Dear Chair, Mr De Geus,
Excellences, most honourable Rita Süssmuth,
Ladies and Gentlemen,
Today, I dare to cast an eye not just over 2019 but also, even further, over the coming decades. I want to look at how we can overcome the challenges ahead and what role Europe should play in this.
(Economic outlook: a downturn after the good times)
But I will begin by looking at the economic background. Economic growth is slowing down. In Germany, we are seeing economic growth of 1 % instead of 2 %. We are looking at a similar situation in many European countries, throughout the world even.
Six years of economic good times are already behind us.
Year on year we had higher annual growth than was forecast after the crisis. We also had higher tax revenues than were forecast. And in most regions of Europe, we had more jobs, falling unemployment and falling youth unemployment. There are regions that have reached full employment, where the main issue for the labour market is a shortage of skilled employees and not job creation or the placement of job seekers.
(Political risks: Brexit and trade wars)
If we look at the political agenda, nearly every point is prefaced with the words ‘we hope that’:
- We hope that there will be an orderly Brexit at the end of March - or maybe not?
- We hope that there won’t be a trade war, as Commission President Jean‑Claude Juncker was able to negotiate a moratorium with President Trump last July, but we may still be looking at a continuing trade war between China and the USA.
- We hope that there won't be a trade war between the USA and the EU.
- We are looking at worldwide developments in Venezuela, Brazil, Argentina and Turkey, i.e. in emerging economies, that are under-reported – problems such as a democratic deficit, autocratic governments, inflation and recession.
And this agenda does not even include a possible war in Idlib, attacks by Turkey on the Kurds in Syria, or perhaps a land grab by the Russians or troops close to the Russians in Mariupol on the road to Crimea - all this is part of the difficult picture we are facing in 2019.
The European elections at the end of May are a democratic beacon in all of this.
(Competing or clashing value systems)
In essence, what we are experiencing right now is a competition between value systems. One might even say, a clash of systems. We – you and I – were born after World War II, a war that Germany started, lost and was to blame for. The Americans, the British and the French, our teachers and our parents taught us values that are enshrined in our constitution. These values are also enshrined in the Treaty of Lisbon. It is a value system based on a parliamentary democracy, a social market economy, the separation of powers, the rule of law, independent courts - the third branch of government - and freedom of speech, the press, religion and belief. It also includes a liberal society and a mainly Judeo-Christian view of humanity. It is based on tolerance towards others. Everyone is accepted, regardless of colour, race, religion, beliefs or political allegiance. We even go as far as loving our neighbour. That's how we were brought up, how we will grow old and how we raise our own children. We have travelled successfully with this value system for a long time; a system that took root along the Rhine and followed the Danube down to the Black Sea.
Now we are seeing that there are other forms of order – and disorder:
- the worst forms of disorder are religious wars, Islamism, terrorism, forced displacement and rape;
- add to that autocracies in Ankara, Moscow and even in the White House, where autocrats tweet round the clock.
- There also other, very different systems: China - the Middle Kingdom, with its one party and unified goal - its planned economy and state capitalism.
(We must fight for our European value system)
If we believe that our European value system is worth preserving – and I am deliberately not saying it is superior – if we want to preserve this value system for ourselves, our children and our grandchildren in Berlin, Brussels and throughout Europe, if we want it to continue to underpin our daily lives with its parliamentary democracy, social market economy, separation of powers, rule of law, independent courts, freedom of speech, the press, belief and religion, a liberal society where there is free movement and freedom, we must actively fight for it. We need to work as a team and to raise our profile and be more convincing. In an election year in Europe, this is more important than ever before.
(More Europe, where we work better together)
I am often asked whether we need more or less Europe.
I believe we should structure key competences so that each level does what it is best at and each higher level must first prove that they can do it better - that is the principle of subsidiarity.
If, however, the higher level can do it better, it should take over responsibility, i.e. at local, regional, national or European level.
(Europe’s strengths: extending our Union for peace to the Western Balkans)
Europe was, is and remains first and foremost a Union for peace.
As I cast an eye over the next decade, I see that, if we want to extend this peace to the Western Balkans, then we should logically envisage enlarging Europe by up to six Western Balkan countries.
You are not ready for this yet and we haven't prepared you for it either. It is still a taboo subject. These countries are Serbia, Albania, North Macedonia - now that it has a new name supported by a majority in Athens - Montenegro, Kosovo and Bosnia‑Herzegovina. These countries are doing everything in their power to meet the requirements for joining the EU, step by step. They are keeping to our value system. They are no longer trying to reshape borders with armed force. They are no longer embroiled in a religious war, as was the case between 1991 and 2001, in other words not that long ago. At the time, we welcomed hundreds of thousands of refugees. Today, they only need one thing from us: a credible prospect of joining the EU. What I am asking you to consider today is, do we want to welcome the Serbs?
