Good morning everybody and welcome to the closing plenary.
I think my job as moderator today is to -
with the help of four fellow revolutionaries
I hope on this podium, blow any holes
that might still be in the complacency of Europe’s...
and we really want to be as challenging as possible
about what in the light of the events of the last few days here in Europe,
what is working and what is isn’t and what are the really tough challenges,
Europe needs to face to get back to growth.
And in that sense I want to see if we can start picking up
some of the themes I’ve heard uttered by many of you in the
home sessions and corridors.
Where you don’t buy the idea that Europe will just weather this crisis.
It was like a bad cold and business will be back to how it was before.
I think many of you have been saying this was a pretty major
thing and it’s brought long term consequences
and I want to try and get at some of that in this closing plenary.
We’ve got just the right people to help us do it.
From the left, if I can - or from my right rather, your left,
if I can introduce Bozidar Djelic, the Deputy Prime Minister
for European integration and Minister of Science and Technological
Development of Serbia and a young global leader -
Six more months.
For six more months, yes.
So still a youth voice for six more months.
Let me explain I’ll move from young global leader to middle-
aged in one day so that’s okay.
Valdis Dombrovskis, the Prime Minister of Latvia;
Dalia Grybauskaite, the President of Lithuania,
Vincent Van Quickenborne, the Minister of Economy and
Reform of Belgium.
So we’ve got four leaders and I'm going to, if I may,
Madame President, start with you and I'm going to throw a tough one
at you which I'm going to repeat to several others on the panel
which was you’ve worked very hard for Lithuania to
get into Europe.
Given the events of the last few days where after all
what was the prize you were seeking, stability, growth, reform,
those were supposed to be the rewards of getting into Europe?
Was the journey worth it?
Looking today, did you get what you expected?
I think we got everything we expected and more.
In addition, of course the journey was long, about 10 years,
for us and in our region we did a huge amount of reforms,
democraticize our society, and practically introduce market economy.
But of course it was a fast, very rapid, robust,
and socially tense period. It cost a lot.
And we thought that after we joined the European Union
at least the hardest work will be done but it looks that
everyday new challenges are falling on us and the road
towards membership was worth mainly because we were capable
to reform ourselves as much as we would like and as deeply
as it was necessary.
And this experience of reforming fast, taking challenges,
openness, and courage to talk with people openly what is
necessary to do, helping already now than all of us in our region
started to feel global problems and failures already by
the end of 2008.
And having that in mind and having this experience of
managing ourselves, already in 2009 we took initiatives and adjusted
our economy and reduced our spending through all our economy
including real salaries, real pensions, real pays in
social benefits by 4% of GDP in one year.
And of course our economy is very small, of course we are a
very open society and economy, of course we depend very much
on external markets but still taking into account global pressures,
national governments and national politicians
with their clear responsibility
can still manage a lot inside the country if decisions are at least
reduced from a political populace.
This is not easy, any government pays the price.
My neighbor paid for free government,
I think, for that, we’re still not paying
for free governments but we’re already losing and our government is
losing credibility because of difficult measures but necessary measures.
So from outside we look as country which is capable to manage,
inside people are angry but that probably is an objective reason
how it is happening.
Why I'm saying that the road towards membership was perfect
school which helped us to manage today’s situation where
we understood that we can rely first on ourselves, only then
second on the European Union and that is an experience which
is very useful still.
Well that’s of course fascinating but not the answer one might have
expected a year or so ago because basically you're arguing the journey
to join Europe was what sort of gave you the training
and hardened you and gave you the political capacity to take difficult
and unpopular decisions but Europe itself is not the prize that’s worth it,
it was the journey that gave you these strengths and capabilities.
Yes and no, our journey was important but also if to take
the messages now that for example during the huge downturn and fall,
today annually the assistance from the European funds, for example,
practically amounts to 25% of annual our budget, that’s significant assistance.
Clearly you cannot deny it.
Yeah. Thank you.
Prime Minister, you have been - and Latvia have been very,
very anxious about joining the Euro.
Does that look quite such a good idea as it did a few months ago?
Well certainly, our plans as regards Euro has not changed,
we still intend to meet most of the criteria in 2012 which means that
we could join Euro in January 1st, 2014 given that the current rules are held.
So there are two worries as regards Eurozone,
the first part is the credibility of the Eurozone itself where
I think it’s a good news that yesterday there was this rescue
package for Greece and also proposed to guarantee mechanisms
to address the crisis in better manner.
In another front, what is really needed is control mechanisms within Eurozone
to make sure that countries in Eurozone have to follow most of the criteria.
There was such a control mechanism, sanctions mechanism in our stability
and growth but it was scrapped in 2003.
Not apparently the time has come to re-introduce this control mechanism.
Second is what we hear and what worries us somewhat is the debate
that there should be some postponement of the Eurozone enlargement
or amending of the criteria so that countries could not enter
and I think it’s quite a misguided debate because the problem of the
Eurozone is not new countries because there it’s quite clear,
you either meet most of the criteria or you are not allowed in.
The problem is lack of control mechanisms within Eurozone and the fact that
most of the Eurozone countries do not follow most of the criteria.
So really we hope this debate will not move into not allowing
Eurozone enlargement and... will come pretty soon with
the case of Estonia it’s a matter of coming weeks and months.
I Both of you made this dramatic adjustments to restore your public
finances and yet you didn’t sort of stop the Euro in the way that the Greece crisis has
and yet you may be penalized because you may not be allowed into the Euro.
Do you feel it’s a double standard?
