given the possibility to fully benefit from the growing global consumer demand, particularly in Asian markets.

Because the end of milk quotas represent opportunities but also concerns, successive reforms have found other, more targeted ways of helping to support more vulnerable areas, where there are strong social and economic reasons for trying to maintain dairy farming.

I am a milk producer, what does it mean for my daily work?

The end of quotas means that there is an administrative simplification in terms of monitoring daily production. However, there is also an additional requirement and responsibility to monitor market signals more closely (producer organisations and cooperatives may play a decisive role in this respect). In this sense, the Commission has set up the Milk Market Observatory in order to increase market transparency and make the sector aware of the market situation. The slowdown in EU production since the end of last year in the face of less positive market signals is a clear example of where the sector is already responding to the market.    

Does this leave dairy farmers without any protection or support?

Extreme price volatility is limited by the “safety net” instruments still available under the Common Market Organisation (public buying in of butter and skimmed milk powder and private storage aid schemes). The Commission has also the possibility to intervene in exceptional circumstances, as it was the case last year with the Russian import ban in the Baltics countries and in Finland.

As well as the system of “decoupled” CAP Direct Payments, Member States have a range of options open to them which they decide at national on regional level. Options include an additional payment for areas with natural constraints and the possibility for voluntary coupled support for certain regions or certain sectors in fragile situation. In implementing the 2013 CAP reform, 18 Member States have introduced a coupled payment for the dairy sector – worth just over €800 million in 2015.

Also, under Rural Development Programmes, Member States or regions have the flexibility to target support at specific challenges such as dairy farms in fragile areas. Possible measures available here include support for investments in physical assets, payments to areas facing natural constraints, income stabilisation tools, advisory services, incentives for innovation, but there are more. Another option includes support for establishing Producer Organisations.

As well as this financial support, the CAP provides practical and organisational support under the 2012 Milk Package*, such as clearer rules on written contracts but more importantly increased bargaining power for producer organisations.

There is also a role for Interbranch Organisations in the dairy sector. These may carry out a series of activities, including improving knowledge and transparency on production and the market; helping coordinate better the way products are placed on the market, in particular by means of research and market studies; promoting consumption; carrying out the necessary research to adjust production in favour of products more suited to market requirements, in particular with regard to product quality; and promoting innovation, etc.

Before the expiry of the Milk Package provisions in 2020, the Commission is committed to present a Report to the European Parliament and the Council before the end of 2018 on the development of the dairy market situation.

 

Aren’t we running the risk of over-producing again?

No, there is not a risk of the same sort of structural surpluses as in the past. The guaranteed price for butter and skimmed milk powder now merely serves as a safety net – such as during the 2009 dairy crisis, where it put a floor in the market. This means that producers are looking at the market when they decide how much to produce. Increased focus on added-value products (such as cheese and yoghurts) as well as on ingredients for nutritional, sports and dietary products have a strong potential in terms of growth and jobs for the EU.

What are the forecasts in terms of production at Member States and EU level?

While some Member States perceive the end of milk quotas as a source of concern, others welcome the opportunities provided by it.

The Commission’s medium-term market outlook last December forecast continued growth in exports, especially for cheese, skimmed milk powder and whey. See page 35 for more detailed prospects per Member State.

 

How has the sector evolved over the years in terms of producers and production?

As in most agricultural sectors – and most sectors of the economy – there has been a gradual decline in the number of dairy farmers around the EU in the past 30 years (-6% a year on average). Average herd sizes have tended to increase, and improvements in genetics and feed efficiency have helped increase the average yield per cow. However, the situation widely varies from Member State to Member State: milk specialised farms in the EU-15* have a milk yield of some 7 300 kg/cow for an average herd of 54 cows, while in the EU-10** the average yield is 5 700 kg/cow for an average herd of 19 cows and in the EU-2*** the average yield is 3 400 kg/cow for an average herd of 5 cows. (This compares with average herd sizes of 115 cows in the USA, 258 cows in Australia and 413 cows in New Zealand.) In addition to this consolidation, we have seen dairy farmers working more closely together through cooperatives. The overall level of production has remained relatively stable, limited by the quota regime. However, the greater market orientation has seen a greater shift towards more added-value products, especially for exports. For example, EU cheese production from 2003 to 2013 increased by 26%, while the volume of exports rose by 69%. The share of ingredients is also significantly increasing notably targeting new nutritional needs linked to modern living habits and evolving demography.

One of the other crucial elements has been the additional investments provided by EU Rural Development funding, in particular for individual farm modernisation projects, but also on other investments. Figures for the 2007-2013, show that EU funding for farm modernisation amounted to 1.8 billion EUR, which was matched by 1.4bn EUR of national/regional public funds, and nearly 7.4 bn EUR of private investment – such that a total of more than 10.6bn EUR was spent on dairy modernisation over the period.

* Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom.

** Czech Republic, Estonia, Cyprus, Latvia,Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia

*** Bulgaria, Romania

Will it create greater price volatility for milk?

Volatility is a normal characteristic of agricultural markets. The European dairy sector is now following a market-orientated policy, which means that, following the ending of milk quotas, production should be based on market needs and opportunities. Where possible, supply and demand should be adjusted to meet those needs and opportunities.

The EU is the most important milk producer in the world and a major player which, with or without quotas, is connected with the dynamics world market. So while experience show quotas cannot prevent crisis, they certainly do impede our farmers to follow market signals and take advantage of market opportunities.

The role for the public authorities is limited to safety net measures. Public intervention remains available if prices drop below a reference level.

Underlying demand growth has not been affected by the latest market downturn – population growth, rising incomes and changing dietary preferences are all positive demand drivers. So, there is good reason to be optimistic about the future

Will this mean that consumer prices get cheaper?

Past experience shows that there is not always a correlation between what the farmer gets paid and what the consumer pays. For example, the significant increase in the farm gate price during the first half of 2014 (+13% for the EU) was generally transmitted to consumer prices for both milk and cheese, but with significant differences between Member States – Germany +8.4%, France +0.8%. By contrast, the generalised decrease in producer prices in the second half of 2014 did not prevent a further increase in consumer prices in most Member States, although to a small extent.

Changes in producer & consumer prices, 2014 relative to the same period of 2013 (in %)

Producer Prices

 

Consumer Prices

Jan-Jun 2014

Jul-Dec 2014

Jan-Jun 2014

Jul-Dec 2014

EU

+12.6%

-7.7%

+3.2%

+1.5%

Germany

+15.3%

-11.7%

+8.4%

+4.0%

France

+12.1%

-0.6%

+0.8%

+0.6%

Poland

+14.9%

-9.6%

+3.4%

+1.1%

UK

+13.2%

-2.4%

+1.6%

-0.5%

Source: DG AGRI Short-term market outlook

End of milk quotas: cities and regions are concerned about the implications and are calling for steps to safeguard the incomes of all producers

Meeting yesterday in Brussels, the members of the Commission for Natural Resources (NAT) of the European Committee of the Regions raised concerns about the impact of the abolition of milk quotas in the EU, particularly in disadvantaged and sensitive regions. In a draft opinion drawn up by René Souchon (FR/PES), President of the Auvergne region, they call on the European authorities to take urgent measures to safeguard the incomes of all milk producers.

In the positions it has previously taken on abolishing milk quotas, the Committee of the Regions (CoR) expressed its concerns about the plan to end quotas on 31 March 2015, and was highly critical of a measure likely to have an adverse impact on the EU’s environmental and territorial cohesion objectives. The CoR is concerned that this will accelerate the concentration of production in the most intensively farmed areas, harming sensitive or disadvantaged regions, including mountain regions but also so-called “intermediate” crop-growing and cattle-breeding regions. These fears are largely confirmed by the Commission’s latest report (published in June 2014) on the development of the market situation in the milk sector. “In light of the milk surplus and low prices recorded since summer 2014, the outlook is extremely worrying because in many Member States and regions, milk production is an essential pillar of the regional economy and of agricultural added value”, emphasised the rapporteur René Souchon, before adding, “It is essential to ensure a steady income for milk producers throughout the EU in order to maintain agriculture and preserve rural communities in all regions, in the interests of meeting the EU’s territorial cohesion objective”.  

In the draft own-initiative opinion adopted yesterday, NAT members call on the European authorities to take steps to safeguard the income of all milk producers, as is the case in most other major milk-producing countries, such as India, China, Japan, South Korea, Canada and the United States, which have maintained or even strengthened their support and protection for the dairy sector.

The draft opinion calls for the following in the short term:

  • to quantify how many jobs, how much added value and how many public goods would be lost in “intermediate” and disadvantaged zones if milk production was abandoned;
  • to make contracting more effective by expanding the mechanism to the whole industry, including in particular large-scale retailers – contracting seeks to formalise a long-term commercial relationship between a producer and their client with the aim of ensuring adequate production in an outlet;
  • to improve the operation of the European Milk Market Observatory, and put in place the necessary resources for it to become a genuine steering mechanism, and not just a tool for post hoc observation;
  • to immediately enhance the safety net for a limited period in order to cope with the looming crisis, pending the introduction of another mechanism;
  • to take urgent steps to safeguard the income of all milk producers, and to examine in particular the European Milk Board proposal.

In the medium term:

  • to harmonise the compensation payments for natural handicaps , financed 100% by the EU budget, to restore milk collection aid, to support the promotion and development of the “Mountain produce” label for dairy products, subject to an adequate level of food self-sufficiency;
  • to encourage the preservation of dairy production , particularly using more mixed and hardy breeds which make use of the grasslands, rather than production from very specialised herds which consume ever increasing amounts of cereals and soya;
  • to draw up a major rural development plan for all countries which have small herds and where dairy farms are in the majority. It seems like their future may be at risk following the abolition of quotas, even though these farms remain the foundation of rural communities.

The NAT commission

The Commission for Natural Resources (NAT) coordinates the work of the Committee of the Regions in the areas of rural development and the common agricultural policy, fisheries and maritime policy, food production, public health, consumer protection, civil protection and tourism. It brings together 112 regional and local elected representatives from the 28 EU Member States. The commission’s chair is José Luís Carneiro (PT/PES), mayor of Bilbao.

The road to 5G

Speech by Commissioner Oettinger at the Mobile World Congress

Good morning Ladies and Gentlemen

It is a great pleasure to be with you on the occasion of this plenary panel on “the road to 5G”. It is my first time at Mobile World Congress and I am really impressed by what is on display here. Just one thing: I thought the show was about phones, not about cars!

This is precisely the point: everything is turning digital, from cars to cities to services to machines. The digital economy is simply becoming THE economy.

And the future network infrastructure, 5G, will become THE infrastructure. Everybody and everything will use 5G. Anywhere, at any time, and on the move, always best connected with almost zero delay and a perceived limitless capacity. Today, we can celebrate that Europe is back in front to continue the journey towards this bright 5G future.

5G

So let’s start with it. This afternoon, the 5G-Public Private Partnership, which was launched here in Barcelona last year, will present our 5G vision, and I can already tell you that it is very exciting.

The digitisation of our economy and society is accelerating. It is unstoppable. With the Internet of Things, we see a new era of connectivity where billions of devices exchange data and instil intelligence in our everyday life. From watches to shoes. From fridges to heating. From hospitals to factories. Any industry will need to adjust to this new reality. But this requires a new generation of communication networks.

5G is expected to be the connectivity infrastructure that will foster this industrial and societal transformation. It is not “only” about more of the same: more capacity, more content, more speed. This is needed, but not good enough. It is about a network infrastructure that is as easy and pervasive as the air we breathe, one that can be used for all sorts of different and personalised usages.

A second key aspect is related to innovation. 5G should become an innovation platform. And with softwarisation and network virtualisation, open networks platforms will lower market entry barriers for service developers, and stimulate a market of third party providers. The same as with cloud computing. Today, we have millions of apps that work on different smart phones platforms. Tomorrow with 5G, the network itself could become a development platform!

5G represents an opportunity for the telecom sector to reinvent itself. With 5G, telecom operators should be able to provide specialised network services to a series of new industry partners: from the automotive, to rail, health or energy sectors. To guarantee that connected cars will be able to react in less than 1 millisecond and avoid collisions. Or that tele-medicine will save lives and not be stuck in traffic. This is why we need the right kind of rules for Net Neutrality. To guarantee an open Internet. But also to allow such specialised services to flourish.

In a nutshell, the advanced 5G infrastructure is expected to become the nervous system of the Digital Society and Digital Economy.

The EU industry has a major role to play in the context of global 5G. It has a strong influence on the competitiveness and innovation of other sectors. Beyond economic matters, it is also about security and technological sovereignty for Europe.

What has been done

These reasons led us to launch a 5G Public Private Partnership. With 700 million euro eamarked under the Horizon 2020 Research and innovation programme to get 5G up and running, while industry partners have committed to leverage the EU funding by up to five times. In one year of existence, this partnership has delivered very convincing results.

First, research is under way. The EU is pioneering 5G research with a set of projects already reaching completion. You can see some dedicated demonstrations here today, at the EC booth and on the corporate stands of key industrial players who participate in these research projects. I invite you to visit projects like METIS, or 5G NOW, to quote but a few.

More is under way, as we will soon award the research grants for 125 million euro to 20 projects to deliver the key building blocks for 5G. They cover novel network architectures, new radio technologies, new service platforms, and innovative utilisation of spectrum. They will place European actors in very good position to contribute towards the future standardisation and spectrum milestones ahead of 5G.

Second, we have progressed on the international front. The European Commission and the Republic of Korea signed a joint declaration on 5G. It is our intention to sign similar agreements with other key regions of the world, notably Japan, China, and the US. We target a single global 5G standard and global spectrum harmonisation. This will maximise global interoperability, and economies of scale.

Last but not least: the 5G vision will be delivered this afternoon. It is a global vision made in Europe and we hope that the whole world will embrace it.

So, what lies ahead?

5G is becoming a concerted global effort in which Europe is playing a leading role. Early 5G deployment is targeted beyond 2020. By then, we need to collectively address a number of challenges beyond research:

– First, we must identify new spectrum for high-performance 5G wireless broadband with a global footprint.

Spectrum – as the essential resource for the wireless connectivity of which 5G will be the main driver – stands at the centre of the digital transformation and is crucial for the completion of the Digital Single Market.

Early identification of a “5G spectrum bands” will contribute to Europe becoming a global hub for 5G development and investments. In the past, European position may have been fragmented, but we cannot afford it in the 5G race. We must build together a European approach in the international spectrum debates with other global actors. The International Telecommunication Union‘s World Radio Conference 2015 is a key milestone, to prepare for the in depth debates that should take place at the next conference in 2019.

But there can be no successful 5G deployment in Europe without enhanced coordination of spectrum assignments between Member States. A call for spectrum reform that European leaders set out in October 2013.

The Commission “Connected Continent” package was a first step in this direction. I welcome the progress in Council, now focussing on net neutrality and roaming. However I will continue to work with them and the European Parliament to achieve a political compromise on some other elements of the package that are vital to a wirelessly connected society and economy.

It contains important measures to facilitate small cell deployment and Wi-Fi which are at the heart of 5G success. Removing administrative barriers for their rapid deployment is the forward-looking policy of today to enable 5G tomorrow.

– Second, the development of standards. 5G standardisation is expected to start in 2016. Research results need to be leveraged early enough so that industrial actors can have very clear positions to defend it in standardisation fora. From the public side, we need to make sure that European and citizens’ interests are safeguarded, notably in terms of global interoperability and openness. Also reforms of the standardisation process, notably on intellectual property, must not discourage investments in research;

– Finally, the 5G full potential can only be realised if close partnership with “vertical” industries are implemented. We need to learn how to more systematically work across industrial siloes and to create cross sector added value. Also adjusting regulations, as they are not always compatible across different sectors. Connected cars are a typical example for which I have already launched an exploratory initiative.

The more immediate future

5G is about tomorrow, yet we need to solve a number of obstacles already today:

4G deployments. 5G will not supersede 4G but build on it. Being a 5G lead adopter requires to be a 4G leader. But Europe is still lagging behind on 4G deployments. There are however encouraging signs, and planned industrial investments on 4G are ramping up. Even more encouraging, Western Europe is leading deployment on latest Long-Term Evolution (LTE) generation, LTE Advanced, with about 50% of networks deployed in Europe. But Europe must do more.

