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Mr President, ladies and gentlemen, I should first of all like to thank your President, Mr Borrell, and all those who have taken the initiative to invite me here today to embark on a series of debates you will be having. I should first of all like to thank you for organising this initiative, and I have already noticed from the introduction that your House is still as lively as I remember it being back in 2001 when I as President-in-Office of the European Council came to defend the decisions of our presidency.
It was Paul-Henri Spaak who said that, not me.
In short, the question is not whether the Union will evolve into a more federal, political entity, but rather when this will eventually happen, or better yet, whether this will happen in time. That is the fundamental question. I, for one, have some doubts as to whether we will make the leap in time and evolve into a fully-fledged political union, and I am happy to share those doubts with the European Parliament. It is true that on 29 May and on 1 June 2005, the referendums in France and the Netherlands dealt a blow to the emergence of a European political union. The rejection of a constitution, which – although far from ideal – could have ushered in much more democracy, more transparency and more efficient decision-making, was a sledgehammer blow for those working on Europe’s political union. We cannot deny that the blow that both referendums caused was so great, that it is unclear even now whether the Constitution can still survive. The ratification process continues, and 15 countries have so far approved it, but let us be honest with ourselves. Some Member States may have been relieved when France and the Netherlands voted ‘no’. At any rate, they have postponed their own referendums indefinitely. In any case, the outcome of these two referendums has left Europe in confusion. And today, exactly one year on, there is no end in sight to that confusion. For we must face the facts. The subsequent 'reflection period' has yielded little or nothing at all. Over the last twelve months, there has been no noisy brainstorming session about the future of Europe, but rather a deafening silence.
A few new ideas have surfaced in the past few weeks, it is true, but I would join you in doubting whether they will amount to much. One such example is, at the risk of sounding condescending, the ‘Europe of projects’, but what we really need is ‘a project for Europe’. Or the idea of having everyone renew their vows to Europe. Or the intention perhaps to save part of the constitutional treaty by 2009, without any certainty that it will not be voted down again.
Be that as it may, it is to be expected that we in the European Council are going to extend the reflection period in just a few weeks. Elections will be held in France and the Netherlands, and an important presidency, the German Presidency, is coming up. There is a right time for everything, conventional wisdom has it. However, deciding when to act based on an election in another Member State or on who presides over the Council of Ministers is not the best approach, in my view. There will always be an upcoming national election somewhere, and waiting for the right presidency means running the risk that no one will grasp the urgency of the matter. Habits set in. Wear and tear take their toll. Why should we make a fuss about the future of Europe? It is doing just fine, without a project, without a constitution.
Yet I firmly believe that we must act as a matter of urgency. And I would like to reiterate the reasons for this: Europe's economic growth is lagging behind, our political influence in the world is waning and our military strength is below par.
To find out what we need to do, we must first take a close look in the mirror, and together answer questions such as: Why did so many citizens turn away from Europe in those referendums? What went wrong in France and the Netherlands? What is the real reason why they did so in two states that were founding Members of the European Union?
In my view, two main answers or explanations can be given. The first, which is also a form of self-criticism, is that many national political leaders have long painted a negative picture of Europe in their own countries. When things go well, the feathers are immediately donned in the national cap, but when something goes wrong, the accusing finger is always pointed at Europe. And it must be said: Europe is a willing victim. No reaction or reply is hardly ever forthcoming when you abuse or lay into it. The most grotesque distortions gain currency: Brussels is supposedly home to an immense, Kafkaesque bureaucracy. The truth is, that some 24 000 civil servants work in the European institutions. This figure is smaller than the civil service of nearly every large European city. Europe is also said to be an enormous money-squandering machine. While I cannot deny that funds are sometimes misspent, and that is also the
for the Court of Auditors’, the truth is that the budget of the European Union is 20 times smaller than that of the United States, and 40 times smaller than that of all other (national, regional and local) governments combined. Each European citizen pays less than five euros a week for Europe – a fraction of what he or she has to pay for his or her national, regional and local governments. In return for these five euros, the citizen has enjoyed peace and prosperity for years, some of them, including us Belgians, for more than half a century. As we know in life, though, and certainly in politics, gossip is more stubborn than the truth, especially when that gossip is bandied about constantly, whether or not it is relevant.
