MOVING EUROPE FORWARD A Stronger Europe to stand for our Values and defend our Interests

Document adopted by the EPP Congress in Marseille/France, 7th-8th December 2011

Table of Contents

1. 2. 3. 4.

Introduction Together stronger - Our Vision of Europe Lessons from the crisis the European economy and the Euro Europe in the World

1. Introduction Built out of the ruins of the Second World War, the project of European integration has brought its citizens long-lasting peace, freedom, stability and prosperity. The enlargement with 12 new Member States, mainly from Central and Eastern Europe, helped to overcome the historical divide in Europe caused by the Iron Curtain and unite what politically, historically and culturally belongs together. The unification of Europe has made armed conflicts in the European Union impossible. It has created growth and employment throughout Europe. The EPP family is the political force that shaped the European project like no other. From the founding of the European Communities after the Second World War to European reunification and the collapse of Communism in Central and Eastern Europe, courageous statesmen belonging to our political family have played a decisive role. Now we are determined to shape the Europe of our future. For the EPP, the European project must remain what its founders envisioned it to be a project for peace, solidarity and prosperity for the entire continent. Our citizens expect quick, decisive and positive action from the European Union and its institutions. They also expect a European Union that is closer to all of them, more understandable and transparent in its decision-making process. But it is not only since the current financial and economic crisis that public support for the way European integration is carried out is decreasing. Too often the European Union and its institutions are blamed for bureaucratic opacity and heavy procedures; whilst still being seen as too weak an actor on the global scene, responsible for the consequences of globalisation on our economies and in our societies. Recent decisions of the European institutions concerning the debt problem in some Member States are not giving the impression to the people that the Institutions have a transparent rule based decision process. Therefore, we need to explain what is decided in the European Union better, and why, and we need to more carefully monitor and ensure that the EU concentrates on those areas where it can deliver added value and that are the major economic, social and strategic challenges of the day. We do not believe that the state should be responsible for every decision in peoples lives. Consequently, we are also convinced that the European Union should not deal with issues that can be better and more efficiently dealt with on a national, regional or local level, closer to the citizens themselves. On the other hand, we are firmly convinced that Nation states alone are not able to defend our values and interests in a world which is increasingly dominated by large powers, who do not all share democracy and the rule of law. The EU as a global political and economic player must protect our citizens and defend our values and interests. Our answer to the global changes and challenges cannot be a weaker Europe. Especially in the area of economic integration, we will need more Europe in order to determine our own fate in the era of globalisation.
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2. Together Stronger Our Vision of Europe A Union of Values European integration has always been based on common values and the will to work together, in order to achieve freedom, peace, stability and prosperity throughout Europe and to promote universal values, which first emerged in the West. The European Union will continue to be successful if we share a common and cohesive vision about our future, take the concerns of our citizens seriously and defend their interests in a rapidly changing world. The respect of human rights, the dignity of every human being from the beginning and in every phase of its existence, as well as the development of democratic citizenship based on the rights and responsibilities of citizens and the fundamental role of the family, are the foundations on which we should continue to build European society. The Treaty of Lisbon has brought significant progress in a number of areas: It has enshrined human rights and citizens rights into the Treaty not only through the Charter of Fundamental Rights but also through the accession of the EU to the European Convention on Human Rights. This includes important provisions on the rule of law and democracy, on the equal dignity of every human being, religious freedom, national minorities, the right for education, equality between women and men, and freedom of media; as well as rights in the area of data and consumer protection. In addition, the Charter contains a range of social and economic rights, among which are the right of collective bargaining, fair and just working conditions, social security, and health care. The new Treaty also includes the mention of the Social Market Economy reconciling economic efficiency, growth and social justice as the economic and social model of the EU, which underlines that the economy is not a goal by itself but should serve society. The Social Market Economy puts the human being at the centre of the economy and makes both market and government function at the service of our societies. Social dialogue is an important mechanism to strengthen cohesion in times of structural reform. Furthermore, by introducing local self governance into the new Treaty, the EU has for the first time recognised the role local authorities play in the day to day life of European citizens. Moreover, the Lisbon Treaty strengthens democracy and transparency in the Union by giving new competences to the European Parliament in important areas such as Agriculture, Fisheries, Energy, Immigration, Justice and Home Affairs. The Lisbon Treaty and its Protocol on the Application of the Principle of Subsidiarity and Proportionality has strengthened the role of the national parliaments; they can now get directly involved in the legislative process through the newly established subsidiarity control mechanism. In addition, the possibility for a European Citizens initiative has given citizens the opportunity to directly influence decision-making in the European Union. The EPP confirms its commitment to the community principle, by which European Parliament, Council and Commission interact in the way foreseen by the treaties. This principle has been a cornerstone of European integration and it has proved to be the best way to safeguard European interests as a whole and to
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ensure the EUs capability to act. We recognise, however, that other forms of co-operation among Member States may be temporarily necessary to overcome the challenges we currently face. A stringent application of the community method also means that all Member States, regardless of size and geographic location, cooperate equally as close. All intergovernmental agreements between EU Member States have to be designed in such a way that they can be gradually transferred into the community method. But as the Treaty constitutes only the technical framework of our cooperation in Europe, the political goals and strategies have to be developed by those politically responsible. The EPP, as the largest political force in Europe, is ready to accept this challenge and to provide vision and leadership. The challenges ahead In the coming years there will be enormous challenges ahead for all of us. During the economic and financial crisis, as well as the sovereign debt crisis, the EPP has strongly contributed to taking clear decisions in order to safeguard the economic system and our common currency, the Euro, and, in addition to this, the prosperity of our societies and economies. We stress the need for improved economic and single market governance in the European Union and better enforced rules for the financial markets. The lessons from the crisis have to be learned. This means that our whole economic and