The Juncker package of 315 billion euro is a huge opportunity in that respect. Investment in digital infrastructures is clearly part of this Commission priorities. We are taking steps towards adoption of the Commission proposal on European Fund for Strategic Investments as swiftly as possible so that new investments can start flowing later this year. We have also worked with Member States to define a pipeline of possible projects. Member States have already identified almost five hundred proposals for ICT and broadband projects representing a total investment sum of 151.7 billion euro in the next 3 years. The interest is there, and I encourage the sector actors to support the relevant Member States proposals;

Access and connectivity are core issues for the Digital Single Market strategy announced by President Juncker. In May the Commission will present this Strategy, feeding into the June European Council. But for me, it is clear that a Telecom Single Market is a cornerstone to the Digital Single Market.

To conclude:

With 5G, Europe has a great opportunity to reinvent its telecom industrial landscape. But 5G is much more complex than earlier generations, and it requires committed partnerships not only with the traditional telecom actors but more generally with the vertical usage sectors. It also requires new ecosystems of software developers. 5G is also a bold opportunity to spearhead the digital industrial transformation of Europe, and to support the Digital Single Market.

We are now at the cross road of exciting developments. I expect that the EU industry at large will set the path towards an ambitious 5G technology development and deployment roadmap. And the Commission is providing undivided support to the roll-out of these promising new technologies, at single market and global scale.

Thank you for your attention

 

Press Briefing by Press Secretary Josh Earnest

The White House

Office of the Press Secretary

For Immediate Release

January 05, 2015

James S. Brady Press Briefing Room

1:30 P.M. EST

MR. EARNEST:  Good afternoon, everybody.  It’s nice to see you all.  Hope you’re feeling as rested and recharged as many of us here at the White House.  I know that I am. 

Some of you are — although I don’t see too many tan faces in the audiences, just on the side.  So —

Q    Happy New Year.

MR. EARNEST:  Happy New Year to you, Goyal.  So I don’t have anything to start, Julie, so let’s go straight to your questions.

Q    Thanks, Josh.  Happy New Year.  Congress comes back tomorrow with Republicans in charge, and I’m wondering if the President has spoken to Mitch McConnell or the Republican leaders either while he was in Hawaii or since he’s been back, and if he has any plans to meet with them this week.

MR. EARNEST:  Julie, I don’t know of any presidential calls that occurred while the President was in Hawaii.  I believe that both the President and the incoming Senate Majority Leader were spending some downtime with families over the holidays.  But I would anticipate that the President will have an opportunity to sit down with congressional leaders in the first couple of weeks that they’re back here.  I don’t have a specific date at this point, but I would anticipate that that’s something that will happen if not this week, then the week or two after that.

Q    He’s occasionally spoken to Republicans at their retreat; that’s in Pennsylvania this year.  Do you know if he has plans to travel to that?  Has he been invited?

MR. EARNEST:  I don’t know whether or not he’s been invited.  I am aware that those are their plans, but I don’t know yet whether or not the President will attend.

Q    Okay.  One of the first things that McConnell has said that he plans to bring up is the Keystone pipeline.  There’s going to be a hearing on it on Wednesday.  The House plans to vote relatively soon.  The President was pretty non-committal in his end-of-the-year press conference.  When he was asked about a veto, he said we’ll take that up in the new year.  We’re now in the new year, we know that this is coming up.  If Congress sends him a bill forcing him to move forward on the Keystone pipeline, will he veto it?

MR. EARNEST:  Well, I’m going to reserve judgment on a specific piece of legislation until we actually see what language is included in that specific piece of legislation.  I will say, as you noted, Julie, he did discuss this at his end-of-the-year news conference a couple of weeks ago, and he did note that the pipeline would have I think what he described as a nominal impact on gas prices in this country.  But he was concerned about the impact that it could have on carbon pollution and the contribution it could make to carbon pollution, the negative impact that that has on the public health of people all across the country, and the impact that that has on our ability to build communities across the country.  As we see weather disasters worsen, as we see in the form of wildfires or more severe hurricanes, that only adds to costs.  So the President does harbor those concerns.

The other concern, frankly, that we have is that this is a — that pipeline projects like this in the past had been resolved in a fairly straightforward administrative way; that there is a process that is conducted by the State Department to evaluate a project and determine whether or not it’s in the national interest of the United States.  That’s how previous pipelines like this have been considered, and we believe this one should be considered in that same way too.

The last thing I’ll say about this is there also is an outstanding ruling that we’re waiting on from a judge in the state of Nebraska to determine what the route of the pipeline would be if it’s built through the state of Nebraska, which means there’s actually not a finalized plan on the table yet for final sign-off.  So we don’t want to put the cart before the horse here, and that is why in the past we’ve taken a rather dim view of legislative attempts to circumvent this well-established process.

So all that said, I’m not prepared at this point to issue a veto threat related to that specific piece of legislation, but we will take a careful look at it with all those things in mind.

Q    Is it fair to say that the President would be urging Democrats to vote against the legislation approving the pipeline?

MR. EARNEST:  Well, we’ll see what the legislation actually includes before we start urging people to vote one way or the other.

Q    Okay.  And if I can just ask on one other topic, just on something that came up while the President was in Hawaii.  Representative Steve Scalise apologized for speaking to a white supremacist group 12 years ago.  Does the President believe that Scalise should stay in leadership?

MR. EARNEST:  Well, Julie, it is the responsibility of members of the House Republican conference to choose their leaders.  And I’m confident that in previous situations we’ve seen members of the conference actually make the case that who they choose to serve in their leadership says a lot about who they are, what their values are, and what the priorities of the conference should be.  Now, we’ve also heard a lot from Republicans, particularly over the last few years, including the Chairman of the Republican Party, about how Republicans need to broaden their appeal to young people and to women, to gays and to minorities; that the success of their party will depend on their ability to broaden that outreach.

So it ultimately will be up to individual Republicans in Congress to decide whether or not elevating Mr. Scalise into leadership will effectively reinforce that strategy.

Q    So far, Republican leadership seems to be standing by Scalise.  Does the President feel that’s appropriate?

MR. EARNEST:  Well, he believes that it’s ultimately their decision to make.  But there is no arguing that who Republicans decide to elevate into a leadership position says a lot about what the conference’s priorities and values are.  I mean, ultimately, Mr. Scalise reportedly described himself as David Duke without the baggage.  So it will be up to Republicans to decide what that says about their conference.
Jeff.

Q    Josh, the Afghan President said in an interview broadcast on Sunday that the United States should consider reexamining its timetable for taking U.S. coalition troops out of Afghanistan.  Is that something that the White House has discussed with him?  And is it something that the U.S. would consider at this point?

MR. EARNEST:  Well, Jeff, what the President has been really clear about is what our strategy in Afghanistan is; that after the end of the year, we are now in a situation where the combat mission in Afghanistan for U.S. military personnel has ended.  The Afghans are now solely responsible for the security of their country.

There is an enduring U.S. military presence and NATO coalition military presence in Afghanistan to carry out two other missions.  The first is a counterterrorism mission.  We continue to see remnants of al Qaeda that do have designs on destabilizing the region and U.S. interests.  We also continue to see a need for U.S. military personnel to play an important role in training and equipping Afghan security forces to continue to take the fight to those terrorist elements and to preserve the security situation in the country of Afghanistan.

There are a lot of hard-won gains that have been made in Afghanistan as a result of the bravery of U.S. military personnel and our coalition partners.  Much of that work — many of those accomplishments are due to the effective coordination between United States military and Afghan security forces, and we want to see that kind of coordination continue, even as Republicans take on — Republicans — even as Afghans take sole responsibility for their security situation.

Q    Freudian slip?  (Laughter.)

MR. EARNEST:  We’re all sort of working out the cobwebs from the layoff. 

Q    What was your reaction then, or the White House’s reaction, to his comments in that interview?

MR. EARNEST:  Well, and I guess this is the other part of the answer that’s also important is the fact that we continue to have military personnel in Afghanistan to carry out these two missions.  The counterterrorism mission and the training mission, the training of Afghan security forces, is indicative of the ongoing commitment that the United States has to the government of Afghanistan; that we built a strong working relationship with the unified government there and the United States and countries around the world who have invested so much in Afghan security continue to be invested in the success, both political and economic, of the Afghan people.

And the United States is prepared to continue that partnership.  But as it relates to the strategy associated with our military footprint, we’ve been pretty clear about what that strategy is.  More importantly, the Commander-in-Chief has been clear about what that strategy is.

Q    On a separate topic, oil prices continue to fall with some resulting falls in the stock market today.  Is the White House concerned about this trend?  And are you watching it?  What is your reaction to it?

MR. EARNEST:  Well, I’ll say a couple of things about that.  The first is, I’m always very hesitant to draw any conclusions or offer any analysis about movements in the stock market.  I know that there are some who have observed — this is a little of a chicken-and-the-egg thing — that some of the fall in energy prices is a direct response to a weakening economy and a fall in the stock market.  So it may not be that one is causing the other; there could sort of be a reinforcing effect there.

What I will say more broadly is that we’ve talked before about why we believe that falling gas prices are, as a general matter, pretty good for the economy and it certainly is good for middle-class families that are being pinched.  And when they go to the pump and they see that the prices at the pump are up to a dollar cheaper than they were last year, that certainly means more money in the pocket of middle-class families.  That’s good for those middle-class families that the President believes are so critical to the success of our economy.

It also is a testament to the success that the U.S. has had over the last several years, in part because of the policies put forward by this administration, to increase production of domestic oil and gas.  It also is a testament to some of the policies this administration put in place five years ago to raise fuel-efficiency standards.

Q    But, Josh, I understand all these things that you want to list, but is the White House concerned about the economic implications of these falling oil prices?

MR. EARNEST:  This is something that we’re always monitoring.  I believe we talked about this a little bit at the end of last year.  But we’re always monitoring the impact that any sort of policy area would have on the economy, so it’s certainly something that we’re watching.  I think that as a general matter, speaking broadly, the impact of falling energy prices has been good for the U.S. economy.

Michelle.

Q    Any response to these recent statements by North Korea?  And are you surprised by the nature of some of them — that they’re coming from a state, even though that state is North Korea?

MR. EARNEST:  They’re not particularly surprising.  We’ve seen comments from the North Koreans in the past.  As it relates to the subject that’s received so much attention in the last few weeks, the hack of Sony Pictures Entertainment, the administration spoke pretty clearly at the end of last week by putting in place a new economic sanctions regime against three North Korean entities and 10 individuals as part of our proportional response to that specific hacking incident.

Q    And the speculation that’s been out there from some analysts that it actually might have come from somewhere else besides North Korea, does the administration see no merit to some of those sort of statements out there?

MR. EARNEST:  Well, this is an investigation that’s being conducted by the FBI.  They’ve obviously devoted significant resources to this.  They have their own area of expertise when it comes to these matters, and they have come to the conclusion, based on the evidence, that North Korea was responsible for this.  And I don’t see any reason to disagree with the conclusions that they’ve arrived at.  If you have questions about why they’ve arrived at that conclusion, you can direct it to them.

Q    And the President called this incident an act of “cyber vandalism.”  But we know that there is a review going on as to whether North Korea should be on the list of state sponsors of terror.  So does that mean that there’s a possibility the President is going to reconsider what he called this hack?  Or is that review of North Korea possibly being on the list based on purely other activities by North Korea? 

MR. EARNEST:  It does not mean that the President is reconsidering the way that he talks about this, but what is prudent is that our national security team is always reviewing the actions, particularly of nations like North Korea, to determine the proper policy response, and in some cases, whether or not that includes including them on the state sponsor of terrorism list.

Now, there are — I will say that there is a very specific technical definition for how states, or why individual countries, should be added to that list.  And so we will work very carefully to determine whether or not the actions that have been taken by North Korea meet that very specific technical definition.

Q    And I mean, the fact that North Korea is not on that list, Cuba is, both are under review — that doesn’t say a lot about that list and its weight.

MR. EARNEST:  Well, I actually think that it might actually say quite a bit about the weight of that list.  The fact that we take so seriously those nations that do sponsor acts of terrorism, that they are in a very small club.  But that is a list that you don’t want to be on, and it’s a list that we take very seriously as we formulate a foreign policy that protects the national security interest of the United States. 

And the fact that we make a very — take a very deliberative approach to determining whether or not a country should be added to the list or removed from the list I think is an indication of just how serious a matter a state sponsor of terrorism is.

Q    Thanks, Josh.

MR. EARNEST:  Move around a little bit.  Justin.

Q    I want to go back to Mitch McConnell.  He, in an interview this morning — from the Washington Post, said that the single best thing that the Republican Congress can do is not mess up the playing field for 2016, the Republican presidential nominee.  So I’m kind of interested in the inverse of that question, which is, is that President Obama’s kind of number-one priority headed in for the last two years?  Or to what extent is preparing the Democratic Party for the 2016 elections and the leader that would presumably continue his vision a priority or something that’s on your guys’ agenda?  And conversely, to what extent are you guys trying to foil Mitch McConnell’s plan to sort of — he wanted the Republicans to seem less crazy, I guess —

MR. EARNEST:  Scary, I think is the —

Q    Scary, yes.

MR. EARNEST:  Typically, the beginning of the year is a time for optimism, where we set our sights high, where we really pursue our grandest ambitions, we make New Year’s resolutions for ourselves about how much we’re going to read more books or go to the gym more often.  And suggesting that they’re going to be less scary is not exactly the highest ceiling I can imagine for their legislative accomplishments this year, but a worthy pursuit nonetheless.

What I will say is that the President does have, in the vein of ambition, a lot that he wants to try to get done this year.  And over the course of this week even, you’ll hear the President talk quite a bit about steps that he can take to strengthen our economy, particularly to benefit middle-class families.  The President believes our economy is strongest when we’re growing from the middle out.  And I do think you can hear the President — expect to hear the President talking in detailed fashion about some of the executive actions that he can pursue and some of the legislative proposals that he’ll put forward that he believes deserve bipartisan support.

And this is something — this is a little different than what we’ve done in the past — this is an opportunity for him to talk about the State of the Union address as we get closer to the date where he’ll actually give the speech.  So a little bit more of a preview than we’ve seen in previous years. 

And I do think it is indicative of the kind of energy that the President is feeling, and, frankly, even optimism that the President is feeling; that we can build on the kind of momentum that we’re seeing in our economy right now to put in place policies that will be good for middle-class families and be good for the broader U.S. economy.

Are Democrats and Republicans going to agree on every aspect of the President’s strategy?  Probably not.  But are there some things where we feel like we can work together to get things done that will be consistent with the ambitions of both parties, and consistent with a strategy that will be in the best interests of the country and middle-class families in the country?  Yes, I think we can.  And whether it’s — I also noted in that same interview, Senator McConnell talked about finding new ways to invest in infrastructure.  He talked about policies we can put in place to open up markets for U.S. businesses.  And he talked about tax reform. 

So these are all areas where there does stand the potential for bipartisan agreement, and the President is certainly going to pursue them.  The President is also going to pursue some other things that Republicans may not like that he can do on his own.

Q    So I mean, I recognize I kind of teed you up there to talk about the next week, but I am actually interested in the sort of 2016 question, the extent to which this is starting to enter your guys’ kind of calculations.  Politically, obviously the President’s time in office is waning, but his legacy and — will be extended and especially influenced by his successor.

MR. EARNEST:  Well, the President, as you may have heard from some of my colleagues after the last midterm election, that the way — the President sees it a little bit differently; that essentially, today marks the beginning of the fourth quarter of his presidency.  And as the President, an avid basketball fan, has observed, a lot of really important things happen in the fourth quarter.  And I think the President believes that’s true not just in an NBA basketball game, it’s also true of a presidency.  And he wants to make it true of his presidency.

And that I do think is why you will see the President pretty energized when he appears later this week, that he’s going to have a pretty ambitious list of priorities that he wants to achieve.  We’re going to look for opportunities to work with Republicans to make progress on those priorities.  And where Republicans don’t agree, you’re going to see the President take decisive action to make progress on his own where he can.

