Danish PM: Austerity and growth are two sides of the same coin

Prime Minister Helle Thorning-Schmidt was in parliament Wednesday to present the Danish presidency's six-month working programme. We spoke to her about the main challenges facing the EU and what the presidency intends to do to stabilise the fragile economic situation and create a solid foundation for growth and job creation.

Bridging the gap between euro zone members and the rest

One of the biggest challenges for the EU this year will be to defend and stabilise the euro. The Danish Prime Minister sees the fiscal compact (the treaty on reinforced economic union) as the best way to calm the markets and create trust in the euro. She is confident the presidency can play a constructive role, even though Denmark is not part of the euro zone: "Denmark as a country will participate as much as it can in the financial compact and we will help to bridge whatever we need to bridge between the euro and non-euro member states."

The EP's three representatives on the working group drafting the fiscal compact recently raised concerns about whether the new treaty would respect the "community method of decision-making" and protect the role of the EU institutions. Thorning-Schmidt said: "I would have preferred that this was done within...our treaties. That wasn't possible, so now it is being done outside the treaties. However, it is good that we are taking a step to save the euro, and it is also good that it is an inclusive process where both the member states and EP are involved". The aim is to have the new treaty integrated into the EU´s legal framework "as fast as possible."

Austerity and economic growth

Thorning-Schmidt doesn't see any contradiction between the austerity measures currently being implemented throughout Europe and the need for growth and job creation: "They are two sides of the same coin. We need to have order in our economic houses, in all member states, in order to create the foundation for growth and jobs. But at the same time we need to do everything in our power with the common budget, with the structural funds, in our individual countries to create new growth and new jobs, and that should happen at the same time as we consolidate our economies."

EU should retain leading role as green economy

One of the main priorities of the Danish Presidency is "green growth", but how will the presidency convince other countries to invest in green technology at a time of economic crisis?

"A lot of member states are concerned about energy efficiency and energy security, and of course a solution is to move fast in adopting the directive on energy efficiency. We need the new (green]) technologies....Don't forget the 20 millions jobs that are connected to the environment. I think we should be happy that we have managed to have a leading role in this area and our job is to make sure that we keep that leading role," she said.

Modern and growth oriented long-term budget

One of the biggest challenges facing the Danish Presidency will be to facilitate negotiations on the EU's long-term budget, the multiannual financial framework (MFF), which traditionally is characterised by intense discussions about how much each country should contribute. "Our task as presidency is to get closer to a conclusion. We will work very hard. I think we have five different council meetings debating that topic, and the whole task is to modernise our budget in order to make a clear budget that points in the direction of new growth and new jobs."

Helle Thorning-Schmidt was an MEP between 1999-2004

Further information

• (open in a new tab) Danish Presidency website
• (open in a new tab) Helle Thorning-Schmidt
• (open in a new tab) EuroparlTV interview with Helle Thorning-Schmidt