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Brexit not the end of European Union, Juncker says

Reuters , Wednesday 14 Sep 2016
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European Commission's President Jean-Claude Juncker delivers a speech as he makes his State of the Union address to the European Parliament in Strasbourg, eastern France, on September 14, 2016 (Photo: AFP)
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The president of the European Commission, Jean-Claude Juncker, sought on Wednesday to rally support for the European Union, saying the bloc battered by the UK Brexit referendum was not about to break up despite its existential crisis.

In setting out the Commission's plans for the first time since the UK voted to exit the EU on June 23, Juncker highlighted the British referendum as a warning that the EU faces a battle for survival against nationalism in Europe.

"The European Union doesn't have enough union," Juncker told the European Parliament in Strasbourg. "There are splits out there and often fragmentation exists ... That is leaving scope for galloping populism," he said.

But he underlined he believed the world's biggest trade bloc was still an important force. "The EU as such is not at risk," he said.

Proof of that, Juncker said, was the success of a new European investment fund that the former Luxembourg premier proposed to double to 630 billion euros ($707 billion) by 2022 to help with a sharp fall in spending since the global financial crisis, helping projects from airports to broadband networks.

"Our European investment fund will provide a total of at least 500 billion of investment by 2020, and will work to reach 630 billion by 2022," he said. "If with member states contribute we can get there even faster."

Juncker also wanted to extend the fund to the private sector in Africa to help curb emigration to Europe, starting with a pot of 44 million euros that could also be doubled later on.

An Africa fund was part of Juncker's efforts to stress a more positive agenda, particularly over the migration crisis that has deeply divided the European Union. He also had veiled criticism of eastern European countries unwilling to take in refugees from North Africa and the Middle East.

"Solidarity must come from the heart. It cannot be forced," Juncker said.

But the Juncker address offered few clues to the negotiations with London that the EU insists cannot start until Prime Minister Theresa May formally sets starts a two-year countdown to British departure. Juncker urged that to be done quickly. A summit of the 27 EU leaders in Bratislava on Friday is also unlikely to shed much light on the Brexit issue.

Instead, Juncker warned that the remaining EU governments should narrow their differences on addressing many problems facing their economies and societies, although he had no plans for "United States of Europe." Aides say he believes the divisions are as great as he has known them in three decades at the heart of EU politics.

"What are we instilling in terms of values in our children. Is this a union that has forgotten its past, has no vision for the future? Our children deserve better," Juncker said, speaking of his father, who fought in World War Two.

EUROPEAN INVESTMENT FUND

With Germany and France both facing major elections in the coming year, major changes in the Union are unlikely, but EU officials are concerned that left-right political tensions over fiscal policy in the euro zone or divisions over taking in refugees will jeopardise the cohesion of the bloc.

Juncker also urged states to complete the setting up of a European Border and Coast Guard, a project driven by last year's chaotic arrival of over a million migrants and refugees, and proposed new cooperation among EU armies, as well as pushing for an acceleration of capital markets union.

Claiming success in fostering investment by the application of seed capital and guarantees from the EU and national governments, the Commission has put the European Fund for Strategic Investment (EFSI) at the heart of its economic policy.

Set up last year to run for three years until 2018 with a target of mobilising 315 billion euros of investment, the current EFSI target is based on 21 billion euros of EU money being leveraged 15 times by other investors.

However, as the EU's current, seven-year budget programme ends in 2020, the total target will rise to 500 billion euros for five years and the Commission will call on member states to add to their contributions.

Brussels says the fund could also serve to bolster Internet connectivity across the bloc.

"We propose today to equip every European city with wireless internet," Juncker said.

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