Europaministerens tale ved DI/CO-konference ”European Business Day” den 20. december 2011.
(Det talte ord gælder)
Good morning everyone. Business leaders, distinguished experts, ladies and gentlemen.
As Minister for European Affairs, I am extremely pleased to see so many prominent people gathered here today in order to discuss European affairs. And thank you – Karsten Dybvad and Thorkild Jensen – for the invitation to speak at this important conference. Your sense of timing and your choice of theme for the conference simply couldn’t be better. With all the experts and prominent people assembled here today, I hope that we will come up with some useful ideas and some new inspiration to help Europe move forward. Let’s give it our best shot.
My speech today will be divided into three parts. First, I will talk a little bit about the current situation in Europe and the EU. Secondly, I will brief you about the political priorities for the up-coming Danish EU Presidency and finally, I will say a few words about what kind of Europe, I hope we will see emerging, when we get out on the other side of the crisis.
Ladies and gentlemen, in less than two weeks, Denmark will assume the EU Presidency for the seventh time, since we became members back in 1973. And what a time to be entrusted with this responsibility! We will take on the role as President of the Council of Ministers at a time, when almost 25 million Europeans don’t have a job. When economists are predicting a recession in Europe next year, and when students, public employees and senior citizens across Europe can’t make ends meet because of drastic welfare cuts.
This only highlights the seriousness of the situation. The structural reforms and the painful austerity programmes that are necessary to confront the crisis are only now about to be implemented in Member States. It is still early days yet.
As a consequence, the economic crisis that is engulfing Europe today will constitute the framework environment for the Danish EU Presidency next year. That’s the reality and that will be our point of departure. But in addition to the crucial job of pushing through EU-legislation in Brussels aimed at tackling the crisis, we will do all we can as Presidency to contain the political fall-out of the crisis. The tensions within the EU were laid bare for all to see at the EU summit 10 days ago. We will do our utmost to ensure that the EU remains fully operational at 27. Not as a club of 17, 23 or 26, but as a collective and productive entity of 27. The EU is a family of 27 and no less. The way to accomplish that mission is to be an honest broker at the negotiating table and to conduct a competent, open and responsible Presidency.
At the same time, I can understand if people are getting somewhat tired of listening to the constant stream of politicians and journalists predicting doom and gloom in Europe. The first rescue package for Greece was adopted back in May 2010 – that is 18 months ago - and the European debt crisis has been dominating the headlines ever since. I have also heard people say that the EU will whether the storm like it has done many times in the past, so please stop crying wolf all the time.
To those people, I would like to say the following. Yes, it is true that the European co-operation has experienced many ups and downs for the past 50 years. There was the “empty chair”-crisis in 1965, when France refused to participate in meetings of the Council because of a dispute with the Commission. There was the famous “I want my money back”-situation in 1984, when Margaret Thatcher threatened to block British payments to the EC budget, if Britain did not obtain a significant rebate. And there was the crisis in 2005, when French and Dutch voters rejected the Constitutional Treaty and left Europe’s leaders scratching their heads in disbelief. In short, tense situations and heated arguments have always been part of the EU’s DNA. And so has the ability to find a compromise that will allow Europe to move on. Finding a workable compromise in the end has also been part of the EU’s DNA.
But, this time things are different. This is not the average EU crisis. Things will not sort themselves out just because that is what usually happens in the EU. This crisis needs to be confronted with the same amount of political determination that drove European leaders to construct the European project in the first place back in 1952. That will be my approach, when the Danish Government is handed the responsibility on January first to navigate our common European ship through these rocky waters.
I would now like to say a few words about the efforts underway concerning a fiscal stability union for the euro-zone and the position of the Danish Government. On Friday last week, we received the first draft of the legal agreement from Herman Van Rompuy. The draft spells out in a legal language the provisions that were agreed by the euro members at the EU summit on the 9th of October. The aim is to ensure greater budgetary discipline, stronger economic coordination, better economic governance and to help stabilise the euro.
It is the firm belief of the Danish Government that the draft agreement now on the table contains several important elements that are in line with Denmark’s national interest. As a small country with an open economy that sells up to 70% of its exports on European markets, it is essential for us to have a stable and prosperous euro-zone at our doorstep. In addition, it is crucial for us that the international financial markets and foreign investors have confidence in the Danish economy and in the determination of the Danish Government to conduct a responsible fiscal policy.
