Speech: 25th Anniversary of the Treaty of Maastricht9 December 2016
We are here to celebrate today the anniversary of the Treaty of Maastricht. It made the Economic and Monetary policy possible and of course the common currency, the euro. It constituted the biggest transfer of sovereignty since the Treaty of Rome 34 years earlier.
In ancient times a Prince had two key competences: the right to wage war and the right to coin. The Treaty of Maastricht created the opportunity to convey this crucial instrument of monetary policy to supranational institutions.
It was not a choice of monetary policy. It was a choice for another kind of Europe. It was a political choice “per excellence”. I’m sure that all the leaders realized that this was the beginning of a process of transferring sovereignty. You can’t have a common currency without a Banking Union, an Economic Union and a Fiscal Union. We are still at the stage of drawing all the conclusions of this essential step: abandoning national currencies. No progress was made since 2014. It is not an ideological discussion between federalists and intergovernmentalists. It is just fearing to take the unavoidable decisions, implying more solidarity and more integration. Unfortunately we take too often those kinds of decisions in a crisis in front of the abyss, a “cliff edge” situation, as it is now called in the Brexit-debate.
We lack the necessary tools to face another unknown crisis. We all are fully aware of this, but knowing the good is not the same as doing the right thing. Knowledge and action are separated as Socrates taught us!
The biggest threat to the eurozone is not economic but political, going from political instability and party fragmentation to the growing influence of populism and populist parties. It creates either weak governments not capable of reforms and courageous measures, or partieswhose goal is to do the opposite of what is needed. The eurozone requests convergence of policies. Divergences undermine a monetary union. Populism would create those divergences.
A member of the eurozone cannot leave it without a very high price. That’s why the UK can leave the EU more “easily” than a eurozone country.
The euro was and is a great political project, unifying the continent in the longer term more than the single market. But at the same time its crisis between 2010 and 2013 has made the European idea less attractive. The single market was a win-win operation. On the other hand, the single currency brought the European idea via the wallet into people’s daily lives, but in a negative way due to the crisis in the euro area. The single currency created winners and losers.
We need to restore cohesion, but not the artificial cohesion based on huge public and private debts as in the period before the banking crisis. Debts have masked imbalances and uneven developments inside the euro area. Debts have created artificial and unsustainable economic growth.
We made progress during the last years in terms of convergence in fields such as inflation, balance of payments, public deficits and even on growth and jobs. Actually, we are creating 5 million jobs in the euro area between 2014 and 2017. Because the main threat to the eurozone is political, we must manoeuver cautiously also in domains such as deficit and debts, or as it is called “austerity”.
The direction of reducing deficits and debts is in my point of view more important than the speed. Too much economic discipline can kill political discipline. The 3 percent target remains of course an absolute necessity.
We have to take into account the global picture. I don’t belong to the club of those who fear the implosion if the Union. Brexit and the chaos it produces is not an incentive to provoke other exits. The confidence in EU-membership increased dramatically after June 23. The problems of the UK have yet to start!
The American presidential elections dealt with the same problems as we are used to in Europe: migration, terrorism, insecurity, globalisation, opposition to the so-called elites. This shows that our root problems are not only related to the EU or to the national democracies. It is a Western wide challenge. Our growing inward looking behavior prevents us from seeing this broader picture. A lack of self-confidence is hampering lucidity on our own situation in Europe.
Day by day it becomes clear what the big challenge for the upcoming years and decades really is. How to keep our societies, democracies and economies open and at the same time how to better protect people against the excesses of this openness? How to better protect people against financial instability; unemployment; unsecure jobs; irregular migration; climate change; social, commercial and fiscal dumping; huge inequalities; etc? We need a new balance between freedom, fairness and protection.
The simple truth is that we cannot provide results in these domains without more European cooperation and integration. It is a “Europe of necessary!” It is not an ideological choice. Actually it is not a choice at all. It is an unavoidable consequence of previous choices and of the political agenda of large parts of our citizens.
Of course this Europe will request more transfer of sovereignty and more solidarity. But in fact we are not sovereign anymore on migration, terrorism, dumping, etc. More European cooperation and integration will give us more “control” over our destiny (using a Brexit idiom). It reminds me that by giving up Belgian monetary sovereignty (Belgian Franc), we won control back. Our national currency was totally dependent on the Deutsche Mark. The euro gave us a seat in the ECB, a say in European monetary policy.
We were for too long in a survival mode. First with the eurozone, and later with the Schengen zone. We decided on longer term reforms but it is time to have a strategic view on the EU. The European Council and the Commission launched ideas already in 2014, but after the Brexit referendum and the American elections it is time to act. We have to seize the opportunity because both events create a vacuum which the Union can fill. A strategic plan waits for an opportunity to get it implemented. The less the time is ripe, the more we have to do to make it ripe.
A really new chapter for more European cooperation is the military one. The Russian threat and America’s reluctance to have as much solidarity as in the past is giving a push to the military dimension of the Union.
The Union cannot become a truly regional and global actor without a relevant military dimension. Far greater synergies in the research, development and procurement for military tools are perfectly feasible. Battle groups must finally become operational. We can establish headquarters for our civilian/military operations and missions, and we can decide upon the instrument of Permanent Structural Cooperation for countries wanting to go forward within the framework of the Treaty, the coalition of the willing.
