Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-10-21-Speech-2-059"
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"Mr President, ladies and gentlemen, it is an honour for me to come here once again before the European Parliament to report on the work of the Council Presidency at such an important time for Europe. If I may, I will try to speak very freely, as is only right and proper in this House, which is the heart of the democratic Europe to which we all aspire.
There were many views on the matter. Some said – and they had reasons for saying it – that dialogue was pointless and that the response to military agression should be a military one. What madness. Europe saw the fall of the Berlin Wall and the end of the Cold War, Europe must not be party to a new cold war that is suffered for no other reason than a lack of composure.
This was a problem that we overcame with our US allies, who believed that the visit to Moscow was untimely. In spite of everything, we worked hand in hand with our US allies. Their position differed from ours. We tried to work with with them rather than against them, and, frankly, given the state of the world today, I emphatically do not believe that it needs a crisis between Europe and Russia. That would be irresponsible. We can therefore defend our ideas regarding respect for sovereignty, respect for the integrity of Georgia, human rights and the differences we have with those who lead Russia, but it would have been irresponsible to create the conditions for a conflict that we by no means need.
Discussions have begun in Geneva on the future status of these Georgian lands that are Ossetia and Abkhazia. I am told that they have begun under difficult circumstances, but who could have imagined it being any other way? The important point, though, is that they have begun. I must also say that President Medvedev has kept the promises he made before the Commission Presidency and the Council Presidency when we travelled to Moscow at the beginning of September.
Europe has brought about peace. Europe has secured the withdrawal of an occupying army and Europe has sought international negotiations. It has been a long time, I believe, since Europe has played such a role in a conflict of this kind.
Naturally I see all the ambiguities, all the shortcomings, all the compromises that had to be made, but in all conscience, I believe that we have achieved everything we could have achieved and, above all, Mr President, that, if Europe had not ensured that the voice of dialogue and the voice of reason were heard, no one else would have done so. Furthermore, when we left for Moscow and Tbilisi on 12 August, with Bernard Kouchner, the entire international media were well aware that the Russians were 40 kilometres from Tbilisi, and their aim was to overthrow Mr Saakachvili’s regime. That was the way things stood. We came very close to a catastrophe but, thanks to Europe – a determined Europe – such a catastrophe did not occur, even though, Mr Pöttering, a great deal of work will of course need to be done to ease tensions in that part of the world.
My second point concerns the crisis, the systemic, unbelievable, improbable financial crisis that began – let us present the true picture – on 15 September, not on 7 August 2007. On 7 August 2007, a crisis began that was serious and worrying but, dare I say it, normal. On 15 August 2008, we entered into another crisis, for what happened on 15 August 2008? Lehman Brothers went bankrupt – and the world, stunned, discovered on 15 August 2008 that a bank can go bankrupt.
It is not up to us, and it is not up to me, to pass judgment on what the US Government did or did not do. All I am saying, and I maintain this, is that, on 15 September 2008, the serious crisis became a systemic crisis, with the collapse of the US financial system, followed by the collapse of the European financial system, and then gradually of other stock exchanges and financial systems.
What attempts were made at that time? There was the first Paulson plan, which did not work. I am not being critical in saying this; I am describing the reality of the situation. At the time we, together with the President of the Commission, tried to put together a common European response, first within the euro zone. Mr President, you have spoken about this; whether people are for or against, the fact remains that, in the euro zone, we have the same bank and the same currency, and therefore the same duty to unite.
Obtaining a common position was not easy. We began by proposing a meeting of the four European countries who are members of the G8. It is not an insult to anyone to say that the influence, for example of the United Kingdom, on the global financial system is greater than that of other countries among the 27. I said that, if, by some feat of imagination, we could manage to secure an agreement between the United Kingdom, Germany, Italy and France, it would not be to the detriment of the other countries of Europe, but it would be to their benefit.
What have we tried to achieve? Firstly, it was the Presidency’s wish for the European institutions to be united in the face of all the crises that we have had to manage. It was my wish for the European Parliament to be involved at all times in the major events that we have experienced, and I should like to thank the chairmen of your groups, of all political persuasions, who have been involved in this dialogue and have worked together with the Presidency of the Council.