There is, however, a second, and in my view, more decisive reason why citizens are put off and voted ‘no’ in both referendums. In their judgment, Europe no longer provides a sufficient answer – if any – to their many questions and concerns. I think that in this age of unbridled globalisation, they see the European engine sputtering and the European economy gasping for breath. Unemployment remains high. Companies are often relocating to the (Far) East, taking jobs with them. A powerful European response is not forthcoming. Although cross-border crime is on the rise, let us be honest, we had to wait – I remember it very well – until the Twin Towers were levelled before an agreement could be reached on the European arrest warrant. And the same thing is happening now with the European patent. Everyone knows that this tool is absolutely necessary if we are to make up for our lag in research and development, but in spite of all the Council’s declarations of intent, this could drag on for years.
This being so, it should come as no surprise that European citizens are opting out of referendums – and let us be honest about the fact that it is not one. We are all too aware that the European Union, as it functions today, lacks the necessary power to provide clear and decisive answers to the concerns of the people, and we are only too aware of why this is so.
Although I am very flattered, Mr President, by this invitation, this initiative is also evidence of the efforts made by your House and of the perseverance it has shown. Allow me to remind you first of all that your Parliament has played an important, if not decisive, role in the Convention. I am delighted that, with this initiative, the European Parliament is once again assuming its responsibilities in shaping the future of Europe.
Until such time as Europe embarks on the road towards a real federation where the unanimity rule is scrapped, or at least limited to the strict minimum, it will continue to be powerless to react rapidly and decisively to new challenges. To put it in a different way: a confederation, based on the intergovernmental method and the principle of unanimity, has no choice but to paralyse our Union.
I think that 50 years after the launch of the Union, it is high time to make a choice once and for all: confederation or federation; unanimity or qualified majority; intergovernmental or community approach. A 'board' led by a number of Member States, or a strengthened European democracy based on an active European Commission and a fully-fledged European Parliament, which make up the essence of European democracy.
Allow me to illustrate the crucial importance of this crossroads by returning to the major challenge facing us, and I believe that the major challenge facing us now is the modernisation of the European economy. If one looks at the figures, what are they now and what do they tell us? Average GDP growth in Europe over the last ten years has been 2.3%, compared with 3.3% in the United States. In Europe, the total employment rate increased by 9% during that same period. In the United States, it increased by 14%. Far more striking is the fact – which we must indeed acknowledge – that, while, in the 1980s, per capita income was still at the same level in Europe and the United States, European per capita income is now 30% below that of its US counterpart. I have not even touched on China, India or Japan, about which a great deal is said. Last year, China's economy grew by almost 10%. The European Union’s trade deficit – we always talk in terms of surpluses, but let us also look at the deficits – with Asia rose to EUR 100 billion, and is expected to rise even further over the next few years.
The European Union's response to this problem is called the ‘Lisbon Strategy’. As I have already said, there are no question marks concerning the objectives of this strategy. Europe must become ‘the world’s most competitive knowledge-based economy’. However, the method used to that end, which enables the Member States to decide for themselves how they intend to go about meeting that objective, is not effective. The facts show that we are falling further and further behind in a large number of areas. There is a simple reason for that. The Lisbon Strategy makes use of the aforementioned open method of coordination, a form of intergovernmental approach that is mainly based on best practices, benchmarking and peer review. Aside from defining a number of general objectives, the role of the European institutions is limited to drawing up rankings and tables for the purposes of drafting reports. That is precisely what others do too in their reports: I am thinking of the World Competitiveness Centre (IMD) and the World Economic Forum (WEF).
The only difference between the reports drafted under the Lisbon Strategy and the ones by these economic institutes is that the latter show that nearly all of the countries in Europe are declining. Some will hasten to say that this is naturally due to the strength of the euro. Yet, it is primarily due to the lack of common reforms in the European Union. In short, although we are striving to make our knowledge-based economy the most competitive one in the world, it must be pointed out that we are in danger of becoming less competitive by the day.
A conclusion is required, which I have tried to defend not only within the Council, but also, prior to that, at the European Parliament, for example when I was invited by the Committee on Economic and Monetary Affairs. That conclusion is as clear as day: the intergovernmental method, without commitments, that underpins the Lisbon Strategy does not work properly.
What we really need is a much more binding, Community-based approach. Social and economic governance in the true sense of the word. A joint European socio-economic policy, in which the Union provides a broad outline of the necessary reforms. These reforms are absolutely imperative if we want both to face up to rising competition from new growth areas and to protect the social model of which we, in Europe, are so rightly proud. These reforms require action not only with regard to industry, innovation, research and taxation, but also with regard to the labour market, pensions, social security and health care, without mentioning other areas.