And that is, I recognize, not a significant departure from the strategy that we have employed in the last couple of years, but I do think that you’re going to see the President be even more energized and even more determined to make progress on behalf of middle-class families.  That’s, after all, the reason the President ran for this office in the first place.  And the President is going to spend a lot of time focused on that here in the fourth quarter of his presidency.

And I guess — so I guess the last part of that is — and all that is to say, that means that the presidential election in 2016 is quite a ways off still.  And the President believes that we should be focused on the kinds of policy priorities that are going to benefit middle-class families.  There will be plenty of time for politics.

Q    And then just on Steve Scalise, I know that you talked a little bit about it with Julie, but I’m wondering, did the President have a reaction to hearing that he had attended these rallies or the statement that you attributed to him?  Have you had a conversation with him about it?  Or does he think Steve Scalise should resign over this?  Are there those sorts of kind of feelings or sentiments coming from —

MR. EARNEST:  Well, I haven’t spoken to him directly about this specific issue.  I can tell you that — but I do feel confident in relaying to you that the President does believe that ultimately it’s the responsibility of individual members of the House Republican conference to decide who they want to elect as their — as the leader of their conference.  And certainly, who those elected leaders are says a lot about who the conference is and what their priorities and values are.  And they’re going to have to answer for themselves whether or not elevating somebody who described himself as “David Duke without the baggage” sort of reinforces the kind of message that the House Republican conference wants to project.

Cheryl.

Q    Yes, thanks.  Just on the legislative agenda, do you see the omnibus as sort of the model where you’re going to start seeing legislation that may have some things that you really don’t like but you’re going to sign it anyway because it’s probably the best compromise you’re going to get?

MR. EARNEST:  That’s a good question.  I would anticipate that anything — that the most substantial pieces of legislation that we hope to get done will necessarily be compromises.  It doesn’t necessarily mean that those pieces of legislation will include things that we strenuously oppose, it just may be that there are pieces of legislation that we feel like don’t go quite far enough but are certainly a positive step in the right direction.

But I think either of those scenarios fits what would be an acceptable definition of a compromise.  And I would anticipate that when we’re operating in an environment where we have Republicans in charge of the Congress and a Democrat in charge of the White House, that compromise is going to be the name of the game. 

And I certainly will hope, and the President certainly hopes, that Republicans are in — will pursue our work together in that spirit.

Olivier.

Q    Josh, the country’s largest police union today said the national hate crime statute should be expanded to include attacks on police officers.  Does the President agree?

MR. EARNEST:  I hadn’t seen that statement.  I think that’s something that we’ll have to consider.  Obviously, we certainly condemn in the strongest possible terms any sort of violence against police officers.  And just a couple of weeks ago in New York we saw a brazen act of violence that really shook that community in New York.  And even here a couple weeks later, the thoughts and prayers of everybody here at the White House, including the President and First Lady, continue to be with the families of those two officers who were killed in that terrible attack.

So I think the question, though, is ultimately, what are the kinds of things that we can do to make it safer for police officers to do their important work.  And this will be among the things that will be considered by the taskforce that the President appointed at the end of last year.  They’re going to be holding their first public meeting next week.  They’ll hear from the representatives of law enforcement organizations.  Because the President does believe that building stronger bonds of trust between the community and the law enforcement officers who are sworn to serve and protect that community is in the best interest, both of the police officers and the citizens of those communities. 

So trying to find that common ground and putting in place policies and looking for best practices where other communities have been able to identify that common ground is going to be part of the very important work of this taskforce and the President is looking forward to their findings.

Jon.

Q    Back to North Korea.  Given that there have been some doubts raised about — private-sector analysts looking at this and raising doubts about whether or not North Korea was actually responsible for the hack, is there some consideration to declassifying the evidence that shows that, in fact, North Korea has done this to give some confidence in the finding of the FBI on this?

MR. EARNEST:  Well, I know that I’d be remiss if I didn’t point out that there were a couple of private-sector organizations that have endorsed the findings of the FBI.  So there are some people who have looked at the evidence and come down on a couple different sides of this.  Obviously what they’re dealing with here is something that’s pretty sensitive.  The evidence that they have reviewed and obtained by making it public does give a pretty strong indication to the North Koreans and, frankly, to other bad actors about the techniques that we use to investigate and to attribute these kinds of attacks. 

So it’s a tricky business here.  I wouldn’t rule out in the future that the FBI may be able to be more transparent about their findings.  But I’d refer you to them in terms of what they feel like they can comfortably release without undermining some of the strategies that they use, both to protect our infrastructure but also to investigate intrusions.

Q    And by using the phrase or the word cyber vandalism to describe this, is the President downplaying the significance of it?  Cyber vandalism, or the word “vandalism” sounds a lot less serious than the word terrorism, as some others have suggested.

MR. EARNEST:  I think it sounds less serious, but the President certainly believes — takes this incident, this attack, as something serious.  It had a serious financial impact on this American company.  It obviously had a serious impact on some of the values that we hold dear in this country about freedom of expression and freedom of speech. 

So it was not the President’s intent to downplay this at all.  I think the President was looking for a way that most accurately described exactly what had occurred.

Q    Okay.  Two other topics.  One, the news over the weekend that Boko Haram has taken over a Nigerian base on the border with Chad.  How much confidence does the White House have in the ability of the Nigerian government to deal with this threat?  How significant do you think the threat of Boko Haram is, and what’s the United States — is there any role for the United States to do anything about it?

MR. EARNEST:  Well, I’ll say a couple things about this, Jon.  The first is, there obviously is a counterterrorism cooperation relationship between the United States and a number of countries in Africa, including Nigeria.  And that kind of cooperation has been valuable in the past in trying to help central governments in Africa and other places in the world, frankly, combat some of these extremist elements in their countries. 

So that counterterrorism relationship is ongoing.  The clearest manifestation of that cooperation is the deployment of some military personnel that are on the ground in Nigeria to try to help recover those girls who were kidnapped from that school relatively early last year.  So that work is ongoing, but this is very difficult work and we’re going to continue to cooperate with the Nigerians as they try to do a better job of securing their country.

Q    But isn’t this an indication that that cooperation is not working at all?  I mean, first of all, the girls haven’t been rescued.  That’s on one side.  The other side, Boko Haram seems to be on the march.  I mean, they’ve actually overtaken a military base that was set up, in large part, to fight Boko Haram.  I mean, doesn’t this show that whatever cooperation we have with the Nigerians just isn’t working?

MR. EARNEST:  Well, it shows that there is — that they face a very serious threat in Nigeria.  And the United States, it does have this relationship with Nigeria that we value, it’s a military-to-military relationship.  We also share some other intelligence assets that have been deployed to fight Boko Haram.  But this is certainly something that we’re concerned about.

Q    And just one last question on the Cuba deal.  Part of it was the Cuban government agreeing to release 53 political prisoners.  Do you have an update for us on how many of the 53 have been released?  Have they all been released, and who they are?

MR. EARNEST:  For a specific update — I’m going to have to take the question and we’ll get back to you — it’s my understanding that not all of them have been released at this point.  But as part of the agreement that was brokered that this prisoner release that the Cuban government decided to undertake on their own in the context of these discussions would take place in stages.

Q    so you’re confident they’re going to follow through on this?  I mean, there’s also been reports that the Cubans have arrested some additional political prisoners.

MR. EARNEST:  What I would say is, at this point, there is no reason to think that they are walking back any part of the agreement.  But we’ll see if we can get you some more details.

J.C.

Q    How concerned is this administration and how closely has this administration been and how closely has this administration been monitoring what is going on in Wall Street right now where the Dow has gone below 300, and the Euro has reached its lowest mark in nine years?  The concerns are the instability of the Greek government and new elections there; that Greece will, in fact, abandon the Euro.  What is the situation?  How does the White House look at this?

MR. EARNEST:  Well, JC, I can tell you that we’re always monitoring movements in the financial markets.  But in terms of sort of ascribing what may be driving those fluctuations in the market, I wouldn’t speculate on that.  But obviously this administration has been working very closely with our partners in Europe as they’ve worked to deal with some of the financial challenges that they faced over the last several years, both as it relates to some members of the EU, but also as it relates to the broader economic trends over in Europe.
You’ll recall that the Chairman of the President’s Council of Economic Advisers, Jason Furman, spoke at this podium a couple of weeks ago, and he discussed some concerns about headwinds from Europe, that their weakening economy is certainly in the best interest of the U.S. economy.  But at the same time, the strength of the U.S. economy is due at least in part to some of the very important and difficult policy decisions that the President made early on in his presidency.
Mark.
Q    Gas taxes, Josh.  For the new year and of course the plunging oil prices and plunging price of the gallon has renewed the talk of raising gas taxes to help pay for infrastructure.  In the past, you guys have said that’s not on the table.  Is it on the table now?
MR. EARNEST:  Well, it’s not something that we have proposed, and that’s been our policy.  We have put forward our own very specific proposal for how we believe we can make the investment that’s needed in infrastructure in this country.  That’s typically what the gas tax revenue is dedicated to, is investing in infrastructure.  And we have put forward our own specific plan for closing loopholes that only benefit wealthy and well-connected corporations, and using the revenue from closing those loopholes to investing in badly needed infrastructure upgrades.
There are some in Congress that have different ideas, including raising the gas tax.  That’s certainly something that we’ll take a look at it, but it’s not something that we have considered from here.
Q    Okay.  I ask because, among those proposals, Bob Corker and Chris Murphy have wanted to raise the gas tax by 12 cents a gallon over two years, I guess it is; you say there are others.  Two questions:  Are you, A, ruling a gas tax increase out?  And, B, is the President going to say something specific on infrastructure and gas taxes in the State of the Union speech?
MR. EARNEST:  I don’t have anything to preview at this point about — from the State of the Union on this specific topic.  But we may have more in advance of the speech, so stay tuned.
As it relates to specific proposals from Congress, we’ll certainly consider proposals that are put forward, particularly bipartisan proposals like that one that you mentioned.  But we’ve been really clear about what we think is the best way to get this done, and that is simply to close loopholes that benefit only the wealthy and well-connected corporations, and use that revenue to make badly needed investments in infrastructure that everybody benefits from.  I recognize that there are some other ideas out there, and we’ll consider those too, but we’ve been really clear about what we support.
Mara.
Q    Just to follow up on that — the gas tax is a kind of permanent, ongoing way to fund infrastructure.  What you’re talking about is a one-time-only closing of loopholes to get some money for infrastructure investments.  Do you think, as others have suggested, that the gas tax as a funding mechanism for infrastructure is broken and should be replaced by another mechanism?
MR. EARNEST:  I’m not saying that, although some have pointed out that the fact that we have — that our vehicles that are on the road are becoming more fuel efficient, which means they’re using less gas, which means that there’s likely to be less revenue from a gas tax.  But what we have said is that we believe there is a very specific way that we can close some loopholes that will generate revenue that will allow us to make some badly needed investments in infrastructure.
Q    But that’s not a permanent funding stream for infrastructure.  That’s just a one-time-only —
MR. EARNEST:  Well, it could be, because we’re talking about permanently closing the loopholes. 
Q    And that amount of money —
MR. EARNEST:  That would be a change in the tax policy.  It could be.
Q    I know.  But do you envision it as something that funds infrastructure over time?  I don’t really understand how that becomes a permanent infrastructure funding source.
MR. EARNEST:  Well, we’re not suggesting that we abolish the gas tax, right?  But there is revenue that could be gleaned from reforming the tax code, and generating revenue that could be used to invest in infrastructure.  And so that’s what our strategy is. 
I recognize that there are other people that have other ideas, and we’ll certainly consider those ideas as they put them forward.
Major.
Q    Is there reluctance to talk about the gas tax because you believe gas prices trending downward are likely to reverse in the not-too-distant future and you don’t want to mess with anything in the price market or taxes for fuel?
MR. EARNEST:  I think the reluctance that you’re perceiving from me is that we believe, frankly, that we have a better idea for how to do this, which is that by closing loopholes that only benefit wealthy and well-connected corporations we can actually invest in the kind of infrastructure that will create jobs, stimulate economic growth and put in place modern infrastructure that we can all benefit from.  So we’re open to these other ideas that others have put forward, but we believe our idea is better.  But I’m not willing to —
Q    But no matter what the price of gas is?
MR. EARNEST:  Well, I mean, this is a position that we’ve had for some time, right?
Q    I know.  And there are a lot of energy economists who have said, well, look, this is a different — this is a time for a different conversation, because the prices are down and there is more room within what people used to budget, and the infrastructure needs of the country haven’t gotten any better, they’ve become more pronounced, if anything; and it’s time for a fresh look at this.  And I hear from you, you’re not inclined to give it a fresh look, and I’m just trying to figure out why.
MR. EARNEST:  I think what I’m trying to say is that we continue to remain open to giving it a look if somebody wants to put forward their own proposal.  Again, this sort of goes to Cheryl’s question, in some ways, about compromise.  We don’t believe that the best way to fund modernizing our infrastructure is to raise the gas tax, but some people do.  And we’re willing to consider those proposals.  We believe that the best way to do that is to close loopholes that only benefit the wealthy and well-connected corporations.
Q    And interpreting your comments earlier that you may or may not have a meeting — the President may or may not have a meeting with congressional leaders on the Republican side this week, it sounds like he probably won’t, looking at the schedule.  Is it fair to say that that is a lesser priority than getting out on the road and sort of previewing the State of the Union and displaying the President’s energetic pursuit of his own agenda, and not treating the new congressional Republican majority as a secondary item, but not as important as his own rhetorical flourishes for this week?
MR. EARNEST:  Well, I think we’re less focused on rhetorical flourishes and more interested in substantive policy ideas that will get our economy moving and benefit middle-class families.  That’s what we’re going to be focused on on the road, and that’s what we’re going to be focused on in our conversations with Democrats and Republicans who are in leadership positions in Congress. 
Look, the President met with congressional leaders a couple of times during the lame duck session, and I’m confident that he’ll do it again early this year.
Q    Right, but it’s just a different crew and a different power structure than during the lame duck.  I mean, I know this is many of the same participants, but they’re — 
MR. EARNEST:  Pretty much all of the same participants, isn’t it?
Q    Right, but they have different levels of power, and their proximity to them is completely different. 
MR. EARNEST:  But even in the context of those meetings that they had in the lame duck, they were talking about this — everybody knew what was going to happen after the first of year, right?  Everybody knew that the President wasn’t just meeting with the Senate Minority Leader, he was also meeting with the incoming Senate Majority Leader.
So I don’t think that that will substantively change the kinds of conversations that they’ll have early this year, which the President believes is important and he’ll do, but certainly there’s no reason we can’t do both, right?  What the President wants to do is he wants to make progress by debating and putting in place where possible substantive economic policy ideas that will benefit the middle class.  Some of those he can do on his own and he is going to do it.  Some of those he is going to require cooperation with Republicans in Congress to get it done and he is eager to do that, too.

Q    Right.  I know you don’t want to preview the State of the Union but the last time the President gave an address like that there was no war against ISIS.  There was no ongoing airstrike and a coalition to confront in two different countries.  Now there is.  So two questions.  To what degree will the President use the State of the Union to give the country an assessment of what has been accomplished and what remains to be done?  And how does the ongoing conflict influence the Defense budget that’s being put together and the ongoing discretionary cap limits that have one more year to go in a full budget cycle after this?

MR. EARNEST:  Again, the State of the Union hasn’t been written yet, so I wouldn’t want to speculate —

Q    Yes, but Cody has been working on it, as you and I both know.

MR. EARNEST:  He is — he has been — but ultimately he’s not the author of it, even he has been working on it.

Q    No, I know, but it’s not like there’s a bunch of blank pieces of paper hanging around.

MR. EARNEST:  No, but it’s not as if the final words that are on the page are going to be the ones that will be read by the President of the United States on January 20th.

Q    But you know these things get blocked out.  What I’m just trying to figure out is how much does the President feel it’s necessary or worthwhile to assess what is a not-insignificant national —

MR. EARNEST:  You’re asking a very legitimate question.  I’m just trying to make it clear that those are — we’re still having those kinds of discussions about what actually is going to be included in there and to what extent it will be included.  But I am confident, as a general matter, that the President will use the opportunity of that national address to talk about the threat that we face from ISIL and what the United States continues to do by leading this broader international coalition of more than 60 countries to degrade and ultimately destroy them.  This is a multi-front strategy that includes airstrikes that were taken in support of troops on the ground; it involves combatting foreign fighters; it involves counter-finance, which you’ve heard David Cohen from the Treasury Department talk about from here.  It talks about important work that needs to be done on the humanitarian front.  And it continues — it also includes the efforts that we have undertaken, working closely with our allies, to counter ISIL’s message in the Muslim world.  So this is a multifaceted effort and I am confident that you’ll hear the President talk about this a little bit at least.

