THE EUROPEAN Commission will not exert pressure on the European Central Bank (ECB) to lower interest rates in the euro zone, the president of the commission, José Manuel Barroso, said in Dublin yesterday.
"The ECB is doing a good job and deserves our support," Mr Barroso told an Ibec breakfast meeting. "Interest rates are a matter for the ECB. I would prefer the ECB to take these decisions rather than politicians."
Mr Barroso was replying to a question from Tom Parlon, director-general of the Construction Industry Federation.
The objective of the ECB was to ensure price stability. In this context, it formed a long-term view on interest rates, based on objective evidence, the commission president said, whereas politicians were subject to short-term pressures.
On the issue of a Common Consolidated Corporate Tax Base, Mr Barroso said: "We are not about to propose anything that would be damaging.
"And with unanimous agreement needed, we would need the agreement of every member-state, too, Ireland included . . . There is nothing to fear."
Asked by Ruairí Quinn TD, chairman of the Irish Alliance for Europe, whether the Lisbon Treaty was the last in the line of European treaties, Mr Barroso responded: "The treaty is not the alpha and omega. I'll be honest with you. This treaty will not solve all the problems of Europe."
Essentially, it would tidy up the rules for working together, but policies, not treaties, were the means for securing economic and social advance in Europe, Mr Barroso said.
Providing the right business environment for small and medium-sized businesses was among the policies which needed be to fostered, Mr Barroso said, "which is why, in June, I will propose a Small Business Act to remove legal and administrative obstacles to SME growth at all stages of their development".
While conscious of the concerns of Irish farmers, Mr Barroso pointed out that the current negotiations on the World Trade Organisation's Doha trade round were not confined to agriculture.
The EU was the world's largest exporter and was strongly committed to economic openness.
As a result, "globally speaking, it is in our interest to get an agreement in industry, services and agriculture . . . though not at any price", he said.
Describing the current trend towards protectionism in the United States as "amazing", Mr Barroso said that it would be "devastating for the world economy if protectionism comes back".
He added: "There is a real possibility of this, bluntly because of China."
He continued: "Very often the argument - the false argument - is made that the rise of China is damaging to European competitiveness and employment. And then the clamour comes for protection. But nothing could be further from the truth.
"Europe has benefited from China's rise and has a stake in its economic strength and stability . . . A hundred million new jobs in China have not cost Europe a single job on aggregate."
