Barroso defends EU crisis response, looks to 2014 vote

European Commission President Jose Manuel Barroso on Wednesday defended the measures taken to tame the debt crisis, putting eurosceptics on notice ahead of EU elections next year. Barroso said the European Union "fought back" as member states realised they had to act together to get through the 2008 global financial crisis and then the debt crisis and economic slump which followed. "What matters now is what we make of what we have achieved," he told the European Parliament in the last "state of the union" address of his term as head of the EU's executive arm. "We have come a long way since the start of the crisis... the facts tell us that our efforts have started to convince" the doubters, he said, citing progress in bailed-out Greece, Ireland, Portugal and Cyprus alongside Spain whose banks had to be supported. "For Europe, recovery is within sight... it proves that we are on the right track," he said. But Barroso warned against complacency, saying the main downside risk to further progress was "political", with sceptics waiting to point out its failings though the EU was a key element in solving the continent's problems. Specifically, he called on Parliament to approve before next year's vote the EU's 2014-20 budget and plans for a 'Banking Union," the new regulatory framework meant to prevent a failing bank pulling down the whole financial system. Getting the banking system working again was essential to growth and jobs, Barroso said. In reply, head of the centrist Liberal Group in Parliament and former Belgian prime minister Guy Verhofstadt, said slight economic improvement was little reason to get carried away. "We are seeing the first signs of recovery but that simply shows that we have hit the bottom of the recession," Verhofstadt said. The figures "show that we are in a new phase of the crisis and not that we are not out of it," he said. "We risk a period of stagnation, a period of high and lasting unemployment," he said, with the jobless rate running at a record 12.1 percent in the eurozone. Barroso said he wanted to put the stress on the positive aspects because "euroscepticism offers no hope." In the 2014 election campaign, MEPs should remember that it was not the EU that was responsible for the crisis but rather national governments who had breached EU rules on spending and tax, he said. The EU had responded, however, and its record should be defended to show what the bloc could do, he added. Barroso has not said whether he intends to run for a third term as European Commission president after next year's elections for a new parliament.