Barroso has just delivered his State of the (European) Union speech. Last year I pointed out that it was a work programme speech setting out the legislative programme for the year ahead - a bit like the speech from the throne in European constitutional monarchies. This year the speech actually reflected the State of the Union title a bit more, though it was still a Commissarial Speech.
The speech had two themes: the economic crisis and the EU's role in the world. On the economic crisis, Barroso proclaimed the Commission to be the economic government of Europe, and announced several measures on market regulation and on jobs and support for growth. Barroso reminded the Parliament of the Single Market Act announced last year, and urged that it be fast-tracked through the legislative process. He also pointed out that the services legislation had not yet been fully implemented by Member States, and claimed that implementation would spur growth in the economy.
The most notable announcements marked a shift leftwards - perhaps made possible by the leftwards shift of the EPP following the departure of the British Conservatives, and the economic and political pressures of the crisis. Growth is a goal. Barroso announced that the European Investment Bank needed to be reinforced so it could lend to the real economy (though no detail was given on how), and called on an "Erasmus for jobs" which would help with youth unemployment by making more internships and work experience available (however no plan has been put forward yet, apart from calling for industry, national governments and the EU to work together on such a scheme). Project bonds will be launched to finance green projects and transport projects, which will stimulate the economy, while Barroso noted that the Commission will bring forward Eurobond proposals. Some forms of Eurobond will require a treaty change, while others won't. The treaty-friendly Eurobond was coined the "Stability Bond".
The biggest announcement was his support for a Financial Transaction Tax (FTT). This was were Barroso showed the most rhetorical energy on the economy: it is a matter of fairness that the financial industry contributes when the ordinary taxpayer has pumped so much into the sector. Is it fair, Barroso asked, to make the farmer pay more in taxes when they have already contributed so much? However such a tax would require unanimity in the Council, and where it would face a lot of opposition. Given that tax sovereignty was such a big issue in Ireland during the Lisbon Referendums, it might even lead to a referednum, should it come to a Council vote.
This leftward shift is not all it might seem, however. Parts of this plan are hard for the Commission to deliver and may not actually happen (the FTT being the most obvious). But Barroso made passing reference to the need to reform the labour market and pension funds. As no actual plans, or even a direction, were given to these reforms, it will be interesting to see what proposals will surface.
Finally, Barroso made a few more general points on Europe and Europe's place in the world. The Commission would protect citizens' rights, including their free movement and Schengen rights. Nobody wants to see a G2 (of the US and China), but the EU needs to play its part in the world and take more responsibility. The COmmission's role in foreign policy - hard foreign policy, rather than development aid and trade - is quite limited, so Barroso could wax rhetorically here about Europe's potential role without making concrete proposals. He did, however make reference to the need for a European defence industry: though nothing was announced, maybe there will be some form of market reforms of further industry co-operation through the European Defence Agency.
Overall the speech was better than last year's - now we need to see how much progress will be made on these promises.
The Parliamentary Response:
Daul (EPP Leader) improved his performance this year. Though still a pro-Commission waffle (leading me to wonder whether Ashton was listening to improve her French or just tuning out), he said his group would support more public-private partnership in education, training and R&D, where more investment was needed, as well as a job erasmus.
Schulz (S&D Leader), who gave one of the better parliamentary speeches last year, floundered this year. Maybe it was because the key issue of the FTT was taken by Barroso, but there was no discussion or analysis of the proposals Barroso put forward, and no questions on the labour and pension reforms Barroso mentioned in passing. Instead of playing a good opposition, Schulz critiqued the use of "19th centuary Vienna Congress methods" of diplomacy which was being "bullied by the markets" - it may be true, but Schulz should be holding Barroso to account, and proposing alternatives, rather than devoting the whole speech to talking about the "other place". Politically, Schulz even failed to stake a claim on the FTT, despite the Party of European Socialists (that make up the vast majority of the S&D group in Parliament) campaigning on the issue.
Verhofstadt (ALDE), the Liberal group leader, has become the federalists' Farage, and focused entirely on a pro-intergration message. Like the S&D, the Liberal leader's central policy idea of the Eurobond was given a place in Barroso's speech, so maybe it left him without anything to say on the actual policies in the speech. The best line he delivered pointed out that it was all very well telling the Parliament about these plans, but "Now you have to say it in the other place" - the "other place" being the European Council.
Zahradil (ECR leader) is the only change in leader since the last speech (an indication of the political turbulance in the right wing group over the last year). While he agreed with Barroso's market measures, he attacked the proposed FTT, saying it would drive financial industries abroad. The rest of the speech attacked the federalism of the other groups, and the Euro, asking if some countries would leave the currency union and if other countries would reconsider their commitment to joining. Though he did not want the Euro to fail, he sharply criticised any of the proposals to change things in the Eurozone as increasing the EU's powers. This provides a handy political cover for playing up the anti-federalist credentials of the group, while not providing any alternatives on how to solve the Eurozone crisis.
Harms (Greens/EFA) hit out against the lack of action on sustainable development since 2007/8 when it was considered a priority, calling the proposals: "Small scale measures, taken too late". Bisky (United Left Leader) said he supported the Commission as far as it brings in good financial regulation, FTT and Eurogroup measures. He also spent a lot of time criticising the intergovernmental approach to solving the crisis. Farage (EFD) said that Barroso was doing more of the same of what was failing, and attacked him for being unelected. He said that people wanted trade, European co-operation, to work in other European capitals and Erasmus but without the EU. I've already written about the differences between free trade and the internal market: what Farage is proposing seems to be the end of the internal market - if so, he should come out and say it and campaign on it, instead of pretending that the same level of trade can be maintained without the EU structures. In his responce, Barroso retorted that Farage had failed to get elected to the UK Parliament, and that he should campaign for withdrawing from the EU there, since the European Parliament couldn't grant it.
It was hardly the most inspiring parliamentary response. Little attention was paid to the actual policies (effectively limited to the ECR rejection of FTT and the Greens/EFA criticism that the project bonds plan and other measures weren't good enough), but there was a lot of time wasted on bashing the Council for being too intergovernmental. They had the Commission President in front of them! This was their opportunity to stake out their policy positions for the year - what they wanted to see happen, what they thought of the Commission's plans - but they failed to articulate an alternative. This might not be too serious for the EPP and ALDE (or even the ECR), which supported Barroso as Commission President, and are essentially the Commission's political base for delivering its economic and market policy. However the S&D, Greens and United Left should have been doing more do provide an alternative.
Verhofstadt and Farage have essentially become copies of each other for this set piece event on their respective sides. However Farage can rest easy knowing that he's done his political job by delivering a punchy speech, even if it doesn't do much in holding the Commission to account. Verhofstadt, on the other hand, advocates a position that needs strong and clear articulation, and which also demands a role of questioning the Commission and holding it to account (even as a pro-Commission party). He didn't measure up to this role.
(How did you score in Barroso Buzzword Bingo? You can read the Twittersphere comments on the speech here: #SOTEU).