The method to be used here – and I do not want any ambiguity on this matter – cannot simply consist of indiscriminate harmonisation; I am opposed to indiscriminate harmonisation or, in other words, to a form of standardisation that takes no account of the differences among the Member States. Plainly ignoring the differences in customs is not an option. No, what I am advocating is a policy of convergence, a similar approach to the one that was successfully applied to the Stability and Growth Pact and that led to the introduction of the euro, because that is indeed what was at the heart of the Pact: a policy of convergence. Unlike harmonisation, which is based on absolute values and which denies the differences in Europe, convergence is about setting minimum and maximum levels, a range of values; it is about creating a framework in which the various Member States of the Union must operate and modernise their economies. The maximum levels are needed in order to inspire the Member States to implement reforms. The minimum levels are needed in order to prevent social dumping.
Convergence also enables the various Member States gradually to develop in line with each other and the Union to become competitive again faced with other growth regions in the world, the main difference being that cut-throat internal competition is prevented and that the Union is not forced to give up its social approach. I also believe that Europeans will thus be able to regard the Union once again as a solid partner, a federation of peoples and nations, which this time round is able to provide an answer to the challenges of globalisation.
I would not wish to start my address on the future of the European Union without first mentioning a date from the recent past: 1 May 2004, which is just over two years ago. A milestone in the history of Europe; a key date for the European Union: sixty years after the Yalta Conference, 48 years after the Hungarian Uprising, 43 years after the construction of the shameful Berlin Wall, and 35 years after the Prague Spring, this day was, as Bronislaw Geremek put it, ‘the real end of the Second World War, and the real beginning of a unified European Union’.
In any case, by radically changing the course of the Lisbon Strategy and enhancing this strategy by employing a more compelling and precise Community method, the Union will once again be able to capitalise on past successes. It must be acknowledged that neither the internal market nor the euro would have come about without a powerful Community driving them forward. It must be said today that, for the internal market, this driving force took the form of the principle of mutual recognition and of qualified-majority voting, as developed by Mr Delors. As for the euro, it would never have come about without the Maastricht criteria and the standards set out in the Stability and Growth Pact, which is also a driving force of the Community.
Ladies and gentlemen, while a new Community economic strategy of this kind is highly desirable for the Union, it is certainly crucial for the eurozone. A single currency and a monetary Union are destined to fail in the long run if they are not supported by a common approach to social and economic challenges. The absence of reforms in one country will inevitably have a negative bearing on the health of other countries, in other words, of the entire zone. If anyone had doubts about the need for, at the very least, a form of economic governance in a monetary union, they need only imagine the United States with one currency, the dollar, and one central bank, the Federal Reserve, but with a different socio-economic policy for each of its 50 states. We would regard that situation as ‘unmanageable’. The fact is, we are faced with that unmanageable situation now, within the European Union, or at least within the eurozone. Then we wonder why we do not have the same economic growth as other regions in the world!
That is why, for some time now, I have advocated taking an initiative to strengthen the Eurogroup. Not with the aim of excluding anyone, because – I repeat – if the 25 Member States were able to apply themselves to developing a new Community strategy together, then I would undoubtedly prioritise that joint approach. Yet, if that proved impossible - which I increasingly fear to be the case - then there is no question of not taking action at all. Moreover, when I talk about the Eurogroup, I am referring not only to the current members of the eurozone, but also to all the countries that, under a contractual clause, are destined to join the eurozone. In other words, no one is being excluded from joining the EU and from being part of the eurozone.
What might strengthening the eurozone entail in terms of creating the social and economic governance that is so lacking in the Union? I am thinking about 'strengthening' here with regard both to the institutional aspects and to the content. In particular, I am thinking about jointly preparing the EU spring summit, about frequently drafting reports and recommendations for the eurozone within the European institutions, about defining common macroeconomic starting points when drafting national budgets, about drawing up convergence criteria on social, fiscal and economic matters – a very important task – and about holding meetings that bring together within the enlarged Eurogroup not only finance ministers, but also employment ministers, social affairs ministers and ministers for science policy - my finance minister agrees. Finally, I am also thinking about ensuring autonomous representation within the international finance institutions, which is an obvious step to take when one has a monetary union and a single currency.
Ladies and gentlemen, so far, I have focused almost exclusively on the economic challenges facing the Union. I would be trivialising matters if I were to overlook the other areas in which we need more, not less, Europe. One such area is justice and security, in which we should be more effective in the fight against illegal immigration, organised crime and terrorism. As regards research and development – please forgive me for repeating myself – we urgently need the European patent. The same goes for a common foreign policy.
With regard to this last point, we must acknowledge the fact that only a European defence can move us closer to a common foreign policy of that kind. My personal experience in 2003, shortly before the start of the war in Iraq, was painful but instructive. At that time, in 2003, it seemed totally impossible to debate the Iraq crisis within the European Council. Divided as we were, we preferred to keep our cards close to our chest. In short, only when we develop common instruments, such as a European army and European diplomacy, will we be forced to lay our cards on the table - and in due time - in the event of an international crisis.