Of course, opinions differed, and who could blame us? In the first few days of the crisis, we did not know initially how best to respond to a crisis, the likes of which had never been seen before in economic history, or in the 20th century, at least. So, I said to myself: once the four have gathered together, we should also bring together the countries of the Eurogroup, plus Slovakia, which is due to join us. That extra week enabled us to find a solution together that would allow the banks to resume their work: lending. However, we found ourselves with a situation whereby the banks were no longer lending to each other, as they no longer had any money to lend, and the entire system was collapsing. We had banks being nationalised in the United Kingdom, banks going bankrupt in Belgium, an Icelandic system – outside Europe but so close to Europe – that was collapsing, very bad news in Switzerland and, little by little, contagion: Germany, France, all swept along. We, in the Eurogroup, succeeded in reaching an agreement on a huge plan – EUR 1 800 billion – to allow our financial institutions to get on with their work and to reassure savers and entrepreneurs in Europe.
Next, we went to the European Council, which adopted the same strategy, and, from then on, we were able to calm the markets in Europe. We had a nice surprise: the Paulson II plan then arrived, and everyone could see that it was largely inspired by the European plan. There is no kudos to be had from this; it is simply a matter of reflecting on the fact that the crisis is global, and so the response can only be global. The United States and Europe need to be aligned.
However, all this is about crisis management, Mr President, nothing more, nothing less. Had we not done this, what would have happened?
We still have to provide the right responses. How could all this have been possible? How can we prevent a repeat of all this? Moreover, does Europe have ideas to uphold or a policy to propose? It was within this context that, on behalf of Europe, I proposed, at the United Nations General Assembly, at the start of September, that an international summit be held to lay the foundations of a new Bretton Woods, with reference to what took place in the wake of the Second World War so as to establish a new global financial system. This idea is making headway. What must Europe’s objective be within the context of this summit? Europe must put forward the idea of a radical reform of global capitalism.
What has happened has been a betrayal of the values of capitalism, not the calling into question of the market economy. There was a lack of rules, and we saw the rewarding of speculators to the detriment of entrepreneurs. We must put forward the idea of new regulation. Europe must and will propose ideas. Firstly, Mr President, no bank that works with government money should be able to work with tax havens.
No financial institution should be able to operate without being subject to financial regulations; traders should see their remuneration systems calculated and organised so as not to encourage them to take unnecessary risks like those we have seen; the accounting rules within our banks should not exacerbate the seriousness of the crisis but, rather, enable us to ease it; and the monetary system should be rethought between fixed exchange rates and no exchange rates between currencies. We have tried everything in the world. Can we, the rest of the world, continue to bear the deficits of the world’s biggest power without saying anything? The answer is clearly ‘no’.
There is no use, moreover, in pointing the finger at anybody; we just need to find the ways and means to ensure that this does not happen again. Moving on, and I could say a lot more, but I should above all like Europe to consider global governance in the 21st century. We should not be surprised that it is not working. We are in the 21st century, but we have 20th century institutions. The US President and Europe have thus proposed several summits, starting from mid-November, that will focus on a new form of regulation, a new form of global governance. I hope that Europe will be able to debate this.
I shall have the opportunity to propose a meeting to my partners, Heads of State or Government, to prepare for these summits. This issue of a radical reform of our capitalist system and of our international system is an issue of equal importance to the European Parliament, which must debate it and which must put forward its ideas. However, Europe must speak with one voice if it wants to be heard.
It was also my wish for us to work hand in hand with the Commission and in particular with its president, because, regardless of the divergences or differences between everyone sitting in this House, everyone is well aware that division between Europe’s institutions weakens Europe and that the duty of those who assume responsibilities is to work hand in hand. We will move Europe forward if the European Parliament, the Commission and the Council find the path to consensus on the major issues, so ensuring that Europe’s voice is heard.
Who will take part in this summit? There are many schools. I think that the simplest thing is the G8, which is indispensable – with the Russians, naturally – to which we should add the G5, which is also indispensable and which would allow China and India, in particular, to be involved in this essential debate. This will be the objective of our trip to China, with President Barroso, to convince the Asiatic powers to take part in this radical reform.
Mr President, there has been a third issue during this Presidency, which has proven to be extremely difficult: that of the future of the energy and climate package. I am perfectly aware that your Parliament and some of your groups are divided on the issue of how to proceed. Allow me to state my firm belief and the policy I intend to propose. The energy and climate package, as ambitious as it is, is based on the conviction that the world is headed for disaster if it continues to produce under the same conditions. That is the long and short of it.
