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A presidency at work for growth in Europe

Dark clouds hung over Europe on 1 January 2012, the day Denmark took over the EU presidency from Poland. Cooperation in the EU was facing a crisis. Just a few weeks earlier, the EU heads of state or government had reached agreement on the content of the Fiscal Compact at a summit in Brussels. However, the UK and the Czech Republic chose to remain outside the compact. This triggered a good deal of murmuring about the first signs of a split in EU cooperation – a so-called “two-speed Europe” – which in reality could end up jeopardising all cooperation in the EU. This was exacerbated by external circumstances.

Dark clouds hung over Europe on 1 January 2012, the day Denmark took over the EU presidency from Poland. Cooperation in the EU was facing a crisis. Just a few weeks earlier, the EU heads of state or government had reached agreement on the content of the Fiscal Compact at a summit in Brussels. However, the UK and the Czech Republic chose to remain outside the compact. This triggered a good deal of murmuring about the first signs of a split in EU cooperation – a so-called “two-speed Europe” – which in reality could end up jeopardising all cooperation in the EU. This was exacerbated by external circumstances.

The economic situation and the continuing, escalating debt crisis in southern Europe, particularly in Greece, also contributed to creating a situation where tensions were running high and patience was running low. Could our European cooperation remain strong at a time of such colossal challenges and internal tensions? We did not know the answer in advance, but approached the task with great enthusiasm. And now, six months later, there is reason to look back with satisfaction.

A bridge over troubled waters

In order to tackle these problems, we decided from the outset that our primary role as holder of the EU presidency would be to act as a bridge-builder. We needed to build bridges between the different positions in the council. Build bridges between the euro-area countries and the countries outside the single currency. And build bridges between the European institutions.

The Danish Government devoted a great deal of time to gaining an overview of the positions and views in the respective EU member states both in the lead up to, and at the beginning of, the Danish presidency. In addition, all Danish ministers engaged in close dialogue with both the European Commission and the European Parliament, providing us with the opportunity to discuss our ambitions for the presidency and Europe.

Our approach was that the machinery of the EU should be put to work. The cooperation had to show that even in times of numerous and diverse challenges the EU was still able to deliver results that demonstrated the value of European cooperation.

We therefore formulated a presidency programme significantly entitled “Europe at work”. Europe would need to roll up its sleeves and get down to work for Europeans, among other things to ensure that more jobs were created in Europe. In the programme, we defined four fundamental priorities for our presidency: a responsible Europe, a dynamic Europe, a green Europe and a safe Europe. These were headings that encapsulated the challenges that Europe faced, and which Europe would need to prioritise during a period of time characterised by economic crisis and global shifts of power.

A Europe that acts in an economically responsible way

The economic situation dominated the agenda both before and during our presidency. The ugly truth is that Europe has not yet exited the crisis, but that the crisis will continue to have an impact on economic development in the coming years.

In this regard, it is clear that it is the responsibility of each member state to ensure that the economic policy it pursues is sustainable and does not produce a dangerously high level of debt. Nevertheless, during the Danish EU presidency we have adopted a new and tougher set of common ground rules in EU cooperation that will provide the framework for tackling the crisis, for helping to prevent future crises, and for restoring confidence in Europe.

The enhanced cooperation and the new ground rules aim to ensure that each EU member state exercises due diligence in relation to economic imbalances such as competitiveness and balance of payments difficulties. In this regard, the agreement we reached regarding the so-called “two-pack” plays a key role, as it strengthens euro-area cooperation and brings to completion the reform of EU economic governance.

On top of this is the Fiscal Compact, which was adopted at the European Council in March and through which member states committed themselves to introducing national legislation that ensures their respective national budgets remain in balance, thus keeping their economies in order.

It is one thing to ensure that EU member states pursue an economically responsible policy. However, in order to exit the crisis and prevent new crises from arising, it is also necessary to strengthen financial regulation and supervision so as to ensure a healthy banking sector in Europe.

We have, for example, secured greater transparency and security in relation to trading in derivatives. The agreement entails that all transactions with financial derivatives must now be cleared by a central counterparty. This counterparty guarantees that both parties in a transaction are always assured of getting what they are owed, even if one of the parties should fall into difficulties. In addition, the council reached agreement on the introduction of new, tougher capital requirements for European banks. These requirements entail extensive regulation of the financial sector and will also imply requirements regarding more and better capital and liquidity in banks.

A Europe that ensures dynamic and sustainable growth

The last couple of years have been poor for European growth and employment. Our European economy has generally experienced stagnation, and competition from the new, fast-growing emerging economies threatens our competitive position in the global market.

For this reason, the presidency from the outset assigned priority to ensuring that growth was put on the European agenda.

The challenge lies in creating growth without the continent falling deeper into debt. It is a question of ensuring responsible growth, and it is this approach we brought to the negotiating table.

We were therefore pleased that we could conclude our presidency by securing agreement in the European Council on 28-29 June on the adoption of a Compact for Growth and Jobs. This growth package represents the culmination of the Danish EU presidency’s efforts to promote growth and employment in the EU. All in all, we have thereby succeeded in completing the circle that entails a sensible balance between consolidation of the public finances and growth-promoting initiatives.

A Europe that goes green

It is no secret that the Danish presidency assigned high priority to the green agenda. And in some areas our ambitions exceeded what some countries were prepared to accept. However, we fought tenaciously for our case, because Europe will need to keep its position as standard bearer for the environment and climate agenda. This is partly in order to prevent the climate and the environment from going under, but also because there are quite simply several million potential jobs within green growth, and these are jobs that Europe can ill afford to lose in the competitive global market.

Indeed, one of our greatest results was achieved within the green agenda. We reached agreement with the European Parliament on the Energy Efficiency Directive; an agreement that can create several hundred thousand jobs in Europe and reduce energy consumption by approximately 17 per cent by 2020. This is, despite everything, a major achievement. As people will know, the cheapest energy is the energy we do not use. Moreover, this directive is also good for the climate, as it contributes to reducing our CO2 emissions.

Justice and migration

During the Danish presidency, we have achieved several results in the area of justice and home affairs that contribute significant progress, benefiting both EU and third-country citizens. For example, we have brought about changes to the rules concerning the conditions for asylum seekers whilst they wait for their application to be processed, and we have created greater clarity regarding which member state is responsible for processing an asylum case.

But we have also secured agreements, respectively, to clarify the rights of victims of crimes and simplify the processing of cross-border succession cases. These are results that improve the legal protection of EU citizens.

Illegal immigration and cross-border crime are challenges that pose a threat to the whole of Europe. It is therefore positive that we have been able to secure the adoption of an action plan for preventing and combating illegal immigration. Together with an agreement reached on strengthening Schengen governance, we now have an opportunity, in quite exceptional circumstances, to activate mechanisms that ensure improved internal border controls and temporary suspension of visa-free travel if widespread abuse is discovered.

Altogether, the Danish presidency achieved more than 250 concrete results, a number of which I have here tried to highlight and explain. These results demonstrate that the EU cooperation functions even in the most difficult of times, and that the member states work in a dedicated fashion to ensure European citizens’ prosperity and rights. Thus, our cooperation in the EU remains strong.

Even though the crisis is far from over, we have taken the first steps on the path to exit the crisis and introduced rules and mechanisms designed to prevent Europe from being thrust into a similar situation in the future. With this in mind, I look back with satisfaction on a successful Danish EU presidency.

Nicolai Wammen is Denmark’s minister for European affairs. A longer version of this article first appeared in the Danish newspaper Politiken on 1 July.

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