EU's Juncker sets out "grand coalition" EU programme

By Tom Körkemeier

STRASBOURG France (Reuters) - Jean-Claude Juncker set out a "grand coalition" investment programme aimed at reviving Europe's economy in an impassioned speech on Tuesday seeking confirmation as the next head of the executive European Commission.

Belying his reputation as a veteran back-room fixer, Juncker spoke with eloquence and fire of his ambition to reindustrialise Europe and put the European Union's 25 million unemployed, many of them young, back into work.

He promised a 300 billion euro ($409 billion) public-private investment programme over the next three years, combining existing and perhaps augmented resources from the EU budget and the European Investment Bank with private sector funds, to build energy, transport and broadband networks and industry clusters.

"We need a reindustrialisation of Europe," the 59-year-old former Luxembourg prime minister said. He won strong endorsement from the Socialist group in the European parliament as well as his own centre-right bloc, the largest in the EU legislature.

In a politically balanced speech delivered in French, German and English, Juncker sought to reassure Germany and other north European fiscal hawks that the 28-nation bloc's strict rules on budget deficits and debt reduction would not be changed.

However, his emphasis on public investment, reaffirmation of a target of raising industry to 20 percent of EU economic output from 19.1 percent in 2013 and call for a minimum wage in each EU country, were designed to reach out to the left.

Juncker acknowledged that many Europeans had lost confidence in the EU and said only economic results and full employment, not endless debate over EU institutions, would restore their trust.

Eurosceptic parties topped May European Parliament elections in France and Britain and won more than a quarter of the seats in the Strasbourg-based assembly.

To British sceptics demanding a return of powers from Brussels to national capitals, he declared that Europe could not be built against nation states and should focus on the big common challenges and not intervene in "small problems".

He was heckled by Eurosceptics but applauded by most lawmakers when he said the euro single currency had protected Europeans in the world economy, and when he quoted former French President Francois Mitterrand as saying that nationalism only led to war.

INCENTIVES

His speech was widely welcomed by centre-right, centre-left and liberal speakers, ensuring him of a broad majority in the vote due after 1030 GMT.

But British Conservative Syed Kamell, speaking on behalf of the sceptical European Conservatives and Reformists group, denounced a parliamentary power grab that led to his nomination.

"The election that was suppposed to end all backroom deals has ended up in the mother of all backroom deals," Kamell said.

Juncker said euro zone countries should get financial incentives if they make ambitious structural economic reforms, funded by the creation of a separate budget for the 18 countries in the currency area.

"If the member states of the economic and monetary union make a particularly great effort, then we have to reflect on financial incentives which could then accompany that process of great effort," Juncker said.

"In that context, we would have to reflect on the setting in place of our own budgetary capacity for the euro zone."

He also promised more transparency in talks between the United States and the European Union to establish a trade and investment pact, which face strong public opposition in some EU countries.

"If we don't publish the related documents ... this treaty will fail. It will fail in the eyes of public opinion," he said, vowing to defend European health, labour and environmental standards in the negotiations.

Juncker said he would work towards the introduction of a guaranteeed minimum social wage in each member state of the EU.

He has previously said he favours setting a minimum wage as a proportion of each country's median income, which varies widely between Luxembourg at the top and Romania and Bulgaria at the bottom.

He also vowed to protect public services in Europe from what he called "the whims of the age" - an apparent reference to privatisation and restrictions on state aid.

(Reporting by Robin Emmott, Julia Fioretti, Adrian Croft, John O'Donnell and Martin Santa; Writing by Paul Taylor Editing by Jeremy Gaunt)