Transcript
A (0:00)
Ladies and gentlemen, my name is Peter Sutherland. I'm chairman of the London School of Economics. And let me say it's a particular honour and privilege to have with us today the President of the commission, Mr. Barroso. He last came here in 2005, having been first appointed as President of the commission in 2004. And in the intervening period, as President of the Commission, he has helped to steer the European Union through a period of notable turbulence. The debate about Europe in Britain is, of course, always a difficult debate and we are now facing into a period leading up to the European elections, which will tell their own story, and after that, to the debate about Britain's place in the European Union. The subject which President Borosa will speak on this evening is reforming Europe in a changing world, which could not be more topical. Your massive attendance, which could have been even far greater than it is had we the room to accommodate them, is an indication of the importance that you also attribute to hearing what he has to say. Finally, I have to say something which I absolutely hate saying for those Twitter users in the audience. I don't even know what it means. The hashtag for today's event is lsebarroso. Even I can understand that. As usual after the lecture, there will be the opportunity for you to ask questions of President Barroso. And I'd be grateful if you would now join me in welcome welcoming him to give his speech.
B (2:08)
Mr. Chairman. Dear Peter, Professor Fraser, ladies and gentlemen. It's good to be back at lse, which always provides such a stimulating environment for debate, with its splendid intellectual tradition of openness and looking at things from the wider European and international perspective. It's also very good to see all of you here today. And I'd also like to welcome those who are following this debate on the Internet. Although I have to say that seeing so many young people here now who have chosen to spend Valentine's Day debating.
C (2:48)
Europe.
B (2:50)
I'm a bit surprised by your sense of priorities. Europe may not be the most romantic subject, but it certainly stirs up real passion and it does merit real debate. What I want to do in my introduction, because afterwards I'd be happy to discuss this issue more detail with you, is to look at the way the European Union is constantly changing in order to manage and make the most of globalization. And I'm particularly interested in hearing your point of view, for the outcome of this process will have far reaching consequences for us all, but especially for your generation. It's your future, so it's your voice that should count the most. So what sort of future do you want to look forward to? I bet that a stimulating and rewarding job will be quite close to the top of your list of expectations. Getting people into work and creating growth is right at the top of the Commission's to do list. But world is changing fast. Influence on economies are shifting. The pace of international competition has shifted not one, but several gears. The question of our times then, is whether or not we succeed in adapting to this changing, complex and challenging global environment. And how. That is the case for companies, both big and small, who are increasingly operating in a world of global supply chains and multinational finance. That is the case for universities engaged in a worldwide competition for brains, funds and prestige. That is the case for the media, whose input and output are now able to cross borders as never before. And most importantly, adapting to a changing global environment is a challenge for citizens too. It's a challenge for each one of you. What is going to be your position in face of this globalization, in change of these opportunities, but also challenges coming from the biggest globalization movement we have witnessed in human history. That is why structures of governance need to adapt, to help citizens do the same, to protect the citizens from some of the undesirable effects of globalization and to support them in getting the most out of the opportunities that globalization offers in terms of jobs, travel, knowledge and innovation, education and exposure to new ideas. Technological changes and economic shifts have altered both the tools and the targets of government. Challenges such as climate change, supply of energy and other natural resources, and the sheer interdependence of economies and financial markets simply cannot be dealt with at national level alone. Citizens have higher expectations and different ideas of what government at all levels should do and should not do for them. And this in turn has led to a legitimate debate about where decisions are best taken. In this fast changing world. Size matters more than ever, critical mass matters. And an enlarged European Union of 28 member states has more impact than any of its member states do individually. Let me add from a personal point of view, because some of the comments I hear very often today is that Europe is in decline. Look, I was very young foreign minister of my country. I remember when we were only 12. I remember the summit in Edinburgh, when, by the way, we decided the funding for the next seven years of the European Union. There is something in the fate of the European Union that those decisions are taken during the British Presidency. It was during the presidency at that time of John Major, and that was afterwards with the presidency of Tony Blair. There was my predecessor, Jacques Delors, Helmut Cole, Francois Mitterrand, Felipe Gonzalez, many more, but only 12. And at that time, the foreign ministers were part of the European Council. Today, it's only the heads of certain government, as you know. And when I compare the way the United States, Russia, China, Japan, India, Brazil look at us today and the way they were looking at that time, I can tell you, based on concrete experience, that they respect much more a European Union of continental size, a European Union that is really a