financial system needs to become more sustainable and fair and less prone to crisis and speculative attacks, whilst special attention should be given to growth. The high level of public debt and budget deficits in the EU has put more pressure on the mechanisms of our Social Market Economy, like social security, decent employment, wages and pensions, as well as the provision of affordable public services. Therefore, many European citizens, especially the economically and socially vulnerable, fear the gradual development of a persistent social crisis. A social crisis would threaten the social and economic rights of every citizen, but also the political and economic freedoms of our democratic system. Economic governance has to be realised in harmony with, not to the detriment of, our European social model. New or aggravating social challenges call for measures, which ensure the protection of social standards but which also support the modernisation of our labour market and its work force. In energy and environment policies, we will be facing multiple challenges; in particular growing demand for energy will go hand in hand with increasing global competition for resources. We need to tackle these issues with a view to achieving goals of safe, secure and sustainable energy and to addressing the legitimate environmental concerns. In order to safeguard energy security and prosperity for our societies we need to achieve the completion of the internal energy market, invest in critical infrastructure and explore our indigenous resources. At the same time, we will be determined to increase our use of renewable energy sources and other CO2 free technologies to prevent potentially catastrophic effects on the climate, the biosphere and life for future generations.
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Beyond enhancing the use of renewable sources, special attention must be paid to energy efficiency measures. These challenges call for a comprehensive and clear strategy to be defended towards other players in the world through energy and environmental diplomacy. The EU will need to further engage with third countries in order reach a global agreement on combating climate change. It should develop a strategy in order to cope with increasing global shortages of food, water and raw materials. The key element of this strategy should be to maximise the potential of the leverage already at the Union's disposal such as internal market and trade. The Common Agricultural Policy should play an important role in that strategy as well. The developments in the European neighbourhood, especially in Northern Africa, require a new approach to deal with the new challenges. Democratic development in the European neighbourhood, as well as prosperity and reforms aiming at stability, has to be a key priority for us. By supporting democratic transition, the rule of law and more open markets for third countries, in particular in its neighbourhood, the EU promotes its values and defends its interests, which are mutually beneficial to both sides. Building political stability and economic prosperity in these countries is the only way to discourage illegal immigration and massive refugee flows, which far too often leads to human tragedies. The topics of immigration and integration are key priorities. Immigration from outside Europe is a reality and it has enriched Europe for centuries. The ability of our societies and labour markets to integrate newcomers must, however, remain a major concern when it comes to shaping new policies. The EPP consequently supports a controlled migration policy, which reflects our European values. We are committed to further development of the Common European Asylum System based on solidarity between Member States, to controlled and targeted economical migration, to fight irregular immigration by strengthening the EU's external borders, on the one hand, whilst engaging in closer cooperation with the countries of origin on the other, and to foster the social and economical integration of migrants into the host societies. The EU and its Member States have to respect their international obligations towards asylum seekers, which have to be distinguished from economic migration. We need to ensure that all activities carried out by Frontex are in accordance with fundamental principles regarding civil rights. We must recall the fact that the enlargement is one of the most successful stories of the EU. But the consolidation of the European Union must now be of the highest priority in order to regain the confidence of its citizens. Whilst supporting the Western Balkan countries on their way to membership to the European Union, we must be prudent about potential future enlargements by strictly applying Copenhagen membership criteria and making sure that the EU's ability to act efficiently is fully maintained. European countries which cannot or do not want to become members of the European Union should be offered a close partnership with the EU. The extension of the
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European Economic Area to third countries represents a constructive means of cooperation of mutual interest for both sides. Clear priorities, better legislation, less bureaucracy Too much bureaucracy undermines competitiveness and costs jobs. We must ensure that future regulations are thoroughly examined before they enter into force, both at EU and at national level. The SME (Small and Medium Enterprises) test must become much more stringent and be fully applied. Following up on the target of a 25% reduction in administrative burdens, the EPP will, therefore, propose a new ambitious target based on clear indicators to be reached by 2018. The highest priority is more effective implementation of the four basic freedoms (freedom of movement of people, goods, capital and services), as well as the return of economic growth and the creation of new jobs despite the current slowing down of growth, which are highly competitive and which allow citizens a decent standard of living. In a period of economic insecurity further investments into education and research should be both desirable and encouraged. We need to strengthen our efforts to improve the quality and effectiveness of our education and training systems including the transition from school to a qualitative job and by creating a highly skilled and motivated workforce in the European Union, including in rural areas, which represent 91% of EU territory but only 56% of the population. We insist on the need for promoting e-governance as a key factor for combating bureaucracy and enhancing sustainable growth and for that reason we call on Member States to train the workforce in the public sector appropriately. On the other hand, we need to bring the European integration process closer to the youth. With this aim in mind it would be convenient that all Member States promote the inclusion - at high school and baccalaureate level - of a specific subject on the background, goals and functioning of the European Union and its institutions. We call on the European institutions to be more ambitious and effective in regard to these priorities and in all areas of legislation and action. Less and better regulation and more efficient monitoring of implementation have to be top priorities at the European level based on the concept of subsidiarity. The priorities of the Union shall also be reflected in the allocation of the financial resources. We call on the European institutions to design and adopt the next Multiannual Financial Framework so that the Union can reach its objectives in all areas of policy, which it points out to be important. Measures shall be taken to make the budget more efficient with a focus on climate, energy and research programs aimed at tackling youth unemployment. The objectives that derive from the new challenges faced by the Union shall be integrated with the newly formulated policy for cohesion, the Common Agricultural Policy and Common Fisheries Policy. The budget shall be an important tool to reach the objectives we set in the EU2020 strategy, whilst at the same time reflecting the limited resources of the budgets of the EU Member States.

