Newly-elected head of the European Commission Jean-Claude Juncker called for a €300 billion package of investment to stimulate the European economy yesterday but stopped short of endorsing greater budgetary flexibility for EU member states.

In a speech to the European Parliament in Strasbourg ahead of his election by MEP's in a private vote, Mr Juncker called for a €300 billion package over the next three years, involving public-private investment and existing funds from the EU budget and the European Investment Bank.

"We need a reindustrialisation of Europe, " the 59-year-old former prime minister of Luxembourg said, pledging to increase industrial production to 20 per cent of the EU's economic output.

He said Europe needed to increase its competitiveness and pledged to support the EU-US trade deal, but he warned that Europe would not sacrifice its standards, particularly in the area of health.

He also promised greater transparency regarding the on-going trade discussions which are particularly contentious in countries such as Germany and Austria.

“If we don’t publish the related documents . . . this treaty will fail. It will fail in the eyes of public opinion,” he said.

‘Social dialogue’

In an apparent nod to the Socialist and Democrats (S&D) group in the parliament, which backed his candidature although he was a European People’s Party (EPP) nominee, Mr Juncker said he wanted to be the “president of social dialogue,” noting that the financial crisis was not over when 25 million people remain unemployed. “We have to remember the principle that the economy has to serve people and not the other way around.”

While welcoming Mr Juncker’s appointment, the head of the S&D group, which contains more than 30 MEPs from Italian prime minister Matteo Renzi’s socialist party, said that “countries with ambitious reforms and that invest in knowledge and know- how should not be cramped . . . [by] duly rigid rules”.

The European Commission is facing pressure from countries such as Italy and France to allow greater flexibility in the application of EU budget rules.

Minimum wage

While indicating that countries which implemented reforms should be offered incentives, Mr Juncker declined to be drawn on details in his first press conference following his election.

Mr Juncker also outlined his support for a minimum wage in every European country.

Mr Juncker, who will attend today’s EU summit at Brussels where the remaining EU top jobs will be discussed, also defended the single currency as something that gave “discipline and protection” to euro zone countries.

The former Luxembourg prime minister, who headed the euro group during the financial crisis, likened the handling of the euro zone crisis to “keeping a burning airplane in the air”.

He said he was "proud" that Greece had remained within the euro zone, but that future economic adjustment programmes would be accompanied by a social-impact assessment.

Mr Juncker, who was prime minister of Luxembourg when controversial tax rulings with multinational companies were negotiated, said he supported the common consolidated corporate tax base (CCCTB), the Financial Transactions Tax (FTT) and was committed to tackling tax fraud.

Luxembourg is one of three countries, including the Netherlands and Ireland, under investigation by the European Commission for specific tax rulings offered to individual companies.