I cannot see one single argument to suggest that the world is doing better, from an environmental point of view, because the financial crisis has taken place. When we decided to launch ourselves into the energy and climate package, we did so with an awareness of our responsibilities towards our children and towards the future of our planet. This is a structural policy, this is an historic policy, and it would be tragic to abandon this policy on the pretext that the financial crisis has occurred.
It would be tragic and it would be irresponsible. Why would it be irresponsible? It would be irresponsible because Europe would be sending out the message that it has not decided to make the efforts it promised on this front and, if Europe does not make these efforts, our chances of convincing the rest of the world of the need to preserve the global balance are non-existent. Thus, it is not simply a question of Europe’s failing to take responsibility for itself, it is a question of failing to take responsibility for the entire world where the environment is concerned. For, if Europe does not set an example, it will not be heard, respected or taken notice of – and, if Europe does not do this job, no one will do it for it. So, we will have missed our date with history.
What is meant by ‘missing our date’? In my opinion, it means two things: firstly, that we must reconsider the ‘three times twenty’ objectives; and secondly, that we must reconsider the timetable, that is to say, the end of the year. However, it is by no means my intention to undermine codecision in any way, and, I might add, I have neither the power nor the desire to do so. Moreover, it takes a mean mind to attribute such a thought to me, even though, attributing thoughts to me is quite a compliment, Dany. Nevertheless, in this matter, we fought alongside President Barroso at the European Council to have the objectives complied with and to have the timetable complied with. It was not easy. We therefore have a few weeks in which to convince a number of our partners, whose concerns I understand; because compromise conditions cannot be created without trying to understand what is being said by those who disagree with you.
There are some economies that are 95% dependant upon coal. They cannot be asked for things that would bring them to their knees, when they already have huge problems. We are therefore going to have to find ways and means to be flexible, while respecting the two red lines I proposed to the Council: compliance with the objectives and compliance with the timetable.
I will perhaps have the opportunity, Mr President, to explain myself at greater length in other forums, but I do not wish to try your patience. I should like to say to you, however: this is what we sought to do, and I hope that everyone will be able to support it.
I would like to say a word about the fourth issue, the immigration pact. The pact is a fine example of European democracy and in spite of the initial differences, everyone was able to agree on a selective immigration policy agreed with the countries of emigration, such that we derived benefits from Schengen that apply to three quarters of the countries of Europe. Furthermore, while we have lifted the visa requirement among ourselves, it is nonetheless only right that countries whose citizens do not need visas to go one from one country to another have the same mindset when it comes to supporting a European immigration policy.
Two points remain before I conclude. The first is that the financial crisis has brought with it an economic crisis. This economic crisis is here. It is pointless to forecast it since we are going through it now. I personally would like to say, being fully aware of the disagreements between certain countries, that I cannot imagine someone explaining to me that, in the face of the financial crisis, we needed a united European response, but that, in the face of the economic crisis, we do not need the same united European response.
I would like to say a word about the meaning of ‘united’. ‘United’ does not mean giving the same response. For the financial crisis we proposed a toolkit, a road map, harmonisation and coordination. I believe the same thing is required for economic policy. This does not mean that we will all do the same thing, but it does at least mean that we have an obligation to talk about matters, an obligation to inform each other, and, on certain issues, an obligation to consult one another. There are several initiatives. Allow me to mention one idea: the stock markets are at an historically low level. I would not like the people of Europe to wake up in a few months’ time only to discover that European businesses now belong to non-European capital, who would have bought them at the lowest stock market price – for next to nothing – and would have taken ownership of them. The people of Europe would then turn round and ask: ‘What have you done?’
I would ask that each of us reflect on the opportunity that could be had if we, too, created sovereign funds in each of our countries, and perhaps if these national sovereign funds could be coordinated from time to time to provide an industrial response to the crisis. I would add that I have followed with great interest the American plan for the car industry: USD 25 billion of interest rates at unbeatable prices, to save the three US car manufacturers from bankruptcy.
I should like us to dwell for a minute on this issue in Europe. We are asking our manufacturers – and rightly so – to build clean cars now, to completely change their production systems. On this basis, thanks to the environmental bonus, 50% of the cars sold in my country will henceforth be clean cars. Can the European car industry be left in a position of seriously distorted competition with its US competitors without the question being asked as to what European sectoral policies exist to protect European industry?
