Following are highlights from European Commission President Jose Manuel Barroso's State of the Union speech in the European Parliament in Strasbourg on Wednesday.
ON SUPPORT TO THE FINANCIAL SECTOR, AND FINANCIAL TRANSACTION TAX:
In the last three years, member states have granted aid and provided guarantees of 4.6 trillion euros to the financial sector. It is time for the financial sector to make a contribution back to society.
Today, the Commission adopted a proposal for the Financial Transaction Tax. Today I am putting before you a very important legislative text.
It is not only financial institutions who should pay a fair share. We cannot afford to turn a blind eye to tax evaders. So it is time to adopt our proposals on savings tax within the European Union. And I call on the Member States to finally give the Commission the mandate we have asked for to negotiate tax agreements for the whole European Union with third countries.
ON REGULATING Rain AGENCIES:
It is important to approve new rules on derivatives, on naked short-selling and credit default swaps, on fair remuneration for bankers.
The Commission will deliver the remaining proposals by the end of this year, namely rules on credit rating agencies, bank resolution, on personal responsibility of financial operatives.
We will be the first constituency in the G20 to have delivered on our commitment to global efforts for financial regulation.
ON SLOW DECISION-MAKING:
The pace of our joint endeavor cannot be dictated by the slowest. A member state has the right not to move. But not the right to block the moves of others. Our willingness to envisage Treaty change will reinforce the credibility of our decisions now.
ON JOINT BONDS:
Once the euro area is fully equipped with the instruments necessary to ensure both integration and discipline, the issuance of joint debt will be seen as a natural and advantageous step for all. On condition that such euro bonds will be Stability Bonds: bonds that are designed in a way that rewards those who play by the rules, and deters those who don't...
The Commission will present options for such Stability Bonds in the coming weeks. Some of these options can be implemented within the current (EU) Treaty, whereas fully fledged 'euro bonds' would require Treaty change.
ON ECONOMIC UNION:
We need to complete our monetary union with an economic union. It was an illusion to think that we could have a common currency and a single market with national approaches to economic and budgetary policy.
In the coming weeks, the Commission will ... present a proposal for a single, coherent framework to deepen economic coordination and integration, in particular in the euro area. This will be done in a way that ensures the compatibility between the euro area and the European Union as a whole.
ON GREECE AND THE EURO AREA:
Greece is, and will remain, a member of the euro area. Greece must implement its commitments in full and on time. In turn, the other euro area members have pledged to support Greece and each other.
ON GREEK ECONOMY AND LENDING:
A program of 500 million euros to guarantee EIB (European Investment Bank) loans to Greek SMEs is already under way. The Commission is also considering a wider guarantee mechanism to help banks lend again to the real economy.
ON EUROPEAN FINANCIAL STABILITY FACILITY (EFSF) AND EUROPEAN STABILITY MECHANISM (ESM):
The EFSF must immediately be made both stronger and more flexible. This is what the Commission proposed already in January. This is what heads of state and government of the Euro area agreed upon on July 21. Only then will it be able to deploy precautionary intervention, intervene to support the recapitalization of banks, intervene in the secondary markets to help avoid contagion.
Once the EFSF is ratified, we should make the most efficient use of its financial envelope. The Commission is working on options to this end.
Moreover we should do everything possible to accelerate the entry into force of the ESM (European Stability Mechanism). And we trust that the European Central Bank, in full respect of the Treaty, will do whatever is necessary to ensure the integrity of the euro area and to ensure its financial stability.
(Reporting by Francesco Guarascio, editing by Rex Merrifield)