The Danish Government attaches great importance to the fact that non-euro members like Denmark can choose to participate in key elements of the agreement, if we want to. We are studying the draft proposal carefully and in a positive spirit. We will enter the coming negotiations constructively and with the clear intention to participate to the widest possible extent within the limits established by our opt-out from the euro. It is important that we now begin a discussion in Denmark about how much of the stronger economic co-operation outlined in the draft agreement we would like to take part in. It is too early to form a definite opinion about this now, because the draft text is not sufficiently clear in certain areas. This will be the subject of intense negotiations in the coming weeks between the euro countries. When the smoke clears eventually, and we have a consolidated text, the Government will discuss how much of the agreement, we would like to take part in together with the political parties in Parliament.
But I would also like to stress that even if Denmark decides to join the new agreement, the EU will not be able to impose sanctions on us, if we violate provisions in the agreement regarding limits for government debt or fiscal deficit. The reason is our euro-opt that gives Denmark a special position. This was also confirmed by the President of the Commission, Mr Barroso, during the weekend. It goes without saying that the Danish Government will make sure that our opt-out from the euro is fully respected, whatever we decide to do. Our opt-out from the euro can only be lifted following a referendum in Denmark, in which a majority votes in favour of lifting it. That is clear.
Another thing that is clear is that the agreement eventually will establish new parameters on how to conduct fiscal policy in Europe. As you know, Denmark has maintained a fixed exchange rate policy in relation to the euro. If we don’t continue this policy, we risk opening the door for increased uncertainty about the Danish economy and our currency. Consequently, we will have this firmly in our mind, when we decide if and how much of the agreement that we want to take part in. Let me just underline as well that the issue of balancing the annual Finance Bill forms an important part of platform for this Government – that is ‘Regeringsgrundlaget’. So, in that sense, the aim of the proposed fiscal stability union sits well with the fiscal policy of the Danish Government.
Although the economic crisis dominates headlines and demands our full attention, we must not fall victim to perceptual blindness and forget about the other, serious challenges facing Europe today like climate change, the need to create long-term economic growth or illegal immigration. We must be able to multitask. We must be able to perform urgent crisis management while we take account of the long-term challenges for Europe. When we identified the priorities for the Danish EU Presidency, we took into consideration this need to multitask and to pursue short term as well as long-term objectives. In contrast to the last time, when Denmark had the Presidency in 2002, there will not be one big, overarching priority like EU enlargement was back then. This time, we will have to focus on several issues of various scope and importance within a long list of policy areas.
The priorities for Denmark’s EU Presidency centre around four key objectives.Firstly, a responsible EuropeSecondly, a dynamic EuropeThirdly, a green EuropeAnd lastly, a safe Europe
Our philosophy behind these four objectives is that long-term debt reduction in Member States is only realistic, if our economies achieve higher growth rates. We must stimulate growth while we tighten our belt at the same time. To perform this delicate balancing act we must become better at obtaining more with less. We must squeeze more value out of every euro spent.
With regard to the first priority – a responsible Europe, it is clear that we need to re-establish order and stability in the European economies. We need to respond effectively and convincingly to the immediate threat posed by unsustainable debt levels in some European economies. This requires a political willingness to implement and comply with the new rules on economic governance that are part of the European Semester. Rules that will be implemented for the first time during the Danish Presidency. Among other things, it will include improved procedures of monitoring the economies of EU Member States, structural reforms and enhanced budgetary discipline in Member States.
The Multiannual Financial Framework – that is the EU budget for the period 2014-2020 - will be high on our agenda. It is crucial that new budget will channel more funds to growth-enhancing areas like research, education and green technologies. During the first months of our Presidency, we will focus on clarifying a number of technical budget aspects and as we move along, we will gradually move into a more political phase, where we hope to narrow the gap between the different positions of Member States. Hopefully, we will be able to provide the European Council with a good basis to finalise negotiations including on numbers before the end of 2012. Currently governments all around Europe struggle to make ends meet in their national budgets. Our European budget will also need to reflect that we live in a time were financial responsibility is and needs to be at the top of the agenda.
But putting together a multiannual budget for Europa should not and cannot only be a question of cutting costs. We need to create growth and jobs in Europe and that aspiration needs to be fully reflected in our EU budget.
Financial responsibility and creating growth and jobs needs to go hand in hand. So if anyone here today would like to volunteer any good ideas about how we create those jobs I will make sure to register them in my notebook which I will consult regularly during the coming months of negotiation.