As it relates to the second question about the Defense Department budget, there obviously are — there is an impact on the Defense Department budget as a result of these ongoing efforts.  It’s one of the reasons that our priorities for the lame duck was getting some increased funding so we could ensure that we had the necessary resources to carry out this strategy.  And one of the other things that we talked about in the context of the omnibus was how disappointed we were that Congress didn’t act on the kinds of budgetary reforms that both the civilian and military leadership at the Pentagon said were desperately needed.

And so I would anticipate that all of that — maybe not discussed in that much detail in the State of the Union, but it certainly will be a priority as we talk to Congress about the FY16 budget.

Q    And during the holiday break, several more detainees were repatriated from Guantanamo.  And the indication is that that’s going to be something that will be rather common in the next three or four months.  Would you be willing to say that this is something that this administration intends to accelerate in the early part of 2015 — to move as many detainees as are moveable out of Guantanamo in the early part of this year?

MR. EARNEST:  I don’t have, frankly, a lot of insight into what the short-term plans are in terms of who is — and sort of what sort of agreements are being contemplated and what troops are up for transfer in the short term.  I can tell you that it continues to be an important priority of this administration to ultimately transfer all of the detainees out of Guantanamo.

Q    But the President has conceded publicly that’s not possible.  That some of them are too dangerous, it can’t be tried.

MR. EARNEST:  Well, which is why we need Congress to take some action to remove some of the obstacles that are preventing the President from doing something that he believes is clearly in the national interest, which is closing the prison at Guantanamo Bay.

Q    One last thing.  David Cameron said over the weekend that the President calls him “bro.”  Is that true?  And is there any other pet names he has for world leaders?  (Laughter.)

MR. EARNEST:  Well, to paraphrase a local baseball player here in Washington, D.C., that’s a clown question, bro.  (Laughter.)  I’m just teasing.

Q    You don’t mean that.

MR. EARNEST:  No, I don’t.  Mostly because I just wanted to use “bro” in my own response.  (Laughter.)  I am not able to give much more insight about the private communications between the President of the United States and the Prime Minister of the United Kingdom other than to —

Q    Having been revealed publicly, do you have any reason to doubt the Prime Minister’s assertion?

MR. EARNEST:  I don’t because, as you know, they have a special relationship.  (Laughter.)

Peter.

Q    Given Mitch McConnell’s unusual admonition to the Republican majority that they should not be scary, I want to get a sense from you right now.  Does the President think the American people should be scared of a Republican governing majority?

MR. EARNEST:  That’s an interesting question.  (Laughter.)  I think the President has been pretty clear that there is a pretty stark difference of opinion about which policies are actually in the best interest of the country, about which — what kinds of policies are going to be in the best interest of middle-class families.  That is, after all, the President’s priority.  And I think by some of the policy choices we’ve seen some of the Republicans make, they don’t share that priority.  And that certainly is a strong difference of opinion. 

But, ultimately, I guess we’ll have to sort of see whether or not members of Congress choose to abide by the admonition of the new Senate Majority Leader.

One example I guess I can think of is the prospect of defaulting on the debt for the first time in our nation’s history is a scary prospect.  Hopefully it’s not going to come to that.  But we’ll have to see.

I guess I would say it this way.  The President does believe that there are some areas where we can cooperate.  So setting aside whether or not they’re scary or not, we do believe that there may be an opportunity for us to find some areas of common ground where Democrats and Republicans can come together to open up overseas markets for American businesses or to reform the tax code in a way that would actually make it more simple and more fair, and close loopholes that only benefit the wealthy and the well-connected.  So there may be some things that we can do to cooperate and actually make some progress for the American people.

Q    We know mayor — back to law enforcement and New York City Police Department but police departments nationwide, some of which have indicated the rank and file, they feel betrayed by the President, by Attorney General Eric Holder.  Earlier you indicated that the President basically feels — certainly feels a sympathy for the loss experienced by the families in New York, but does the President feel a sympathy with those police — members of police departments right now who feel targeted?

MR. EARNEST:  Well, I think what the President believes is that it’s clearly in the best interests of people who are living in communities that have legitimate concerns and clearly in the best interests of law enforcement officers that have legitimate concerns to come together and try to strengthen the bond of trust between law enforcement officers and the communities that they’re sworn to serve and protect.  And that is a pursuit that is important and would benefit communities all across the country.  And it certainly would stand to benefit law enforcement officers who do the heroic work every day of getting up and putting on a blue uniform, and putting their lives on the line to protect the community that they work in.

And that is a calling that the President believes is worthy of our honor and respect.  And if there are things that we can do to make it safer for them to do that important work while at the same time inspiring greater trust in the communities that they are sworn to serve and protect, that that’s a good thing, that that is a laudable goal and ultimately it will have the effect of fighting crime in communities all across the country.

Q    Mayor Bill de Blasio is going to speak in a matter of moments — when we leave this briefing, we’ll hear some of his remarks given the latest that’s been taking place up there.  Recently, Police Commissioner Bratton has called it very inappropriate that the officers turned their back to the mayor during the eulogy for officer Ramos.  Does the President agree with Bratton?

MR. EARNEST:  Well, I haven’t spoken to the President about it.  I do think that Commissioner Bratton did have I think an important view that he expressed on this.  He described — this is a letter that he sent to police precincts all across the city of New York.  And he said, “It was not all officers, and it was not disrespect directed at Detective Ramos.  But all the officers were painted by it, and it stole the valor, honor and attention that rightfully belonged to the memory of Detective Rafael Ramos’s life and service.  That was not the intent, I know.  But it was the result.” 

Q    So I guess, simply, even if — broadly speaking, does the White House think that action is inappropriate?

MR. EARNEST:  I think what I will say is that the part of Commissioner Bratton’s letter I think that resonates most strongly here at the White House is that those who are attending those funerals are there to pay their respect for the service and sacrifice of the two officers who were being laid to rest.  And certainly the President has — believes that their service and their sacrifice is worthy of celebration and respect, and should be afforded all of the outward symbols of honor that they’ve been given.  And I think that’s what the vast majority of the people who attended those funerals, including police officers who attended those funerals, actually gave.

Q    Digressing very briefly, we just learned a short time ago that two aspiring U.S. ski team members were killed in an avalanche in Austria.  That information is just coming to us, I don’t know whether you guys have been made aware or if the President was aware or had any thoughts, given that tragedy to U.S. aspiring Olympic athletes.

MR. EARNEST:  Peter, I was not aware of that report.  Obviously, the President has on a number of occasions had the opportunity to welcome Olympic athletes to the White House, both as they’re preparing for competition and after they have competed.  And, obviously, our thoughts and prayers are with those who were apparently lost in this specific incident.

These are young men and women who make our country proud, and certainly they dedicate their lives to their pursuit and their calling and their passion, which is the performance in their sport.  And so I am not aware of this specific report but certainly if it’s true it is a tragedy.

Q    Josh, another update over the holidays would be these recommendations to reform the Secret Service.  And I wonder, has the President actually been given some sort of a report or a briefing?  And where is the White House specifically on this increased speculation that we might see the security fence outside raised?  That was one of the recommendations.  So where specifically is the President, White House staff on that?

MR. EARNEST:  That’s a good question, Ed.  I don’t know whether or not the President has received this specific briefing but we’ll follow up with you on this.  And as you’ll recall, the President did have interest in reviewing this report.

Q    Right.  I just wanted to get it on the record.

MR. EARNEST:  We’ll follow up with you.

Q    Specifically working with Congress, following up on both Julie and Major on the meeting — not just the meeting itself, but why not meet with Republican leaders this week.  But you and others are giving this impression the President is ready to work with Republican leaders but no meeting this week probably.  Instead, he is going out on the road on his own and he did this interview with NPR over the holidays where he said, I’m ready to start vetoing a lot more stuff and there’s going to be a lot more executive action.  So aren’t you saying he’s going to work with Republicans, but his actions are actually speaking louder than those words?

MR. EARNEST:  Well Ed, I think the President’s action to invite Congressional leaders, both Democrats and Republicans to the White House just a couple of days after the midterm elections, and talk about where that common ground is, I do think that speaks to the President’s — the priority that the President places in working with Republicans to make progress for the American people.  But you’re also right that the fact that the President is going to start the new year by announcing some new executive actions and some new policy proposals that will benefit middle-class families indicates that he’s most focused on results.  He’s mostly focused on substantive policy ideas that will benefit middle-class families.

Q    But they haven’t even been sworn in yet, and you’re already talking about, he’s moving forward on executive action.    He’s going out on the road to go directly to the American people — he’s free to do that but they haven’t even been sworn in yet, and you’re saying he’s getting ready to do more executive action.

MR. EARNEST:  Yes, he is.  And the President is determined to make progress where he can on his own.  As the President has said many times, particularly in the aftermath of the midterm elections, we can’t allow a disagreement over one thing to be a deal-breaker over all the others.  So, I have no doubt that there will be some Republicans who are going to be critical of policy proposals that the President pursues on his own to benefit middle-class families.  That may be an area where an honest disagreement exists. 

What we’re mostly focused on when we have conversations with Republicans, though, is figuring out, where is there common ground?  Where do we agree?  And the disagreements may be more plentiful, but that’s all the more reason we should spend a lot of time looking for that area of common ground and the President will do that.  He did that at the end of last year, he’ll do it as this year gets underway as well.

Q    Last thing.  Republicans talking again as they have many times before about trying to change the President health care law.  And I want to ask you specifically, not about that, but about this new book from Steven Brill, because this was not a quick drive-by.  He spent I believe 19 months interviewing a lot of people around here and from what I’ve seen of it so far, he points out the good of getting millions more people insurance, but both in the book and some of his early television interviews he’s indicating that he believes — this is after studying it very closely — it’s a raw deal for taxpayers; that a lot more people are getting insurance but the taxpayers are picking up that tab.  And that the health care costs are not coming down because of the law itself, despite what was promised.

MR. EARNEST:  Well let me say a couple things about that, Ed.  The first thing is it’s important for people to remember the Affordable Care Act substantially reduced the deficit, which is good for the economic health and the fiscal health of the country, and also good for taxpayers.  And we have seen that the growth in health care costs has been lower than at any other time in recorded history — in almost 50 years since they’ve been measuring that specific statistic.

We’ve also seen the average premium for employer-based health care coverage — these are individuals who are essentially not really affected by the Affordable Care Act and certainly aren’t getting health insurance because of the Affordable Care Act — they saw that their premiums only went up 3 percent, even though in previous years it had been going up by double digits every year.

So one of the goals, as Mr. Brill points out in this book, has been to limit the growth in health care costs and the numbers indicate that very early on, that there has been very important success associated with the Affordable Care Act in doing exactly that.  And that’s something that we’re going to continue to do in addition to expanding coverage and getting more people covered with health care; in addition to putting in place the kind of patient protections that the President has long advocated — everything from ensuring that men and women can get the kind of preventative health care maintenance, annual checkups and things;  that those can be covered free of charge; that you can’t be discriminated against because you have a preexisting condition.  We can put in place all of those things and we can actually limit the growth in health care costs, and that’s what the Affordable Care Act has done.

Q    And he also has this conclusion that from talking to the President own advisors, that people in the West Wing believe that the real chief of staff is Valerie Jarrett, and that when the author pressed the President himself in an interview, he just wouldn’t comment on that.  Why wouldn’t the President knock that down, why wouldn’t he say Valerie Jarrett is not my chief of staff?

MR. EARNEST:  I think because everybody already knows that.  And I think that Ms. Jarrett obviously plays a very important role here in the West Wing and in advising the President of the United States, but I think even she would tell you that she’s not the chief of staff and doesn’t want to be.

Alexis.

Q    Josh, can I follow up?  I have two quick questions.  One is a personnel question.  You had anticipated that the President’s Counselor, and maybe his senior advisor — I’m talking about Podesta and Pfeiffer — might leave in a few weeks.  Can you update us on whether they’re going to be departing the White House soon?

MR. EARNEST:  I don’t have any updates on any personnel matters at this point.

Q    You can’t say whether John Podesta will indeed be leaving?

MR. EARNEST:  Well, I can say — I mean, we said that when he started last year that he would essentially be serving through the end of the calendar year.  He’s going to stay on at the beginning of this year to help with the State of the Union.  I don’t have an exact date for his departure though.

Q    But maybe February?

MR. EARNEST:  I don’t have any guidance on that, but we’ll keep you posted.

Q    Ok.  And you don’t want to say anything about Dan?

MR. EARNEST:  Well, I’d say lots of things about Dan.  (Laughter.)  But in terms of any personnel announcements associated with Dan I’m not aware of any.

Q    The second question is, at the end of the year, the percentage of people who said that they approved of the job that the President was doing went up.  And lots of people have analyzed the polling numbers and why that is, and I was just wondering if the White House could share its own interpretation of why that percentage went up at the end of the year.

MR. EARNEST:  Well, I think, like financial markets, it’s always a tricky, risky business to try to analyze what’s actually driving fluctuations in poll numbers.  I can tell you that — I think what I’d rather do is sort of convey to you why so many people in this building felt really optimistic heading into the holidays at the end of last year, and that is because we did feel like over the course of the last six weeks or so of last year that we had been able to make a lot of progress on a variety of important policy priorities that the President ha

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERETSE KHAMA IAN KHAMA,

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERET…

13/11/14

1. Madam Speaker, before we begin may I request that we observe a moment of silence for those of our citizens who have departed from us during the past year. Thank you. 2. Honourable Members, it is my pleasure to once more present an updated assessment of how Government intends to move Botswana forward by seizing opportunities to secure our future. 3. As this is the first session of the 11th Parliament, let me preface my remarks by welcoming the newly elected members of this Assembly. Let me further congratulate you Madam Speaker on your own election.

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERETSE KHAMA IAN KHAMA, PRESIDENT OF THE REPUBLIC OF BOTSWANA, TO THE FIRST SESSION OF THE ELEVENTH PARLIAMENT – “MOVING BOTSWANA FORWARD”

 

INTRODUCTION

 

1. Madam Speaker, before we begin may I request that we observe a moment of silence for those of our citizens who have departed from us during the past year. Thank you.

 

2. Honourable Members, it is my pleasure to once more present an updated assessment of how Government intends to move Botswana forward by seizing opportunities to secure our future.

 

3. As this is the first session of the 11th Parliament, let me preface my remarks by welcoming the newly elected members of this Assembly.  Let me further congratulate you Madam Speaker on your own election.

 

4. Today’s gathering is an outcome of our 11th consecutive general election. As is our tradition, the ballot was conducted in a peaceful, free and fair manner. For this we can once more thank Batswana in general, as well as the Independent Electoral Commission (IEC) and other individuals and organisations that helped to ensure the poll’s success.

 

5. In any democracy elections are the means to the greater end of forming a Government capable of translating the popular will into public service delivery. We who have the honour of sitting in this House are accountable to the hundreds of thousands who entrusted us with their votes. Although divided in their choices, the voters were united by a shared desire for a better future. It is, therefore, our responsibility to ensure that together we deliver that future by at all times putting the national interest before our own.

 

6. Last month my party, the Botswana Democratic Party, was re‐elected on the basis of a detailed manifesto that promised to secure our common future by building on our past achievements. Today, before this House I reaffirm our commitment to honour that pledge.

 

7. In as much as we recognise that a government of and by the people is not an event but a process; this administration shall continue to engage Batswana across the country about their concerns through various fora and media, from the venerable realm of dikgotla to the digital world of interactive online communication. It was as a result of wide-ranging consultation that our manifesto was predicated on what we understood to be our citizens’ core aspirations. These include achieving:

 

• Job creation for sustainable livelihoods and income generation;

• Food security through continued agricultural renewal;

• Expanded access to land and housing ownership;

• Access to world-class quality education that caters to current and future needs;

• Citizen, including youth, economic empowerment;

• Dignity for all through the eradication of poverty;

• Zero tolerance for corruption in all of its manifestations;

• Elimination of mother-to-child transmission of HIV; and

• Government reform that leverages on the application of new technologies. 