3. Lessons from the crisis the European economy and the Euro The Social Market Economy as our model Transforming the European economy into a worldwide competitive knowledge economy and into a 500 million strong consumers' market where products and services can circulate freely are among the most important challenges for the European Union. We commit ourselves to tackle the decisive reforms for increased growth, making the European Union the world's biggest economy with the most dynamic markets. Economic growth based on increased competitiveness must be the primary way to combat the economic shortcomings. The EPP firmly believes that the Social Market Economy requires reforms for stable public finances, increased competitiveness and new jobs. The EPP stands for the Euro as a stable currency reflecting the strength of the Euro zone. The Euro is a visible symbol of European integration and an expression of Europes position in the world. Therefore, we need to further develop the institutional framework and deepen the political Union. The EPP believes the monetary Union needs to be completed with an economic Union. It is our strong belief that the advantages of the Euro far outweigh its costs, but more economic and fiscal integration, as well as stabilising measures, are needed to ensure this positive outcome. In this respect, we are ready to reflect upon changing the institutional framework of the Union to enable this fundamental objective. The sovereign debt crisis was also a failure of the economic governance of the EU. The EPP will, therefore, continue to fight for strict fiscal discipline and stronger economic integration on the basis of the Social Market Economy model. More financial discipline would ensure that upcoming generations will not have to face unbearable financial burdens; therefore, it would strengthen justice between generations. Thus, we believe that a debt brake should be installed by all members of the Euro zone. We need efficient multilateral supervision based on ethical principles. These principles should be applied to all areas of our economy including the financial markets and have no protectionist character. The regulations of financial markets must keep up the pace with internationalisation and product innovations. The regulation policy of the EU should go hand in hand with a more effective global regulatory framework shared within the G20. For the EPP, market forces in combination with sustainable economic and social policies are the driving force for growth and are to be accompanied by an institutional framework that enables prosperity for everyone and prevents market dysfunctions. Our economic order shall enable free and fair competition for the well-being of all actors. The framework conditions shall stimulate the start-up and growth of SMEs, with particular focus on innovative products. In our view sound fiscal policies are a source for growth and jobs in the long run. For our economy to restart, we must support our industries in all their diversity and recognise the need for an integrated and proactive industrial policy, encouraging research, innovation and new
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technologies, which allow us to find ourselves at the forefront of scientific progress. At the same time we must not leave aside our traditional competitive industries, which bear a great amount of experience and technical knowledge as well as provide hundreds of thousands of European jobs. We must also remember that different types of industries and companies face different challenges and adapt our policies to the needs of both SMEs and worldwide firms. We are supportive of innovative forms of corporate governance (associations, cooperatives, corporate social responsibility). Another lesson from the crisis is that we need more sustainability. Therefore, the EPPs concept of the Social Market Economy includes efforts against climate change and environmental damage. This global approach to regulatory frameworks shall also take into account the particularities of emerging economies. It shall not lead to market distortions or create competitive disadvantages for any economic region. It shall consider the needs of economic activities but also take into account the need to preserve the earth for future generations. The European Peoples Party sees regulation as an enabler for market forces to develop and unfold. We will not miss the opportunity given to us by the crisis of the past years and will learn to find the right balance between the markets and regulation, in order to lay the future of growth and employment on stable ground. The EPP's concept of the Social Market Economy also implies measures, taken at all national levels, to reform inefficient social security systems and labour market regulations in a way that stimulates secure employment and growth while ensuring solidarity. Civil society organisations need to be enabled to identify ways of contributing to economic recovery and to combating social exclusion and poverty. We also need to embrace targeted public and private investment in education and innovation. For the knowledge based society "Lifelong learning" is essential. Furthermore, we need concrete steps to fulfil the realisation of the goals of the Bologna Process: mobility, mutual recognition of qualifications and joint degrees. In this regard, special attention should be given to language training in order to improve student and labour mobility. The strengthening of the Bologna Process is functional to the growth objectives established in the Europe 2020 strategy. We are aware of the expectations our economic model faces outside the Union and are ready to rise to that challenge. We commit to staying united in our vision so that we maintain our ability to shape the global agenda. The EPP will also actively contribute to developing better support for reconciliation measures, such as family-friendly employment policies, flexible working arrangements and various forms of leave for both women and men. Sharing the view of these recent Council conclusions, the EPP considers that these policies contribute to achieving major policy objectives of the EU, notably regarding growth and jobs, the well-being of families, social inclusion of vulnerable groups and equality between women and men.