If we as citizens, voters and taxpayers aren't willing to welcome these countries, then they will turn away from Brussels and towards Moscow or Ankara. They will import tanks, wage religious wars and reshape their borders with armed force. If this were to happen, then we would have to admit that we had learned nothing from recent history. Of course, joining Europe is a gift. But the first gift that Europe made was to Germany - from Schuman and Monnet. In 1950, discussions began on founding a European Coal and Steel Community. The aim was to rebuild and to ensure that the need for energy and raw materials for industry, housing and infrastructure were met. I ask you, in all honesty, did Germany deserve this five years after a war it was to blame for? Absolutely not! We had been at war many times before with France - just think of Napoleon and Bismarck, among others. But Belgium, Luxembourg and the Netherlands always remained neutral and peaceful neighbours. We invaded them in World War I and World War II. We destroyed Leuven. President Jean-Claude Juncker’s father was forced to serve in the German army when it invaded Paris. And just five years after the most terrible war in human history, for which we were responsible, we were allowed to become a founding member of the European project. It was a stroke of luck, a blessing and one that made the German economic miracle possible! Just as we received that gift then, we should be ready to offer that gift to others now. By that I mean by ensuring peace in the Western Balkans and extending our Union for peace to the whole continent.
(Our second strength: Europe must continue to export its values)
Secondly, we have exported our values. The accession of 13 new countries over the last decade was perhaps too much too soon - maybe so. But the windows offered to us by history open and close so fast. Helmut Kohl's ten-point plan after the fall of the Berlin Wall and the offer to exchange one East German mark for one West German mark may have had flaws from a macroeconomic point of view - maybe so. But the windows offered to us by history open and close so fast. If Helmut Kohl had not launched this decisive plan almost 30 years ago (which was criticised by Gorbachev, Bush Senior, Thatcher and Mitterand, supported by Hans-Dietrich Genscher, Wolfgang Schäuble, Theo Weigel and Willy Brandt, and opposed by Lafontaine), then German reunification would not have been such a success for Berlin, Germany and Europe. Helmut Kohl recognised and made good use of a window of opportunity. If Slovakia, Czechia, Slovenia, Hungary, Poland, Estonia, Latvia, Lithuania, Malta, Cyprus, Bulgaria, Romania, and most recently Croatia, had not become part of the European Union, some of these countries would be reeds at the mercy of an aggressive wind from Putin's Russia, just like the unfortunate Armenia, Georgia, Moldova, Belarus and Ukraine. We have exported our values, security and peace and our children will see whether we have achieved peace not just for today but also for the future. That Europe is a Union for peace and a community of shared values is not talked about enough in Germany. We take it too much for granted.
(Our third strength: the benefits of a single market and external trade)
Third, the greatest economic achievement of the European Union is the single market. It is made up of 28 EU countries, plus Switzerland, the Western Balkans, Norway, Iceland and even Liechtenstein. With 550 million people it is still the biggest single market in the world. We set standards. We can rely on products having the same list of contents. Products only need to be licensed once and they can then be sold throughout the EU without protectionism or customs duties. Cars are a good example of this. In Germany, we produce far more cars than we need. Our pharmaceutical industry produces many more tablets than we can ingest. The single market has been the basis for Germany’s success as an export nation.
Today, you can find a whole host of goods and products, such as cheese, wine, cars, clothes and music in the shops. Previous generations did not have this range of choice every day in their shop windows, certainly not in such quantities and of such good quality, and nowhere else in the world has it.
Added to this single market is external trade. If you have a single market, you must negotiate trade agreements at European level. And we have never been so much in demand. The USA may have stepped out of much of the multilateral trade system, but we at the Commission, in particular the Trade Commissioner Malmström, are busy negotiating with all corners of the world. We have partners who want to have a social market economy, democracy, world trade and transparency. Canada is a good example of this and, at the moment, we are also in negotiations with Japan, Singapore, New Zealand, Australia, Vietnam, Mexico, Chile and Mercosur. We can use our legal systems, our import/export and investment protection culture to support climate and environmental protection policies, and to oppose the use of child labour, through trade agreements and economic relations. This is a large part of the benefit we get from Europe. Our single market brings untold benefits within the EU and our collective trade negotiations bring added value in our dealings with the outside world.
President Trump bases his politics on the dollar. This leading currency is actively used as a means of exerting pressure. We can resist it thanks to our single market and the euro, which would not be the case if we still had the German mark as has been suggested by some parties. To which my answer is: so why not go back to using thaler and guilders? Europe is still being built but we, the 19 countries in the euro area, stand in the way of the Chinese currency becoming the second reserve currency; Bulgaria, Croatia and other countries will follow our lead. That’s why
we should do everything in our power to ensure that the euro strengthens our economic and political sovereignty;
not to do so would be a mistake, as it would hit Germany harder than countries such as Malta and Latvia.