I know that the idea of developing a European army or European defence is likely to be perceived by some Atlanticists as a sacrilege or as a denial of our transatlantic obligations. Well, that is not the case. In the 21st century, NATO is going to change; it is likely to evolve from a regional defence alliance into an international security network, consisting of allies and partners. At the same time, there is every reason to believe that we will make ever more explicit efforts to tackle international security issues within this kind of renewed international cooperation association, rather than continue to call on the so-called coalitions of the willing. The disadvantage of these coalitions is that they disintegrate easily following each change of government.
Within this new ‘transatlantic security network' – the foundations of which will be laid in Riga – Europe’s defence must be developed and integrated as an autonomous European pillar. It goes without saying that a great deal of resistance will have to be overcome in order to succeed in this. Resistance on the part of some Americans, for example, who can only see NATO as an alliance of countries, and resistance on the part of some Europeans, too, who continue to regard European defence as an alternative, or even a rival, to NATO. Yet, I believe that, by finding a middle ground between these two arguments, it will be possible in the long run to overcome this resistance. The European operations conducted in Bosnia, Macedonia and Congo have shown this.
Be that as it may, the development of Europe's defence, which is intended to operate both as an autonomous entity and as a pillar of NATO, is urgent and essential. We cannot play the part of the world’s moral conscience without having the military might to back it up. Nor can we constantly call on the United States to come to our rescue when we are faced with a civil war on our own continent, as was the case in Bosnia and Kosovo.
The question remains: what does all this have to do with the Constitution and the draft Constitution?
The reason why I briefly mention that day is that many people today seem to have what I would call a particularly short memory when they talk about the enlargement of Europe and of the European Union. The Union is said to have been too hasty in welcoming the former Soviet satellite states into its fold. The Union is said to be expanding too fast. The Union is said to have reached its natural borders, and to have exceeded the limits of its so-called absorption capacity. What, though, does ‘too fast’ mean to people who were oppressed for nearly half a century? What is ‘too hasty’ for people who we scarcely bothered about before they freed themselves from the Communist yoke? Come to think of it, what are ‘natural borders’? Where do such borders lie, when we see that European cities such as Belgrade and Dubrovnik are still outside the European Union? And what ‘absorption capacity’ are we talking about? The one in our head or the one in our wallet?
Theoretically, of course, there are various possibilities. We can opt for the
regard the constitution as a lost cause and continue to work on the basis of the treaties signed in Nice and elsewhere. That is not, in my opinion, the right way forward, for then, we would retain the unanimity rule, which, in turn, means vetoes and, perhaps, paralysis.
We can also take an approach that could well catch on, namely a ‘pick and choose’ approach, if I can put it that way, trying to save the most attractive parts of the constitution, but my question is, then, which parts? I can imagine that every member of the Council will have a different priority. For one member it will be the subsidiarity test, while for the other, it may well be larger powers for the European Parliament, for example. I will let you guess. Ultimately, the odds are that at the end of the ride, we will end up with more or less the same Constitution. It is highly doubtful that ratification in two or three years’ time will have a greater chance of success than today.
We could also take a ‘roll-back’ approach, where we interpret the outcome of the referendums as a sign that the citizenry actually want less Europe, meaning that we should reduce Europe back to nothing more than a free-trade zone. However, dropping our European ambitions and going against the course of history would be like abdicating, a form of betrayal, for the success, to date, of European unification cannot be denied. It has proven to be the best remedy for poverty, dictatorship and war. Europe has brought long-lasting peace, social protection and unprecedented prosperity. So we must stop being cynical and painting a picture of the Union as some kind of inconvenience.
Practically and politically, there is just one option that remains, and that is to press on with the ratification of the Constitution. Each country and each citizen of the Union has the right to express an opinion on this Constitution, but remember, there may have been two 'no' votes – in the Netherlands and France – but there were 15 'yes' votes in the 15 other EU Member States. I do not think that Europe would be a democracy if it did not take that simple statistical fact into account. Moreover, in my view those who in recent months have put ratification on the back burner are duty-bound to start or resume the ratification procedure – and I will tell you why. We agreed this when we approved the draft Constitution in the European Council. That is why we added a special declaration to the constitution, declaration 30, which states: ‘If four-fifths of the Member States have ratified it two years after signing it, and one or more Member States have encountered difficulties in proceeding with ratification, the matter will be referred to the European Council’. Well then, if not all of the countries start a ratification procedure, then the content of this declaration will obviously be pointless, which means that any breakthroughs in the European Council will be blocked.