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The EPP will strengthen EU legislation in civil, family and social laws in order to improve protection of European citizens in view of intra-European mobility. Better economic governance for a stronger European economy The European Peoples Party welcomes the comprehensive set of decisions on economic governance made by the European institutions since the beginning of the crisis. Throughout the crisis, we have proposed measures to safeguard financial stability in the Euro Area and assure financial markets of our commitment towards the Euro. Further, we proposed preventive long-term measures to improve our economic governance, enhance budgetary discipline and address macroeconomic imbalances. Therefore, macroeconomic surveillance must primarily focus on countries underlying structural deficiencies so as to boost the competitiveness of the Eurozone as a whole. The 'Governance Package' was agreed in close co-operation with the Council and the Commission and successfully adopted in Parliament despite fierce opposition by the Left. Before that, the EPP Group had been equally successful in leading the Parliament to an agreement in the field of six reports destined to improve financial supervision. In addition, we welcome the Euro Plus Pact and the introduction of the European Semester as an instrument to promote sound fiscal decisions and enable deeper economic coordination. We call for a thorough implementation of this coordination tool and expect more fiscal discipline and sustainable public finances as an important source for stronger economic growth. We shall ensure the stability of the Euro zone in such a way that it is credible for investors, and provides them with a safe and predictable business environment. The nature of the European and international financial system calls for an approach on the supranational level. Nation states cannot overcome this crisis on their own. The strengthening of the surveillance powers of the European Commission is the right way to guarantee respect for the rules of the new economic governance mechanisms. A family matter - Boosting competitiveness for a stable Euro Next to the irresponsible accumulation of sovereign debt the lack of competitiveness has brought us into the current crisis. Economies that lack competitiveness are not able to withstand market pressure and overcome their debt crisis. And it is exactly through restoring our competitiveness that we can foster growth in our economies and thus lay the foundations to climb out of the 'valley of debt'. How can we achieve this? By a threefold approach which does not cost European taxpayers a single Euro: An extended and binding Euro Plus Pact; Facing reality by making the most of the Single Market; Cutting red tape to give breathing space to our entrepreneurs, i.e. to our SMEs.

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We welcome the commitments the European Council has made by agreeing on the Euro Plus Pact, which fills an important gap. But the EPP family is committed to going much further. We want to define and extend the content and process of this pact more clearly. The situation of most of our economies is serious. We do not have a minute to loose in making our economies more competitive. The EPP will, therefore, be direct and frank in its proposal. We cannot pretend that painful structural reforms can be avoided. The crisis has shown us that no single country can ignore developments in any other country - we all sit in the same boat. We, therefore, commit ourselves to fully include all non-Eurozone countries in this pact; push in the European Council for giving this pact a binding character; integrating the Euro Plus Pact into the European Semester is a first step but does not go far enough; include concrete benchmarks / targets with regards to the retirement age and national provisions on working time; reinforce fiscal cooperation going beyond the important proposal for a Common Consolidated Corporate Tax Base; administrative support to and cooperation with those of our 'family' who could benefit from technical assistance in improving e.g. their tax systems / tax enforcement system to fight tax fraud and evasion. We should discuss whether such support remains solely voluntary or should be made an obligation for countries supported by the European Financial Stability Facility (EFSF) measure.