(Europe – continent of freedom and free movement)
Fourth, Europe is the continent of freedom and free movement. As a 19-year-old with a centre parting and shoulder-length hair, I took a trip from Tübingen to Strasbourg. The checks in both Kehl and Strasbourg took half an hour – interior, under the bonnet, boot, passports shown; we even had travellers’ cheques on us. These days the light rail takes you from Kehl town hall to Strasbourg every eight minutes. What a difference!
My favourite town in Europe is Görlitz on the River Neisse. It once belonged to Charles IV and Bohemia, and later to the Holy Roman Empire of the German Nation. After the Second World War, the river became a cold dividing line. The western half of Görlitz belonged to the district of Dresden in the GDR and the eastern half was part of Polish Silesia. There was no contact or movement whatsoever between these two parts of the town. Today, Poland and Germany are united in the European Union. The Neisse has thus become a lifeline. The town is becoming interconnected, bridges are being built, daily life, sport, work, housing, schools, growing old, being cared for, friendships, all those things are going on across the old borders. Europe is the continent of freedom and free movement. This is precisely why we should do everything we can to stop permanent checks at internal borders. I am not entirely convinced that the fence between Denmark and Schleswig-Holstein can prevent the spread of swine fever.
Permanent checks on the border between Salzburg and Bavaria by Horst Seehofer’s customs officials and further checks by Markus Söder’s customs officials would be very detrimental to business, such as just-in-time deliveries from Magna to BMW in Dingolfing. Instead, we should protect our external borders effectively, so that we know who wants to come in and can check and register them lawfully. However, internally, it seems to me that free movement is the way forward and what history teaches us is best for quality of life, mobility and freedom for people throughout Europe. No other continent has such freedom of movement.
(Competitiveness: Europe must not become an open-air museum)
Fifth, European competitiveness. We run the risk in the long term of not being innovative enough, strong enough in research and development or fast enough in new technologies.
We are also lagging far behind in the digital revolution. Europe must not become the world’s next open-air museum – along the lines of ‘Heidelberg, central Berlin, this is how it used to be’.
At the same time, there are a few new areas where there is clear added value from European cooperation, such as robotics, sensors, photonics, micro and nanoelectronics, high-performance computing and artificial intelligence.
No company (neither Philips and Schneider Electric, nor Siemens and Bosch) has enough human resources, engineers, IT specialists or money to compete alone against Google, Amazon, Facebook or Microsoft in Silicon Valley. But it is precisely these things coming out of California which are being copied in every detail by Chinese companies like Tencent, Huawei and Alibaba.
In the digital revolution you need either enough users or enough money. The Chinese, with 1.3 billion potential users, have an advantage over us. The three billion euro which the German government has managed to scrape together for artificial intelligence over the coming years is too little; thirty billion would be more appropriate. However, Europe could provide this funding through programmes like Horizon Europe and by combining resources from the Member States and research industry in joint undertakings and smart public-private partnerships. It is only through European research teams that we can compete with the research and development of the Pentagon-backed industries in California and the dynamism and iron will of China. To do this, we will still need the ETH in Zürich und Basel and the excellence of Oxford, Cambridge and London – another clear reason why a smart Brexit is necessary. A European team would be a win‑win for the UK and the EU as a whole.
(Brussels more transparent than Berlin)
We are often asked how things work in Brussels. I would invite you at this point to fly on to Brussels after each visit to Berlin, since we all have three capitals: first Munich, Stuttgart, Düsseldorf, Wiesbaden, Mainz or Saarbrücken, second Berlin and third Brussels.
You will see in Brussels how transparently MEPs, officials, Commissioners and their private offices work. There is more transparency in Brussels than Berlin. For instance, while Commissioners publish their weekly schedules, German ministers do so only to a very limited degree.
Another thing is the perennial criticism that the EU lacks democratic legitimacy. The ‘European Bundestag’ is the European Parliament in Strasbourg and Brussels. The Parliament is directly elected – the next elections are in May – on the basis of a broad range of parties, lists and candidates. The Council is basically the second chamber or ‘European Bundesrat’. It is made up of the Member States, like the 16 federal states in the Bundesrat. Then there is the European Council, which brings together the Heads of State and Government and sets the course. The European Commission is the management; you could even call it the European government, with operational responsibility for daily work, legislative proposals and budgetary implementation.
