Toespraak voorzitter Van Rompuy op Brussels forum Duits Marshall Fonds (en)

EUROPEAN COUNCIL THE PRESIDT

Brussels, 15 March 2013

EUCO 73/13 PRESSE 120 PR PCE 65

"PREPARING FOR THE FUTURE"

Speech by President of the European Council Herman Van Rompuy i to the Brussels Forum of the German Marshall Fund

It's a pleasure to be here at this year's "Brussels Forum". A place for inspiring political conversations, and perhaps clashes of views, at the highest level. I am coming straight from chairing a meeting with 27 Presidents and Prime Ministers. As always, it was not easy, but our discussions since last night were serene and surprisingly consensual. Maybe even more than here in the room among you!

This morning we had frank and productive debates about our relationship with Russia and our concerns about Syria. But the main purpose of our meeting was to set a shared direction for our economic policies. There couldn't be a more important issue

There was broad agreement among leaders on our strategy and its four strands:

One: restoring financial stability and maintaining it, which is vital for confidence of consumers and investors;

Two: ensuring sound public finances, structurally sound; Three: fighting unemployment, especially for the young;

And four: working on long-term reforms and competitiveness: preparing for the future

Four strands, and we need all four at the same time. The question is finding the right balance

Here I should like to say that we - and I mean, the leaders of all European countries - are strongly and painfully aware of the social distress, and also of the debates raging outside. Let me assure you: if there really was a simple choice between "austerity" and "growth", believe me, I wouldn't hesitate for a second in choosing growth!

But growth is not something governments can either buy or summon, no, it is something for which they have to keep striving. And restoring sound public finances, far from being incompatible with steady growth, is one of its preconditions. There are others: confidence, credit, competitiveness - to name three essential ones

There's a tendency to paint things in black and white and I think it's important to bring in some nuance in the debates. We won't solve a debt crisis with more debt. At the same time, deficits cannot be eliminated overnight - that would risk triggering a downward spiral - so it has to happen gradually, and steadily

For each individual country that means making its own choices - difficult choices, but sensible ones:

• - 

  not just going for 'easy' cuts but also launch long-term reforms;
• - 

  not just raising tax levels but also tackling tax evasion;
• - 

  and when cutting, making sure NOT to sacrifice vital areas for growth, like innovation or education

Such smart and situation-specific choices are precisely what our common rules allow and what today's joint decisions encourage. That's for instance why we also look behind the figures at structural efforts. So it is about how to achieve a good balance, a steady pace and the right priorities. No easy solutions, but an intelligent mix of remedies. Sorry to be so nuanced! I know it's not politically correct!

I am fully aware that for many people this type of answer is rather frustrating. It is perhaps intellectually sound and the right thing to do. But the problem is we're facing serious time lags. We're running against the clock. People want to see results

Yes, we have managed to restore financial stability in the eurozone i and leave existential threats behind us. But our initial results are taking time to translate into more economic activity and jobs. Declining spreads or growing FDI flows are hugely important, but of little comfort for people who fear losing their job or struggle to find one. And as long as there isn't a brighter outlook, there will be discontent, criticism, despair... That's why the perspective of the economies picking up at the end of this year, and next year, is so important

Meanwhile, unemployment - especially youth unemployment - is the absolute highest priority now. It's affecting millions of individual lives. In the most-hard-hit countries, it may have deep social and political consequences

We've been mobilising many, many levers. For instance, redirecting € 16 billion of EU funds to help almost 800.000 young people and 55.000 small companies just last year. Also, helping companies access credit and expand their activities. Over 200.000 SMEs in 2012 received support from the European Investment Bank. In the next three years, the Bank will co-finance up to €180 billion worth of projects. These are hardly trivial amounts!

And I'm only talking here about what we're doing jointly, as a Union. But the bulk of the efforts has to be carried by countries. Germany and Austria are good performers, with high employment rates; and for instance Spain and the UK have recently taken big initiatives

EUC

From the start of the crisis, two central principles have guided our response and actions. Responsibility, individual and shared, and solidarity. Both have been strengthened massively in the past three, four years. Just look at the depth of reform and budgetary efforts, how countries have really taken the bull by the horns. In some cases, a real change of culture. And then look also at the scale of the financial support among countries, of the political will and means mustered to help each other out in difficult times - it's unprecedented within our Union

As a point of reference, we can take the most celebrated demonstration of solidarity in modern times (and rightly so), the US Marshall plan - a suitable example in this Forum! It amounted to around 2% of the GDP of recipient countries in aid and grants, while the total assistance to Greece (taking into account all grants, loans, and debt write-off) amounts to over 170% of Greek GDP. It's not a perfect comparison - the US at the time came to the rescue of half a continent -, but it's still telling. That kind of solidarity is more than symbolic. Our ultimate goal is to preserve and defend together our way of living, our interests and values in the world. And we strive to seize all opportunities that bring us closer to that

In this regard, the perspective of opening transatlantic trade negotiations was good news. It makes good sense. Together Europe and America are the backbone of the world economy, nearly half of world GDP & a third of world trade. So it's a huge opportunity to create millions of jobs either side of the Atlantic, with the potential to bring up even the rest of the world's GDP by up to €100 billion

It's good to see Europe perceived again in Washington as a source of growth... and not as an impediment to growth. But if we want to secure this role we need to do it now, not in ten, twenty years time. We must seize the moment

We're impatient to get started, but we also know the negotiations won't be a smooth ride. Obviously there will be sensitive issues, and each of us will have to confront our sacred cows. (Perhaps including actual cows...!) There will likely be difficulties in Congress, but also don't forget in the European Parliament. But with flexibility, open-mindedness, and maybe some creativity, I'm confident we will find solutions

What's at stake with a transatlantic free trade area, is to enshrine Europe and America's role as the world's standard setters; beyond product specifications, it means setting the rules that shape the workplace, even societies as a whole

On other issues too, we have the responsibility to work together. And if you allow me to say in passing, I'm each time struck by the number of foreign policy issues the US and the European Union agree upon - from Iran to Syria. In fact, President Obama tends to find summit meeting with European leaders a little boring, because we agree on so many things..

I think that's just great news. We have to keep this transatlantic conversation going. And that's why I wish you all a very stimulating few days here. Here at the Brussels Forum I always have that strong feeling: "the West" still exists

EUC