Today in Strasbourg in a speech to the Federation of the European Construction Industry, Guy Verhofstadt will argue that the health of the construction industry is vital to the health of the wider European economy.

"The construction sector is the barometer of the economy at large. When the economy is booming, so is construction, and vice versa."

The speech will outline the extent of the crisis in the construction sector, brought on principally by the economic downturn and in particular marked collapse of business in countries like Spain, UK and Ireland which had previously experienced a credit-fuelled boom. The severe fall in demand has had a knock-on effect on many downstream industries which have affected in particular SMEs and their employees. Verhofstadt recalls that 95% of businesses in the construction sector comprise fewer than 20 workers.

Specifically, Guy Verhofstadt is proposing that the EU devise a dedicated strategy for the sector given its pivotal role in stimulating economic growth and jobs. Such a strategy should contain at least the following four elements:

- the setting of a Europe-wide price for construction materials as is currently done in the US and China;
- agreement on availability of EU grants and EIB loans for construction projects to be accompanied by more transparency and accountability.
- increase in budget line to support SMEs in the sector which accounts for some 7.5% of total employment in Europe;
- a special focus on the construction sector in the new Member States which are still lagging behind in many basic infrastructures and have been especially badly hit by the financial crisis making recivery even more difficult.

Finally, Verhofstadt will underline that the recovery of the construction sector is inextricably linked to the European economic recovery as a whole which requires a strengthening of cross border financial supervision, a recapitalisation of Europe's banks to support investment and the development of a green, non-fossil economy that respects sustainability and climate change commitments. "Energy efficiency is not just a problem, but a huge opportunity for our economy and must be a priority for the construction sector."