Well this we will see pretty soon.
And I think the real test is in Estonia which had the 15% recession last year
and yet 1.7% of GDP budget deficit.
So they clearly met most of the criteria, they're physically one of the most prudent
countries and there we will see if Eurozone is willing to stick
to its own rules or it will invent new rules not to allow Estonia in.
And of course it will come of how implications for Latvia and...
also Lithuania in the sense that if there is a credibility that Eurozone
enlargement is an open process, it’s also incentive and possibility
for us to explain to the people that measures we do are needed.
We will join Eurozone in due time.
Whereas if this will not be the case then it will become also more difficult
to explain why, for example,
we need to make most of the criteria in 2012.
Why a budget deficit of 3% and not 3.5%?
Djelic, you - I mean Serbia has really this issue of accession
and has been a driving dynamic of your country’s politics
for quite a few years now to meet Europe’s demands if you like.
Do you sort of look now and wonder whether the price
is going to be worth it?
Well for sure the enlargement is going to become more demanding,
the criteria for countries to join Europe and to join the Eurozone
are going to be tougher but at the same time that’s not necessarily
a bad thing as long as there is a win-win solution.
Europe has still its soft power aspect and definitely for the Western Balkans
history never stops.
Either we have the European agenda or if we don’t, then you will probably
have another agenda.
So that’s why it’s always an important thing to keep this European integration
process going.
I was last week in Berlin and I was testifying in front of the Bundestag
the day when the Greek package was being voted.
And of course in opening... to the members of parliament
"Ladies and gentlemen, just what you wanted,
another Balkan country. Here we are."
And yet - then I told them that we froze wages and pensions
in October of 2008, having done a precautionary program with the
IMF and the EU in 2007, that our total debt to GDP is 32% of GDP,
that we’re the only country upgraded by the OACD last year,
and that the capital...
ratio of our banks, 80% of them Euro- based of the mother banks,
and that stress scenarios run by the IMK and the ECB show no need for
re-capitalization.
But that’s also the truth and therefore what we need
is to keep this process going because that’s something
that has a very powerful and beneficial effect on the domestic, I would say,
political front, and at the same time even though I do not expect
the generosity to be at the level as it used to be before,
it used to be that when Spain or Portugal would join they would get between 3%
and 5% of GDP, not only budgets, very significant transfers.
It is not going to be as good a deal as it was but it’s still a very good deal
and the best deal on the table for our countries as well.
Minister, you listened to this and you hear, I think, that economic liberalism,
your credo, probably does even better in the accession countries
than it does in Belgium.
You're hearing countries that have joined, a country that wants to join,
and the level of adjustment that they have made,
the rigor they’ve shown in their public finances is one that old Europe
would find enviable.
Do you think you can learn a lesson and will we see now in the agreement
of the last few days similar levels of adjustment here?
Well it’s like "Here I am old Europe, there they are new Europe."
Let me say I think that what those three countries and other countries
have achieved is remarkable and at the same time I think that the
comfort of the Euro, having the Euro, has postponed a lot of stricter reforms
in all Eurozone countries including our country.
And what we’ve seen last weekend, the response, the massive response
of European institutions I hope is a wake-up call that prevented us from
the real downfall but I think after the euphoria of the markets yesterday,
what you see in the public mood is sobriety that means that most people
today realize that the battle to come is an uphill battle
that means that especially in Belgium but also other countries.
We have elections in a few weeks, Holland has elections to come,
UK just had elections.
As for the next few years those politicians continuing to promise
the moon in this continent will not be longer credible.
So the message is that there will be probably a decade of
austerity that is necessary but let’s put it in a positive way.
I think 2010 could become a new start for Europe because
either we go for the future of a footnote continent comparing
to the United States where you have economic growth
predicted above 3%, not speaking about China, India,
and other countries, or you go to a real world player
with real economic growth, and that is Europe,
and that means more growth than we have today.
Predictions are 1%, 1.5% that is not enough to pay
for the welfare that old Europe, so-called old Europe, has today.
So what you need is I think two things.
First of all I think you need more European ambition.
There is huge benefits awaiting, 500 million customers, high income,
middle income customers.
The single market is not yet there.
There's a lot of protectionism, national chance protected
by member states especially in the old Europe that prevents us from regrowth.
And secondly what you need are brave, honest politicians on the national level
that say to the people "Hey there, if you want to protect that welfare,
we should work longer and we should work harder,"
including the politicians, of course.
And this is the only way because it is either reform or it is decline,
that is the reality.
Thank you.
Look let me - it’s a very good point, if I may,
and I'm going to come right back to you but I want to do so
by reminding us that formally the session, the question part of this session
was the issue of Europe 2020, the new document that is to replace
the Lisbon Agenda.
And it sets five goals although I think it’s still got to complete its
winding path through the different approval processes.
Those goals are increasing the employment rate to 75% in Europe,
boosting spending on research and development 3% of GDP,
attaining the sort of 20-20-20 climate energy targets,
lifting 20 million people out of poverty, cutting the school drop-out rate to 10%
from the current 15%.
And I think probably to everybody on this panel and the audience,
there's a sort of sleepwalking quality to this.
It doesn’t seem related to the sheer scale of challenge that
Europe now faces.
It certainly begs the question that if the Lisbon agenda didn’t work,
why would these goals adopted 10 years later work.
But more fundamentally, it seems to dock the issue
that surely we’re not at the point of setting incremental
goals for Europe.
We’re at a point, as you just hinted Minister,
of saying "Look, we’re living under completely different fiscal
ceilings for the next 10 years.
