Mr President, Ladies and Gentlemen,

“Europe in crisis” – sometimes followed by a question-mark, but often enough by an exclamation mark – that's the headline under which, if one has read the European papers recently, the European Council will meet today and tomorrow in Brussels. Mind you, this crisis is not one made in Europe, but a global crisis which – as we've discussed often enough in this House – is not passing Europe by. Worse still, the crisis has of course long hit Europe with its full force. Particularly in these times, Europe will therefore face a test, because we have never yet come through such a global crisis together, because the European integration project is being stretched by hitherto-unknown forces, and because some members could – and the signs are there – be tempted to relapse into national mindsets.

For that reason I say that Europe's reaction to this crisis will show whether it is fit for the future. Let me add that Germany, as a large member which helped found the EU, cannot just stand by and watch – we have a special duty to Europe, to the EU.

Moreover, Europe must not put European solidarity at stake through timidity. This is not the time for us to question the whole European structure, but rather to use this crisis situation to jointly make sure that the EU arrives at more convincing answers to the global crisis than we as nations would ever find.

That's the starting point for today's and tomorrow's European Council. I could even say it's the starting point for European policy over the next few months and years. But as you know this Council is of course particularly important at this moment, a few days after the European Parliament elections. Some, but not all, of the Europe-wide trends we saw in the election results must worry at least those of us whose primary concern is a democratic Europe. Two pan-European aspects, I think, must spur us to act – the fact that only 43% of Europeans voted is one of them. This is the lowest turnout since direct elections to the EP started. The other aspect is the worrying rise in the number of votes for populist and Eurosceptic parties. Paradoxically, in this regard growth took place in the EP.

This is a challenge to all those wishing to see a strong and united Europe. We must all face up to the fact that many citizens clearly doubt that the EU brings any advantages either for themselves or for their countries. You must surely have noticed as I did during the election campaign that the vision of European integration, reference to the EU's historic achievements regarding peace and stability in Europe, are not yet enough to convince the voters. That reference is particularly insufficient if we want to regain people's confidence in the EU's future potential. Our task – a more ambitious and topical one – is to prove, every day and on every issue, that Europe can provide a better political answer to globalization than the nation states.

This is why vital future issues are on the agenda at the European Council – how we can together find a way out of the economic and financial crisis, how Europe can retain its leading role in global climate protection, and how Europe can become more effective and democratic; above all, however, the realization that no Member State alone can shake off this crisis.

Last December – we discussed it in this House – a recovery programme at European level was adopted to supplement national efforts. That programme must, and indeed will, be successful. These national and European efforts have of course had other effects; they have left holes in the EU Member States' budgets. As you are aware, Europe-wide debt has risen on a massive scale. We must not ignore the fact that we have a responsibility to future generations and that this huge debt is making people anxious about inflation and the threat to monetary stability. This is why it's appropriate and in my view necessary for the Council to revisit the issue of the Stability and Growth Pact.

We should above all not forget where this crisis began.

With that in mind, the Council meeting will directly address financial-market supervision. The financial crisis has made one thing clear, i.e. that unbridled economic freedom endangers the very foundations of our social order. We have seen and learned that the market needs rules, and above all – as our finance minister has often pointed out over the past few weeks – we need an international financial order with no grey areas or black holes.

I think that together with other European partners we have been quite successful on this. At the London G20 summit, along with France, we not only managed to launch a debate on a new regulatory framework, a new supervisory system for the financial markets, but also to place this issue high up on the international agenda. Of course we not only want to keep it there but also to ensure that the EU as a whole is involved in it, so that the EU can play a real part in shaping the future course.

Jacques de Larosière, the former head of the French Central Bank, has put forward what we see as very good proposals aimed at improving financial market supervision. Our task now – also at this summit – will be to implement these proposals, on which I don't want to go into detail now. One major element, however, is the creation of a European Systemic Risk Council, a body that would specifically monitor systemic risks that could arise on the financial market. We will call for any such body to be chaired by the European Central Bank. We will take steps to harmonize the EU-wide supervisory options, complementary to national supervision, that is still needed to achieve even greater efficiency.

We're not only facing an economic and financial market crisis but also, as I said earlier, a threat to the European social model as a whole. Our post-crisis answers should be European ones that must not only be convincing in economic and financial terms, of course, but also in social terms. In other words we must improve the overall conditions for more jobs in Europe. Although that is above all the task of the EU Member States, the European Council, too, will discuss this issue today and tomorrow. And rightly so, because this discussion is necessary.

If there is one issue which will decide our future to a greater extent than any other, it is climate policy. With that in mind, climate policy is high on the agenda of this Council meeting. Let me assure you that the Federal Government is fully committed to achieving agreement on an international climate protection convention in Copenhagen in December. As you know, the EU has already made the first moves here. We have undertaken to cut CO2 emissions by 20 percent by the year 2020. At that time we declared that we were prepared to reduce emissions even further, if other industrial countries and emerging economies were also to make an appropriate contribution.

International burden-sharing based on individual ability and the polluter-pays principle – that is the balance which must be achieved before the December climate conference in Copenhagen. That is a hard and ambitious enough task, I admit, but the solution must be found before the Copenhagen European Council.

Mr President, ladies and gentlemen, the major foreign-policy issues facing us can of course only be tackled together, in the EU – what strategic answer do we require, in particular, to the situation in Afghanistan and Pakistan? What can the EU do, not only to help stabilize the Middle East, but also perhaps to promote its peace process? How can we achieve effective cooperation with the new US Administration, one which doesn't only involve individual EU Member States, not only Germany, but above all the EU itself? How can we make that cooperation more efficient than it has been in the past?

We're playing our part. However, the task is – and let me underline this – to make sure that the EU as a whole becomes more effective and significant. We all know that no single Member State is able to tackle alone the global issues I've just mentioned. Let me remind you, ladies and gentlemen, that this was the reason behind the Lisbon Treaty. There was a basic realization that the nation states alone are not enough, that we need an EU which is more efficient and effective in many fields, and particularly in foreign policy.

As far as the Treaty goes, I hope – without wishing to predict too far ahead – that we're now entering the home stretch. Our aim is for the European Council today and tomorrow to take the appropriate steps to ensure that the Treaty enters into force by the end of this year. I'm confident that this can be achieved. Twenty-six of the 27 responsible national parliaments have so far approved it. I hope we can successfully conclude the ratification process in Germany. The Federal Constitutional Court will hand down its decision in a few days' time on 30 June.

The biggest barrier – as your faces and some of your interjections reveal – naturally remains the unresolved situation in Ireland. You know that the December European Council already dealt in detail with that situation, taking a number of steps to allow Ireland to repeat the referendum. You are aware of the Irish concerns – predominantly ethical and family-law issues, abortion, taxation and defence. Legal guarantees will take account of those concerns. These will be legal clarifications: there will be no renegotiation of the Treaty itself.

Ladies and gentlemen, Europe's capacity to act, progress on the road to the world climate conference, a new global financial architecture – these are the issues the Council will address.

In my view this Council agenda reflects the prophecy made by Hendrik Brugmans, Charlemagne Prizewinner and European of the first hour. He said that we Europeans will either play a role on the world stage together – or not at all.

Thank you very much.