Economic growth will also help stabilise budgets. The provisions of the SGP foresee that the budget has to be at least in equilibrium over the medium term. This means that in good times a budgetary surplus is to be aimed for. The modified Stability and Growth Pact, as well as the newly created European Semester, should be instrumental in insuring that Member states aim at a surplus rather than making deficits year after year. However, fiscal sustainability needs to be seen in conjunction with financial sustainability. The sovereign debt crisis struck at times when the economies were already weakened by the financial crisis. We trust the European Stability Mechanism will help safeguard the stability of the Euro zone as a whole. This will include suitable and proportionate involvement of the private sector in cases of state insolvencies. A courageous and responsible economic policy at national level, with a view to restructuring labour markets, tax systems, social security systems to name but a few, will lead to proper economic governance. Economic policy on a European level needs to be accompanied by clear measures at a national level. The governance principles advocated by the EPP will, in the end, not only strengthen
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the European economy but also lead to better and sustainable integration of Member States in the Euro zone and stronger integration of future EU member countries and new members of the Euro Area before they join. Reinforcing the Single Market - Guarantor for Jobs and Growth Europe's main success story and guarantor of welfare is the Single Market - a cornerstone of European integration. We recognise that barriers in realising the full potential of the EU's Single Market, especially in the service sector, are a major impediment to jobs and growth in Europe and hamper our global competitiveness. Removing bottlenecks in the functioning of the internal market is among our priorities. Businesses and entrepreneurs must be given a real possibility to scale up and sell services and products to the EU's 500 million consumers, which form the largest economy in the world. That means first of all that the existing acquis, in particular the Services Directive, is fully implemented and enforced, in letter and spirit, in all our 27 Member States. The Commission is asked to make concrete proposals before spring 2012 for a faster and stronger mechanism allowing it to enforce the Single Market acquis in all Member States, as the current lengthy procedures are not adequate. We believe that the European Commission must be put in a position to fulfil its role and fully live up to its responsibilities. The EPP calls in particular for the services market to perform better. The free movement of services, and not least the knowledge oriented services, must be encouraged by, for example, fully implementing and improving the Services Directive. The EPP calls on the European institutions to speed up decisions, which are already pending, on proposals aimed at making the Single Market more competitive and breaking down existing barriers. The giving of general priority to regulations over directives to avoid diverging and thus distorting implementation should be considered. Among these proposals, the EPP identifies modernisation of the legislation on the recognition of professional qualifications as being overdue. The recently proposed optional Common European Sales Law instrument can help the EU to use the full potential of the single market; it will strengthen the single market for consumers and businesses by giving them more choice in line with the principle of contractual freedom, whilst respecting subsidiarity and the different national legal traditions. The EPP recognises the need for adequate protection of intellectual property rights and supports the creation of unitary patent protection as an affordable, secure and efficient patent system, which would give incentives for investment and research efforts. The EPP considers that the increasing brand infringements over the internet require action to strengthen the confidence of the consumers and the companies, which operate online. The EPP
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welcomes proposals that help to fight against counterfeiting and supports the foreseen review of the current regulatory framework for the trademark protection. Stronger rules for the financial markets and a new financial architecture During the sovereign debt crisis the EU institutions reacted well, stabilising the Euro and preventing further worsening of the situation. The institutions of the Union reacted accordingly by taking up new responsibilities. We welcome the fact that since May 2010 the European Central Bank has intervened in the crisis by buying bonds of struggling economies as a temporary emergency measure, which helped reduce the yields on the bonds and enabled countries to stay solvable. However, the situation can only stabilise if long-term economic measures are in place and the European Central Bank adheres to its role as independent guardian of the Euro. As the crisis was primarily a financial crisis, banks need to be at the centre of our attention. We are aware that high levels of public and private debt combined with low levels of bank capitalisation affect the stability of our common currency. Therefore, it is obvious that we need better and more effective surveillance in the financial sector. The EPP requests that all financial actors should be subject to regulatory control. At the same time, we should be aware that trust and trustworthiness should also be the core value of the financial and economic realm. An efficient financial system is central to the economy and the work of improving stability is continuous. Therefore, solid capital adequacy requirements for banks must be ensured, in order to reduce default risk and prevent costs for taxpayers. The EPP is ready to consider stricter benchmarks regarding bank capital adequacy than proposed by the Basel III Agreement, including equity requirements for government bonds. The EPP welcomes the adoption of a new set of global regulatory standards on bank capital adequacy and liquidity. This is the right approach to address the shortcomings in financial regulation, which became obvious during the financial crisis. We believe it enables a more resilient banking sector and improves its ability to absorb shocks arising from financial and economic stress. This will contribute to long term financial stability and growth in the long run. More high-quality capital means safer banks. We are aware that stronger, safer banks will be less profitable. Investors must prepare for lower, but more stable returns. The European Peoples Party will monitor the phasing-in of the Basel III Agreement and make sure that the implementation of Basel III in Europe shall not lead to a competitive disadvantage for European companies. Given that European companies rely more on bank loans, in comparison to US businesses, which fund activities more heavily through the capital markets, we need to sustain the European banks lending capacity. Following credible stress tests, we underline the need for the recapitalisation of failing banks, which are of systemic importance. We note that the European Banking Association can conduct stress tests but needs the political power to oblige banks to recapitalise if they fail these tests. We welcome the