very important power globally than when we were probably cozier 6 or 9 or 12, but with not this dimension. So size matters. Today, if we want to discuss with our American partners or with China or other giants, it's obvious that the European Union gives more leverage to the actions of each of our member states, even those who have an extensive network of international influence and very important international resources. Ladies and gentlemen, this process of adapting can feel like a new and uncomfortable challenge. Sometimes the temptation can be to close the curtains, hide behind the sofa and hope it will all go away. But European story has always been about dealing with a changing context. The Coal and Steel community that literally bolt the continent together in peace and shared values. The single market that overcame economic inefficiency and fragmentation, deliberately creating interdependence through one trading space. A single market in goods, services, capital and people. More recently, within the European Union, we have brought countries together around a shared agenda to update our economies to deliver smart, sustainable and inclusive growth. In today's globalized world, that means updating skills, going digital, boosting research and innovation, using our resources, better resource efficiency, and also be able to fight together against a very important existential threat to our planet, that is climate change. European integration has been and remains one of our best tools to manage and benefit from globalization. And maybe most importantly, the European Union, as I said, has expanded. And as more member states have joined, Europe's nations have strengthened their place and voice in the wider world. We have come a long way. 100 years ago, Europe showed the world how not to act. Today, Europe points the way forward. A more peaceful, more prosperous, more progressive continent than anyone would have thought possible. In just 100 days, when up to 500 million people across Europe will have the chance to voice their opinions on the future of Europe through democratic elections. We should not take this for granted. Just ask the people waving European flags on the streets of Ukraine. They look to Europe for freedom, prosperity and security. They know what Europe is for. We are starting to emerge from one of the biggest financial and economic crisis ever, certainly the biggest crisis ever since the beginning of European integration. As we now speak about it. Since the 50s of last century, at the height of the crisis, some said that European integration could not survive the shock that it was the end of the euro, even of the European Union. I've heard in the most acute moments of the crisis, I've heard experts, analysts, commentators making very, let's say, concrete predictions to their clients, for instance in financial world about Greece exiting euro, the implosion of the euro, also the possible disintegration in European Union. I have to say that they were wrong. I should also remind them that the financial economic crisis was not a result of European integration. In some countries, by the way, including this one, the turmoil in the financial markets was the result of irresponsible practices in parts of the financial sector. In others, the economic crisis was deepened by a lack of competitiveness as a result of delayed or or half hearted reforms. And too many member states inside and outside the euro area had built up untenable debts, again often against the consistent recommendations made by the European Commission. And I say inside and outside the euro area because it became popular to speak about the crisis of the euro area or the crisis of the euro, forgetting that we had the crisis in euro area countries and in non EURA countries. We had programs also for countries that were not or not yet in the euro area, from Latvia that meanwhile joined to Hungary to Romania. And we had the crisis in countries that are not even in European Union. The biggest, most instant case being of course Iceland. So once again the crisis was not a result of the Euro. The crisis was the result of lack of supervision, a complete national responsibility. At that time there was no competence of European institutions in terms of supervision or an accumulation of debts that member states have allowed to expand from two levels that were in fact not manage. So not only was Europe not the cause of the crisis, indeed it has shielded us from even bigger risks. During the crisis it was thanks to European solidarity that we could help the most vulnerable countries inside and outside of Eurozone. It was thanks to European resolve that we could forestall a cycle of protectionism and kept markets open for, among others, British exports, which at a time when the UK economy was readjusting radically, was good news for British businesses and British jobs too. But the crisis taught us all lessons and European Union has adapted as a result. We have radically reformed the way Europe's single market in financial services is regulated and supervised. We have prioritized initiatives to boost employment, in particular amongst the young. If, even if I want to remind, employment according to the treaties is mainly a national responsibility. So When I see some people saying, but what does Europe for employment? I mean, what do the governments for employment? That's their responsibility. Labor market policy is a national responsibility. We can help. And in fact, we are now creating new instruments that before the crisis were not available because member states simply did not want the European Union to, to have these responsibilities. And above all, we have now all understood that full monetary union demands a more advanced and more integrated system of economic governance for the eurozone countries, open to everyone and fully compatible with the single market. Before this reform, the European Commission could draw government's attention to excessive debts, structural inefficiencies or macroeconomic imbalances. But