SPEECH/06/255
Louis MICHEL
European Commissioner for Development and Humanitarian Aid « Is Europe in need of a vision ? »
EUR-IFRI’s Tuesday debates Brussels, 25 April 2006
Ladies and Gentlemen,
Many thanks to Pierre Defraigne for organising this debate and inviting me to open it.
We are all aware that Europe is going through a crisis of political legitimacy. The French and Dutch referenda on the Constitutional Treaty are only the symptoms. In June, the European Council will have to review the situation following the period of reflection ushered in last year in the wake of the referenda. That period is almost up, and we are still all waiting for the reflection. The Austrian Presidency has therefore invited the Commission to present its ideas for the debate by the Heads of State and Government. At the end of the week the 25 Commissioners are getting together to discuss the subject at a seminar. I intend to use the occasion to express some of my own ideas!
But I would like to begin by offering you a bit of food for thought.
Let’s start with an observation: the people of Europe appear to have no clear point of reference about the political dimension or the geographical dimension of the European Union.
The enlargement to ten new Member States, the prospect of Turkey’s accession and the Member States’ difficulty in reaching agreement on financing the European project only heighten their concerns.
The crisis of political legitimacy comes in tandem with an economic and social crisis in many Member States. For the people of Europe then the lack of a reference point on the European project goes hand in hand with anxiety about their future. And it is this feeling of fear that Eurosceptics rely on when they (with the help of the majority of governments) blame Europe for everything that goes wrong.
Unable to carry out the reforms that our economic problems call for, some countries demonise Europe so that it is more often seen as a force for globalisation than an instrument for managing it. Others exploit the crisis for political purposes and would have us believe that the “European model”, the model chosen to bring us the “European dream”, is the cause of the crisis.
But while we are racked by self-doubt, the rest of the world is dreaming of Europe. I can vouch for this because I have seen it on my travels all over the world: from abroad, the “European dream” is seen as a harmonious political and socio-economic model that has struck a unique balance between personal responsibility and development, on the one hand, and social cohesion and redistribution, on the other; where well-being and progress are measured in terms of quality of life and social benefits rather than the accumulation of material wealth alone.
Europe is one of the rare Utopias in history which has actually been created. It is an amazing success. Our founding fathers carried off the extraordinary feat of giving us peace, shared prosperity and security, that is what Europe has done for us. Europeans now take peace for granted. But they forget that this is a recent and still fragile state of affairs. President Barroso told me the other day that at the age of 17 he was not allowed to read the books he wanted because of the dictatorship in his country, Portugal. Remember that it is barely 15 years since the Berlin Wall fell, and the Srebrenica massacre is even more recent. That great twentieth century tragedy would not be possible today with the planned enlargement of Europe.
The people of Europe have also forgotten the incredible prosperity in which they live. Because, with the passage of time, they have largely lost sight of the link between the economy and social benefits. They have ended up forgetting that social benefits are chiefly made possible by a flourishing economy. They have also forgotten that there is no social protection without work, without responsibility or without a living - and dare I say liberal – democracy.
Our model of society today faces challenges that threaten our whole social fabric, as Pierre Defraigne wrote so eloquently in a recent article. The pace of technological progress, the disruption of the international division of labour following the sudden and dramatic upsurge of China and India in the world economy, and our ageing population are all factors that threaten our model of society based on a balance between freedom of enterprise and economic progress, on the one hand, and social justice and solidarity on the other.
Faced with these challenges, we can adopt one of two courses of action.
One is to continue to let people believe that the welfare state can be maintained as it stands. Yet that is to neglect population ageing at a time when four people in work cover one non-working person and it will be down to two by 2050... When payroll costs will double if we don’t find new ways of financing the essential functions of the state.
The other course of action, requiring courage and clarity of vision, is to draw up a new contract with our citizens that tackles the hard questions. Shouldn’t we be asking our fellow-citizens to show more flexibility and work longer? Can we continue to finance social security by taxing the proceeds of labour? Shouldn’t we get other forms of revenue – corporation tax, consumption, assets, even pollution - to make a bigger contribution?