We’re living in a much more intense global competitive environment
where Europe is in danger of being at the losing end."
What is the fiscal framework which is going to allow us forward?
And how does it relate to what has received a lot of attention over
the last day here which is obviously the core for many of us of Europe’s
comparative advantage if you like, is the sort of social market model.
But what I don’t think we’ve answered yet and maybe
we can in this final session, is that model affordable anymore
given the fiscal ceiling we have and what does it really mean anyway,
because across the countries represented at this platform today,
there are very different levels of social spending and social provision.
So what is it that we’re defending? Is it affordable?
And is it realistic in terms of the decade of difficulty we have ahead?
Minister let me start with you and we’ll then just go down this way.
Well I think that EU 2020, I don’t want to get very institutional about it,
it’s less targets, it’s better monitor, it’s not that bad,
but what I miss really is an ambition for more entrepreneurship
because if you talk about growth and you want to have more growth,
what you need are more entrepreneurs and more lean way
for those entrepreneurs to create the growth and that is really lacking
in the document, sorry to say so.
Look at the United States for example,
if you look at the export power of the United States more than 50%,
and that is for the first time in 2010, for the first time the United States
export more to emerging markets than to what I would call
“developed markets.”
But for example Belgium, with all due respect for my country,
we only export 3% to China and 75% goes to the EU 15 classical states
so if you want to have more entrepreneurship,
you’ll need less bureaucracy, more lean way
for the entrepreneurs to become European players and
that means the single market and so lesser protectionism.
And secondly, you need more ambition towards real exportation
and that is the core of the issue and that I think is the only way to
continue to survive what we call the "social market model.:
We talk too much about social, sorry to say so,
but we talk too less about market.
Madame President.
Okay, 2020, your - in the introduction said that this
document replacing Lisbon.
My question "Do we need to replace Lisbon at all?"
Nothing worse at all.
Do we need to replace that? Then in 2020 we have four-five targets,
are they sufficient and good enough
reacting to the challenges we’re facing?
Is this the receipt as prescription in apotheca that if we fulfill
these four targets, we are safe and prosper?
No. Nobody guarantees anything.
Especially nobody can say that one size fits all.
Of course we will have so-called national programs
but on the basis made on these as directions/targets
but in today’s problematic, I think it’s a very,
very narrow segment what we’re talking about.
We’re really still facing the global challenges
in global economic downturn in financial sector,
that means for our future financial stability,
still the risk exists and we have national regulations,
not even European ones, so we have virtual economic crisis
and bubble and we have national or maximum tri-regionalized
or tri- to half-European level regulations.
So in total, then we’re discussing 2020, already after last week’s events,
it became too narrow for discussion.
But anyway if going to this narrow item I will say that still unclear
clear ownership, still unclear the - how it will be delivered,
and the sanctions if it will not be delivered,
that means all we are really replacing not very successful Lisbon
or we try to have something more successful.
That’s only time, processes, and flexibility of the document
and process can help because if we stick to the document
and we will not change it and we will try to fulfill
routinely bureaucratically what we are today having on the table,
it will be a huge mistake because it is projected for the 10 years ahead,
we everyday see change in wealth,
everyday seeing different understanding and different future
of our fiscal stability in most of our countries
and what we can afford during the next 10 years having in mind
our fiscal situation.
And then we’re talking about some kind of social models
we try to accommodate.
We do have already in Europe different understanding of it,
different quality of it, and different capabilities to form.
In our countries in new member states still our payments
and social benefits are comparatively lower
while for us probably it’s easier mentally to adapt
for new difficult measures, we probably were supposed to introduce,
but of course - then we talk about some kind of coordinated attitude
towards social model on the European level.
We’re far away from it.
It’s too diverse when the... thinks differently
especially in some regions as our regions who went quite fast
into market liberalization and everything including in social relations,
including the labor market.
Why to think that 2020 will help equally good and well all 27,
that’s quite an illusion.
Why probably to have as open process which can absorb
additional measures in the future, additional terms of end priorities in
the future during these 10 years will be made a better and new approach,
not to suggest to what we have on the table today
because I'm not sure that it is what is on the table today is the answer...
Thank you. Prime Minister.
Well I would say as best we can do now to protect
what we call European social model is to focus this EU 2020 strategy
as much as we can on growth and jobs.
This early, it seems to be a priority if we will ensure growth,
we will be better able to ensure EU social model.
So what can be done in this sense?
Of course we need to address the bottlenecks which exist
in order to improve our growth.
First, it’s a business environment, something is being talked very little.
Also in respect to EU 2020 strategies, there should be actually much more
into it about improving of business environment,
cutting red tape, removing existing barriers in the EU internal market,
SME support and enabling or... enabling small business tax,
labor market reforms, all that kind of issues
which can boost the EU growth potential.
If we talk on new member states, there's also another important aspect
that best way we can go to the social cohesion,
there is rules of economic cohesion so really it’s a role of EU cohesion
policy which should be more interlinked into EU 2020 strategy.
So I think if we all focus on growth, if we all focus on improving
business environment, we will also be able
to better address our social problems in the aging society.
Well on the face of it, the document is better than what Lisbon was.
Less targets, more comprehensive, I would say,
at the same time but I guess the issue is can we get there.
It will be desirable to get there with differences, national differences.
The issue is do we have the conditions to succeed.