it relied on peer pressure alone to remedy them. Now, for countries in Europe, we have effective tools to act against budgetary irresponsibility, to target macroeconomic risks, to push for profound structural reforms with the threat of strict sanctions. And we are seeing the results of the reforms underway. Latvia, that has implemented one of the quickest and toughest adjustment programs, has not only joined euro area, but currently has one of the highest growth rates in European Union. Ireland is now able to issue long term debt at rates of only about 3%. So in a better position after the structural adjustment program than some countries that have not felt the need to ask for those kind of support. Spain has exited its specific program for banks successfully and is once again attracting new investors. Greece is expected to return to growth this year. Portugal has seen positive growth since the second quarter of last year. Just today there were new figures confirming very good results. Its unemployment rate and interest spreads are consistently going down and we expect it to successfully conclude its program shortly. So countries have worked really hard to rebalance their budgets and reform their economies. Aware of the impact their efforts or lack of efforts have on other economies. They could not have done it on their own. This is very important because people speak about the current difficulties and we know about extreme difficulties in, in some parts of Europe, namely social difficulties, unemployment and in some cases situation of social emergency. But people should ask, and what if they were not in the European Union? Or what if they were not in the Euro? Of course they would have to adjust because the financial markets were completely closed to them. They had not financed at that time financial, financial support capacity to finance themselves, not only to pay the debt, but to pay the deficit. So without the support of the euro area countries, without the instruments that we have created, meanwhile, it will be simply impossible for some of these countries to pay their public services, to pay their public servants, to pay the national health system, to pay the Social Security system to, to pay all the basic functions of a modern state. So certainly it was, and it still is very difficult, but the alternative will certainly be more difficult. At European level also. So I spoke about efforts of the countries now, but also at European level. We have deepened economic governance, bringing our economic integration in line with the monetary union. We have set up systems to support euro area economies in need, such as European Stability Mechanism, completely new, some call it European IMF with 700 billion euros. We have put in place common rules for all EU banks, including making sure bonus policies do not encourage irresponsible behavior, as well as a framework partly inspired by sinking here in Ukraine for managing when banks go wrong without calling on support from the taxpayer. To sum up, we have shown that we are willing and able to do whatever is necessary to make sure the Euro thrives, to maintain the benefits of the single market and to regain the trust of financial markets, investors and citizens alike. When the difficulties in the Eurozone first became clear, the outside world, from international political partners to global companies to experts and academics, was unanimous in demanding far reaching change, fully aware that their fate was tied to ours and vice versa. Let me tell you, anticipating my memoir, that I had some difficult moments when representing the European Union. I was in all these G8 and G20 meetings and I had to listen to some representatives of some countries that are not some of them examples of governance, telling us how to deal with the crisis of the Euro. But at the same time all of them say, please unite, please do it together. We need a strong Euro, a credible currency, and we need that you do it together. From the President of the United States to the President of China, to the Prime Minister of Japan, the President of Russia, the President, President of Brazil. This was the message that we were getting because the outside world understood how important was the stability in Europe, also for global stability and global prosperity. But I can tell you that at the last year's G8 meeting in Lough Hearn and the G20 meeting in St. Petersburg, we Europeans did not receive any lessons on how to address the crisis any longer. Instead, we got appreciation and encouragement because the challenges are now well understood and they are not at all limited to Europe, as we are seeing now. And the effectiveness of our crisis response is now equally well noted because Europe has taken the bull by the horns. Of course, if you ask me what is my sincere opinion, could we have done it better? Could we have done it faster? Certainly we could. By the way, the European Commission was always pushing for this more ambition. But let's be Honest. We are a union of democratic states now, 18 countries in euro area, 28 countries in Ukrainian. And we have to take democratic decisions. We cannot impose them. So if you consider the extreme complexity of the European Union as a construct, I think it is fair to recognize that a lot was done done to avoid the most negative consequence of the crisis and also to come to a new situation. So it is perhaps surprising, at least for me, to see the persistence of some of the doomsayers within Europe. They have updated their tune. Of course. The argument is now that Europe lacks the capacity to deliver grossen jobs and faces a lost decade. And all too often, instead of looking at the things that need to change at home, it seems much easier to point to Brussels as the ball and chain that is dragging down Europe's growth potential. We still see the temptation so common in so many national politicians to Europeanize failure and nationalized success. By the way, that is not the worst we are accused of. Just last week, Brussels was blamed