 

8. Each of these commitments is based on realistic analysis of where our country is and needs to go in order to meet the reasonable expectations of its people, while improving our global standing in an ever more competitive world. Taken together they are consistent with our broader vision of achieving inclusive sustainable development that upholds the dignity of all.

 

ECONOMIC OUTLOOK

 

9. Madam Speaker, owing to the prudent economic and financial management by my Government, the country was able to survive the 2008/09 global financial crisis and economic recession with minimum impact on the domestic economy. We were able to save jobs in both the public service and private sector, as well as continued to provide essential public services to our people.

 

10. Having successfully weathered the storm of the economic downturn, we can look forward to better days ahead, with economic growth buttressed by reduced inflation. These positive trends should allow us to revive some of our postponed projects, along with outstanding issues affecting the conditions of service among public employees. Our optimism is in part based on forecasts of continued, albeit still fragile, global economic recovery, with worldwide output projected to grow by 3.3% in 2014 and 3.8% in 2015.

 

11. Turning to the domestic economy, the gross domestic product (GDP) at current prices stood at P124 billion in 2013 and it is projected to expand to P136.5 billion in 2014. In real terms, the GDP grew by 5.8% in 2013, and is projected to grow by 5.2% in the current year, driven by both the mining and non-mining sectors.   Within the non-mining sector, retail and hospitality industries, as well as agriculture are experiencing growth.

 

12. Average national inflation continued to decline from 8.5% in 2011 to 7.5% in 2012 to 5.9% in 2013 and further to 4.5% in September 2014, which is well within the Bank of Botswana objective range of 3 to 6%. This positive trend gives us confidence in our ability to maintain a low inflation environment, which is necessary for domestic enterprises to compete in the global market.

 

13. In terms of our fiscal management, Government succeeded in restoring a balanced budget during 2012/13 financial year, after four years of budget deficits. For the 2013/14 financial year we were able to collect P 48.9 billion, up from the P 41.7 billion received in 2012/13, while total expenditures and net lending for 2013/14 amounted to P 41.73 billion. This resulted in a budget surplus of P7.2 billion, largely due to the good performance of the mineral sector. For 2014/15 a budget surplus of P1.3 billion is currently projected. These savings will allow us to reduce our debt burden and rebuild our financial reserves.

 

14. To sustain a positive balance sheet will, however, require expanded revenues. Here I can report that we were able to collect P48.9 billion in the 2013-14 financial year, up from the P41.7 billion received in 2012-13. The 2013/14 outturn for expenditure and net lending was P41.7 billion.

 

EMPLOYMENT

 

15.  Madam Speaker, to be meaningful to Batswana, economic growth has to be accompanied by expanded employment, which is why our manifesto listed job creation at the top of our aspirations. To reiterate what I said in my own message to the voters, of all our campaign promises tackling unemployment is the most important one. While there has been some progress in recent years, current estimates put unemployment among those 18 and above at just over 17%. Although this reflects a modest reduction since 2007, it has been insufficient to absorb all those seeking employment, especially among our talented youth. We can and shall do more.

 

16. Our Economic Diversification Drive (EDD) is a key instrument for job creation. Since its 2010 inception, EDD has been facilitating employment generating business opportunities by promoting the consumption of local products. While our immediate focus has been leveraging public procurement in support of domestic industries, as we move forward our emphasis will shift to developing greater internal capacity for export-led growth, while continuing to value local goods and services.

 

17.  So far a total of P13.3 billion worth of goods and services were recorded since the inception of the initiative. Out of this figure, the value of local manufacturers and service providers (EDD purchases) amounted to P590.5 million for 2010/2011, P1.8 billion for 2011/2012 and 2012/2013 and P2.3 billion for 2013/2014. Over one thousand enterprises have so far been registered under the EDD Programme, which has contributed to the employment of 28,000 Batswana.

 

18. We have already begun implementing our EDD Medium to Long Term Strategy, to develop sustainable sectors for economic growth and diversification. A leading example is the Leather Sub-sector Strategy, which is focused on the establishment of a Leather Park in Lobatse at a total cost of about P225 million. Government has agreed to finance the park’s primary infrastructure, a Common Effluent Treatment Plant, estimated to cost P102 million, while other components of the project will be financed through private sector investment.

 

19. Government had also budgeted over P20 million to provide temporary assistance for over 12 months to support 34 textile companies, employing 2,912 workers.

 

20. While the nurturing of SMMEs, support for existing industries and value addition remain critical in our achievement of job creation, we further anticipate that over the next few years local formal sector employment will be generated with the emergence of new economic opportunities through the synergies generated by the development growth nodes or clusters across the country.

 

21. In the Chobe region, for example, we anticipate an expansion of opportunities in tourism, construction, transport services and agriculture resulting from the construction of the road and rail bridge at Kazangula and phase one of the water pipeline to Pandamatenga, along with associated infrastructure. It is estimated that when completed these two mega-projects will create over 9000 permanent jobs.

 

22. Additional emerging labour intensive opportunities are already being generated in our urban areas, as reflected in Selebi-Phikwe’s development as a metallurgical hub, the continued growth of Gaborone as a global diamond as well as regional technical services centre, and Francistown’s growth as a nexus for trade and transport. We further anticipate additional jobs through synergies generated by new mining activities, the continued expansion of commercial agriculture and the development of Trans-Kgalagadi road and potential rail corridor.

 

COMPETITIVENESS    

 

23. A key to unlocking these job creation opportunities will be increasing our global competitiveness. To improve our competitiveness ranking in the area of goods market efficiency we have tightened our market monitoring for greater efficiency in the provision of goods and services, while the Competition Authority is reviewing mergers and potential cartel activity involving both local and foreign companies.

 

24. Madam Speaker, job creation is inevitably linked to investment. In this respect the latest FDI Intelligence report indicates that Global Greenfield FDI showed signs of recovery, increasing by an estimated 11% from 2012 to 2013. The increase in local investment has been even greater, with UNCTAD’s 2014 World Investment report showing Botswana having grown by 27% in 2013.

 

25.  The Botswana International Trade Centre (BITC) continues to promote our country as a competitive location for investment, making business contacts and generating leads. During the 2013-2014 financial year, BITC helped realise a total combined investment capital of just over 1 billion pula, of which P 642 million was from foreign direct investment (FDI) and P449 million came from new domestic investments. In 2012/13, BITC further recorded P1.9 billion worth of goods and services exported into the region and beyond, of which P738 million was attributable to financial and international business services by the financial services cluster.

 

26. Botswana was ranked number one in the 2014 Baseline Profitability Index, surpassing Hong Kong as a location for medium to long term returns on investment. In essence the Index suggests that investors can expect to do well here once they have established themselves in our market.

 

27. Government is, furthermore, working to limit the number of licenses and permits, while allowing mixed land use zoning, adopting risk based approach for Environmental Impact Assessments and Management Plans, and decentralising the management of electricity connections.

 

28.  Government has also embarked on a National Work Ethic programme to promote productivity. So far, 254 facilitators have been assessed to implement the programme, which commenced in May 2014.

 

29. The drafting of a Bill which will provide the legal framework for the establishment of Special Economic Zones and the Special Economic Zone Authority is being finalized.

 

30. The Rural Development Council (RDC) has been upgraded as the national consultative body to promote and coordinate the implementation of rural development policies and programmes. As a result community based projects such as the Zutshwa Salt Project and the Mogobane Irrigation Scheme, to mention some, have been resuscitated.

 

CITIZEN EMPOWERMENT

 

31. Madam Speaker, it is pleasing to note that to date, CEDA has funded 5,462 enterprises with a total value of nearly P8.55 billion, in the process creating over 48,935 thousand jobs.  During the 2013/14 financial year, CEDA assisted 151 new enterprises with a total monetary value of P152 million, collectively generating 1042 new jobs.

 

32. Since its inception, LEA has also facilitated the creation of 4995 new jobs, including 568 in the ongoing financial year. The Authority has further trained a total of 9,317 entrepreneurs. In an effort to inculcate an entrepreneurial culture, LEA embarked upon the Entrepreneurship Awareness Workshops among secondary school leavers, vocational trainees and prison inmates; over 26,000 of whom have been trained.

 

33. Madam Speaker, through the Botswana Bureau of Standards (BOBS), we have encouraged our small and medium enterprises to implement quality assurance activities within their businesses. Progress has been made in certification of goods especially in the building and construction industry. To further ensure that prescribed goods entering our borders comply with domestic standards, a BOBS office has been opened at the Tlokweng Border.

 

RULE OF LAW

 

34. Madam Speaker, adherence to the rule of law remains a cornerstone to our national development. It is thus encouraging that independent comparative surveys, as well as domestic polling, consistently place us among the best in the world as well as first in Africa in terms of our upholding the rule of law while ensuring the safety and security of all our citizens. These surveys include:

 

• 2014 Ibrahim Index of African Governance, where we ranked first in the category of safety and security;

• World Justice Project’s 2014 Rule of Law Index, where we were ranked 25th in the world as well as first in Africa;

• 2014 Global Peace Index where we were at 36th place, ranking above half of European countries surveyed;

• 2014 Legatum Index for Governance and Rule of Law, where we were ranked 28th in the world; and

• 2013 Global Democracy Index, where besides ranking 35 out of 167 countries we achieved a near perfect score in the area of civil liberties.

 

35.  In light of such reputable findings it is unfortunate to say the least that some individuals, working through foreign as well as domestic media, including rumour mongering on social media, have attempted to instil the perception of Batswana living in fear. This is in an apparent effort to undermine this country’s longstanding and shared record of peace, order and good Government.

 

36. While the mass circulation of false and malicious reports intended to incite undue alarm may be aimed at promoting the political agenda of some, it is at the collective cost of tarnishing the image of the country as a whole. It is also a threat to the economy we all must depend upon for our livelihoods. Such disinformation should therefore be rejected with contempt by all peace-loving Batswana. All citizens, residents and potential visitors to Botswana can be confident that this Government will continue to both abide and uphold the rule of law without fear or favour.

 

37. Let me, nonetheless, also observe that we have not, and shall not, allow past achievements or international accolades to breed complacency as we recognise that, here as elsewhere, criminal activity is constantly evolving and increasingly sophisticated. We therefore remain determined to pursue a zero tolerance approach to all forms of criminal activity, including corruption.

 

38. To counter emerging domestic and trans-national challenges the Police Service has deployed integrated law enforcement strategies to combat all forms of criminality and anti-social behaviour. This has involved an ongoing redirection of resources to deal with violent and intrusive, cross border and cyber based criminal activities.

 

39. Whilst total recorded crime excluding road traffic violations rose by 4.7% during the year 2013, significant reductions were, however, registered in respect of violent and intrusive crimes.  Offences in this category, which included burglary, store breaking, robbery, house breaking, threats to kill, murder, rape, motor vehicle and stock theft, declined by 15.4%.

 

40. Road traffic management poses an additional policing challenge. Analysis of road accidents shows a youth bias, expressed in reckless driving, often aggravated by the influence of alcohol. As a result of the increase in the intensity of road policing initiatives, the number of detected road traffic offences rose by 32.4%, while there was a corresponding decrease in the number of fatal road accidents by 2.6%.

 

41. Madam Speaker, the Department of Prisons and Rehabilitation continues to improve security in the prisons and rehabilitation of offenders. While overcrowding has been a problem in some of the Prison institutions, there has been substantial reduction in congestion since 2008. In June 2014 there were 3824 offenders held in prisons, which was 13% below the authorised holding capacity.

 

42. Madam Speaker, the internal and external challenges of today’s constantly changing security landscape, call for a structurally aligned, strategically focused and adequately resourced, as well as highly trained and motivated, defence force. The BDF will thus continue to evolve its structures and strategies to defend the nation, while continuing to provide assistance to other law enforcement agencies in combating crime, including poaching.

 

ACCESS TO JUSTICE

 

43. Madam Speaker, as was most recently demonstrated in the Judgments of the High Court and the Court of Appeal upholding the constitutionality of the Standing Orders of this very House, our Judiciary continues to independently and effectively deliver on its constitutional mandate of settling disputes, both large and small, without fear or favour.  This Government will, as always, respect decisions of the Courts and expects all citizens to do the same.  Equally, we must all display tolerance and recognize everyone’s right to approach the Courts for the resolution of any legal issue no matter how strongly we may disagree.

 

44. To improve everyday access to justice several special court projects like the stock theft, maintenance, traffic, small claims and most recently corruption court have been put in place so as to speed up and improve the case disposal rates, while promoting greater access to justice by simplifying court rules and processes to make them more user friendly.  In addition a Court Annexed Mediation will be in place by the end of the current financial year.  This f

The EU at the G20 Summit in Brisbane, Australia – Supporting global recovery

On 15 and 16 November 2014, European Commission President Jean-Claude Juncker and European Council President Herman Van Rompuy will participate in the 9th edition of the G20 summit in the Brisbane Convention and Exhibition Centre, Brisbane, Australia.

At the G20 summit in Brisbane (Australia) the President of the European Commission, Jean-Claude Juncker, and the President of the European Council, Herman Van Rompuy, will push for the adoption of a strong Brisbane Action Plan on Growth and Jobs to put the G20 collectively on a higher growth trajectory.

This and the European Union’s views on other key issues on the summit agenda (financial regulation, tax avoidance/tax evasion, development, anticorruption and energy matters) are reflected in the joint letter by the two Presidents to EU Heads of State and Government of 21 October 2014.

A background briefing by Commission and Council representatives will be held in the Berlaymont press room (for accredited journalists only) on Monday 10 November at 9am.

Background

The G20 leaders’ process has been co-initiated in 2008 by the European Union. The G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.

The European Union thus is a full member of the G20 and is usually represented at G20 summits by the President of the European Commission and the President of the European Council.

The Brisbane Summit is the 9th edition of the Group of 20 (G20) Summit of the world’s major advanced and emerging economies. Together, the G20 members represent around 90% of global GDP, 80% of global trade and two-thirds of the world’s population. This year, Australia welcomes Spain as a permanent invitee; Mauritania as the 2014 chair of the African Union; Myanmar as the 2014 Chair of the Association of South-East Asian Nations (ASEAN); Senegal, representing the New Partnership for Africa’s Development; New Zealand; and Singapore. The 10th edition of the G20 Summit will be hosted by Turkey in 2015.

For more information:

Joint letter from the Presidents of the European Commission and the European Council ahead of the Brisbane G20 Summit: http://europa.eu/rapid/press-release_MEMO-14-600_en.htm

G20 website of the Australian Presidency: https://www.g20.org/

Two Europes or One Europe?

European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

Valedictory speech by President Barroso

European Parliament plenary session

Strasbourg, 21 October 2014

Mr President, Honourable Members,

First of all, I would like to thank you for the invitation to address this Parliament in what would be the last time I have this opportunity. In fact, we are coming to the end of my second mandate as the President of the European Commission and I am very happy to be here with you and my colleagues to present to you our bilan, since this is my second Commission, I think I can also refer to the last ten years.

I want to share with you my feelings, my emotions, what I think about the way the European Union has responded to these very challenging times and what I think are the most important challenges for the future.

I think you can agree with me that these have been exceptional and challenging times. Ten years of crisis, and response of the European Union to this crisis. Not only the financial and sovereignty debt crisis – let’s not forget at the beginning of my first mandate we had a constitutional crisis, when two founding members of the European Union rejected, in referenda, the Constitutional Treaty. So we had a constitutional crisis, we had a sovereign debt and financial crisis, and in the most acute terms we now have a geopolitical crisis, as a result of the conflict between Russia and Ukraine.

The constitutional crisis that we had was in fact solved through the Lisbon Constitutional Treaty. The reality is that at that time, many people were saying that it would be impossible for the European Union to find a new institutional setting. And in fact there were moments of ambiguity and doubt. But basically, we could keep most of the acquis of the European Union, including most of the new elements of the Lisbon Constitutional Treaty, which was ratified by all Member States including those that today seem to have forgotten that they have ratified the Lisbon Treaty.

