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Denmark in a Changing Europe: How Denmark will Position itself in the EU

Speech delivered by the Danish Minister for Foreign Affairs, University of Copenhagen, March 31st 2014

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Dear Lykke, Michael, members of the Danish Foreign Policy Society, dear all. Thank you for inviting me to deliver a speech at this conference, which I have been looking very much forward to.

As we approach the European elections, the appointment of the new European Commission, the appointments for the leadership positions in the European institutions and the important referendum on the Unified Patent Court – the first referendum on an EU issue in 14 years – it makes perfect  sense to look ahead and discuss the issue of “Denmark in a changing Europe”.

These days, we are regrettably again seeing unrest and aggression near our borders. Ukraine is fighting for a better future closer to the EU, and we support the Ukrainians politically and economically. It is therefore highly relevant to remind ourselves why we founded the European Union and that Denmark is influenced by decisions outside of our borders.
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Today, I would like to present my view on what challenges the EU is facing, why the EU is important for Denmark, what direction I believe the EU must go in and therefore also how Denmark should position itself within the EU. 

To me, European cooperation is not only the most important platform for Denmark’s political and economic interests; it is likewise Denmark’s most important foreign policy tool. For better and for worse, we are affected by the developments in the world around us, and through our membership of the EU, we have the best opportunity to influence these developments.

This pertains both to issues of concern to our citizens such as food security, pollution, organised crime and not least the framework conditions for growth and employment. But equally important, the EU is also important in foreign policy issues, global trade and international climate and energy policy.

We lay down our foreign policy based on our national foundation, but it is to a high degree exercised through a European framework.

In many countries – including Denmark – there are political parties who criticise everything coming from the EU. They believe that the best solution to our current problems is a return to the absolute sovereignty of the nation state. 

This may sound appealing. But in reality it is an illusion with no connection to the hyper-connected globalised world we live in. Denmark – and Europe – is deeply dependent on the surrounding world. We cannot isolate ourselves behind closed borders. We cannot pretend globalisation does not exist, and as my distinguished Dutch colleague Frans Timmermans has said: “The populist parties paint a picture of a glorious past that never did exist as a template for a future that never will exist”.

The Danish government wants a strong EU and we want Denmark placed as close to the centre as possible. We must be as close to the core as our opt-outs allows us. Being close to the core means having influence on decisions which are bound to  influence Danish citizens and businesses. We must continue to be actively involved in shaping the Single Market, financial regulation, free trade, the transition to a low carbon economy and foreign policy. The further away from the core we find ourselves; the harder it will be to influence these developments.

In brief, we need to exchange the illusion of absolute sovereignty with real influence in European and global affairs.

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For many of us, Denmark has been a member of the EU for as long as we can remember. We have become accustomed to peace and stability in Europe. And we take the benefits of the EU for granted. No one can imagine a breakup of the Single Market. We have gotten used to the rich selection of goods from all over Europe in the supermarkets. We have gotten used to the fact that all young Danes have the opportunity to work at a pub in London without having to apply for a working permit. And we have gotten used to being able to drive from Denmark to Italy without being stopped at country borders and having to show our passports.

But the global trends suggest that we cannot take all of this for granted. This concerns our prosperity, our values and our freedom of movement throughout Europe. And basically it concerns peace and freedom in Europe. The incidences in recent months just east of our boarders, have sadly reminded us of that.

In just two hours, one can fly from Denmark to the Maidan Square in Kiev. I made that trip just a few weeks ago. And I can assure you that one does not need to spend much time at the Maidan Square to understand how relevant and how strong the desire for European unity is. I had the opportunity to speak with several of the demonstrators, who have risked their lives for the European values and a better future for themselves and their children. That experience affected me deeply. 

These are people living just on the other side of our borders. They fight for the values and rights we know so well in the EU and take for granted. They fight for a Europe where freedom and prosperity goes hand-in-hand. They dream not only of achieving fundamental rights, but also about jobs, better living conditions, prosperity and equal access to education. We must support their battle for freedom and democracy politically and economically – which is what the EU has done in recent months.