for the devastating floods here in the south of England. And we have also been accused of the death of poor Marius the giraffe in Denmark. It's an instant caricature. But it's only that caricature. Of course, neither the floods nor the giraffe have anything to do with European regulations or responsibilities at all. But that said, and now, speaking seriously on the floods, I'd like to say that the European Commission stands ready to help in any way it can and will look constructively at any request from the UK government for assistance under the Solidarity Fund. Of course, in accordance with the criteria of this fund, less look to the facts. Starting with the fact that for the past decade the European Commission has been working with and for member states to deliver the right environment for growth at home and abroad. Under our Program for Smart and Better Regulation, which I Launched back in 2005, we have presented 660 initiatives for simplification, cut initiative burden by over 25%, and have repealed more than 5590 legal acts. For example, we no longer have unnecessarily complex rules on fruit and vegetable standards. So you will already have seen. You can buy cucumbers in all the shapes and sizes you may wish. As I've said very clearly and very often before, not everything needs a solution at European level. Europe must focus on where it can add most value. It does not have to meddle where it should not. That is why, in spite of the calls in that direction, we have not proposed European legislation against back pains or to stop hairdressers from wearing high heels. Let me be honest, I also have back pain. And so it's a very serious issue also for people that are working. But we, I frankly think that we don't need a regulation at European level for back pain. So here I've been saying this to the European Parliament and I see here some distinguished members of the European Parliament. I think this is something that we have to think really about, whether we can many cases repeal legislation that is not needed. And if I may quote, great French philosopher here, Montesquieu, he said, and I've quoted it also European Parma les loi unit il fi bliss les loi ni CE sar. Useless laws weaken the necessary ones. And this is something I'm very committed to. So our default rule is to exempt the smallest companies from European legislation. EU needs to be big on big things and small on the smaller things. And one of the biggest things we do is upholding and deepening the single market, enforcing competition rules and stopping unfair subsidies, laying out concrete plans for further opening our internal market. For instance, in the telecoms and digital sectors, where UK companies stand to benefit from new European markets and taking action against member states where they have been slow to fulfill their commitments. For example, in relation to the internal market in energy. On trade, the European Commission negotiates international deals on behalf of all the member states. And having been personally engaged in this, I have to tell you I've learned a lot about agricultural denominations in the last years. I can tell you on these negotiations, size really matters. European Union is the biggest trade player in the world. We have had some great results recently, finally achieving a breakthrough in the WTO last December. While our bilateral liberalization effort has gathered unprecedented pace. The Transatlantic Trade and Investment Partnership with us that I was proud to launch. Negotiations in the margins of the G18 law firm, together with President Obama, could be worth £10 billion a year to the UK alone. We have concluded good trade deals with South Korea and Canada. We are negotiating with Japan, mercosur and India. That is a world of new opportunities for European companies, which mean jobs opportunities for our citizens. And since we want our European companies to be able to compete on the merits abroad, we have fought for better rules against tax evasion and tax fraud internationally. And last month we presented our Long Term framework on climate and energy, building on successful experience of our 2020 policies and looking beyond combining ambition with realistic assessments and proportionality. Taken together, all this shows that there is a space for reform and that necessary changes are being actively and ambitiously pursued, debated and delivered. And I think the moment is ripe here in uk, but also more widely to pursue this. There is a groundswell of people, civil society, business people, trade unions, commentators, politicians, making the positive case for looking at Europe on the facts and pragmatically addressing the things that can be improved. That is something I can only welcome in this context. I would like to mention free movement of people. I know that feelings run high on this issue, so we need to be crystal clear. I am very much aware that free movement may put unintended strains on local communities and services, and that in some cases there has been abuse. There is a lot that national governments can do to tackle abuses if and when they occur. European rules include firm measures to tackle fraud. The European Commission is eager to help. We can provide financial support for integration through the European Social Fund, for example. And we have clarified anti abuse rules, for instance, on sham marriages. We are tough on abuse. At the same time, we remain absolutely firm on the principle of free movement rights. There are four freedoms in the single market. Goods, services, capital and people. We need all four of them. There is a balance here. For some, opening up one area, such as service, is self evident because it creates huge new markets for things like the legal or business services that, for instance, the UK excels in. When it comes to goods, we all benefit from more choice. The same goes for capital. It was no easy ride keeping our internal market for financial services open during the crisis. But we have done it in the interest of strong and competitive