The crisis currently afflicting Europe calls for a political project to restore our bearings and our sense of purpose. If we are to achieve that, it will require a new contract for Europe – a true political project, not an institutional project. Not a “Europe of projects” (which does not sound very serious), but a “Project for Europe”, a project that could rewrite the script that explains the EU message. A project to restore the confidence of Europe’s citizens. And to remind them of the original credo of the European project: without growth, Europe loses credibility; without solidarity it loses any legitimacy.
The Barroso Commission has already paved the way for a project on these lines with the renewal of the Lisbon Strategy, focused on growth and employment (even if it means being harder on Member States in the future and subjecting them to genuine multilateral surveillance), the revision of the Stability and Growth Pact, the revised Services Directive, the Directive on the portability of pension rights, the Globalisation Adjustment Fund, the European Institute of Technology initiative, a new European energy strategy, implementation of the ambitious Hague Programme for justice, freedom and security, the global projection of our values through the commitment to double EU assistance to developing countries and the adoption of a strategy for Africa; the European consensus on development, the first genuine strategic framework agreed by all the institutions; the strengthening of our partnerships with our strategic allies like the United States or China and India; the opening of accession negotiations with Turkey and Croatia. And, after a very rocky road, finally an agreement, even if it does not meet all our expectations, on financing Europe from 2007 to 2013.
All the above are key components of a project for managing globalisation. But as usual at the Commission, the marketing has been pretty poor, there’s no escaping it. We are particularly good at confusing ends and means: instead of speaking of our vision of a prosperous and cohesive society, we talk about competitiveness and better regulation – then we’re surprised when the man in the street is disenchanted by this seemingly bureaucratic, soulless Europe. Competitiveness is just not sexy!
So if we’re going to talk about growth, we have to say that it’s for reinforcing prosperity and solidarity.
Growth to reinforce solidarity
The European contract for growth is simple. It involves taking all possible steps to restore vigorous and sustainable growth, which is a prerequisite for preserving our social protection systems. The Barroso Commission’s message to the Member States meeting at the informal Hampton Court summit is that there is an urgent need for action - not hasty, ill-considered action but resolute, well-thought-out action.
Like any contract, it must stipulate the responsibilities of the various parties, namely their responsibilities in achieving the common goal of growth.
The Commission, for its part, has launched proposals to boost growth rates by pushing ahead with the internal market. I have already mentioned some of them. Our Hampton Court contribution gives some others.
In the near future we will have to tackle other questions, for example:
- encouraging creativity by getting the European patent adopted, something that will smooth the path of innovative companies;
- the macroeconomic framework for the structural reforms that Member States need to carry out: we have a duty to use the revised Stability Pact and the possibilities it offers of rewarding reform. But we also have a duty to ensure that the Pact is adhered to by all the Member States, whether large or small, by conducting an open dialogue with the European Central Bank;
- reorganisation of European budget allocations for various policies so that the budget better reflects political priorities. What does this involve? Tight screening of the budget to identify priority areas. This will be a rather painful exercise, of course. But our financial resources must be focused on our political priorities. The 2008/2009 rendezvous clause will provide us with the opportunity.
The Member States also have obligations. They are not only the guarantors of this contract, they are the principals: it is they who can pull the levers to create more growth and more jobs. But through its action in the areas I have mentioned, the Commission can help prepare the ground for the Member States to complete the raft of necessary but painful reforms to labour markets, tax systems and welfare systems.
Any growth strategy is, in my view, worthwhile only when backed up by a social strategy.
At this point let me refute straightaway the dichotomy that many appear to want to impose on us: Europe looks after economic matters, social matters are for the Member States. It is time to clear up this misunderstanding about Europe and social policy.
This misunderstanding takes two forms. Some people regard the EU as a super state that should carry out social policy just like a nation state. This is obviously a mistake. Others believe that certain national models are not financially sustainable and that it is up to the EU to put the countries concerned on the right path by pushing them to reduce expenditure.
Making use of Europe in this way is unacceptable because it leads to a twofold rejection of the integration process. Some people reject integration arguing that it will damage social rights, while others do so on the grounds of the constraints it would place on national sovereignty.
So is there a European social model? There are a number of social models in Europe. But it is true is that we have a social “culture”, a common vision of citizens’ social rights.