So first of all at the national level,
granted we do have differences for sure,
this being said, one common thing we have heard over the last two days
and I guess that’s the theme for several years and several political cycles,
is that there is a tyranny of one generation, this is the baby boomers
who are exhibiting an egoism of historical proportions,
having lived through the 30 great years of development and now,
because they have the swing vote in almost every country,
hanging on to their entitlements and to their future pensions
at almost all costs and de facto blocking a lot of governments
in implementing reform.
And if you think that new Europe is younger than old Europe,
you're wrong.
We are older than old Europe and in that sense those problems
are actually even more acute in some of those countries
which are supposed to catch up, which of course makes the job
even more difficult.
Then on the level of Europe, again in Berlin,
interestingly Germans seems to me have become specialists
of the Greek retirement system.
They analyze and they compare in large circulation papers
when they go, what is the early retirement,
what do the policemen can get, and so forth,
and in that sense it took 10 years to discover that
a true common market requires a common currency
and it would appear that this crisis in 10 more years show that it’s
going to be very difficult to have a common currency
without tightly coordinating fiscal and even social policies
in some point of time and maybe that’s politically not very...
but at the end of the day the payers would want
to make sure that the receivers do not have any easier goal.
It should be more logically that the people who need to catch up
should work even harder, not less, than those who have achieved
something before.
And then I guess the third point is to, in this 2020, is to talk about science,
technology, innovation, entrepreneurship.
I guess what we will see that’s more than a hypothesis,
we see it in telecom equipment, we will see it in a lot of the internet...,
we will see it in aerospace and I'm sure we will see it more
and more in infrastructure.
In November last year, for the first time,
Chinese companies won an EU- financed highway project in Poland.
Currently in Belgrade we are building a bridge over the Danube
with Chinese money.
And I guess we will see more and more,
not only the United States doubling their expenditures and then trying
to attract even more of the European brains as they have been doing
successfully over the past few decades, but also new competitors
and a call for all of us to really focus on this issue so as to be able
to have something to export.
And in that sense I think we need something like a new airbus,
something that can fire up the imagination of the people,
something concrete, maybe a green electrical car where Europe can lead
and where only Europe can address the American and the Chinese
and maybe the Indian competition.
And in that sense, and that’s my last point,
there's also a need for Europe a bit more to flex its muscle...
times the ideology in the open market, of course are the more desirable things
and yet we do not face the same amount or openness
and fair game in other geographies in our markets.
We’ve seen it in Copenhagen.
Europe was leading but was unable to have the leverage
to get to a world agreement and t he same story would
need to have us think quite hard of how to leverage
the fight and to have the biggest market in the world
in order to effect and to make us successful in the long run.
Okay, well there you have it, the 2020 document probably okay
but hardly up to the scale of the challenges that Europe faces.
Let’s now open it to the floor and say - throw in questions,
points as wildly as you like because I think this is for all of us
a chance to sum up what the last day and a half has meant
in terms of messages for where this region is going.
In the back, right.
My name is Yosh Martins from Consumers International.
There's a lot of talk about the need for growth
but there's no talk about sustainability and it is like in this need for growth
we can not afford sustainability as if it were a luxury.
So I think we should re-take, regain the previous discussion
about sustainable growth and private debts for Europe
should look for its advantage because sustainable growth,
sustainable consumption is what we need for this world.
Thank you. There was one up the front - yes.
...with the European Commission. It’s more of a personal anecdote really.
I'm married to an Indian and we have an Indian friend here,
an executive from a multinational company.
He worked here in Brussels for a year and was very fond of the soup
that they served in the canteen at his office.
But he found one day in July that there was no more soup
and so he inquired about it and apparently the person who was
dealing with the soup was on holiday for a couple of months
and so was the whole supply of the soup, the person who sold the ingredients
and the van that transported the soup.
Anyway, he was very surprised about the fact that he couldn’t eat soup for a
couple of months and I think he really used it as a sort of point
to say how surprised he was that at the bottom line
there's a lot of Europeans who really don’t want to work that much,
the main motivation factor for a lot of Europeans
because we’re a rich society in a way I guess,
is to go on holiday and to retire early.
How do we reconciliate this with the sort of challenges
that we have been discussing?
Great. Yes over here.
Kirsty Hughes, Oxfam. Two comments.
One not really fully with my Oxfam hat on.
We’re very good at beating ourselves up in Europe, very good,
I mean 25 years ago I was doing my PhD on European competitiveness.
In the early ‘80s I look back at folks from the 1960s
about the American challenge.
There's always somebody challenging or somebody we’re not better.
Actually if you noticed, we’re still here, we’re still a huge trade block.
You’ve got Germany as leading - one of the two top leading exporting
countries in the world.
If we want to become a low-carbon Europe by 2050 as we absolutely must,
we’re perfectly capable of doing that.
So where’s the kind of confidence, not only about the competitiveness
but also about our welfare state that may need reforming.
Maybe the baby boomers have got it wrong but what about
"Well we can't be as rich as we thought we were going to be but we’re going to be
more equal societies, we’re going to be better societies,
we’re going to think about wellbeing.
Where’s some of that positive vision?
And putting my Oxfam hat back on, if we don’t have that sort of
positive vision, how are we going to look out towards the world
and take our responsibility for the world more seriously,
whether it’s our responsibility because we caused that climate change,
I mean it was pathetic.
We weren’t just sidelined by Copenhagen, we chose to be sidelined,
we didn’t use our negotiating skills and our supposed leverage.
What about the impact of the global economic crisis
on the poorest countries in the world?
So very clearly didn’t cause it and...
pushing 50 to 100 million more people into poverty.