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proposals of the European Commission on the revision of the credit rating agencies assessment regime and the alignment of the executive remuneration in banks and companies with long term targets. We welcome the greater alignment of financial markets, banking and regulation policies as part of the Euro Plus Pact, as well as the new European financial architecture. We recognise that this shows the enormous progress, which has been made when compared to the situation before the crisis. However, we need a legal framework to deal with problematic banks, which shall lead to a more resilient banking system as a whole. We support the introduction of a financial transaction tax, as a tool to discourage speculative financial activities and enable the financial sector to contribute to overcoming the economic crisis in Europe. In re-capitalising and re-structuring banks, we must minimise long-term costs and protect tax-payers' interests. The purpose is to safeguard the financial system, not shareholders. We recognise that aggregate macroeconomic indicators for the Euro Area are showing the way out of the crisis, in comparison to other parts of the world. However, we recognise that the crisis has been more deeply rooted in some of our Member States than in others and we will continue to act in the interests of the Euro Area and the European Union as a whole. We must not lean back in our efforts to have all the right tools in place to enable economic growth and create employment opportunities across Europe. At the same time we want to ensure that the reforms in the Euro zone must not lead to a long term division between the Euro zone and the EU. Therefore, the Community institutions have to be in charge, not new bureaucracies. The Euro zone is an avant-garde for the whole of the EU and not a permanent division. For an integrated trade policy In the changing world economy, it is of the utmost importance for Europe to benefit from globalisation, which represents an opportunity for its growth, jobs and competitiveness. The appearance of new economic powers, such as the major emerging countries, including the BRICS (Brazil, Russia, India, China, South Africa) countries, and the economic crisis have changed, to some extent, the global wealth distribution and international balance of power. The European Union has a number of cards to play in this context. It is the worlds leading trade power with the highest level of openness and the number one destination for foreign direct investment. It is in Europes interest to keep the world trading system open and fair. And it is in Europe's interest to use any trade defence instrument, as it does, in order to establish a global, level playing field. Therefore, in spite of the slow progress made in the Doha Development Round, we remain committed to the multilateral trading system and the World Trade Organisation (WTO), which has a key role to play in ensuring better management of globalisation, more equitable distribution of

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its benefits and well balanced economic growth. Europe demands a strong WTO leadership in this regard. But Europe has to promote its interests and values more assertively and with a spirit of reciprocity and mutual benefit for itself and its strategic partners. The Free Trade Agreements (FTAs) that the EU is negotiating, as well as the future WTO multilateral agreement, have to illustrate this principle, focussing on fair and reciprocal provisions on market access for goods, services and investments, public procurement, protection of intellectual property, and supply of natural resources and raw materials. Third-country production methods for export to the EU must provide European consumers with the same guarantees, in terms of inter alia health, food safety, animal welfare and sustainable development, as those required of EU producers. That is also why Europe must obtain the inclusion of food safety and Phytosanitary standards, and also a chapter on social and environmental standards when negotiating Free Trade Agreements: this is how it will limit the risks of dumping. We require balanced FTAs, which guarantee a level playing field. All trade negotiations, and especially FTA negotiations, must be preceded by objective and rigorous impact studies. Combating commodity price volatility and ensuring food security The wide and sudden price variations observed in the commodities markets since 2007, in particular in the oil and agricultural markets, have made commodity price volatility a vital issue for the world economy. Excessive price fluctuations foster uncertainty and disrupt the forecasting abilities of the various economic stakeholders. This uncertainty is exacerbated by the lack of transparency in the commodities markets, which in turn makes prices more volatile. The financial markets must provide the means for managing this volatility, by allowing actors to protect themselves against price variations. There should be improved harmonised regulation for these markets, in order to prevent market abuses and price manipulations. Dealing with agricultural commodity derivatives should be restricted as far as possible to investors directly linked to agricultural markets. The higher demand derived from population growth and higher incomes in emerging markets shall also be tackled through more efficient resource allocation. The regulation policy of the EU should be established in the context of the wider regulation policy objectives of the G20. The next Common Agricultural Policy (CAP) reform should also contribute to reduce food price volatility. The EPP welcomes the fact that the European Commission has kept the two pillar structure in its legislative proposals for the CAP post 2013. However, it stresses the importance of a clear distinction between the first pillar, guaranteeing food security and providing income support to
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farmers, and the second pillar, supporting rural development. In order for the future CAP to ensure the supply of high-quality, and at the same time, affordable food for European people, the EPP favours a balanced and integrated approach between the introduction of additional environmental measures and its key role in safeguarding efficient production.

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4. Europe in the World A Europe capable to act The EU has, with the development of a Common Foreign and Security Policy (CFSP), a European Security and Defence Policy, the appointment of a High Representative and the establishment of a European External Action Service (EEAS), taken important steps to strengthen its role in the world. Still, the Union is not living up to its potential. Europe should be in a position to promote European interests in the world and take responsibility in cooperation with its global partners. Europe needs to be united to find the right answers to the changing balance of power in the world and to the threats, which regional crises, failed states, scarcity of resources, international terrorism and weapons of mass destruction pose for our societies. Therefore, we must as a Union make use of established political and institutional bases to speak with one voice and act in a coordinated way. We shall, in particular, take advantage of the existence of the EEAS and the EU Delegations. We encourage further upgrading of the EU status in other multilateral organisations and institutions. Conscious of the current multipolarity of the new global order, the EU should pay special attention to the new emerging powers (such as the BRICS), as well as to the new informal groups and dialogue, such as G-20. The EPP stresses the importance of transatlantic partnership in order to jointly fight for freedom, democracy, human rights, rule of law and market economy. Tackling global challenges will be more successful and efficient if the EU and the US identify common goals. According to the geo-economic and geo-political shift, the Asian rise is one of the features of utmost importance of our time. We are witnessing one of the fastest industrial revolutions. Thus, we have to strengthen our relations with strategic partners such as China, India, Japan and also with other ASEAN partners. Europe and Latin America have not only strong historical, political and economic ties but also many common values due to our shared Christian roots. We are committed to the democratic and economic progress of Latin America and must, therefore, continue fostering our bilateral and multilateral dialogue with Latin-American countries. Political and economic ties should be strengthened through appropriate agreements, whilst also taking into account the increasing economic role of the BRICS countries. To protect its values and position in a globalised world the EU has to build on not only common political, diplomatic, and economic instruments but also military ones. In this context, EU relations to strategic key partners play a crucial role for tackling global threats but also for improving security of energy supply and access to raw materials. We, therefore, support the continuation of result-oriented negotiations with Russia to reach a new Partnership and Cooperation Agreement based on the deep commitment to democratic principles and common values.