I do not count myself among those who would like to lay down a single social model for everyone. That would be completely unrealistic. But I do believe that we can reach consensus on a basic package of social rights that would take the form of policies which guarantee citizens:
- access to education;
- access to health;
- access to the administration;
- access to justice;
- and the right to physical, nutritional and environmental security.
Under the clearly understood principle of subsidiarity, it is up to the Member States to implement these objectives, each according to local practice and history.
Such a basic package would bring about convergence: those lagging behind would catch up and those that so wish can continue making progress.
This package of social guarantees is crucial if we are to prevent a diversity of values becoming a contest of values and States. This applies to the maximum working time, say, but also to tax. Can we really afford to do without convergence at European level, providing a framework for a shift from direct to indirect taxation? I’m talking about convergence, not about actual harmonisation, of tax rates. First we need more coordination regarding the taxable base for corporation tax.
Security to reinforce our freedoms
The second part of the contract for Europe concerns security.
This is a truly cross-cutting issue that has to be studied in greater detail. Security now has to be broadly defined as being more than physical security; it embraces food safety, health issues, environmental protection and the sustainable development of our planet. These are all things that generate fear. We must therefore find answers.
This is undoubtedly the area where Europe today appears to offer the greatest and least disputed value-added in the eyes of European citizens, as is made clear by the debates conducted after any disaster (health, terrorist, aviation, and the like). Satisfying this demand for protection while upholding the rights and freedoms of European citizens is the challenge we must rise to.
The first plan of action is to make security a true right of European citizens alongside freedom of movement and solidarity.
To do this we have to pursue some courses of action already under way (border controls, the fight against terrorism and the proliferation of violence, and so on) while flagging security in the broad sense of the term as a component of mainstream policies.
Security can be a parameter of internal market rules (financial rules, protection of privacy, industrial and environmental standards, etc.), of commercial policy (defence against all the forms of dumping, prevention of fraud), of technological development and innovation (basic research on public-health-related issues, economic intelligence) and of energy (security of supplies and reducing external dependence) - though there is the outstanding issue of the continuing refusal of Member States to pool gas and oil stocks.
The EU must continue the process of consolidating its international influence so that it can harness/influence the main global developments which may affect the well-being of our European citizens: examples are measures to control pandemics, weather phenomena, uncontrolled migration, illegal trafficking, and so on. Europe has a major role to play in development aid and in achieving the Millennium Goals.
Not enough has been said about the extraordinary security advantages that enlargement has given Europe. Our enlargement policy will spread peace and democracy, and open markets. There is practically no hope of stabilising the Balkans, for example, if we take away the hope of accession to the EU. It would be disastrous if fresh conflicts broke out in the region. The EU would suffer a massive loss of its potential geopolitical influence if it decides to leave Turkey out in the cold. It would also lose its project of an open and cosmopolitan Europe.
- The second line of action is to strengthen the rights and freedoms of European citizens through a number of specific measures that embody the concept of an open society.
European and national leaders have a crucial role to play in educating and informing people of the value-added provided by Europe if they are to win their support for the European project.
Ladies and Gentlemen,
In conclusion, let me say that I am optimistic and I hold no truck with the prevailing gloom about Europe. Although the current crisis is serious, I am sure that a proactive political project, a new contract such as the one I have outlined to you and based on two planks - growth to reinforce solidarity and security to reinforce our freedoms – will put Europe back on track and restore our citizens’ confidence in the European project. The Barroso Commission has reached a key moment in its political life. Until now we have been working mainly to an agenda inherited from our predecessors - an agenda that this Commission has taken over in part only. It is up to us now to build a positive agenda for the coming years. And I believe that the achievements of the last few months (the spirit of Hampton Court, the revival of the Lisbon Strategy, the consensus at the last European Council on the Commission’s proposals on energy and other sectors, the revision of the Services Directive, or the agreement on the financial perspectives) have given us the political basis for doing it.
And where does the institutional question fit in here, I hear you ask? Personally speaking, I believe that it is the institutions that serve the political project, not the other way round. The history of European integration shows that progress on institutional issues has always been possible when clearly associated with a political project. So let’s first talk political content, use all the room for manoeuvre that the current Treaties allow us to put it into effect, then decide accordingly what institutional changes are necessary to implement the project. I believe at this moment that the Constitutional Treaty will be a major source of inspiration for the future.
Thank you.