Where’s our responsibility towards them?
Well yes we were the biggest development spender in the world, good,
so let’s keep that and think how we’re going to use it.
So I don’t think we’re going to get out of this current economic crisis
with these 2020 documents and everything else if we don’t have a much,
much more compelling political narrative and that’s got to come from the public
and from civil society but it’s also got to come from our leaders, too. Thank you.
Great. Jeffrey.
Jeff Littman from the UN World Tourism Organization.
Listening just to the debate and first the Minister saying
we have to have a new ideal and then the following who talked about
let’s bring sustainability back into the equation and then listening to Kirsty
in that positive way talking also about the need for higher value,
perhaps social inclusion, maybe the thing that we’re looking for which
has now become the sort of strategic drive of the G20 in the UN system
is the green economy.
And maybe Europe should actually set itself up to become
the champions of the green economy which at the moment it looks very much
as though China is setting itself up to do.
Great.
I'm going to catch a call on somebody from the floor,
Timothy Garton Ash, and ask him as a longtime writer
about European affairs as he listens to this discussion.
Are we right to be sort of rather pessimistic and feeling burdened
by the challenges of Europe or should we actually shrug it off
and argue that Europe’s always like this?
Because it is certainly the case that coming to a European forum
of the World Economic Forum after having been in other regions
immediately before it, whatever their problems,
there was an energy, a euphoria,
these problems we can overcome, we’ll be back to high growth,
why is Europe so depressed? Can we have a microphone?
Well thank you Mark.
Kirsty is certainly right to say that one could fill a whole book
with obituaries of the European project and crises and episodes
of Euro fatalism and Euro pessimism.
I have to say I think this one is very serious in historical terms
because I do not think we have the great drivers
of the European project that we had for most of the post-war period
and because the global challenges we face and particularly the emerging
great powers are huge competition.
For me the conclusion from this conference is what a couple
of our speakers have already said that we cannot continue
in the old rhetoric of simply saying we must defend
our European social model and just have a little bit more growth
and work a bit harder and a bit better.
That is totally inadequate for the challenge we face.
We have to set about a totally redesigned European social model,
the European social market economy,
and then we will have a chance at what we need from our leaders
is not that rather emollient reassuring rhetoric
we get from our leaders but the language of blood, sweat, and tears.
Thank you.
Charles Grant here, another long term observer of Europe.
Well I totally share all the gloom applying say the next five years
but I can only be more optimistic if I think more about the long term
because I think in the long term we can be more optimistic.
I think the Euro crisis will do more for economic reform in southern Europe
than the Lisbon Agenda or EU 2020 will ever do.
It is going to be brutal and nasty. It will force through hard, harsh reforms.
And I think 10 years from now, we’ll be seeing the dividends of that
and 10 years from now either we have a dynamic, lean,
mean southern European economy or the Eurozone will have broken up.
And I think I take the optimistic view there.
Secondly the whole set of issues around energy will I think create
a dynamic for integration in Europe because we are building a single market,
however imperfectly and slowly, we do care about our energy security,
we are going to learn to speak with one voice in our external energy relations
because harsh self-interest will push us to do that.
We have no alternative.
That will drive forward integration.
Finally, it’s the sheer strategic element that you mentioned Mark.
I think that a lot of Europeans maybe want to live in a big...
that doesn’t worry about problems in other parts of the world
and doesn’t want to think about security challenges.
But actually, a lot of Europeans, when they see a G2 emerging,
when they see that on all the important decisions,
the US and China are the voices that count on financial regulation
or climate change or immigration issues or counter-terrorism,
then I think a lot of Europeans will wake up and say
“Hang on, we don’t want the US and China to dominate the 21st century
and we need a voice too”
and then that will help the kind of political integration Europe
that many of us would like to see.
So I think at the very long run we can be more optimistic
but it’s going to be five years of ghastly crisis and introversion
and blaming each other and a lack of solidarity and people not trusting
each other before we come through towards those that are sunny slopes
10 years ahead.
Anyone else want to comment on the prognosis before we come
back to the panel? Okay.
I mean I think we sort of heard the different range of views very well put
from the floor here but you would- probably what unites the optimists
and the pessimists is actually either whichever camp you're in,
there's got to be fundamental reform.
The division is more about "Is that achievable or not?"
I don’t really hear anybody thinking that Europe can
kind of bump along as it is and we’ve heard from the audience
the reference to the massive sort of baby boomer problem
where the people who were the engine of the growth,
the ones who like to have those holidays and anything else
that has become their aspiration or focus are now finding themselves
joining the ranks of the retired with a huge cost, caring cost,
to the European economy.
So these are difficult times and I think we’re all talking about
the need to have a real ambition about fiscal limits
and re-engineering the social model to reflect those fiscal limits.
But if we may, let’s go once more, we’ll start at the other end this time,
but once more through our panel to have some closing observations on this.
[00:42]
I guess does one need to be a pessimist?
Well one cannot afford to be a pessimist and at all levels,
I mean, be it in the government or NGO or other sectors,
one needs to really look this reality in the face and it’s really
a more challenging one that it used to be because there's a couple of
billion other humans who are now producing more and more
the type of stuff we used to produce
and mind you, at this point in time, they are able to produce it cheaper
and maybe even at a better quality and it’s not anymore shoes,
textile, and toys, it is getting to be more the airbuses and things that
Ericsson produces so the threat to the markets caps and the profitability
of what are today the stabilizers of some of the rich societies.