More recently – because I learned to leave to the end the economic issues because they are still with us – we had this very serious challenge and threat to our stability, in Europe, coming from the unacceptable behaviour of Russia regarding Ukraine. And we took a principled position. We offered Ukraine an association agreement and a free trade agreement and I am happy that, in spite of all the difficulties, Ukraine was there, signing and ratifying the association agreement, and I want to congratulate this Parliament, because the same day at the same hour the Parliament in Ukraine was ratifying this agreement, you were also ratifying the agreement showing you can offer hope to Ukraine as part of the European family of nations.

At the moment I am speaking to you, this crisis is not yet solved – we know that. But I think we can be proud that we have kept a position of principle, that we have condemned in the most unequivocal terms the actions of Russia and that in fact an association agreement was ratified, not only with Ukraine, but also with Georgia and Moldova because I believe we have a duty to those countries that are looking to Europe with their spirit and their hope to share with us the same future and because they want to share with us the same values.

At this moment we are still mediating and, today, there is a meeting mediated by the Commission on energy with the Russian government and the Ukrainian government, so a political negotiated solution is possible, we are working for that. It is in the interest of all the parties to have a political agreement, but a political agreement that respects the principles of international law, a political agreement that respects the right of country that is our neighbour to decide its own future and a political agreement that respects the sovereignty, the independence of that country. So, we should be proud of what we have been doing in this very challenging geopolitical crisis.

And we also had the financial and sovereign debt crisis. The reality is that the crisis was not born in Europe, but the fact is that because we were not prepared, because the Euro-area had not yet the instruments, we were very much affected by it – not only in financial terms, in economic terms, in social terms and in political terms. I think this crisis was probably the biggest since the beginning of the European integration process in the 50s of the last century. Let’s now put things into perspective.

Dear Members of Parliament,

Let’s remind ourselves what was the main opinion of most analysts in the economic and financial media, or even many of our countries or outside of Europe, about what could happen: everybody was predicting Greek exit, Greece exiting the Euro, and, of course, Greece exiting Euro would certainly, immediately have had a cascading effect in other countries, a domino effect that was indeed already felt in countries such as Ireland or Portugal. But let’s not forget, Spain was also under very heavy pressure, and Italy. We were staring into the abyss. I remember well what happened in discussions in the margins of G20 in Cannes in 2011, I remember well when analysts were predicting with almost unanimity a Greek exit and at least 50% of them were predicting the implosion of the Euro. And what happened? Not only was there no exit of the Euro, now we are to welcome the 19th member of the Euro, Lithuania will join us in the 1st of January 2015. And not only did Greece not leave the Euro area, it has enlarged and the European Union has been enlarging as well. This is a point that has been very much underestimated in our analysis.

2004, the year I had the pleasure and the honour to assume the leadership of the European Commission, do you remember that we were 15? Today, we have 28 countries. So we have almost doubled the membership of the European Union during this crisis. Is there a better proof of the resilience and the capacity of adaptation of our Union? The fact that we were able to remain united and open during the crisis I think confirms the extraordinary resilience and the strength of the European Union and this should not be underestimated.

I know that, for some, these things do not count for much. They are in a way making an idealisation of the past; they dream probably of a closed Europe; they think Europe was better when half of Europe was under totalitarian communism. I don’t think that. I think Europe today is better than when half of Europe was under communism. The fact that the European Union was able, during all this crisis, to open, to consolidate and to unite on a continental scale almost all of Europe around the values of peace, of freedom and of justice, I think it is a great thing we should commemorate and not to be ashamed of, as some seem to be.

So, this is I think also a reason to commemorate. Many people were predicting, as you probably remember, those of you following these issues at that time, that the European Commission would not be able to function with 25 or 27 or 28 Members, that the European Union would be blocked. The reality is that the European Union was not blocked by the enlargement; the reality that I can share with you now is that sometimes it was more difficult to put together some of the founding Members of the Union than all the 28 countries of Europe.

So I think we should be proud of that as well, collectively, because the European Union was able to remain united and open during the crisis. And when I say open, I mean it in all senses of the word, including with an open attitude towards the world. For instance, when we have promoted a proactive climate agenda after the failure of the Doha Development Round and the Doha trade talks. And we are now leading in that sense, because I believe that trade can be one of the best ways to support growth globally and in the European Union. Or when we, because it was an initiative of the European Union, went to the former President of the United States of America, inviting him and convincing him to organise the first G20 meeting at Heads of State or Government level, because that was a way of having a global cooperative approach and to avoid the return to ugly, nasty protectionism. That could be a temptation in times of crisis. So we were able to keep Europe not only united and, in fact, enlarging its membership, but also open to the rest of the world.

But now, are we stronger or are we weaker? I know that the most critical people today will say that we are weaker. But are we really?

In fact, when the crisis erupted, we had almost no instruments to respond to it. We were facing, as it was said at that time, an unprecedented crisis. Yet we had no mechanisms, for instance to support the countries that were facing the immediate threat of default. A lot has been done. We have collectively, the Commission and the Member States and always with the strong support of the Parliament, we have created a new system of governance. We have today a much more reinforced governance system than before, including with unprecedented powers for the community institutions, and we have done everything to keep the community method at the centre of our integration. For instance, the Commission today has more powers in terms of governance of the Eurozone than before the crisis. The European Central Bank has today the possibility to make direct supervision of the banks in Europe, something that would have been considered impossible earlier; it would have been almost unimaginable before the crisis. And I remember when we spoke about the banking union, when I gave an interview saying that we need a banking union, I received some phone calls from capitals saying ‘Why are you speaking about the banking union? This is not in the Treaties’. And I responded, ‘Yes it is not in the Treaties, but we need it if we want to fulfil the objective of the Treaties, namely the objective of stability and growth’. And today we have a banking union.

Honourable members,

If we look at things in perspective and we think where we were ten years ago and where we are now, we can say with full rigour and in complete observance of the truth that today the European Union, at least in the euro area, is more integrated and with reinforced competences, and we have now, through the community method, more ways to tackle crisis, namely in the euro zone. Not only in the system of governance in the banking union, but also in the legislation of financial stability, financial regulation, financial supervision.

We have presented around 40 new pieces of legislation that were all of them approved by the European Parliament. And once again I want to thank you, because in almost all those debates the European Parliament and the European Commission were on the same side of the debate and were for more ambition, not less ambition for Europe. And so today, I can say that we are stronger, because we have a more integrated system of governance, because we have legislation to tackle abuses in the financial markets, because we have much clearer system of supervision and regulation. So, I think we are now better prepared than we were before to face a crisis, if a crisis like the ones we have seen before should come in the future.

Of course, you can say that there are many difficulties still. Yes, and I am going to say a word about this in a moment regarding the prospects for growth, but please do not forget where we were. We were very close to default, or, to use a less polite word, to a bankruptcy of some of our Member States. And look at where we are now. From the countries that had to ask for adjustment programmes, Portugal and Ireland exited the programme successfully. Ireland is now one of the fastest growing countries in Europe. And in fact all the others that were under the imminent threat of collapsing, are now in a much more stable mood. Spain, that asked for a programme for the banks, also has improved successfully. So in fact only two countries of all those, because we should not also forget the Central and Eastern European countries that also had adjustment programmes, even if they were not yet in the euro area, only two countries are still completing their adjustment programmes.

The deficits now on average in the Eurozone are 2.5%. This is much less than in the United States or in Japan. So, in terms of stability, we are much better now than before. By the way, the Eurozone has a trade surplus. The European Union in general now will have a surplus in goods, in services and, for the first time in many years, in agriculture.

I am saying that because very often the opinion in some of the political sectors is that we are losing with globalisation. This is not the case. Some countries of our Union in fact are not winning that battle, but on average we can say that Europe is gaining the global battle in terms of competition, namely in terms of trade and investment.

But of course, growth is still timid. I think that basically we cannot say that the crisis is completely over, because threats remain, but we have won the battle of stability. Today nobody in the world will honestly bet on the end of the euro. The euro has shown that it is a very strong, credible and indeed stable currency. The reality is that our growth is still timid and clearly below expectations.

So what can we do for growth? This is the important question. And for that I need to make a reminder once again. I know very well that very often the European Union policy and namely the European Commission policy has been presented as completely focused on austerity. I think this is a caricature.

We have constantly asked at least for three important lines – fiscal consolidation certainly, for the countries that are feeling the pressure of the markets. It would be completely irresponsible if they could not frontload a programme of rigour to correct their public finances, but we have always said with equal vigour, probably some would not like to listen, the need for structural reforms, for competitiveness, because the reality is that even before the crisis we were growing under our potential, that is the reality, and with serious problem of lack of competitiveness in some of our countries and so that is why we needed more ambitious structural reforms.

But we have also argued in favour of investment. I have always said that we need more investment, public and private investment. Private investment will come the more we show that we have competitive economies that we can attract private investment. Indeed I am now happy to see that most of our countries, certainly at a different pace, but they are pursuing ambitious structural reforms that would have been considered completely impossible before the crisis.

And the reality is, if we want to be honest in terms of the analysis that the countries that have suffered the most during the financial crisis were precisely those that have lost in terms of cost competitiveness before the crisis. And now, for instance the reforms that have been made by Spain, by Ireland, by Portugal, by Greece, are impressive.

Now, apart from the political consolidation and the structural reforms, we have always seen the need for more investment. Private investment, but public investment as well. You will remember the debate about the MFF. President Schultz remembers certainly. We were together in many meetings asking the Member States to do more in terms of investment and the most important instrument we have at European level for investment is the Multiannual Financial Framework, that is around one trillion euros.

So if there is not more ambitious investment it was not because of a lack of ambition of this Commission, or a lack of ambition of this Parliament. It was because of the opposition of some capitals. This is the reality. We are for solid investment, targeted investment for growth. Not only with the MFF. Remember the proposals that for instance here in the State of the Union speeches with you I have put forward. The increase of the capital for the EIB that finally was agreed. The project bonds that the Member States have accepted, but only as pilot project bonds. The facility that we have created for SMEs with loans from the EIB and funds from the structural funds, from our budget. Unfortunately only two countries wanted to pursue that line.

Or, for instance, the programme for youth, the Youth Guarantee that we have proposed and that the Member States have agreed. But now with the Youth Employment Initiative, only two countries have accepted to have a dedicated programme for youth employment.

So, my dear colleagues, let’s be clear: we are for investment. I wish all the best to the new Commission and to my friend and colleague Jean-Claude Juncker, to have the support of the Member States for a more ambitious investment programme for the next years. I believe this is possible now, I believe the awareness is much bigger on this matter. But once again this is part of a comprehensive strategy that combines fiscal consolidation with structural reforms and investment, and, of course, all the measures taken by us in terms of the banking union and in terms of financial regulation for stability.

And I’m saying this with this vigour because I think it would be now a mistake, after everything we have done, to give up, to show less determination, to abandon the road of structural reform. I think we have done a part of the job, stability is broadly there, growth, even if it is slower than what we would like to have, but now we need determination to complete the reforms so that sustainable growth, not growth fuelled by debt, excessive public or private debt – because such growth is artificial, it’s a fictional growth, and afterwards, sooner or later, we would pay the price – but sustainable growth – that I believe it is possible if we continue the courageous path of reforms and a stronger governance for the European Union.

I don’t have the time now to go over all the other policies we have been developing over the years. But let me just highlight one or two, because I think they are very much at the moment of decision, and I think they are important.

I’m extremely proud that is was my Commission in my first mandate, in 2007, that put forward the most ambitious programme for climate protection in the world. And we are still leading in the world in terms of the climate agenda.

In fact, we were able to join the climate agenda with the energy security agenda, and I’m saying that because this week we are going to have an important discussion in Brussels at Heads of State and Government level, and I hope that the European Union will keep its leadership role – of course not to be isolated but to have others, because we have a responsibility towards our planet. And this is was certainly one of the great advances of these years, that the European Union was able to make the most important and bold steps in terms of fighting climate change.

Another area where I think we could very proud is – in spite of all the restrictions because of our financial situation – that it was possible in the MFF to get 30% more for Horizon 2020, for research and technology. I think there is a great opportunity now for us to do more in that area, as also in the culture side, with our Creative Europe programme.

The reality is that in some areas it was possible, in spite of the economic and financial crisis, to increase investment at European level.

But I’m also very proud that in spite of the pressures of our budgets, we could always be there in terms of development aid and neighbourhood policy.

Whenever there was a big tragedy in the world, from the tsunami in Indonesia to the recent Ebola crisis, from the Syrian refugee crisis to Darfur, we were there, we were among the first. And I think we, Europeans, should also be proud of that, because we are still, together with our Member States, the most important donor for development aid in the world. That is something that corresponds very much to our values and I’m happy that in spite of all the crises we did not abandon our obligations in terms of development cooperation.

I have already said a word about trade. I think it is very important to keep an ambitious trade agenda, an open Europe but for free and fair trade. And the Commission has concluded a record number of agreements, not only with South Korea, Singapore, Central America – the first region to reach an agreement -, Peru, Ecuador, recently with Canada, with Western Africa, Eastern Africa and Southern Africa. And I could also mention some others that are now progressing, like Japan, the United States and also an investment agreement with China.

So we are the most important trade bloc in the world. We are the biggest economy in the world.

And I’m saying that because today I know it’s very fashionable the pessimism, the defeatism about Europe, what I call the intellectual glamour of pessimism. But I believe that we have a good record to show and I believe that together, collectively, we are much stronger and we can better defend our interests and protect our values.

Dear colleagues – I call you colleagues because I believe we have been sometimes in discussions but we have been colleagues in this great enterprise that is the European project -, I think politically we have some lessons to draw.

One is that we have shown great resilience. I think we can say that the forces of integration are stronger than the forces of disintegration. And I believed that day and night, sometimes in very dramatic moments, sometimes when I had to make dramatic appeals to some capitals: to the richer countries, asking them to show more solidarity; and to the poorer countries asking them to show more responsibility.

Sometimes we have done it very discretely, it’s true. The European Commission is probably more discreet than others. I did not want the Commission to be part of the cacophony of different voices during the most acute moments of the crisis. It was extremely market sensitive that situation. But I can tell you, in my full conscience, that we have done everything we could with existing instruments to avoid the fragmentation of the euro or to avoid a division in the European Union. And I very often had to call on my colleagues in the European Council, Heads of State and Government, to show the ethics of European responsibility.

But one of the lessons I draw from this is that if eventually it was possible to come to decisions, it is true that it was sometimes extremely painful and difficult. And took time. We have said also, and I think it is something that we can all agree: democracy is slower than the markets are.

The Commission would have preferred, and I’m sure this Parliament as well, decisions to be bolder, more comprehensive, faster. But we are a Union of democratic states, we are not a super state. And we have to respect different sensitivities.

One of the conclusions I draw from these ten years of experiences is the need to cooperate between institutions. I know sometimes it is more popular to put forward impossible ideas and to criticise others. But I firmly believe that we need to engage with different institutions, that it is not a solution to oppose the countries to the European Union. On the contrary, we have to show to our countries that they are stronger if they are part of the European Union. That we are not diluting their national identity but, on the contrary, we are asking them to share their sovereignty so they can project better their interests globally. I’m firmly convinced of this.

And I’m saying this to you now, as I am leaving in a few days: my only interest is that these lessons are learned so that we do not repeat some mistakes in the future. At the same time, I think we can say that it is not through confrontation but through cooperation that we can attain our objectives.

At the moment I prepare to hand over this very challenging and interesting job to my good friend Jean-Claude Juncker, I want to say here, on my behalf and on behalf of all my colleagues of the Commission, that we wish the new Commission all the best, that they have a great challenge ahead of them but that they could count also on our support. And I’m sure of the support that this Parliament is going to give to them.

Because, Mr President, the relations were not always perfect. But I think you can agree that we were able to establish a fruitful relationship between the Parliament and the Commission.

I’ve been in this Parliament more than 100 times. There was never a Commission that was so often represented in the Parliament as my two Commissions. We have established this cooperation and I’m so grateful because this Parliament, sometimes with very strong demands, was always supportive of the community method, was always supporting the community institutions. And I believe this is very important for the future of Europe.