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The EPP underlines the fact that the new Lisbon Treaty on the European Union offers a wide range of civilian and military means in order to implement the European comprehensive approach in fields such as conflict prevention, peacekeeping, crisis management, post-conflict resolution, counterterrorism and humanitarian intervention. However, the Member States have not yet made full use of the new possibilities of the Lisbon Treaty. In the short term, there is the urgent need to implement a comprehensive approach with quick and robust advancement of the strategy of pooling and sharing existing and new military and civilian crisis management capabilities for future Common Security and Defence Policy (CSDP) missions, aiming for a stronger EU Defence Union. In the midterm, the EU should define its own security interests, prioritise its strategic goals and, identify the need for capabilities. The Atlantic Alliance and NATO remain of vital importance for global security. But Europe also has to focus its capabilities on solving conflicts and problems, especially in its neighbourhood by its own means. In a time of budgetary restraints in our member states, ever closer coordination and cooperation are very necessary. The European Defence Agency (EDA) has to harmonise operational needs, further common procurement and stimulate the strengthening of the industrial and technological base of our defence efforts. The EPP expresses its deep concern with Iran's ongoing pursuit of nuclear weapons. The last report by International Atomic Energy Agency (IAEA) confirms the country's plans with regards to developing a nuclear programme for possible military aims. This could, in the short term, further destabilise the situation in the region and severely delay the perspective of a peaceful resolution of the Middle East conflict. The EU must accept that the current strategy of engagement with Iran has proved to have serious limitations and take a firm position on the matter. European Neighbourhood Policy (ENP) We welcome the fact that the Lisbon Treaty has made important steps forward towards creating the conditions for the EU to become a global player. We firmly believe our global engagement has to start from our neighbourhood. We support the development of democracy, sustainable economic growth, civil society and stability in our neighbourhood. We recognise the progress achieved and reforms implemented in some of our neighbouring countries through cooperation with the Union and its Member States. We are committed to symmetry and synergy between the Eastern and Southern Dimension of the ENP. Therefore, we grant due attention to both dimensions of the ENP, including in financial terms. We believe that the distribution of funds should be symmetric and balanced for both regions, with an approach that it is performance-driven predicated on clearly defined criteria and assessable benchmarks for each individual partner country and taking into consideration that the departing point for benchmarks for the Southern and Eastern part of the ENP is different and must be
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taken into consideration when allocating financial resources. However, we point out that although aid can act as leverage for ENP countries, it is not enough to guarantee sustainable and lasting development. Furthermore, our initiatives shall promote regional and cross-border cooperation among ENP countries. We also believe countries in our neighbourhood shall make good use of the transformational know-how of some current EU Member States, which have undergone similar processes in the recent past. Our political support for our neighbours shall be complemented with technical expertise and financial support. Financial allocations will be more strongly linked to the performance in our partner countries and will be much higher for countries that implement political reforms and reforms to strengthen the rule of law, respect human rights, protect the freedom of religion and cooperate on illegal immigration issues. They will also be tailored to the specific needs in each country. The prospect of participation in the EU internal market is a powerful tool for change in the region. This is why we believe we will go on with negotiations for Deep and Comprehensive Free Trade Area Agreements, where conditions are fulfilled and once previous impact studies have been undertaken. The Union will give particular attention to frozen conflicts and autocratic regimes (Belarus etc.) in its neighbourhood and analyse the tools to advance them towards a settlement, whilst playing a more active and constructive role in their resolution. We assess the lack of achievements in this area as one of the shortcomings of the European Neighbourhood Policy to this date. Cooperation in the Mediterranean Following Arab popular protests and revolutionary changes, our relations with the countries involved in the Union for the Mediterranean have to be redefined. Our purpose remains insuring democracy, prosperity and stability in the region. Thus, the EU must support the democratic transition in the southern part of the region. In this respect we aim for new Euro-Mediterranean partnership and a new framework for cooperation in order to strengthen the new democracies and provide a new platform for political relations and economic cooperation. Our relationships also have to be based on mutual advantages in order to enable the first steps toward further economic development in the area to be taken. Strong economic achievements are needed to give this new cooperation effectiveness. Making sure that SMEs benefit from our new approach is the best way to make it popular among the population. This way we would insure sustainable development that would lead to a reduction of poverty and foster democracy. The EU must get involved in the re-construction of Libya and closely cooperate with all the countries in the Middle East and North Africa region striving for democracy in order to foster the democracy process. In this regard, the EU must involve young people, in particular, in building democracy through, for instance, exchange programmes. The Union for the Mediterranean, which the EPP strongly supports, must be the major player in establishing a region based on peace and cooperation.