But this being said, a crisis focuses everybody’s minds,
there is now a clear view of how Europe should function
at this level of integration, some at times unpalatable conclusions
have to be drawn and although we are not at the table yet
but we’re trying to influence every bit and to give our contribution
that in the October council, we will see some movements
after the establishment of this European Monetary Fund
a possibility for a European ranking agency that will not have
the pretty ugly conflict of interest issue that the current competitors have,
the possibility then to be more assertive and with more leverage on the top
16 or 17, if in Cancun an agreement cannot be reached,
and then also a more specific in our also national level,
2020 targets being implemented to get on with those projects.
And I guess the focus on all of this, if you look deep down
with the public opinions, yes there are those who will be
making a lot of noise, nobody can say that we will not see more terrible things
happening because indeed in some quarters the situation is really difficult
but at the same time I believe that there is a lot of realization
within the public opinions that this time it’s really serious
and that everybody has to do more than just a bit more work
and a bit more contribution.
So I think yeah, it’s going to be tough the next two or three years
but I think we’re going to get there.
Prime Minister.
Well coming from the EU member state which competes very closely
with Sweden being number one or number two which produces
a fair share of energy from renewable sources,
more than one-third of our energies comes from renewable,
and also producing least CO2 emissions per capita in EU...
I will probably just add a couple of points on this sustainable development.
Well certainly 20-20-20 targets are part of the EU 2020 strategy
so targets are set and in fact also during the crisis and with the
fiscal limitations we have, there are many things we can do
to meet those targets and to move more towards sustainable development.
And one example you do not always need high tech or anything like this,
one example is energy efficiency.
Take for example now expanded quite substantially is
housing energy efficiency program to improve heat insulation of housing
and if you look at the biggest polluter in Europe,
it’s not industry or not transportation.
It is the housing sector,
energy associated with heating or cooling buildings.
Then there are also many things which you can do:
first stimulating economy in short run;
second reducing your emergency dependency from imported energy;
third reducing your emissions.
So there are really many things you can do without green ideas
with the result 2020 strategy being too fiscally expensive.
In fact you can save money if you target proper areas.
So there are many things we can do for sustainable development
and I think we will do them.
Then of course there is the philosophical question
of what happened in Copenhagen with our 20-20-20 proposals.
We know nobody else is no where close to that level
of proposals but probably we also should listen what the
European world was saying.
I think it was more clearly pronounced by India which were really clear.
“Okay, you in the west agree to whatever per capita emission
targets you want and we in India will go below those targets.”
So first off we’ll be talking if there is a sort of a human right
to pollute then it should be equal to all humans and that’s something
we in the west should keep in mind when we are negotiating
emission reduction targets now in Bonn and in Mexico and in Cancun next time.
Madame.
Going a little bit to a more macroeconomic picture between
the economic centers of the world and seeing and trying
to see the Europe inside of it.
I think that already Europe is shaking a lot from...
pressures but still we try not to wake up and not to smell reality.
Reality is running after us in one country or in another as we have now,
for example, in south Europe, but still we’re trying to do
mainly window dressing and this I mean by including that
in the 2020 and by the politically correct language, for example,
to save, to defend whatever we had.
Do we need to say what we had?
Maybe let’s think about what we need to have and to defend openness
and the capability to change in Europe otherwise the more we
will defend what we have, the less we will be able
to defend what we have or had.
So for this point of view, for us smaller nations, open nations,
dynamic nations, it’s easy.
As I said, we have been challenged, we have been beaten by situation,
by competition, by difficulties and we are ready to take on ourselves
more but still for Europe, in general,
then we’re trying to cook and prepare a lot of political papers
which are not workable, which are not helping.
It’s really avoidance of seeing reality eye to eye.
And here we need to understand that Europe cannot live alone,
cannot survive in this globalized situation alone while all measures
and creation their regional European institutions is not enough
including European funds, regulatory bodies,
it’s not enough if these bodies will work separately from
international accepted bodies and not reform the bodies,
including creating agencies, IMF, World Bank,
and other financial institutions which still work in old manner,
non-reformed, and we do not have different instruments.
And if, for example, all accounting rules,
understanding of banking in Europe is different from what is going on,
for example, in New York, what we’re talking about,
the situation and challenges are globalized,
their approach will still have national, even only national,
not yet European, why Europe if will not be able to concentrate, to coordinate,
to agree together, what we need to do for us will be very difficult to compete.
While here I want to say that it’s not about pessimism, opposite,
the first to formulate reality than to know how to go about it,
that means positive, that means optimism
but we’ve absolutely opened realistic understanding of
what is indeed going on and in the world.
So why for me we in our country try to be critical not only
about ourselves but also what we can do,
how we discuss the projects in Europe, why we are so enough positively
critical towards 2020.
We don’t want this document or this project or this idea to fail
before it works and to fail as it was with other strategies as Lisbon,
for example.
Why in the council together, most of us, we are uncomfortably,
for some countries questioning a lot of questions and giving
a lot of problems but we would like any strategy workable, effective,
and resultative.
Why all feeling around the room and around the conference
is not only about just one other paper, one other idea,
it’s about how long after the crisis started really we started to feel
in 2007 already, we’re still talking about necessity,
of coordinate, about necessity to manage joint problems together
and still working separately, Europe included.
So I don’t know long the world will be only talking,
probably after another broke or problem or some kind of difficulty,
large difficulty, Europe including, not only Europe but Eurozone,
is now on the edge of facing another trouble and how fast it will react
as it did on Sunday not only politically but really how fast
the measures will be introduced and agreements will be reached
really not just by political correct language that will result Eurozone
will manage or not.