Anyway, I personally think that four-fifths of the Member States is feasible within the European Union – if, that is, everyone assumes their share of responsibility. If we manage to reach that quorum, then a totally new situation would arise, a situation which certainly opens up new prospects vis-à-vis the current barriers. After all, if that happens, if we reach this four-fifths quorum and when we meet, I cannot imagine the Council simply running through the agenda as usual and not discussing anything, in the knowledge that the necessary ratifications were missing in the Union. This declaration to the Constitution would be rendered meaningless.
In the meantime, however – and that is also the message I would like to press home today – whether or not we reach the four-fifths quorum, nothing is standing in the way of the further integration that I have just described – quite the opposite. It would be good if a second track were opened alongside the ratification track. This second track would not require any changes to the treaties. It would be a project involving all countries that wanted to take part, as I described in detail a moment ago.
In other words, I am suggesting that we quickly develop a new strategy along two lines. The first involves moving forward with ratification and fully fleshing out and applying declaration 30 to the Constitution; the second involves making a new and significant leap forward in European unification, without requiring any amendments to the treaties, on the basis of a number of points I set out a moment ago. This two-track strategy is, in my view, the only way to get through the current period of uncertainty, which could drag on for years, in a meaningful way, and, above all, the only way not to waste time. After all, time is the last thing we can afford to waste.
In conclusion, I would like to add that, 52 years ago, the European Defence Community collapsed after a 'no' vote in the French Parliament. There was great dismay at the time, but the European leaders of the day did not let that setback throw them off balance. In fact, they knew perfectly well what they had to do. They did not need time to reflect. They did not need to make enquiries or organise opinion polls. They spent two years negotiating in one place, Val Duchesse, just a couple of kilometres from here. They then took the results to Rome, where they signed a treaty that led to the creation of the European Economic Community. That was when they put Europe on the right track for good. That was 52 years ago.
It is exactly the same thing that we need today. After all, the situation today is not all that different from the situation 52 years ago. Today, the majority of the French and Dutch citizens voted against the constitution, and today we must not let ourselves be thrown off balance. Today, the time is ripe for a major leap forward. And today we need bold policy to put Europe back on track.
Why, so far, have we not done the same thing they did 52 years ago? What is the big difference? What is needed? The answer is simple: courage, political courage. The same courage that Jean Monnet, Alcide de Gasperi, Konrad Adenauer, Max Kohnstamm, Paul-Henri Spaak and Robert Schuman demonstrated back then; the courage to pick ourselves up after a major setback, square our shoulders and keep on going. That, more than anything, is what we need now.
What I wish to make clear at the outset of my speech is that the future of the Union must not be thought of in terms of ‘either …or’: either ‘enlargement’ or ‘deepening’; either Turkey or the Constitution. History and the direction of history are unequivocal. The Union must continue to grow. This is the only guarantee for lasting peace and stability in Europe. The only guarantee that Bosnia or Kosovo, or the entire Balkans for that matter, will not go up in flames again tomorrow. The only hope, too, that countries such as Ukraine will become stable democracies in future.
At the same time, the Union must be deepened further, and European integration must continue unabated. In any event – and that is something that lies at the very heart of this debate – it is time we put an end to the period of stagnation in Europe. After all, lack of progress in European integration did not start with the referendums in France and the Netherlands, as many people would have you believe. The citizens have been experiencing a crisis in Europe for longer than that: division over Iraq, non-compliance with the stability pact, and the debate on financial perspectives which we resolved in the end. I would also dare to add the Lisbon Strategy to this list. Let me make it perfectly clear that there is nothing wrong with the goals of the Lisbon Strategy, but the so-called ‘open method of coordination’ used to implement it has been far too weak to give European unification and integration a fresh, decisive impetus after the successful introduction of the euro.
No choice should be made between deepening or enlarging first, as some people lead us to believe. Both are necessary. Nor should a choice have to be made between Europe as a free trade area or Europe as a political entity. Here once again, the direction of history is unequivocal. We are in fact evolving very rapidly, from a uni-polar world dominated by the United States of America, to a multi-polar world in which countries like China and India are rightly demanding an emphatic role. If Europe wants to continue to play a leading economic, political or military role in this new world order, then political union is the only alternative. No single Member State, not even the large ones, can harbour any illusions about going it alone on the world stage. As my illustrious predecessor, Paul Henri Spaak, rather cynically put it so many decades ago:
‘Europe still consists solely of small countries. The only relevant distinction that remains is that some countries understand this, while others still refuse to acknowledge it’."@en1
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