The Ukrainians have not experienced the “wind of change” in the years after the dissolution of the Soviet Union, and they still hunger for progress. Let me give you an example to put things into perspective: In 1990 – shortly after the fall of the Berlin Wall – the prosperity levels were the same in Poland and Ukraine. Today – only 24 years later and 10 years after Poland became a member of the EU – Poland is three times more prosperous than Ukraine. 
The developments in Ukraine illustrate why it is so important for us in Europe to stand together. But let me also be clear that we do not stand together against Russia, we do however stand together to protect our values, to protect Ukraine and the Ukrainians, to defend international rule of law and to maintain peace and stability in Europe.

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Let me clarify where I see the greatest challenges currently, and where Europe should increase its focus in the coming years.

Firstly, the global balance of power is changing and will continue to do so. The global economy is expected to double by 2030, and the new power centres are evolving at great speed. The bulk of future economic growth will occur outside Europe. The EU’s share of global trade is declining while the population is ageing. Due to these developments, the global political influence of the EU is under pressure. The competition from other parts of the world is intensifying and our ability to create economic growth, which is a precondition for our future wealth, is challenged.

The changed global balance of power puts pressure on the EU’s role in the world. Countries such as China, India, Brazil and – as we are currently witnessing to an extreme extent – Russia, are all seeking a role on the international stage. The size of these countries alone stresses the need for European unity. This development has been hard to recognize in some European capitals; nevertheless it is becoming reality. The crisis in Ukraine has emphasised this need.
 
Secondly, growth and employment will be a top priority for the European cooperation in the coming years. However, we must consider what kind of growth we aim for. The growth must be sustainable and go hand-in-hand with our ambitions on climate change and social objectives in the EU, amongst others.

Thirdly, we cannot ignore the fact that the European peoples’ trust in the EU currently is historically low. Just 31 percent of EU citizens have trust in the EU, and the trend is declining. In my view, there is no doubt that the declining trust has roots in the global economic crisis, which has affected not only Europe, but the rest of the world. It is however important to remember that the EU neither caused nor worsened the crisis – in fact, quite the contrary.

Another factor influencing the declining trust in the EU is the public debate on what the EU should or should not do. We need to ask ourselves how we strike a balance between what should be dealt with at the EU level and what should be left to Member States. Also, we need to examine how we can improve the EU’s legitimacy and how we can strengthen the involvement of national parliaments. 

The British Prime Minister has announced that he wants a new settlement with the EU if the Conservative Party wins the next election in 2015. In that case, the new settlement will be put up for a referendum in 2017 where the British people will be able to decide whether or not to remain a member of the EU.

I appreciate the UK greatly, and the UK has through many years been an important and close partner to Denmark in the EU. But Denmark has chosen a different path than the UK, because we are convinced that being close to the core will ensure the greatest level of influence.

The Dutch government has argued for a modest and more effective EU. To summarise, they advocate that legislative initiatives should be European where necessary and national wherepossible. I find it hard to disagree. 

The debate should not be about more or less EU; it should be about a better EU. The debate should be about how we ensure that the EU creates added value on areas of concern to our citizens. The President of the Commission, Mr Barroso, has put it very precisely when he declared that “The EU needs to be big on big things and smaller on smaller things”. For the Danish government, the debate should first and foremost be on what topics the EU should focus on in the coming years.

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So in what direction should the EU develop? I will argue that reforms continue to be needed in order to strengthen our competitiveness, in order for us to create growth and jobs in the EU. Reforms are a precondition for the EU’s ability to do well in the global economy in the long run. This, again, is a precondition for increasing public trust in the EU because the EU more than anything is a mean to achieve meaningful results to the citizens. The EU is not, and should not be, an end in itself.

Several reforms have already been implemented. Since 2008, the economic cooperation in the EU has intensified significantly, which has contributed to regain the financial markets’ trust in the Euro. Due to our great dependency on the economic development in the EU, this is an advantage to Denmark even with our Euro opt-out. 

Simultaneously, the strengthened banking cooperation will form the foundation of a well-organised financial sector, a sector which alongside shipping, is arguably the most globalised sector altogether.

The Danish government has not yet decided whether to participate in the Banking Union.  Many considerations need to be taken into account. Our position in the negotiations has been that Denmark should have a real choice. That is where we are now. We have launched an analysis to evaluate whether we should be in or out. From a pure European political perspective, there are many advantages by participating, as it would help us ensure influence and keep Denmark closer to the economic policy formulation in the EU.