This does not mean calling into question the single market. This does not mean calling into question the principle of competition. This does not mean calling into question the principle of State aid. What it does mean is that Europe needs to provide a united response and a response that is not naïve when faced with competition from the world’s other major regions. Our duty is to ensure that, in Europe, we can continue to build aircraft, boats, trains and cars, because Europe needs a powerful industry. On that policy, the Presidency will stand up and fight.
To conclude, my final point concerns the institutions. I do not know whether it is a sigh of relief because I am concluding my speech, or whether it is because the other subjects were less important. The institutions are not the only subject in Europe, and it would be very wrong to devote ourselves too much to this issue, to the exclusion of everything else. The institutions are an issue, however. I should like to express my firm belief that the crisis calls for a reform of the European institutions. The crisis implies that Europe can provide as powerful and as swift a response as any other world force, such as the United States, was able to provide faced with the tragedy represented by the financial crisis.
I am one of those who believe that it would be a very serious mistake not to reform our institutions. Very serious. Not least because, in order to follow complicated subjects such as Georgia and Russia, the financial crisis and the economic crisis, it does not seem very sensible to have a rotating presidency every six months. Regardless of what votes were cast in the last elections, I must say to you that, frankly, if we like Europe and if we want Europe to speak with one voice, it does not seem very sensible to me to think that the Council Presidency should change every six months. Therefore, together with President Barroso, we shall have to create a road map for December to see how to respond to the Irish question. I fully intend, before leaving the Council presidency, to propose this road map and to point out, on a consensual basis, the ways and means to overcome the situation that has arisen.
I should also like to say one last thing, which is that the euro zone cannot continue without a clearly identified economic government. We can no longer continue like this. I should like to pay tribute to the work of the ECB. I should like to express my firm belief that the ECB must be independent, but, if the ECB’s work is to realise its full potential, the ECB must be able to negotiate with an economic government. That was the spirit of the treaty. The spirit of the treaty is dialogue, democracy and independence on both sides, and in my mind, moreover, the true economic government of Eurogroup is a Eurogroup that meets at Heads of State or Government level. I was amazed to discover, when I called for this meeting, that this was the first time such a meeting had taken place since the euro was created.
To be frank, we create a currency, we provide ourselves with a central bank, and we have a single monetary policy, but we do not have an economic government worthy of the name. The effort that consisted, Commissioner Almunia, in electing a president of the ministers of finance was beneficial and I was involved in the decision, as I myself was a minister of finance at the time. Furthermore, I should also like to pay tribute to the work of Jean-Claude Juncker, and to your own work. However, I should like to say one thing: when the crisis assumes proportions such as we have seen, a meeting of the ministers of finance alone is no match for the seriousness of the crisis. Furthermore, when we had to raise the sums that we raised, it was not the ministers of finance whom we had to mobilise, but the Heads of State or Government, who alone possessed the democratic legitimacy to take such serious decisions.
We wanted, first and foremost, for Europe to stand united – something that has not been easy to achieve. We wanted it to think for itself, because the world needs Europe’s thinking, and for it to be proactive. If Europe has something to say, we want it not just to say it, but to do it.
Ladies and gentlemen, I could say an awful lot more. I should simply like to say, by way of conclusion, that the world needs a Europe with a strong voice. This responsibility rests on your shoulders; it rests on the shoulders of the Commission and on the shoulders of the Council. I should like to say to you all that it has been very useful for the Presidency to feel, aside from the differences, the solidarity of a European Parliament that had, from the outset, analysed the seriousness of the crisis and that was willing – and may you be commended for it – to go beyond our different tendencies in order to create the conditions for Europe to unite. I wanted to say this to you because it is my very profound belief.
First we had the war, with the altogether disproportionate reaction of the Russians during the Georgian conflict. Words have meaning. I use the word ‘disproportionate’ because it was disproportionate to intervene as the Russians did in Georgia.
However, I use the word ‘reaction’ because, if that reaction was disproportionate, it is because an entirely inappropriate act had taken place beforehand. Europe has to be fair and should not hesitate to step out of ideological frameworks in order to bring a message of peace.
On 8 August, the crisis began. On 12 August, we were in Moscow with Bernard Kouchner for the purposes of achieving a ceasefire. I am not saying that this was ideal; I am simply saying that, within four days, Europe managed to bring about a ceasefire. At the beginning of September, Europe obtained a commitment for a return to lines held before the start of the crisis on 8 August. In two months, Europe secured the end of a war and the withdrawal of occupying forces."@en1
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