My dear colleagues of the European project,

The way to solve the problems we have in Europe is not through revolution and even less through counter-revolution. It’s by compromise, it’s by reform. Evolution and reform. We have to reform to adapt to the new challenges but not with new clashes between the institutions, not with clashes against our countries. And I believe that if this idea of strong cooperation putting the European common good above all else, I think my colleague and friend Jean-Claude Juncker and his new Commission will have success, of course based on the support I’m sure you are going to give them.

Because the European Union is a union of values. In these last days I had to face many journalists and they asked me ‘what was your most emotional moment? Which moment did you prefer?’ And I have many, and I also had very difficult ones, to be honest. But one of my most emotional moment was when, on behalf of the European Union, together with Martin Schulz and the President of the European Council, Herman Van Rompuy, we received the Nobel Peace Prize on behalf of the European Union.

I think this was a powerful reminder sent to us from the global community that we count in this world and that what we do is very important. That the values that were at the origin of the creation of our Union, namely the value of peace, are still at our essence today. And that we have to fight for them.

And I think is the moment I really said I want to share with all those in the different institutions, including this Parliament, that have been working for a united, open and stronger Europe. And when I leave this office, with all my colleagues at the Commission, I can tell you that we have not achieved everything we could, or everything we would have liked to have achieved, but I think we have worked with the right conscience, putting the global interest of the European Union above specific interests. And I believe that now there are conditions to continue to do work for a united, open and stronger Europe.

I thank you for your attention.

Auf wiedersehen, goodbye, au revoir, adeus.

Muito obrigado, thank you very much.

Following the statements of the Members of the Parliament, President Barroso made the following closing remarks:

Mr President,

I should like to take up a number of the points raised by the previous speakers. Firstly, I believe that proof that we – and by “we” I mean the Commission of which I have had the honour of being Presidentare on the right track lies in the fact that the criticisms have come from the opposite ends of the spectrum, though often couched in the same terms, resolutely ignoring the difficulties and extraordinary challenges that we have had to face and failing to put forward any coherent response.

The truth is that we have been through possibly the worst economic and financial crisis we have seen since the countries of Europe began to come together and that it was not the European Union or Europe that spawned the crisis. This is what some defenders of national sovereignty, as they like to call themselves, do not or will not understand. It was not Europe that created excessive private debt or caused the financial sector to behave irresponsibly. Quite the opposite – this all took place under national scrutiny, or rather lack thereof. Europe is the answer. We now have one of the most ambitious regulatory and supervisory systems in the world, if not the most ambitious. In other words, saying that Europe is worse off because of the European Union is simply not true. It shows a complete lack of respect and a lack of intellectual rigour. Europe is not responsible for the financial crisis, which had its roots in the United States. Europe had its weaknesses, but what the European Union did was to respond. The blame for this does not lie with the European Union, and I believe this is something that all those who share the European ideal – be they at the left, right or centre of the political spectrum – should have the courage to state, because by remaining silent we will be reinforcing the populist rhetoric of the extreme right and extreme left.

I listened carefully to those of you who said that populism was on the rise and who laid the blame for this at the door of the European Union. Ladies and gentlemen, this is not true. It is abundantly clear that populism and xenophobia exist outside the European Union. Look at the anti-immigrant incidents that have taken place in Switzerland. Look at what happened in Norway when that terrorist killed all those young people because he was opposed to a multicultural Europe. Look at the Tea Party movement in the United States. Is Europe to blame for America’s Tea Party movement?

We are currently seeing an aggressive form of populism around the world, which espouses arguments from both the left and the right. Sometimes it is difficult to tell the difference. So to say the European Union is responsible for this shows a lack of intellectual rigour and a lack of political integrity. What we have to do, as Europeans, is to demonstrate that it was not Europe that caused the crisis or the public debt in the Member States. There was little that Europe could do when, for example, one Member State falsified its accounts. This is something Europe had to face. The first initiative of my second Commission was to ask the Member States to give us more powers to supervise national statistics, because in my first Commission this was rejected. And not by Greece. It was rejected by the big Member States, which were reluctant to hand more powers over to the European Union. So if we really want to have a debate, let us be quite clear and strict in terms of intellectual integrity and political candour.

Ladies and gentlemen, there is one thing that I would like to say to you with the greatest of conviction. The team that I have had the honour of heading has worked with enormous commitment and diligence, whilst always putting Europe’s interests first. There is something that I want to say to you, since this is a political assembly with a wealth of political dynamics, but where the emphasis is always on the common European good. My Commission was not made up of colleagues from the EPP, socialists or liberals. It was made up of people who worked for Europe. My party is the EPP and I am proud of that, but, as President of the Commission, my party is Europe and that is the message I wish to convey, in particular to the major forces of the pro-European centre-left and centre-right.  Differences must, of course, be aired, but they must not be allowed to weaken the pro-European camps. We cannot hand the extreme right or extreme left anything else on a plate. Pro-European forces must come together. They must have the courage to defend Europe. They must do so at national level, and not just here in Strasbourg. We need a major coalition of this nature for Europe because I believe that we have the strength to win the battles of the present and those of the future.

Thank you very much for your attention.

Daily News of 2014-07-31

MEX 14 / 31.07

DAILY NEWS

31 / 07 / 14

G-7 Leaders Statement on Ukraine

G-7 leaders joined yesterday in expressing their grave concern about Russia’s continued actions to undermine Ukraine’s sovereignty, territorial integrity and independence. “This week, we have all announced additional coordinated sanctions on Russia, including sanctions on specific companies operating in key sectors of the Russian economy. We believe it is essential to demonstrate to the Russian leadership that it must stop its support for the separatists in eastern Ukraine and tangibly participate in creating the necessary conditions for the political process.”, said G-7 leaders in a joint statement. “We remain convinced that there must be a political solution to the current conflict, which is causing rising numbers of civilian casualties. We call for a peaceful settlement of the crisis in Ukraine, and underline the need to implement President Poroshenko’s peace plan without any further delay.”

Read the full statement online .

June 2014: Euro area unemployment rate at 11.5%; EU28 at 10.2%

The euro area (EA18) seasonally-adjusted unemployment rate was 11.5% in June 2014, down from 11.6% in May 2014, and from 12.0% in June 2013. This is the lowest rate recorded since September 2012. The EU28 unemployment rate was 10.2% in June 2014, down from 10.3% in May 2014, and from 10.9% in June 2013. This is the lowest rate recorded since March 2012. These figures are published by Eurostat, the statistical office of the European Union.
Eurostat estimates that 25.005 million men and women in the EU28, of whom 18.412 million were in the euro area, were unemployed in June 2014. Compared with May 2014, the number of persons unemployed decreased by 198 000 in the EU28 and by 152 000 in the euro area. Compared with June 2013, unemployment fell by 1.537 million in the EU28 and by 783 000 in the euro area. European Commissioner for Employment, Social Affairs and Inclusion László Andor commented: “The unemployment figures for June 2014 confirm the first signs of economic recovery we have been seen in Europe over the past year. But while job destruction seems to have come to a halt, the reduction of unemployment has only been very modest so far. Our objective must be to create the right macroeconomic conditions for sustainable recovery and for Member States to implement structural reforms such as the Youth Guarantee to ensure that the recovery is job-rich. Only then will we see the creation of hundreds of thousands of jobs every month, and an end to these excessively high and unacceptable levels of unemployment.”

Other news

Bank transfers: Single Euro Payments Area to bring easier payments and transfers in euro area from 1 August

The Single Euro Payments Area (SEPA) creates a true European Single Market for retail payments in euro where and transfers, direct debits and payments between Member States are as easy and fast as the equivalent domestic transactions. It will become operational in all eurozone countries on 1st August 2014. It will also apply to euro-denominated transactions in non-eurozone countries from 30th October 2016. SEPA will greatly facilitate euro payments for citizens and businesses and increase competition between banks.

Commission adopts French programme to use €499 million from Fund for European Aid to the Most Deprived

The European Commission has approved today the French Operational Programme to use the new Fund for European Aid to the Most Deprived (FEAD). France, the first Member State to have its FEAD programme adopted, will receive 499 million euros in current prices in the period 2014-2020 to support the provision of food aid to those most in need in the country (complemented with €88 million from national resources). Commissioner for Employment, Social Affairs and Inclusion, László Andor, commented: “I welcome the swift adoption of the French operational programme. The Fund for European Aid to the Most Deprived will play a key role to help Europe’s most vulnerable citizens with food or other basic goods. In many Member States severe material deprivation is on the rise and many households cannot afford a meal. I am looking forward to approving the programmes of all the other Member States, so that the rest of the 3.8 billion euros available can be put to the best use in our fight against poverty”.

Protecting Intellectual Property Rights: Customs authorities detain nearly 36 million fake goods at EU borders in 2013

Customs authorities in the EU detained almost 36 million items suspected of violating intellectual property rights (IPR) in 2013, according to the Commission’s annual report on customs actions to enforce IPR. Although this is less than previous years, the value of the intercepted goods still represents more than € 760 million. Today’s report also gives statistics on the type, provenance and transport method of counterfeit products detained at the EU’s external borders. See also the Q&A: MEMO/14/501 .

EU develops new driverless car parking system – so you never waste another minute looking for a space

There are only a few minutes before your flight check-in closes, or before your train departs, but you now have to spend precious time hunting for a free space at the airport or station car park. Imagine leaving your vehicle at the main entrance and letting the car do the rest on its own. Researchers from Germany, Italy, the UK and Switzerland are working on this, and successful tests took place at Stuttgart airport earlier this year. €5.6 million of EU funding is invested in the system which will be available in the coming years. Vice President Neelie Kroes said:We need to think ahead and find smarter ways to move, to save time, money and our environment. Who wouldn’t want to save time parking their car?

Compromise found: Part of EU fleet can continue fishing in Mauritanian waters until end of 2014

EU vessels fishing shrimps and small pelagics in Mauritanian waters in the framework of the EU-Mauritania Fisheries Protocol will be able to continue to do so until 15 December 2014. This is part of the compromise which EU negotiators found last night in Nouakchott after the Mauritanian authorities had upheld the position that all EU vessels would have to leave Mauritanian waters as of 1 August 2014. According to the agreement found, Mauritania accepted EU fishing activities for a period of 24 months as part of the bilateral Fisheries Protocol, hence the shrimps and small pelagics fisheries which started in January 2013 can continue, whereas those EU vessels which had been fishing tuna and demersals since August 2012 during a transitional period will need to leave Mauritanian waters today. Furthermore, the EU and Mauritania agreed to continue the discussions for a renewed Fisheries Protocol so to allow the full EU fleet to resume their activities soon. More information

Flash estimate – July 2014: Euro area annual inflation down to 0.4%

Euro area annual inflation is expected to be 0.4% in July 2014, down from 0.5% in June, according to a flash estimate from Eurostat, the statistical office of the European Union. Looking at the main components of euro area inflation, services is expected to have the highest annual rate in July (1.3%, stable compared with June), followed by non-energy industrial goods (0.0%, compared with -0.1% in June), food, alcohol & tobacco (-0.3%, compared with -0.2% in June) and energy (-1.0%, compared with 0.1% in June).

Aides d’État: la Commission conclut que la cristallerie belge Val Saint-Lambert a reçu des aides d’État incompatibles; autorise la vente de certains de ses actifs

La Commission européenne a conclu que certaines des mesures d’aide octroyées par la région wallonne à Val Saint-Lambert SA (VSL) ont conféré à l’entreprise un avantage indu sur ses concurrents, en violation des règles de l’UE en matière d’aides d’État. VSL doit à présent rembourser ce montant, majoré des intérêts, pour atténuer les distorsions de concurrence engendrées par l’octroi de ces aides incompatibles avec le marché intérieur européen.

Mergers: Commission approves acquisition of Pirelli’s steel tyre cord business by Bekaert

The European Commission has approved under the EU Merger Regulation the proposed acquisition of the steel tyre cord business of the Italian company Pirelli by its Belgian-based rival NV Bekaert SA. Steel tyre cord is used to reinforce radial tyres and has a major impact on their safety and performance. The Commission concluded that the acquisition would not raise competition concerns as the merged entity’s customers, which are large, multinational tyre companies, have countervailing buyer power which is further strengthened by over-capacity in the steel tyre cord market. In addition the Commission found that Bekaert will continue to face effective competition from a number of other strong competitors located outside the European Economic Area (EEA), in particular in Belarus, Korea and China. The transaction was examined under the normal merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.7230 .

Mergers: Commission clears acquisition of Uniqa Life by Uniqa Insurance Group.

The European Commission has approved under the EU Merger Regulation the acquisition of Uniqa Life of Italy by the Uniqa Insurance Group (Uniqa) of Austria. Uniqa Life is a life insurance company active only in Italy, while Uniqa is an Austrian-based insurance group offering products and services in all insurance sectors (life, non-life, re-insurance) in a number of European Economic Area (EEA) countries. The Commission concluded that the proposed acquisition would not raise competition concerns given the very low combined market shares resulting from the transaction. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.7298 .

Mergers: Commission clears acquisition of GEA’s heat exchanger business by private equity company Triton

The European Commission has approved under the EU Merger Regulation the acquisition of sole control over the German heat exchanger business of GEA by the private equity company Triton of Jersey. Triton invests in medium-sized businesses in Northern Europe, in particular in Austria, Germany, Switzerland, and the five Nordic countries. GEA’s heat exchanger business manufactures a broad portfolio of heat exchangers serving different applications such as power, climate and environment or oil and gas. The Commission concluded that the transaction would not raise competition concerns, because the overlaps between the activities of Triton’s portfolio companies and GEA’s heat exchanger business are limited. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.7306 .

Mergers: Commission approves acquisition of Doeflex by INEOS in plastic compounding sector

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Doeflex Compounding Limited (Doeflex) of the UK by INEOS AG (INEOS) of Switzerland. Doeflex is a PVC compounder with a single manufacturing facility located in Swindon, UK, controlled by two individuals. INEOS is a global manufacturer of petrochemicals, speciality chemicals and oil products. Among other activities, INEOS produces commodity S-PVC E-PVC, plasticizers and S-PVC compounds in the European Economic Area (EEA). The Commission examined the effects of the merger on competition in the area of S-PVC compounding and more specifically for the manufacture and sale of dry blended and gelled compounds in North Western Europe, Western Europe and the EEA. S-PVC compounds are intermediate products between S-PVC and end-products. They are obtained by blending additives such as plasticisers, heat stabilisers and pigments with S-PVC. S-PVC compounds are then further processed to produce end-products such as pipes, window and door frames, cables, etc. The Commission concluded that the transaction would not raise competition concerns because the merged entity would continue to face strong competition after the merger and customers would still have sufficient alternative suppliers in the market for S-PVC compounds and its sub-segments. The Commission found, in particular, that other strong players, such as Kem One, which recently acquired Solvay’s compounding business, and Begra will continue to compete with the merged entity in these markets. The Commission also found that in spite of the vertical links between INEOS’s upstream activities in S-PVC, E-PVC and plasticizers and its compounding business, the proposed transaction does not affect INEOS’s ability and incentives to shut out competitors from the S-PVC compounds market or customers from access to supplies because INEOS was already vertically integrated pre-transaction and the addition of Doeflex’s business has limited impact on the pre-existing situation because of its limited size. More information will be available on the competition website, in the Commission’s public case register under the case number M.7132 .

Mergers: Commission clears acquisition of Bull by Atos

The European Commission has approved under the EU Merger Regulation the acquisition of Bull S.A. by Atos S.E., both of France. Atos delivers IT services, including managed services, business process outsourcing, consulting & systems integration and cloud & enterprise software. Bull is active in the development of High Performance Computing (HPC) supercomputers and uprange servers, in the design, building and managing of data centres, HPC infrastructure and cloud computing solutions, in the consulting as well as integration and maintenance of critical business applications and in the design, consulting and integration of end-to-end security solutions. The Commission concluded that the proposed acquisition would not give rise to competition concerns, given the parties’ moderate combined market positions resulting from the proposed transaction and the presence of a number of strong players that are active on the respective markets. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.7308 .  