In addition to strengthening of the economic and financial cooperation, we should continue the modernization of the EU’s other policies:

Firstly, the single market should be expanded. There are still large gains to be achieved by strengthening the digital single market, the single market for services and the single energy market.

Secondly, we need to continue the transition to a low carbon economy. An ambitious climate and energy agenda goes hand-in-hand with strengthened energy security, a better climate as well as more jobs.

The crisis in Ukraine has once more showed that energy policy also is foreign policy. We are to a high degree dependent on energy import. If the current trend continues, 80 percent of the EU’s energy will be imported from third countries by 2030. Hence, we have to focus more on energy security and energy independence, and it needs to happen through a more well-functioning single market for energy and ambitious goals for energy efficiency and sustainable energy. It strengthens our external relations and will benefit Europe’s competitiveness. I am very pleased that the European Council, at Denmark’s suggestion, tasked the Commission to present by June this year a plan for how the EU can become more energy independent.

Thirdly, we should focus on free trade agreements which will improve market access for European companies outside Europe. 90 percent of all economic growth is expected to occur outside Europe in the coming 10-15 years. Our attention right now is therefore to a large extent on the EU’s agreements with the USA and Japan. Apart from having large economic potentials, these agreements will also entail that we, as trading blocs, will be so large that we together can set better global standards.

And finally, we have to strengthen our cooperation in research, development, innovation and education. If the EU shall manage the global competition, we need to compete not on low salaries but on the ability to create new jobs, because we are capable of inventing new products or optimizing processes.

 

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I cannot mention research and development without also mentioning the important referendum on the unified patent court that will take place in Denmark on May 25. In Denmark, we make are good at transforming good ideas into jobs. Companies with patents account for a third of Danish export and one in ten jobs in Denmark. Therefore, there is a clear line from an efficient protection of patents to keeping and creating more jobs. And this applies in particular for a country like Denmark, which is very innovative and has many smaller companies. The current patent system is for many smaller companies so tiresome and expensive that it is uneconomic to use.

Therefore, the referendum it is about giving Danish companies the same opportunities as their competitors in countries like Germany, Sweden and France. Danish companies should not be disadvantaged. That is why Danish trade unions and business organizations warmly recommend that Denmark should join the unified patent court. They know what is at stake.

When the new patent system is fully implemented, it will be possible to get a patent which is valid in more than 20 countries on a one-stop shop basis. And it only takes one court case to defend a patent in more than 20 countries if another company plagiarizes your product. That is an enormous simplification and will save companies troubles and expenses. And it is voluntary. Companies can decide whether they only want a Danish patent or a unifitary-patent.

It would be very unfortunate if Denmark decides not to participate. With the reform of the patent-system, the framework conditions for European companies will be strengthened and Europe’s competitiveness improved. Denmark should take part in this development and Danish companies should of course be able to get full advantage out of the new system.


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The EU is approaching a defining moment both inside and outside of our borders. When the European elections have been held, top jobs allocated, and the new Commission is in office, we have to further develop the cooperation by focusing on the EU as a project that has an important role to play in ensuring peace, prosperity and welfare in Europe and in our neighborhood. For that, growth and jobs should be a fundamental objective.
Let me summarize: We need a strong EU as it is through the EU that we, as a small country with an open economy are able to influence decisions which affect the everyday life of our citizens and companies. We should seek influence by being critical, constructive and pragmatic. If we place ourselves outside, we will have such influence. We thus need to be as close to the core as possible.
And then we need to be better at explaining the EU. We need to remind ourselves what unique achievement the EU is when it comes to promoting democracy, human rights, respect for the individual, our model of society with both solidarity and welfare, sustainable development and not least a peaceful, voluntary cooperation amongst independent nation states. It cannot be that we only remember that, when severe incidences like the Ukrainian remind us.
The European dream is actually so strong that ordinary people are willing to stand up against cold-blooded dictators and heavily armed soldiers to chase the hope that this dream will also one day be reality for them. That it is a powerful aspiration, and we need more of that power in the Danish debate on the EU.
Thank you for listening!