European financial centers right here in London as well as in Paris or Frankfurt. You cannot have a single market without free movement of European citizens. The UK has long shown that flexible and mobile labor markets help deal with economic changes and asymmetric shocks. Those who move to work tend to put way more into the tax system than they take out in benefits. And successive UK governments have been at the forefront of efforts to bring new opportunities to new member states through enlargement. So we should not now disappoint the new members of our union. It will be completely unfair. And also, if you think in economic terms, namely when you speak about competitiveness of Europe, comparing to the United States or others, can you imagine a situation where goods, capital and services could move from New York to California, but people could not? It would be absurd. An internal market needs all these freedoms. If not, we are shooting in our own feet. And also, there must be no first and second class citizens in Europe where only the high skilled are able to move and work freely while the low skilled are not. This will be a kind of stratification Social stratification that is against all the principles of fairness and against the principle of non discrimination. So we need to be also clear about the figures. There are as many UK citizens in other EU countries as there are Europeans living and working in uk. And what is very clear is people's perception of free movement, because in all opinion pools across Europe it consistently comes out as the one thing people see as one of Europe's greatest achievements, freedom of movement, namely for the new generation. This is something that is extremely important and we should not forget, because I still remember when I was a little bit younger than you that it was not so easy to travel around Europe. I even don't mention to work or to study. To travel, to go from one country to another was sometimes an adventure. Not to speak about those that are now members of a union, that were subject to totalitarian regimes in Central and Eastern Europe, that could not even apply for a passport, they could not leave their own country. So freedom of movement is a great progress in human civilization. Ladies and gentlemen, in a democracy, any reform agenda should provoke debate. In Europe the discussion is not about a lack of reform. It is about the depth, direction and speed of our reform efforts. In a few weeks time, people across Europe would exercise democratic right to question those changes, put forward their views and decide the outcome. This is a process of constant adaptation. Personally, I feel further integration of Euro area is unavoidable. It must be designed in a way that complements everything we have achieved so far, that preserves the integrity of the single market that guarantees equal treatment of all member states and free and undistorted trade and competition that maintains our economic, social and territorial collision. We must continue to find ways to accommodate diversity without undermining the fundamental unity of the 28 member European Union. Flexibility is necessary. That does not mean we should move to Europe a la carte. Nor would it be right to put into question our shared values and principles. Of course this will not be acceptable. But it is clear that that some countries are going to go further quicker than others. If the political will is there, this can be accommodated. Diversity in areas such as justice in home affairs and defence has been an integral and workable part of European life for decades now. And last of all, let me say this. This is a collective moment to focus on what we expect from Europe, what can be achieved in Europe and through Europe in the wider world. This is your decision and your responsibility. I believe your future in all the areas I have just mentioned. Single market, financial services, competitiveness and innovation, enlargement, trade, the way we promote our values and our economic interests in the world stage. In all these areas, successful UK governments have engaged proactively one allies and convince their partners of the legitimacy of their case. The European Union would not have become what it is today if it weren't for British politicians and entrepreneurs, British thinkers and British ideas. Without uk, Europe would be less reform driven, less open and less international. Less effective as a tool for managing and benefiting from continuing globalization. For a country so open to the world, it's a paradox that UK remains so torn on Europe. European Union is not some diktat forced upon member states. It is created by the member States to work with and for them and promote our shared European interest at home and in dealing with the rest of the world. The uk, which is very good at selling its views and promoting its interests in European Union, is a lot stronger as a result of it. I know that there are several perspectives on Europe, but I believe the right thing to do is not to turn away, but to engage and see what together we can do to make it better. If you don't like Europe as it is, improve it, talk about it. Explain the practical concerns. Find ways to make Europe stronger, internal and internationally. And you will have in me the firmest of supporters. Find ways that allow for diversity without creating discrimination, holding up the equality of member states and a shared engagement to preserve our freedoms, our four freedoms, but also the principles and values, democratic principles and values that are at the core of European Union. And I will be with you all the way because that is precisely what I have been doing from the moment I took up office in Brussels 10 years ago. And let me finish with a word on the so called British question. In the end, the British people can judge for themselves. But my very personal, very strong conviction is that the European Union is better off in the UK and that UK is better off in the European Union. I thank you for your attention.