We have to go on with the free trade agreement. “Free and fair” trade. The “America first” philosophy is actually one folding back on itself. By the way, it is contradictory with the other slogan “Make America great again”. The dropping of the TPP in Asia (America first) means a considerable loss of influence of the US (Not making America great) in the Far East. The Union must conclude the negotiations with Japan next year. The agreement with Vietnam is already finalised. We have to go on with the talks with Indonesia. Korea and Singapore are already strong trading partners. But also in South America we have agreements in the pipeline, namely with Brazil and Argentina – after our trade deals with Peru, Ecuador and Colombia. We signet the CETA with Canada.
The Union has to remain open because it is a source of growth, jobs and influence in the world. I fear that the protectionist course of the new American administration will jeopardise the TTIP-agreement. It had the potential to be the biggest trade and investment agreement ever, setting standards for the other half of the world economy. Hope is a verb. Optimism is a moral duty.
Our internal trade, our single market, has also got to be strengthened. Free movement of goods, services, capital and people is not enough. We have to add a chapter on “industrial policy”, on micro-economic policy, creating an Energy and Digital Union. Our market is too fragmented and too dependent respectively on Russia and on a few American companies. We made progress during the last years, but starting with a huge lag. Competitiveness remains key.
Consolidation at the level of enterprises is inevitable on a European scale. The time of “national champions” should be over. Unfortunately we notice these old fashioned reactions every day. In the financial sector we also need consolidation in order to remain competitive vis-à-vis American and Chinese competitors.
Another lesson I draw from Brexit ant the American elections is about jobs. We have to reflect on the simple fact that two countries (the UK and the US), both with very low unemployment rates of 5% - full employment - , nevertheless still face a very low level of social harmony and contentment, such that their societies are growing more polarised and more aggressive, not only politically, but also socially. Even those who have a job fear they may lose it any day. Many of the low and lower middle class have resigned themselves to lower wages and one third of them in the EU and US feels that their standard of living is declining in the last 5 years. The motto ‘it’s the economy stupid” is no longer entirely true.
In climate change we can become world leaders in the clean energy transition, but other players like China are catching up. This transition is the growth factor of the future. The EU is well placed to use our R&D and innovator’s policies to turn it into a concrete industrial opportunity. The climate scepticism of the incoming American administration is again an opportunity for Europeans to go ahead with our climate goals. By the way, we will “over-perform” by doing better in 2020 than the target of -20% greenhouse gas emissions. The new objective of -40% in 2020 in within reach.
The Union spoke with one voice at the COP-21 conference in Paris, on the most important theme for the human race. We shouldn’t be too humble.
Another area where we shouldn’t miss the train is Africa. We donated a lot in the past. We opened our market for African countries. But China is on the rise in Africa. We have to react. The Commission is fully aware of investment possibilities and is setting up instruments. If we want to contain migration coming from this populous neighbouring continent, we have to offer them something in exchange. Africa’s share of the global population is expected to grow from 16,4% in 2015 to 25% in 2050, and 39% by 2100. Financing concrete investments, also attracting private capital where possible, needs to become a priority.
The biggest danger of neo-nationalism and populism is a “bunker-mentality” or a “fortress” mind-set. The paradox is that we have to remain open-minded in order to defend our interests and our identity. The biggest enemy is fear. It is precisely anxiety which is at the source of irrationality and even of decisions going against the long term interests of our people, our nations, and of Europe as a whole. I repeat, this openness has to go hand in hand with protecting our citizens better against unfair and undesirable evolutions. It can be our new narrative for the years to come. A mix of offensive and defensive, but in any case a narrative of hope.
Let’s hope that after the elections of 2017 a new initiative is taken to re-dynamise the European Union. I prefer to use this verb instead of “re-invent”. It would mean a new Treaty. The last one took 8 years to negotiate. Let us invest our time and energy on other issues. This doesn’t prevent us from reflecting on the institutional framework for a future Europe. We can even ask a group to produce proposals, but the upcoming years will be devoted to policies and to obtaining “results”. “The Europe of results” is the only way to get back trust.
But we need more than deeds. We have to change our language about the EU. Maastricht and Brussels have something in common. They were and they are symbols of a negative Europe, imposing sacrifices and efforts on people. The names of our two cities became symbols of a Europe after the glorious days of the win-win, when Europe was not yet affecting our daily lives. As I said, this perception changed dramatically with the introduction of the euro. The Union is mature now. It is no longer a love affair of young people. We are in a marriage with its ups and downs, with the 27, “for better and for worse”. We have to fight for our marriage. Love is a verb. One country is in a process of divorce. Let’s hope we can achieve an “amicable” divorce by mutual consent. Until now this is not sure. Let’s hope.
In a time of globalisation – not only in the economy, but in so many fields such as information, culture, fashion, sport, music – there is no room for a stand-alone and for this sentiment of national “exceptionalism”. We are in our nation states not better than others but we are proud that we are what we are. Identity is a very natural feeling, certainly with people with whom we live closely. But identity has always to remain open. Identity can have different layers, also a European one.
Maastricht understands this better than other cities. It was a part for centuries of the duchy of Brabant, my region. For almost four hundred years it is a Dutch province, although not fully and with periods of foreign occupation. Regions and cities living close to borders think and feel with more openness than others. Brussels and Maastricht have also something positive in common!
Nevertheless, the Treaty of Maastricht was a milestone in the history of the European Union. Maybe the most game changing document after the Treaty of Rome, of which we will celebrate soon its 60th anniversary.
The European idea is a young project, historically speaking. Younger than most of our nation states. It is in a building-up stage. It is already now a part of our cultural and political DNA. The Maastricht Treaty contributed a lot to the forging of this major step. It is our responsibility to make further steps as we are all parts of this relay-race. We received the baton from our predecessors and we passed and pass it to the next generation.