Speech by Mr.

Antonio Cabral, Senior Advisor, European Commission President Barrosos Private Office at the opening session of the 1st Round Table between the European Economic and Social Committee (EESC) and the Brazilian Council for Economic and Social Development (CDES).

My dear panel colleagues allow me start addressing in portuguese os membros da mesa que representam o Brasil o pas irmo!-, o Sr Antoninho Trevisan chefe da delegao do Conselho de desenvolvimento econmico e social do Brasil e o Embaixador Ricardo Neiva Tavares. Distinguished representatives of the Brazilian Council for Economic and Social Development and of the European Economic and Social Committee, Distinguished guests, Good morning. It is a great pleasure and an honour to have the opportunity to address the 1st Round Table between the European Economic and Social Committee and the Brazilian Council for Economic and Social Development.

It was exactly two years ago when the EU and Brazil celebrated in Lisbon their first ever bilateral Summit and established a Strategic Partnership. Todays meeting is the concrete evidence that our strategic partnership is delivering on its commitments and has produced a significant diversification and intensification of our bilateral relationship. Therefore, let me first welcome your initiative to set up an EU-Brazil Round Table. Through its regular meetings and its recommendations I expect it to become a tangible, visible and valuable example of co-operation between the EU and Brazil. The European Commission will no doubt make full use of all the opportunities to exchange views with you.

The EU-Brazil Strategic Partnership is nothing but the recognition of the worlds changing reality. I believe our decision to establish a partnership has been fully vindicated by the recent events. Over the last few years, Brazil has enjoyed steady economic growth based on prudent ad sound

macroeconomic policies; it has seen its social indicators improving and has been acquiring an increasingly stronger political relevance both in Latin America and on the global scale. Although not immune from the dire consequences of the current economic and financial crisis, Brazil has been sailing through the storm rather. As a member of the G20 Brazil has been advocating, along with the EU, for better regulation and stronger supervision of international financial markets and has been leading the calls for increased representativeness of emerging Institutions. Not only does the EU share with Brazil a common culture but also fundamental values, such as the respect of democratic principles and human rights, a commitment to strengthening multilateralism in defence of international peace and security and the promotion of development and social justice. Our Strategic Partnership frames all this within a structure that by fostering cooperation and dialogue can lead us to be a force for good and deliver benefits not only to our own peoples but also to the peoples of many third countries. countries within the International Financial

Some observers, within Latin America but also in Europe, have claimed that the EUs decision to establish a strategic partnership with Brazil is not consistent with our traditional commitment to strengthening regional integration in the subcontinent. This is not correct. Regional integration in the MERCOSUR and in Latin America at large and the EU-Brazil strategic partnership are mutually reinforcing. The EU continues to support, politically and economically, regional integration efforts in Latin America. We remain committed to concluding Association Agreements with MERCOSUR, with Central America and with the Andean Community. We remain better placed than anyone else to understand the virtues and support the benefits of economic and political integration and will continue to encourage similar efforts in other regions of the world. Ladies and gentlemen It is fair to say that our strategic partnership is starting to deliver. The domains in which the EU is currently engaged with Brazil are numerous indeed. We have established regular

political and human rights dialogues, we are engaged in addressing together the main global challenges from peace and security to climate change and to that purpose we work together on a wide variety of sectors of mutual interest such as science and technology, energy, environment and climate change, information and communication society, territorial cohesion, employment and social cohesion and many others. While we speak here today, the 11th Joint Committee between the European Commission and Brazil under the EC-Brazil Cooperation Agreement dating back to 1992 is taking place in Brussels. The meeting will give us a snapshot of progress made in the implementation of our numerous sectoral dialogues and will help us steer our work in the months to come. We are in fact approaching the 3rd EU-Brazil Summit which will take place in Stockholm on 6 October. Over the next day you will be discussing the very same issues which are likely to form the thrust of our attention in Stockholm: climate change and energy, and the economic and financial crisis.

These are fundamental issues to which the EU and Brazil, by working closely together, can play a decisive contribution in the search for global responses. Let me focus on these two issues, climate change and the economic and financial crisis. On climate change the Copenhagen conference will be a decisive moment. The fight against climate change has been a defining issue for this Commission. Over the last few years we have achieved a great deal in the EU on climate change. On the basis of proposals put forward by the Commission in January 2008, the EU has now formally adopted the climate and energy legislative package which makes Europe the first region in the world to set far-reaching, legally binding climate and energy targets. The package delivers on EU leaders commitments in March 2007 to reduce greenhouse gas emissions by at least 20% and to raise the share of energy consumption provided by renewable resources

