European Council President Van Rompuy and European Commission President Juncker, Joint EU Presidential media briefing, G20 International Media Centre, Brisbane
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Natasha Bertaud, European Commission’s spokesperson for President Juncker: Hello and welcome. It is my pleasure to chair this press conference of European Commission President Jean-Claude Juncker and European Council President Herman Van Rompuy. I will first give the floor to President Juncker.
Jean-Claude Juncker, European Commission President: Good morning, ladies and gentlemen. This is my first G20 meeting as President of the European Commission, and at the very same time the last G20 Summit of my good friend Herman Van Rompuy. I would like to touch briefly on three main topics President Van Rompuy and myself will address later today.
Firstly, investment. We come here today against the backdrop of what we can only describe as a modest economic recovery. Global GDP growth is slower than expected and growth in Europe is lower than we did hope for. We have to do more to kickstart and sustain economic recovery. We each need to do our part and it is good that in July the G20 members were able to put forward growth strategies. We strongly support the Brisbane Action Plan put forward by Australia and we push for agreement on the global infrastructure hub to help implement the global investment initiatives by matching investors with projects. The G20 investment initiative and new investment plan are very much in the same vein. We will launch before the end of this year a 300 billion euro investment package on the level of the European Union. We put into place our own hub by putting together the European Investment Bank and the European Commission. And the fact that on the G20 level this global infrastructure hub is put into place, it is in total completion with what we are doing in Europe.
The second item we'd address is trade and we are very happy that India and the US have found an agreement on how to move forward, paving the way to the implementation of the Bali decisions. I would like to inform you that the European prime ministers plus Mr Van Rompuy and myself, we'll have – tomorrow, I think – a meeting with President Obama, where we will touch upon the issue and where we will make clear as Europeans that: a. we want this agreement, b. that we will not sacrifice Europe's food safety, environment and health standards or our cultural diversity on the altar of free trade. And we want to inject doses of transparency into our negotiations. The third issue we'll address is related to tax evasion. This is a subject discussed in Europe with new energy. We would like the G20 countries to join the efforts of the Europeans to have a greater transparency in the tax field. We will do everything possible in order to support the Base Erosion and Profit Shifting action plan we proposed, but it didn't become part of the conclusions, an automatic exchange of information as far as tax rulings are concerned.
I've asked the commissioner in charge of taxation to prepare a directive as far as the automatic exchange of information concerning tax holdings as far as these are concerning Europe. These are some of the issues we'll address in the course of today. And the other issues of importance will be presented by the President Van Rompuy.
Natasha Bertaud: Thank you. President Van Rompuy.
Herman Van Rompuy, European Council President: Thank you. Good morning. I realise that it's quite early, also for you and around midnight in Europe. So let me be brief and focus on only a few points to complement what President Jean-Claude Juncker has just said.
First, on the global economy. This G20 Summit will be focusing on growth and jobs. That is welcome and that is needed. Global and European recovery is slower than expected, as the President of the Commission just said. It is uneven and it is not yet delivering the jobs needed. The evolution in the Eurozone is due to external and internal factors. Geopolitical tensions at our eastern and southern borders are hampering a regain of confidence. The poor performances in some emerging economies decreased the growth of our exports. But internally the high level of private debt is a handicap for new investments. Although monetary policy is very accommodating and fiscal policy is neutral in 2014 and 2015, the recovery remains insufficiently strong. We have to overcome our structural problems and we are doing so. I'm confident that the next decade will not be a lost decade for Europe, nor in economic terms. Europe is doing its share.
During the last years of the crisis, Europe, and in particular the countries of the Eurozone, have carried out a lot of reforms, both at national and at European level in terms of strengthening the architecture of our economic and monetary union. This includes more recently and very importantly the Banking Union and the stress tests of the banks that will create a more solid financial sector in Europe. In turn, this will ensure more private investment, also in Europe, and not least in the small and medium sized enterprises. Still, more needs to be done for recovery and job creation. We must act both on the demand and on the supply side. And that's why we must boost investment in Europe. And in this context I welcome, in particular, Jean-Claude Juncker’s investment initiative of 300 billion euros which he just mentioned. We believe that there are strong synergies between the G20 investment initiative and the EU investment initiative.
The growth strategies all G20 members submitted will be an important tool for following up on the commitments we make here. Growth is not only a matter of money. In the European Union we must make use of our strongest asset, the single market. We must push forward with the energy union, as European leaders decided at our European Council in October. We must push forward with the single digital market and in a real area for research and innovation. Allow me to recall that the European Union's Horizon 2020 research program, which is 80 billion euros, is the biggest research program in the world. Beyond that we must continue reforming internally our labour markets and promote externally international trade. The European Union remained a very open economy without protectionist tendencies.
On the contrary, we are concluding free trade agreements, for instance with Canada, and negotiating others, like with the United States and Japan. Secondly, I bring a positive and strong message to the G20 on international climate change talks in Paris next December. At our last European Council, less than a month ago, the European Union agreed on the world's most ambitious climate and energy goals for the period 2020 to 2030. A legally binding target of reducing CO2 emissions by at least 40 per cent. Targets of increasing energy efficiency and a share of renewable energy by at least 27 per cent. And boosting the European energy market by establishing the interconnections between the countries.