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There is a great potential for cooperation in the field of energy between the shores of the Mediterranean. Concerted projects, such as the partnership on renewable energy, with projects such as Desertec, euro-Mediterranean interconnections in the gas and electricity sectors, improvement of motorways and train infrastructure, and de-pollution of the Mediterranean sea, can deliver benefits for both sides. The Mediterranean should become an area of common economic development, improved political and cultural exchange, and where shared political purpose and common values, such as the respect of human rights including freedom of religion, are respected. The EU should also be opposed to whatever unilateral steps could lead to another outburst of violence in the Middle East region. According to the European Council Decisions of December 2009, the EU should seek a deeper involvement in the peace process in the region, based on its common position, that within an agreed time-frame will lead to a two-state solution with the State of Israel and an independent, democratic, contiguous and viable State of Palestine, living side by side in peace and security. In an increasingly competitive international system seeing new emerging powers as global or regional actors, it is crucial for the EU to engage with them more effectively. Engaging with emerging powers aims, first, at protecting and promoting our interests and values and, second, at facilitating a multipolar world, a more open and stable international system, and reinforcing global governance. Cooperation with Eastern Partnership countries Since the creation of the Eastern Partnership (EaP) in 2009, strengthening cooperation with our Eastern Neighbours has been at the heart of the EPP. And it becomes even more crucial and indispensable as recently the EU seems to have found itself in retreat with regard to this region. Therefore, we need to significantly upgrade and commit to stepping up the implementation of the Eastern Partnership project with special focus on shared values to the benefits of partner countries' societies. In this respect, the EPP supports the efforts of those EaP countries that commit themselves and work on building and consolidating deep and sustainable democracies and market-economies. In this regard, we endorse the current EU official approach of sanctioning the Belarusian authorities, while striving to strengthen ties with the civil society and the people in Belarus by providing EU financial and technical support to democratic opposition, human rights defenders and civil society organisations, including non-registered ones, as well as to students and free media. In the case of recent developments in Ukraine leading to the sentencing of the former Prime Minister Yulia Tymoshenko and other political prisoners, the EPP stands by the position that this may delay and have serious consequences for Ukraine's future relationship with the European Union and the Association Agreement; it may potentially push the country further away from a European perspective. Additionally, in keeping with the concept of democratic ownership, we stress that parliaments, local and regional authorities, and civil society should be supported in their efforts to play their proper role
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in defining EaP strategies, holding governments to account, monitoring and assessing past performance and achieved results. Therefore, we stress the importance of empowering the EaP parliamentarians in decision-making processes and we support the development of democratically oriented political parties as well as creation of NGOs and civil society organisations. In this respect, we welcome the setting up of the EURONEST Parliamentary Assembly and we believe it will bring positive effects by serving as a platform to exchange views and find common positions on global challenges of our times in respect to democracy, politics, economics, energy security and social affairs, as well as strengthen ties between the countries of the region with the EU. The EPP also stands by the position that strengthening the Youth dimension of the Eastern Partnership is an important investment in the future of mutual relations, with great potential for years to come and in the democratisation of those Partners and harmonisation of their legislation with European standards. Therefore, we encourage the EU to use the opportunities created by the EU Visa Code for improving visa delivery for certain groups of travellers including students, researches, businesspeople and media. A new partnership for development in Africa Africa is at a crucial point of its development. We will be at the forefront of efforts in favour of the development of the poorest countries, including those in the Sahelian zone, and we encourage democratic governance, legal security and the fair distribution of resources. The EPP will support an Afro- European partnership aimed at creating activities and jobs for young people and at meeting local needs in the fields of education, energy and food. The EPP will also continue supporting the goals and objectives established in the EU-ACP agreements. Achieving the Millennium Development Goals The EPP firmly supports the achievement of the Millennium Development Goals by 2015, which were agreed in 2000, as well as meeting the target of the 0.7% of GNI for official development assistance. The EPP believes that acceleration of progress to meet the MDG targets is crucial, in particular with regards to the fight against hunger, disease, maternal and child mortality, basic education for all, and protection of the environment. Aid effectiveness The EPP firmly believes that poverty alleviation cannot be sustainably delivered in the absence of economic development. We aim, therefore, at assisting developing countries to reach a stage of economic development where a free market in goods and services can operate freely within the broad parameters set by the State and according to basic international norms of international trade.

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We need to break the chain that enables big government, over-regulation and high taxation to suffocate the entrepreneurial and innovation spirit and free up important resources in the developing world. Similarly, we must create a favourable and reliable investment climate that allows for more Foreign Direct Investments, establish a proper taxation system and generate structures, which create a positive environment for investments and private enterprises.

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