There is more to be done. The first lesson from the crisis is that we need a robust supervisory system for banks to ensure that what happened in Ireland and elsewhere will never happen again. After all, it was the banks which gambled and lost on property loans. It was the banks which had to be bailed out by the taxpayer. Two years ago, the EU established European supervisory authorities. The European Parliament had pushed for more integrated and intrusive supervision of banks, insurance and financial markets. The member states first refused our requests, only to come back to our ideas this year in June. Two years were lost in the process. Now, the project is back on the table. That is good news. Work is ongoing and member states seem to already disagree. We parliamentarians will do our utmost to set up a solid, transparent pan-European supervision of banks because we believe this is in the interest of our citizens, but we will not do it at any costs. We want a supervision of banks that works and can, at a later stage, be extended to insurance, pension funds and financial markets and also be extended from the eurozone to all EU countries.
Ordinary hard-working people cannot be asked to shoulder the follow-up costs of this crisis alone. The European Parliament with an overwhelming majority believes that the financial markets have to deliver now and they have to contribute to the follow-up costs of the crisis with a financial transaction tax. In the view of the European Parliament, it is simply a matter of moral decency and social justice. I know the reluctance of Ireland, but those who wish to have a financial transaction tax should not be prevented from implementing it on the basis of enhanced co-operation.
The second lesson from the crisis is that credit-fuelled booms are simply not sustainable. Financial crises, time and again, show similar characteristics: cheap money, excessive debt, speculative bubbles with overvalued assets and so-called innovative products on the financial markets. In my eyes this is fantasy football. One of the them, credit-default swaps, was referred to by Warren Buffet as a "weapon of mass destruction", leading to irrational exuberance that tips over into panic when the first mortgage payments are not met. Time and again we are told that this crisis was an accident and completely unpredictable. Yet, they keep happening, and at regular intervals.
To protect ourselves from the next crisis, the European Parliament believes that we have to get tough financial market regulation with transparency as its core principle into place, decrease macro-economic imbalances and return to growth based on the real economies. Ireland is well-placed. Ireland's growth in recent years has been based on the high-skill, high-technology sector. Renewed growth will come from jobs in industries of the future. With its well-educated workforce and functioning administration and its intact business and social model, I am convinced that Ireland will succeed in the long term.
The third lesson from the crisis is that we need a growth pact to boost the economy and create jobs, in Ireland and in Europe. The European Parliament believes that a more balanced approach is needed - "Yes" to sustainable budgets but also "Yes" to growth initiatives. The European Council is called upon not only to talk the talk, but to walk the walk. It promised a growth initiative. It now has to deliver a growth initiative. That is also a question of credibility. Fiscal stability is necessary, but it needs to be backed up by other measures as well.
It is the conviction of the European Parliament that the EU budget supports growth and that it is an investment vehicle. Calls for cuts in the EU budget may be popular. They sound wonderful but they are irresponsible. The EU budget is not money for Brussels. The EU budget is money for the people of Europe. It is a means of boosting the economy, one we need more than ever at a time of crisis, to create growth and jobs. In areas like research and development, it provides Europe-wide scale from which individual EU countries like Ireland all benefit.
Ireland is living proof that the EU budget is a tool to make the lives of people better. Over the last years Ireland received €30 billion net from the EU. Ireland used this money wisely, maximizing the impact of receipts from the Structural Funds to accelerate development and modernisation. Success stories like Ireland will no longer happen if the EU budget is slashed. Vital areas for Ireland, like agriculture, would also suffer. That is why in the negotiations with the Heads of Government the European Parliament is fighting for a proper budget, for the people of Europe.
The Taoiseach mentioned the role of the Parliament. We will meet more often in the next weeks. I am fighting for an ambitious budget. Not far from here, in the capital of another island member of the European Union, people are thinking of cutting the European budget in a way I will never accept.
The overwhelming majority of my colleagues will not accept it either. We will meet more often. The Members can count on me, but the Taoiseach should know that I count on him as well.
The people of Europe need to see light at the end of the tunnel. Unemployment, and especially youth unemployment on the scale we witness today in some parts of Europe, threatens to destroy the social fabric of our societies. It leads to frustration and anger, resignation and alienation. It undermines the legitimacy of our democratic institutions. I will quote an eminent historian and great man, Tony Judt, whose father as a boy had emigrated to Ireland from Belgium: "The last time a cohort of young people expressed comparable frustration at the emptiness of their lives and the dispiriting purposelessness of their world was in the 1920s; it is not by chance that historians speak of a 'lost generation'." Today, we are faced with what could potentially become another lost generation. Young people, as witnessed most recently in Spain or Greece, are taking to the streets because they feel abandoned and outraged. Their helplessness and despair in the face of seemingly all-powerful financial markets coupled with alienation from the political institutions is the biggest threat to democracy.
Democracy lives when people know that they can take decisions about their lives and that, by getting involved, they can change society for the better. We elected politicians are called upon to win back their trust. Therefore, I welcome the announcement of the incoming Irish Presidency that it will make the European youth guarantee a priority of its work. The European Parliament believes that the youth guarantee is an important initiative that will prevent young people from paying for this crisis with their life chances. I will describe a personal experience I had in Madrid two months ago. I met 30 young men and women aged between 18 and 30 years old. All were unemployed and some of them had three academic degrees. A young woman aged 26 who had qualified as both an architect and psychologist put a question to me. Before that I asked her about the combination of architecture and psychology. She said that architects know nothing about psychology, so they build houses in which nobody can live. When I asked about the psychology, she said psychologists know nothing about technology even though we are living in a technological 21st century. Her two answers were already a reason to employ the young woman.