to 20%, both by 2020. It also contributes to the target of improving energy efficiency by 20%. We can be proud, at a time when decisive and urgent action is needed, that the European Union is leading the way in the run-up to Copenhagen. Brazil on its part, is key to any ambitious deal in Copenhagen. Brazils 2008 Climate Change Plan, among other things, goes into the direction of mapping out a number of actions to control the future growth in emissions. Particularly notable is the national pledge to reduce Amazon deforestation by 70% by 2018 compared to 1995-2005 levels. It is therefore paramount that the EU and Brazil work together in the run up to Copenhagen . Energy cooperation is another fundamental plank of the EUBrazil relationship and is one of the key priorities for Europe. It reflects the experience of Brazil in renewable energies, its importance as a key player in the world energy markets and its influence in the energy developments taking place in Latin America.

Cooperation in the energy field can offer mutual benefits. The EU and Brazil share concerns and challenges in this field. We have much to learn from each other, particularly in biofuels, but also in energy efficiency and security. Let me now turn to the economic and financial crisis which has spared no countries. We in the EU have taken bold measures to stem the crisis, both in order to restore the functioning of financial markets and limit the negative feedback on the real economy, as well as to support the economy. The EU has taken measures at different level to address the crisis in financial markets: immediate action was taken by central banks and governments. The ECB and other central banks cut interest rates and injected ample liquidity in the system in order to prevent the interbank market grounding to a complete halt. Threatened by the spectre of potential systematic bank failures in the wake of the Lehman Brothers bankruptcy, governments swiftly adopted in October bold financial rescue packages. At the same time, while it is essential to manage the immediate crisis, the entire EU financial architecture is under review to make sure that a crisis

of similar nature and magnitude cannot repeat itself in the future. In order to limit the fallout of the financial crisis on growth and employment, the European Council, on initiative of the Commission, adopted in December last year the European Economic Recovery Plan. The Recovery Plan foresaw a significant fiscal impulse in the magnitude of 1.5% of GDP., combining short term measures to sustain demand with structural reforms to boost growth potential and prepare the EU for the future, in particular paving the way towards a low-carbon economy.. The Commission and the European Council are closely monitoring the implementation of the Plan. The EU is delivering. According to a first assessment of the measures taken at the Member State-level we are broadly on track and in line with the principles set out in the Recovery Pan. The temporary fiscal impulse is now estimated at close to 2% of GDP, that is more than envisaged in the plan. Active budgetary policies are sustaining economic activity this and

next year.

If one includes the effects of the automatic

stabilizers the overall fiscal effort will amount to some 5% of GDP. The EU is therefore giving its contribution to the global recovery as foreseen in the G20 context. The G20 is now the forum where the global responses to the global crisis are give. As a member of the G20 Brazil has been throughout the crisis a reference partner. Besides addressing the real economy in order to restore growth, the G20 has agreed to reform and strengthen financially the international Financial Institutions as well as to enhance regulation and supervision of international financial markets. The EU is also delivering on this front: following proposals from the Commission and under the Swedish Presidency- legal work will be launched for the creation of a Financial Systemic Risk Board to deal with macro-financial supervision and a European System of Financial Supervisors to deal with oversight of financial institutions. As members of the G20 both parties have an interest in deepening the discussion on these matters. In this vein, the launch on 16 July, next week!, in Brasilia of a high-level macro-economic and financial dialogue adds a crucial instrument to improve our joint work.

Ladies and gentlemen I could not finnish my intervention without some words on employment, that is on people. The economic effects of the crisis have translated into significant social consequences. The number of those without a job has been increasing steadily. We must address this issue with determination. I am happy to say that on this domain both the EU and Brasil share the same values:the economy is an instrument to increase the wellbeing of citizens. Social considerations do matter! We have to strive to preserve and strengthen our human capital. This must be done by improving our policies to promote skills, active labour market measures and social protection measures. From the point of view of the EU the response to the crisis must be based on three key priorities: i) maintaining employment, while keeping firms

competitive,and promoting mobility; ii) upgrading skills and matching labour market needs; iii) increasing access to employment.

The participation of the social partners in shaping the measures to be taken to re-launch the economy is essential, in particular as regards the labour market. In the EU we have a well established social dialogue which has been particularly valuable in the current difficult juncture we are going through. Ladies and gentlemen To conclude, let me hail once again the significant progress made in the implementation of the EU-Brazil Strategic Partnership and the important advances it is bringing about to the bilateral agenda. Your meeting of today and tomorrow provides a major contribution in this direction and the Commission looks forward to receiving your recommendations which will no doubt help us further developing and advancing the bilateral EU-Brazil agenda. Thank you and I wish you a very productive work today and tomorrow.