President Barroso’s speech at the Euroscience Open Forum

European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

President Barroso’s speech at the Euroscience Open Forum

Science building bridges

Euroscience Open Forum

Copenhagen, 22 June 2014

Your Majesty,

Dear Minister [Sofie Carsten-Nielsen, Minister of Higher Education and Science]

Dear Chair of ESOF [ESOF2014 Champion Professor Klaus Bock]

Dear President [Euroscience President, Professor Lauritz Holm-Nielsen]

Distinguished Guests,

Ladies and Gentlemen,

It gives me great pleasure to be here with you today for the 2014 Euroscience Open Forum. I would like to thank you for inviting me to take part in this very important event.

In a country with over 400 islands, with three bridges over six kilometres long, what more appropriate theme could have been given to this Forum than “Science building bridges”.

A country world-known for its scientific leadership; for its expertise across a range of fields, from clean technology to biotechnology, from pharmaceuticals to telecommunications.

A country proud and confident about its knowledge-based society, renowned for its openness, and desire to cooperate internationally; a country whose bridge, the Oresund Bridge, links, not just two countries, i.e. Sweden and Denmark, but Europe’s regions, from Scandinavia to Western and Central Europe.

Your Majesty,

Ladies and Gentlemen,

[Europe 2020/Horizon 2020]

As we start to move out of the worst financial and economic crisis since the 1930s, now is the time to focus on building a strong, sustainable future.

On building a bridge between our past scientific traditions and a world where we share increasingly important global challenges and where we need innovative solutions.

That is precisely why, back in 2010, we put in place our new Europe 2020 strategy, designed to build a balanced, knowledge-based economy, with education, science, research and innovation at its very heart.

That is also why we have managed to make the seven year budget for our European research programme, Horizon 2020, 30% larger than its predecessor, despite the slight decrease in the European budget as a whole. It was not easy but we got it. We managed to convince Member States that at least the science and innovation budget should be increased. At 80 billion Euros over seven years, Horizon 2020 is one of if not the largest research and innovation programme in the world, designed to complement other sources of national and private financing.

We have therefore managed to match ambition with resources, giving you the researchers the stability and long term commitment that you need.

This goes to show, as we discuss the challenges facing us in the years ahead, that science does indeed matter for the future of Europe.

Not just to a large audience such as yours, but to everyone in our societies. Because I believe that our social and economic progress and many of the solutions to today’s problems will come from science. And I would even say that “The future of Europe is science”.

[Successes]

As our recent Communication on research and innovation as sources for growth has shown, we have a lot to be confident about.

Europe undoubtedly remains a world leader in science and has the capacity to innovate.

Our European Research Area remains the largest knowledge-production house in the world: we have twice the number of science and technology graduates in Europe than in the United States; and with 7% of the world’s population, we still produce roughly a third not only of the GDP, but also of patents and high impact scientific publications.

And despite the financial and economic crisis we have managed to halve the innovation gap that we still have with the United States and Japan.

[More to do]

But we cannot afford to stand still, in a world where scientific and technological progress is accelerating at an unprecedented pace, and where South Korea is moving further ahead, with China quickly catching us up.

So we must adapt to the new challenges and new ways of working in the 21st Century.

The role of digital technologies and the wealth of information and data that is being produced pose many questions about how science and research will be performed in the future. I know that Commissioner Geoghegan-Quinn, whom I would like to congratulate, for her commitment and passion on these issues during her term as Commissioner, will discuss this particular matter with you on Tuesday morning.

We must also adapt our culture so that women are better represented in research and science, another matter close to my heart: indeed, whilst women hold 45% of all PhDs in Europe, they only represent 30% of career researchers.

Last but not least, we must bring in our younger generation into science and innovation, reinforcing and tailoring our educational systems so that they more fully embrace creativity and risk.

This is key to Europe’s future.

Your Majesty,

Ladies and Gentlemen,

Allow me to highlight briefly five bridges that we have been building and that we must collectively continue to build.

First, we are building bridges between all the scientific disciplines. Our Innovation Union seeks to mainstream science and innovation across all sectors, and cross-fertilise your ideas to develop new technologies, products and services for the complex multi-disciplinary challenges in our societies. This is why Horizon 2020 champions a challenge-based approach and why the European Institute of Innovation and Technology, recently launched its Call for Proposals for the Knowledge and Innovation Communities.

Secondly, we are building bridges between researchers and the general public. Horizon 2020 is a large programme, with a broad set of objectives from excellence in science – with the European Research Council now chaired by Professor Bourguignon – to industrial leadership and a number of key societal challenges, allowing us to focus on the big priorities relevant to every European citizen. I am very proud of the ERC. But in order to ensure that the progress you make, for example on new vaccinations or nano-technology, is properly explained and embraced rather than feared, across society, we need a considerable communication effort from scientists themselves as well as from policy makers. There is an important role for the media here.

Thirdly, we are building bridges between the laboratory and the marketplace. After 30 years of negotiation, we finally agreed a European-wide patent. Once fully implemented, this will reduce the cost by up to 80% for small and medium sized businesses and individual researchers to register their creative ideas. This should encourage more private investment, because at 1.30% of GDP, we still lag behind the United States, Japan or South Korea, where private investment, venture capital and the culture of risk are more widely shared.

Fourthly, we are building bridges between Member States. With the European Research Area, we are encouraging reforms for a greater mobility of researchers and for pan-European research infrastructures.

But our countries must make an equal effort in research if we are to bridge the gap in investment across Europe, and if research opportunities are available across Europe. Collectively, we are missing our Europe 2020 target of 3% GDP in research and development, averaging just under 2%, with more regional disparity and ten Member States still averaging under 1%. We are doing fiscal consolidation but we need smart fiscal consolidation.

Finally, we are building bridges internationally, trying to reach out to all countries in the world. Only two weeks ago, I signed an agreement with Prime Minister Benjamin Netanyahu, granting Israel – a leading nation in science and innovation – access to our Horizon 2020 programme, as part of our science diplomacy. The principle behind this agreement, as well as with agreements we have with twenty other partners, is simple: it is that we can tackle together more smartly and efficiently the global challenges we face. And this is also why I am pleased to see so many international participants at today’s Forum.

[Conclusion]

Your Majesty,

Ladies and Gentlemen,

We cannot afford to rest.

And although Niels Bohr once said that prediction is very difficult, especially if it is about the future, I have nevertheless asked the Science and Technology Advisory Council and Professor Anne Glover, my Chief Scientific Adviser, to produce a report on foresight. Let me take this opportunity to thank them for their dedication to this work, which will be unveiled in the conference “The future of Europe is science”, to be held in Lisbon on 6th and 7th of October.

I look forward to a successful Euroscience Forum and to an ever increasing role of Europe in science and innovation, with a view to the next Forum in 2016, in Manchester.

Thank you.

Keynote speech to the WIRE V Conference

European Commission

[Check Against Delivery]

Máire GEOGHEGAN-QUINN

European Commissioner for Research, Innovation and Science

Keynote speech to the WIRE V Conference

WIRE V Conference

Athens, 12 June 2014

Ladies and Gentlemen,

First of all I wish to congratulate the Hellenic Presidency for organising this fifth edition of the Week of Innovative Regions in Europe, following on from Granada in 2010, Debrecen in 2011, Krakow in 2012 and Cork last year.

WIRE I in Granada in March 2010 was one of the first major policy events in which I participated as Commissioner, so I remember it well!

The successive conferences have given me the opportunity to take stock of ongoing developments in the important relationship between research and innovation and cohesion policies.

In 2010 we were just beginning to set the framework for the future of these policies.

By 2011, the cohesion regulations and Horizon 2020 were being drafted. By 2012 they had been adopted by the Commission and were under discussion with the Member States.

Those discussions were completed in 2013 and now, in 2014, the first calls for proposals under Horizon 2020 have already been launched – indeed, some are already being evaluated – while the cohesion programming documents are being submitted and adopted.

WIRE V builds on the work of these earlier conferences by focusing on the concept of smart specialisation and on a policy agenda that is very much results-oriented.

The three broad themes of this conference – European funding and smart specialisation for 2014-2020; business driven regional innovation and the use of open data and knowledge to drive scientific excellence – provide rich possibilities for debate and analysis, as is shown in the detailed programme for the next two days.

Smart specialisation is at the heart of WIRE V and with good reason.

In Granada in 2010, everyone was wondering about this new idea and what it would mean.

Things have moved quickly in just four years.

Now, future cohesion support for research and innovation is conditional on having a smart specialisation strategy in place. And more broadly speaking, such a strategy should also be the broad framework in which to pursue ‘smart growth’

I welcome the fact that many Member States, through the process of self-assessment, are reporting the existence of smart specialisation strategies, at national or regional level.

Nevertheless, I also know that other Member States and regions have not yet made the necessary progress and may need to submit action plans for later completion of their strategies.

Whatever your situation, I would urge that all strategies be put in place as soon as possible. Smart specialisation is now an essential, if not the essential tool in the successful planning and implementation of support for research and innovation.

As I said at WIRE IV, there is no denying that we have a considerable research and innovation divide in Europe – a divide that remains despite our best efforts.

There are several reasons for these disparities, mostly related to structural deficits such as lack of research investment, insufficient capacity-building, the structure of a country’s industries and the profile of its companies, as well as lack of access to international networks.

Cohesion policy has a crucial role to play in tackling this divide through capacity building. And a smart specialisation strategy can act as the blueprint.

Today’s discussion on Regional Innovation and European Growth couldn’t be more timely.

The Annual Growth Survey 2014 confirmed that, after five years of financial and economic crisis, the first signs of a slow recovery are starting to appear in Europe.

While we seem to have reached a turning point in the crisis, the recovery is still modest and very fragile, so these positive signs should not make us complacent, they should encourage us to take further measures to secure a lasting and sustainable recovery.

I think it is safe to say that we are all agreed – whether researchers, business people, policy makers or civil society – that research and innovation drives sustainable growth and jobs.

So if Europe is to re-take the path to a strong and lasting recovery, it will have to place its bets on research and innovation.

Since we last met at WIRE IV in Cork last year, the EU has launched new programmes for research and innovation and for cohesion.

Horizon 2020 couples research and innovation by focusing on excellent science, industrial leadership and tackling societal challenges, while the European Structural and Investment Funds are designed to ensure that this knowledge can be absorbed and used effectively.

Combining these two sources of funding could significantly increase their impact, which is why we have made sure that the two programmes are mutually compatible and mutually supporting.

Research and innovation is also taking an increasingly prominent place in the broader EU policy framework, and in particular the European Semester. I am therefore particularly pleased that, for the 2014 Semester, Country Specific Recommendations relating to research and innovation have been proposed by the Commission for 15 Member States, the highest number so far.

Ladies and gentlemen,

I’d now like to bring you right up to date with some news that’s hot off the press!

Two days ago I launched, together with Vice President Olli Rehn, a Communication on Research and Innovation as Sources of Renewed Growth.

One of the thorniest issues we have to face is how we square the circle of investing more in research and innovation in times of fiscal consolidation, when public budgets are under greatest pressure.

The very clear message from the Communication is to prioritise and to reform.

The Communication underlines the importance of investing in research and innovation in order to allow Europe to capture new growth opportunities.

In recent years, we have seen that continued investment in the sources of jobs and growth is paying off in several Member States and in the transformation of economies like South Korea and China.

And this is also what the EU did last year when it agreed its new seven-year budget. While the overall budget envelope was reduced, there is a decisive shift towards research and innovation, with Horizon 2020 seeing a 30% real terms increase in finance.

However, maintaining or increasing investment will only be most effective when they go hand in hand with measures to increase their quality.

We need far-reaching reforms of research and innovation systems in order to increase the quality and efficiency of public expenditure in these areas.

I have no illusions about how difficult this can be, having steered through the major reform of Horizon 2020 to be simpler and to achieve greater impact.

Our new proposals will support governments to make the necessary reforms to their own research and innovation systems.

And reform of Member States’ research and innovation systems will also encourage businesses to invest more in R&D and innovation. Many businesses look globally when they invest in research and innovation. So Europe, the Member States and regions must be able to put forward an attractive proposition.

Progress at European level, for example on the European patent, remains essential, so we will continue to implement the innovation-friendly measures championed by the Innovation Union initiative.

Alongside these framework conditions, there is the potential for smart investments by the public sector to leverage private investment.

Improvements in the quality and efficiency of public spending can help create a ‘virtuous circle’, by leveraging higher investment levels from the private sector and generating increasing economic returns.

No government can fund world class science and innovation in all areas, and so each country and region must take tough decisions to prioritise their research and innovation budget in the areas where it will produce the greatest impacts.

This brings us back to smart specialisation.

Here, European regions have a strong role to play: by identifying the most promising growth opportunities, they can reprioritise action and investments, build innovation frameworks and direct us towards solutions that foster growth and jobs. Regions can also profit from systemic learning and the exchange of good practice on smart specialisation.

I have a feeling that this new Communication will provide many ideas to discuss at a future WIRE conference.

In conclusion, let me once again express my gratitude to the Hellenic Presidency, including Georgia Tzenou of the National Documentation Centre and her team, as well as to my services in the directorate General for Research and Innovation, for organising this event.

As ever, I very much look forward to hearing concrete recommendations from your deliberations that can help us increase the impact of research and innovation across the EU at every level.

I would therefore like to wish all the participants a very enjoyable and productive conference.

Thank you.

Commission points to innovation reforms to sustain economic recovery

European Commission

Press release

Brussels, 10 June 2014

Commission points to innovation reforms to sustain economic recovery

The European Commission has today highlighted the importance of research and innovation (R&I) investments and reforms for economic recovery in the European Union, and made proposals to help EU Member States maximise the impact of their budgets at a time when many countries still face spending constraints. Increasing R&I investment is a proven driver of growth, while improving the efficiency and quality of public R&I spending is also critical if Europe is to maintain or achieve a leading position in many fields of knowledge and key technologies. The Commission has pledged support to Member States in pursuing R&I reforms best suited to their needs, including by providing policy support, world-class data and examples of best practice.

Olli Rehn, Vice-President of the European Commission responsible for Economic and Monetary Affairs and the Euro, said: “The European economic recovery is gathering speed while the pace of fiscal consolidation is slowing down, in line with the EU’s reinforced fiscal framework. Nonetheless, budgetary constraints will remain, which is why.it is more important than ever that Member States target their resources smartly. The EU budget is helping drive growth-enhancing investment in research and innovation and today we are putting forward ideas to help maximise the impact of every euro spent.”

Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science, said: “Fostering innovation is widely accepted as the key to competitiveness and better quality of life, especially in Europe where we cannot compete on costs. This is a wake-up call to governments and businesses across the EU. Either we get it right now or we pay the price for years to come.”

The Communication published today highlights three key areas of reform:

  • Improving the quality of strategy development and the policy-making process, bringing together both research and innovation activities, and underpinned by a stable multi-annual budget that strategically focuses resources;

  • Improving the quality of R&I programmes, including through reductions of administrative burdens and more competitive allocating of funding;

  • Improving the quality of public institutions performing research and innovation, including through new partnerships with industry.

The Commission has also called on Member States to prioritise R&I, as public authorities regain margins for growth-enhancing investment. With current R&I spending across the public and private sector worth just over 2% of GDP, the EU remains well behind international competitors like the United States, Japan and South Korea, with China also now very close to overtaking the EU (see graph). Increasing R&I spending to 3% of GDP therefore remains a key target for the EU, but the Communication today shows that improving the quality of public spending in this area is also essential in order to increase the economic impact of investment. The Communication points equally to the need for the EU needs to put in place the right framework conditions to encourage European companies to innovate further.

Public and private R&D intensity in 2012 in the EU and some third countries

Background

Innovation is central to economic growth and business competitiveness, and is at the heart of the EU’s Europe 2020 strategy. Today’s proposals follow those of the 2014 Country Specific Recommendations where a number of Member States received recommendations to reform their research and innovation policies. The Commission has also issued today a State of the Innovation Union report demonstrating progress against the 34 commitments made and highlighting the need for further efforts.

The EU budget for 2014-20 marks a decisive shift towards R&I and other growth enhancing items, with a 30 % real terms increase in the budget for Horizon 2020, the new EU programme for research and innovation. A further EUR 83 billion is expected to be invested in R&I as well as SMEs through the new European Structural and Investment Funds.

Innovation Union: http://ec.europa.eu/research/innovation-union/index_en.cfm

Horizon 2020: http://ec.europa.eu/programmes/horizon2020/

MEMO/14/405