The second priority for the Danish Presidency – to return Europe to an economic growth path – is all about promoting the further development of the Single Market. 2012 marks the 20-year anniversary of the Single Market and it has proved to be one of the greatest achievements in the history of the EU. But there is still a large unused potential in the Single Market. The Commission will propose 12 concrete initiatives aimed at improving the business climate in Europe. This will include better online security for consumers and lower roaming charges, when people use their cell phones abroad. Another key part of a modernized Single Market will be an efficient and user-friendly EU Patent System. Such a system will allow businesses across Europe to avoid having to submit applications with 27 different national patent authorities in order to acquire an EU wide patent protection. Hopefully, European companies will soon be able to escape the hideous paperwork of having to submit 27 patent applications to 27 national patent authorities. Instead, they will be able to submit just one application to a European Patent Office.
As our third priority, we want Europe to adopt a much more ambitious approach to green growth. And this is really about being able to focus on confronting the economic crisis that is engulfing Europe today. While we engage in urgent crisis management, the European economies must be sustainable in the long run. In recent years, the EU has taken the lead globally on the green agenda by developing a comprehensive energy and climate policy. Now, the time has come to speed up Europe’s transition to a greener and more sustainable economy and the way to do that is by creating economic growth without increasing our consumption of natural resources and fossil fuels. This will not happen by itself. We need to work hard and agree on new initiatives, if we are to maintain our comparative advantage to other regions in the world. Otherwise, we risk that knowledge-intensive jobs and high-tech research capabilities begin moving to other countries that possess a clear understanding of how to invest in the transition to a green economy. A green transformation entails a lot of things, but paving the way for long-term economic growth in Europe is a fundamental part of it.
As you know from sports or business, there can be times, when playing defense is not really an option, if you want to safeguard your position and achieve a positive outcome. Sometimes, you can be forced to play offensively, even though you have been dealt a weak hand and most people expect you to lie low. I firmly believe that Europe finds itself at such a moment in time today in relation to the green agenda. If we want to preserve our prosperity and our impressive living standards in the longer term, we cannot afford to be constrained by short term thinking and forget about the bigger picture. If Europe is to thrive in a new world order characterized by the rise of non-European giants like China, India and Brazil as well as by international competition to get hold of scarce natural resources, Europe needs to dramatically upscale its research and investments in green technologies, renewable energy and energy efficiency. This is not just about achieving some favorable strategic goal 30 years from now, but just as much about creating new knowledge-based jobs in Europe in the short term. The Danish Presidency will work hard to promote the green agenda, but we will do it in a consensus-seeking, result-oriented and inclusive way. Needless to say, we will also put a lot of effort into the negotiations on the energy efficiency directive and on the follow-up to the EU’s climate road map.
As our fourth priority, the Danish Presidency will take the lead on a number of important initiatives within Justice and Home affairs. You may remember that the first months of the Arab Spring caused thousands of North-African people to head North towards Europe in search of shelter. This refugee pressure and our on-going problems with illegal immigration in Europe underline the need to finalise the EU’s common European asylum system in order to ensure an appropriate reception and treatment of people turning up at our door step. The Danish Presidency will push hard to promote a well-functioning European asylum system and stronger Schengen cooperation.
Ladies and gentlemen, let me conclude with a few remarks about what I believe we will see happing in Europe as the EU Member States wrestle their way through the crisis. As I said, it seems apparent that we are still in the early stages of what looks like a prolonged period of slow growth in Europe. According to the latest numbers from the Commission, the Danish economy is expected to grow by 1 point 4% next year, and our two biggest export markets – Germany and Sweden – are expected to see growth of just zero point 8% and 1 point 4% next year. The numbers for other important European economies are equally disappointing. The UK zero point 6%, Italy zero point 1% and France zero point 6%. These numbers are not particularly uplifting, and if you happen to be among those Member States struggling with too much debt, these numbers make it really difficult.
With a prolonged slow growth scenario for Europe being more or less the consensus prediction among economist today and in view of the austerity programs now underway in many Member States, my personal hope is that we will draw a fundamental lesson about what led Europe into the crisis in the first place. And I am not thinking about greedy bankers, sub-prime lending or collateralised debt obligations. I hope that we – and by “we” I mean the people of Europe – will be able to dispel the widely shared myth that our prosperity, our social security and our free health care systems exist in the same way as gravity exist. As something that will always be there for us no matter what we do. It does not of course. Our prosperity, our social security and our free health care systems are fundamental achievements of our modern societies that we must now make an additional effort to preserve.
Our welfare depends on the choices that we make and the ability of every generation to add value rather than to subtract value. Our welfare society is based on a premise of rights and obligations, and I am afraid that what led Denmark as well as much of Europe into the current crisis was an overemphasis on rights and an insufficient commitment to our obligations. The economic crisis engulfing Denmark and Europe today will redress this balance, and that may not be such a bad thing after all.