And here we had already, and it is very right, a lot of countries,
16 now, do have one currency but do not have at all one fiscal policy.
We do have Central Bank but we do not have really single monetary policy.
Is it possible at all?
You can ask any academic economist and probably he will argue
“No, practically it’s very difficult.”
That means the stability pact was created to at least to try to coordinate
fiscal policies.
What we did with it exactly before the crisis in 2005?
We just laundered it out, loosened it, and it’s not helpful at all
in this environment.
So if our economic policies will go together with economic cycle
and our election cycles, of course will be very difficult for all of us
to agree because every year, in each country or in Europe,
we have elections after elections and if we forget that economics
have their own cycle, not necessarily depending on
political cycle, we will be failing again.
So why I just want to finalize saying that we need to
clearly agree what kind of Europe we want,
how deep integration we want, and in what areas we want to agree,
otherwise we will be only discussion larger, with enlargement,
looser with enlargement, less decisive with enlargement,
and not resultative with enlargement.
So if we will understand these problems in the future hopefully
we will be able to avoid them.
Thanks very much Madame President. Minister, last word.
Yes when I listen to my three colleagues it reminds me
of the saying that the European Union is very good at telling member states,
candidate member states, what they should do
but is less well in reforming itself so maybe that could be a lesson for us.
Secondly, I'm not pessimistic, not at all.
If Greek socialists can reform, everybody can, yes we can.
But the point that the gentleman there made is quite clear.
He said “Okay, the Euro crisis was a wakeup call,
the question is how do we stay awake?
How do we stay awake?”
And then I think the only answer is, of course, ambition, targets, etc.
You need an instance, an institution that is willing to look at it.
And I believe, I'm a Belgian, sorry to say so, that Europe there,
European Commission and European institutions have unique opportunity,
that is, to show their teeth.
And that means that respecting the Growth and Stability Pact,
respecting the targets EU 2020 are enlarged towards growth, respecting,
real respecting, that is, this is really the core essence
because the issue, I mean, there are huge member states
of so-called old Europe that never respected the Growth and Stability Pact
if there is no respect for targets.
How do you want that once we can have a very good continent?
I listened to all the questions.
I won't respond to them but I think really the lady of Oxfam and others,
I'm a free market liberal and I'm very proud of the social system that we have
but the big question today is if we want to continue to have
a social model then it’s ununderstandable that today, in my country,
when a company like Opal, GM, and Antrop closes
that people at the age of 52 can say "I go on a pre-pension scheme."
This is unaffordable. We can't pay it any longer.
So if you want to continue to have a social model,
which I'm willing to protect, you need economic sustainability
and that is the core issue.
So let’s do first things first, and first things first is growth,
room for entrepreneurship, and that is of course the need
for the World Economic Forum, that is entrepreneurship,
that is the beginning of everything.
Well thanks. What an interesting discussion,
I mean, I think it confirms everybody feels there's a need for really tough
choices that European politics needs to recalibrate itself to live within
the limits of the fiscal ceilings of the coming years.
I mean no sacred cows, we have to be ruthless
about what we preserve in order to create space for the new initiatives
that we want to build up.
I think climate change was clearly referred to by a number,
a green economy as one of the ways forward that we need
to do much more in.
But I think what all the panelists gave us was a sense of
that Europe is at a bit of a crossroads as a way forward which means
you don’t stop at one currency, you’ve got to have a higher
degree of coordination across one fiscal, one social, you name it perhaps,
or Europe goes another direction where it, as the President said,
gets looser larger and less effective.
And so this is a challenge and I think this discussion has reflected
the debates of the last day and a half and I think we’re grateful to
everybody who has participated in them.
Let me now ask Andre Schneider, managing director of the Forum
and its COO to close the meeting for us.
Thank you very much.
And I will be very short because I think the important things
have been said.
So distinguished panelists, ladies and gentlemen,
distinguished guests, I can only thank you
for your engaged participation in this World Economic Forum on Europe.
It was very timely, there were very important discussions,
and I think if there's one thing I would like to give you home
is the theme "Renewed Leadership, New Vision."
I think there are still many things up to do to decide to really go
and find the right solutions and we heard many of the directions
which have to be taken.
But I think I would like to... and saying even if I agree
we need to have actions after discussion but discussions are at the fundament
of actions so I want to invite you all to join us again in one year
at the next World Economic Forum on Europe and Central Asia
which we will be holding in Vienna from the 8th to 9th of June
to actually get together and pursue this discussion but also use this
now to look also further to central and eastern Europe, central Asia,
to Caucus and the Black Sea Region.
So thank you very much to everyone and I'm looking forward to
see you next year in Vienna.
Andre, if I may, just before we - could we just say a special word
of thanks to the Crown Prince who’s with us this morning as being such
a force in hosting - well getting this meeting organized and in supporting it
and as always, you're so discreet about it
that I'm not sure everybody here recognizes the role you’ve played,
Prince Philip, in this, and thank you.
Start of audio loop [59:55]
going on and in the world.
So why for me we in our country try to be critical not only
about ourselves but also what we can do,
how we discuss the projects in Europe, why we are so enough positively
critical towards 2020.
We don’t want this document or this project or this idea to fail before
it works and to fail as it was with other strategies as Lisbon, for example.
Why in the council together, most of us, we are uncomfortably,
for some countries questioning a lot of questions
and giving a lot of problems but we would like any strategy workable,
effective, and resultative.