(European Commissioners have democratic legitimacy)
It is often said that the Commissioners are not elected. My response to this is: Do you know how to become a minister in Berlin? Last time, the three party chairs – Martin Schulz, Horst Seehofer and Chancellor Angela Merkel – came to an agreement at seven o’clock in the morning after a long night’s discussion about which party would get which ministry. Each party chair then decided who would be a minister, and the list of ministers from the three parties was sent to the Federal President. They were then sworn in. Nobody consulted the Bundestag, no member of the Bundestag has ever voted in a minister. In contrast, candidates for Commissioner are proposed by a democratic government. For instance, former Commissioner Günther Verheugen was proposed by the Red-Green coalition and I was first proposed by the CDU-CSU-FDP and later by the CDU-CSU-SPD, and thus indirectly democratically selected. I have also had to take part on three occasions in a three-hour hearing before the relevant committee of Parliament to justify my candidacy. Not every candidate makes it through, some are rejected. In the end, the European Parliament and the Council vote on the entire Commission. Compared with federal ministers, we thus face many more democratic hurdles and have much more legitimacy. I therefore reject the charge that we are not democratically legitimate.
We should ensure that Europe is portrayed objectively and that we get the message across that Europe has a great deal of democratic legitimacy, albeit perhaps not enough.
This is also why the Spitzenkandidat (lead candidate) system was introduced, since politics needs to be personified. We saw this last time in the TV duel between Jean‑Claude Juncker and Martin Schulz. The candidates this time round are Frans Timmermans for the S&D, Manfred Weber from Lower Bavaria for the CSU, CDU and EPP, and two candidates, including the German Ska Keller, for the European Greens. The FDP and Liberals have yet to decide whether to put forward candidates.
(EU elections should be as important as elections for the Bundestag)
European elections should be as important to us as elections for the Bundestag, no more and no less so. This applies to the parties, how they run their campaign, finance it and organise events, and to the candidates, electorate and media.
However regrettable Brexit is, however difficult the situation with autocrats around us and however many internal weaknesses we discover, the good thing about these developments is that it becomes clear to people how important European elections are. We must use a high turnout to ensure in future that Europe is stronger and does not suffer further setbacks along the way.
(Rule of law called into question – the budget as future leverage)
When it comes to the rule of law, we do not have much leverage. It is one of the EU’s fundamental values, which guarantees judicial independence, justice and a high-quality legal system that is not arbitrary or subject to political interference. It is this independence of the judiciary which is now being called into question in Poland, Hungary and in another guise in Romania. In the European Commission we are doing what we can. While the founders of Europe gave the Commission powerful instruments when it comes to examining accession candidates – we are checking chapter by chapter whether Serbia meets the conditions for membership – if a country is already a member of the club, the Commission is fairly weak. This is because the Europe of the ‘fatherlands’ did not want the Commission to keep a close eye on governments or even issue instructions, warnings or punishment. For that reason we have included rule‑of‑law conditionality in my budget proposal for the next decade. Only a few days ago Parliament voted in favour of this by a two-thirds majority.
When the principles underpinning the rule of law are infringed, when a Member State influences the courts, independence is restricted or early retirement is introduced to replace officials against their will, we should have the right to reduce payments from the EU budget.
This is something that can be decided by majority voting, and I am counting on it being approved by the Council and Parliament for the budgetary framework covering the next decade. It is an effective way of ensuring that the rule of law is maintained or restored, since no government wants to have to tell its people: ‘We are not getting any more money from Brussels.’
(2019 - a year of key personnel decisions)
Some key personnel decisions will be made in 2019. The whole of the EU’s upper echelon will look completely different in a year’s time. Council President Tusk cannot run again and will step down at the end of November. Commission President Juncker has said that he will not run again, and we will step down at the end of October. I reckon that at least 22 of the current 28 Commissioners will not be returning. In most cases because the government which proposed them is no longer in office. This applies to Moedas for Portugal, Cañete for Spain , Mogherini for Italy, Moscovici for France and Bieńkowska for Poland. It is equally unclear who will succeed Draghi as ECB President and who the new President of the European Parliament will be. I also suspect that over 50 per cent of MEPs will be newcomers.
We will have to see whether Parliament remains sufficiently stable and pro-European. At the moment the ‘grand coalition’ between the EPP and S&D has a majority, but the polls suggest it will not hold. We therefore need a third party to join forces with it, such as ALDE, the Macronists or the Greens. We should also expect an anti‑European alliance for the first time, involving, for example, Salvini, Di Maio, Le Pen, Wilders, the Sweden Democrats, True Finns, AfD and FPÖ. Their manifesto is simply: destroy Europe. They are not capable of finding more common ground, but a single-line manifesto is enough as far as they are concerned.
That is why European elections should be as important as Bundestag elections to you, me and everyone, no more and no less so.