This is not only good news for the climate, it is also good news for the European economic actors as they have now got the predictability of a long-term framework to plan investments, to spur innovation and to bolster research. The European Union is already today the most energy efficient major economy and we now expect other major economies to match the European commitment to ensure a breakthrough in Paris next year at the so-called COP21. And while I'm at it, let me also in this G20 context recall that the European Union remains the biggest donor of development aid. Likewise, all EU countries have fully ratified the 2010 IMF quota and governance reform.
My third and final point is on Ukraine and Russia. While this is not on the G20 agenda, the situation and the recent military escalation continue to be of utmost concern. On Sunday the EU leaders represented in Brisbane will meet President Obama, where Ukraine will figure on the agenda. But I want to restate that the European Union continues to believe that it can only be a political solution to the crisis. We will continue to use all diplomatic tools, including sanctions, at our disposal. The EU foreign ministers will on Monday assess the situation on the ground and discuss possible further steps. We need to avoid a return to a full-scale conflict. Our parties should abide by the commitments they took in the September Minsk agreements. We call particularly on the rebels and the Ukrainian authorities to apply maximum restraint. Russia, for its part, must apply all its influence on the rebels to ensure the implementation of the Minsk agreements. Russia must stop the inflow of weapons and troops from its territory into Ukraine. Russia must withdraw those already present.
To conclude, by returning to the G20 agenda in Brisbane, on all the agenda items, be it the global economy, climate and energy, taxation, we cannot work in isolation. We need the whole international community to act with us and here the G20 can play a decisive role. We fully support the way this summit in Brisbane has been prepared by Australia as we fully support the Brisbane Action Plan. Once again, the European Union and its member states will be constructive actors. Thank you.
Natasha Bertaud: Thank you. Okay, the gentlemen are on a tight schedule this morning. We'll have time for two to three questions. I'd ask you to please wait for the mic to come to you. We'll take from you there at the back.
Jamie Smith, Financial Times: Jamie Smith from the Financial Times. My question is to President Juncker. The Australian hosts of the G20 have likened the scourge of tax evasion as picking people's pockets. Is this what Luxembourg was effectively doing while you were prime minister and do you expect G20 leaders to raise the Lux Leaks issue with you? And how do you intend to rebuild confidence in your own leadership given that tax avoidance is such an important issue today?
Jean-Claude Juncker: Tax avoidance is an important issue for each and every one of us, not only for our Australian friends. We decided in Europe to fight against tax evasion when I was addressing the European Parliament before being voted in the office of the President of the European Commission. This was one of the major points I made, because I really do think that on the international and on the global level we have to fight altogether against tax evasion. Tax evasion sometimes happens because of the interaction between very divergent national tax rules in accordance with the law. You can create the situation, the result is a very low taxation of companies. This has to be avoided. The reason why this happens is due to the fact that via the instrument of tax rulings, a number of states in the European Union, as partners worldwide, are driven into a system of that kind because of the interaction of divergent national tax legislation. So we have to harmonize this tax legislation as far as Europe is concerned.
We have to make sure that we'll find an agreement in Europe on a common taxation basis. Projects of the commission are on the way. As a commission, we decided last Wednesday to push the council into action over a final agreement. I proposed last Wednesday at the meeting of the college to ask the commissioner in charge of taxation to write the directive related to the automatic exchange of information in the field of tax rulings. We tried here to have this European initiative being picked up by the conclusions for the G20 meeting. This was not possible. But as far as Europe is concerned, we move into the action of automatic exchange of information concerning tax rulings.
Natasha Bertaud: OK. Yes, please, at the back.
Unknown Speaker: My question is for Mr Rompuy. You talked about the possible sanctions, the further sanctions against Russia. Could it be more specific, please? Are you talking theoretically about new sanctions or the European Union countries already prepared some kind of specific package on it? And if the answer is yes, when could it be implemented? Thank you.
Herman Van Rompuy: First of all, I repeat what I said in my introductory statement on Ukraine. We will continue to use all the diplomatic tools, including sanctions, at our disposal. That is exactly what we said in the European Council by the end of October. And the next sentence – and I'm repeating it – the EU foreign ministers will on Monday, on Monday, assess the situation on the ground and discuss possible further steps. So the key for us is the implementation, as I said, of the Minsk agreements. And Russia has still the opportunity to fulfil its Minsk commitments to choose the path of de-escalation, which could allow sanctions to be rolled back. If it does not so, however, we are ready to consider additional actions. But I go no further today than this because we are evaluating the situation. And we are waiting on the assessment that on Monday will be made by the foreign ministers.
Natasha Bertaud: OK. Thank you. Time for one last question. Please, here at the front. Can you bring the mic? Thank you.
Unknown Speaker: Do you accept it's not necessary to have tax harmonization to prevent an economy being built on tax avoidance? Wouldn't you accept that is what you did for more than 20 years? And therefore you are simply not a credible figure to represent the European Union on this issue? Should you not stand aside, at least on this issue?
Jean-Claude Juncker: I explained at length how in Luxembourg and in other countries, not all of them speaking French or German, things of that kind could happen because of the discrepancy between national tax legislation. What we are intending now is not a full-fledged tax harmonization on each and every detail, but eliminating from our national tax legislations the open gates for tax evasion. This will be done. I'm in favour of tax competition but I'm also in favour of a fair tax competition in Europe. Back in 1997, under my chairmanship, the council adopted a code of good conduct against unfair tax competition under these rules. A lot of national legislations in more or less all European countries had to be changed or eliminated. This process has not come to an end.
Natasha Bertaud: OK. That's all we have time for today. Thank you very much.