The young woman told me that she intended to leave Spain, adding: "There is no place for me here." She said she would go to a Latin American country. However, the ambassador of this Latin American country had told me some days beforehand, when I met with the Latin American ambassadors, that his country would close its borders to Europeans in the foreseeable future. This is the reality of Europe in the 21st century. The young woman asked me a question which I wish to repeat in this Parliament, as a representative of parliaments in all the member states of the European Union. She said: "The EU has about €700 billion for the banking system. How many euro are there for me and my generation?" If we do not find an answer to that question and organise Europe in a more fair and just way, with a more fair and just distribution of the riches of our Continent, and give a chance to our young generation, we will lose the fight for democracy in Europe. That is sure. Therefore, the youth initiative could be a cornerstone of change in the first half of next year.
The members of the European Parliament very much look forward to Ireland's seventh Presidency of the EU Council. Since joining the EU, Ireland has made enormous contributions to European integration. Judging from very good past experiences with Irish Presidencies, I know this Presidency will be exceptional.
I wish to say something about a trend that is worrying me deeply. Times such as these, times of crises, are always times of the executive. The pressure of events calls for swift action and leaves parliaments, both national parliaments and the European Parliament, ever more marginalised. Parliaments are increasingly seen as an annoying waste of time. They are not. Parliaments are the guarantors of democracy. However, decisions on European policies which affect us all are increasingly taken in a way which reminds me of the Congress of Vienna in the 19th century, when Europe's leaders were ruthless in their defence of national interests, international politics were seen as a zero sum game and the stronger imposed their will on the weaker. The big member states, or those which consider themselves to be big member states, should not, in the European context, be able to give lessons to the smaller countries.
Post-war Europe is founded on the sober acknowledgement of the fact that our interests can no longer be separated from those of our neighbours. Either we all lose or we all win. The fundamental basis for this is what we call the community method. The community method means resolving disputes by means of dialogue and consensus, basing decisions on the principles of solidarity and democracy, reconciling the interests of the smaller and larger member states, northern and southern Europe, eastern and western Europe; and placing the common good above individual interests. Over the last two years, the community method which has served us well for many years has been undermined. The European Parliament and I as its President will defend the community method, which to us is the soul of the European project.
This crisis has driven home the lesson that our economies and our lives have become deeply linked and interdependent. One country's economic problems can undermine the European economy, but many countries working together can solve the problem. Either we all sail together or we all sink separately. Solidarity is in the best interest of all. From the crisis we have learned that we need more European economic co-operation, but this must never come at the expense of democracy and the community method. If we want to continue with deepening European integration and keep our democratic societies, we must strengthen the ties between the European and national parliaments. This is especially true if we talk about budget issues like the European semester, where together we must ward off attempts by the executive to curtail the key prerogative of parliaments, which is the right to adopt a budget. This is why I have made co-operation with national parliaments a priority of my time in office.
I intend to strengthen economic dialogue and introduce a "parliamentary week", during which national and European parliamentarians would together take a close look at the annual growth report and the guidelines for national budgets. I look forward to working together with this Parliament in this and in many other ways.
This is not written in my speech and I am known for adding to written speeches sometimes. Many colleagues in national parliaments and in the European Parliament do not know what the European semester is. It has nothing to do with academic education. In the future Ministers for Finance must, under the framework for the European semester, submit their draft budgets to Brussels before the national parliaments adopt it. In Brussels, civil servants from the Commission will look at the draft budgets of the Irish, the Germans, the Italians, of all members states of the European Union, and they will analyse it on the basis of the so-called "annual growth survey", which is not a criterion adopted by the European Parliament. That means concretely that the Irish draft budget will be evaluated by civil servants of the Commission on the basis of criteria they have themselves developed. This is deparliamentarisation and therefore we are not adversaries, the national parliamentarians and the European Parliament. We must build a complementary framework between national parliaments and the European Parliament to make the European semester democratic. Therefore, this parliamentarian week is an important step for more democracy in Europe.
Almost 40 years since Ireland joined the EU, Ireland has been transformed from a country primarily trading with the United Kingdom only to an export-led high technology economy deeply rooted within the solid foundations of the European Union. We in the European Parliament look forward to working closely with Ireland as it takes on the Presidency of the Council at a crucial time. No doubt, the last few years have been very hard and mistakes have been made but I believe in their hearts and minds, Irish people are true Europeans. Europe is on Ireland's side and Ireland can be proud of its true European vocation. Europe is not a thing we can play with. Europe is an idea, a fascinating one. It is an idea of solidarity, mutual trust and respect and capacity. In our work together in common institutions between bigger and smaller member states to find always a fair deal, saving face for everyone by way of compromise becomes a common decision in the end. That is what we need, the combined power for 27, soon to be 28 nations that are prepared to work across the borders between nations to face the challenges of the 21st century. No country, neither Germany nor Ireland, can manage alone.