Why all feeling around the room and around the conference is
not only about just one other paper, one other idea,
it’s about how long after the crisis started really
we started to feel in 2007 already, we’re still talking about necessity,
of coordinate, about necessity to manage joint problems together
and still working separately, Europe included.
So I don’t know long the world will be only talking,
probably after another broke or problem or some kind of difficulty,
large difficulty, Europe including, not only Europe but Eurozone,
is now on the edge of facing another trouble and how fast it will react
as it did on Sunday not only politically but really how fast
the measures will be introduced and agreements will be reached
really not just by political correct language that will result Eurozone
will manage or not.
And here we had already, and it is very right, a lot of countries,
16 now, do have one currency but do not have at all one fiscal policy.
We do have Central Bank but we do not have really single monetary policy.
Is it possible at all?
You can ask any academic economist and probably he will argue
"No, practically it’s very difficult."
That means the stability pact was created to at least to try
to coordinate fiscal policies.
What we did with it exactly before the crisis in 2005?
We just laundered it out, loosened it, and it’s not helpful at all in this environment.
So if our economic policies will go together with economic cycle
and our election cycles, of course will be very difficult
for all of us to agree because every year, in each country or in Europe,
we have elections after elections
and if we forget that economics have their own cycle,
not necessarily depending on political cycle,
we will be failing again.
So why I just want to finalize saying that we need to clearly agree
what kind of Europe we want, how deep integration we want,
and in what areas we want to agree, otherwise we will be only
discussion larger, with enlargement, looser with enlargement,
less decisive with enlargement, and not resultative with enlargement.
So if we will understand these problems in the future hopefully
we will be able to avoid them.
Thanks very much Madame President. Minister, last word.
Yes when I listen to my three colleagues it reminds me of the saying
that the European Union is very good at telling member states,
candidate member states, what they should do but is less well in
reforming itself so maybe that could be a lesson for us.
Secondly, I'm not pessimistic, not at all. If Greek socialists can reform,
everybody can, yes we can.
But the point that the gentlema n there made is quite clear.
He said "Okay, the Euro crisis was a wakeup call,
the question is how do we stay awake? How do we stay awake?"
And then I think the only answer is, of course, ambition, targets, etc.
You need an instance, an institution that is willing to look at it.
And I believe, I'm a Belgian, sorry to say so, that Europe there,
European Commission and European institutions have unique opportunity,
that is, to show their teeth.
And that means that respecting the Growth and Stability Pact,
respecting the targets EU 2020 are enlarged towards growth, respecting,
real respecting, that is, this is really the core essence
because the issue, I mean, there are huge member states of
so-called old Europe that never respected the Growth
and Stability Pact if there is no respect for targets.
How do you want that once we can have a very good continent?
I listened to all the questions. I won't respond to them but I think
really the lady of Oxfam and others, I'm a free market liberal
and I'm very proud of the social system that we have
but the big question today is if we want to continue to have
a social model then it’s understandable that today,
in my country, when a company like Opal, GM, and Antrop closes
that people at the age of 52 can say "I go on a pre-pension scheme."
This is unaffordable. We can't pay it any longer.
So if you want to continue to have a social model,
which I'm willing to protect, you need economic sustainability
and that is the core issue.
So let’s do first things first, and first things first is growth,
room for entrepreneurship, and that is of course the need
for the World Economic Forum, that is entrepreneurship, t
hat is the beginning of everything.
Well thanks.
What an interesting discussion, I mean, I think it confirms everybody
feels there's a need for really tough choices that European politics
needs to recalibrate itself to live within the limits of the fiscal
ceilings of the coming years.
I mean no sacred cows, we have to be ruthless
about what we preserve in order to create space
for the new initiatives that we want to build up.
I think climate change was clearly referred to by a number,
a green economy as one of the ways forward that we need to do much more in.
But I think what all the panelists gave us was a sense of that
Europe is at a bit of a crossroads as a way forward which means
you don’t stop at one currency, you’ve got to have a higher degree
of coordination across one fiscal, one social, you name it perhaps,
or Europe goes another direction where it, as the President said,
gets looser larger and less effective.
And so this is a challenge and I think this discussion has reflected
the debates of the last day and a half and I think we’re grateful
to everybody who has participated in them.
Let me now ask Andre Schneider, managing director of the Forum
and its COO to close the meeting for us.
Thank you very much.
And I will be very short because I think the important things
have been said.
So distinguished panelists, ladies and gentlemen,
distinguished guests, I can only thank you for your
engaged participation in this World Economic Forum on Europe.
It was very timely, there were very important discussions,
and I think if there's one thing I would like to give you home
is the theme "Renewed Leadership, New Vision."
I think there are still many things up to do to decide to really go
and find the right solutions and we heard many of the directions
which have to be taken.
But I think I would like to... and saying even if I agree we need
to have actions after discussion but discussions are at the fundament
of actions so I want to invite you all to join us again in one year
at the next World Economic Forum on Europe and Central Asia
which we will be holding in Vienna from the 8th to 9th of June to actually
get together and pursue this discussion but also use this now
to look also further to central and eastern Europe, central Asia,
to Caucus and the Black Sea Region.
So thank you very much to everyone and I'm looking forward
to see you next year in Vienna.
Andre, if I may, just before we - could we just say a special word
of thanks to the Crown Prince who’s with us this morning as being such
a force in hosting - well getting this meeting organized and in
supporting it and as always, you're so discreet about it
that I'm not sure everybody here recognizes the role you’ve played,
Prince Philip, in this, and thank you.