Speech by Minister of State Michael Georg Link at the conference organized by the Konrad Adenauer Foundation on “The financial crisis as a legal watershed? The future of European integration and the Basic Law”

29.06.2012 - Speech

-- Translation of advance text!--

Ladies and gentlemen,

The preamble to the Basic Law charges us “to promote world peace as an equal partner in a united Europe”. These are the two constants that have accompanied the Federal Republic of Germany’s foreign policy since its founding. They remain valid in the light of the sweeping changes which our world is currently experiencing as a result of globalization.

The European project is currently facing the toughest test in its history. Many people wonder whether the efforts to tackle the sovereign debt crisis in the eurozone will be successful. However, the crisis has long since also gained a political dimension. It has led to a loss of confidence in the European Union. We have to work together to ensure that this lost confidence is restored swiftly. That’s a huge challenge.

At the same time, we mustn’t turn a blind eye to a second major challenge: globalization is forcing Europe to come to grips with matters it has never had to address before. A new global governance has to be developed and we must redefine our relations with the world’s new global players. It’s far from evident what role Europe will play in tomorrow’s world.

We thus find ourselves in a crucial defining phase for European politics. Overcoming the sovereign debt crisis is our absolute priority. However, we also have to transform the EU into an internationally effective and strong player.

Europe and its citizens will only have a bright future if Europe is successful in tackling this twofold challenge. I’m convinced that we can only master these great tasks with more Europe.

Based on this, an informal group of European Foreign Ministers was formed in March at the initiative of Federal Minister Westerwelle to reflect on Europe’s future.

It’s seeking to think beyond the crisis in Europe and develop new perspectives. It wants to spell out what “more Europe” has to entail.

For the group is convinced that the clearer our vision of tomorrow’s Europe is, the better we’ll be able to tackle today’s crisis.

Ahead of today’s European Council, the ten Foreign Ministers presented an interim report last week. Their aim is to kick off a debate on Europe’s future which goes beyond short-term crisis management.

In essence, they expressed their desire to establish ever closer political cooperation in Europe.

How can we achieve that?

First of all, we need a policy of consolidation, solidarity and growth.

Secondly, we must render our monetary union irreversible through enhanced cooperation in the spheres of economic and financial policy.

And thirdly, we have to improve the capacity for action and strengthen the democratic legitimacy of European institutions.

Ladies and gentlemen,

During the last two years we’ve take key steps to overcome the debt crisis which few would have believed possible. We’ve advanced towards sound budgeting:

- The fiscal compact is intended to end a failed policy of paying off debts by making new debts. The compact amounts to no less than a commitment to the long-term consolidation of public finances.

- The creation of the European Stability Mechanism shows that we’ve further developed the principle of solidarity among Europeans.

- In the Euro Plus Pact, a number of EU member states have agreed on ambitious structural reforms to generate more competitiveness.

Solidarity and sound economic management are two sides of the same coin. It’s therefore only logical to have the laws ratifying the ESM Treaty and the fiscal compact jointly approved today in the Bundestag and the Bundesrat.

The European Council will today also adopt a European growth pact in the spirit of this resolute consolidation course. The German Government has gained the support of its partners on its core concerns: no economic stimulus packages and no growth financed by yet more borrowing.

Rather, we have to ensure that small and medium-sized enterprises have easier access to loans, advance the development of European infrastructure by encouraging private investment, complete the single market and boost free trade.

At the same time, we have to resolutely gear the European Union’s budget to generating growth. We don’t have to spend more in Europe. But we do have to spend our money more wisely.

We are currently conducting negotiations in Brussels on the EU’s Multiannual Financial Framework for 2014 to 2020. Roughly one billion euros are available for this period.

Our goal is to restructure the EU budget and turn it into a growth programme for the next seven years.

Ladies and gentlemen,

Solidarity, sound economic management and growth are necessary to overcome this crisis and create renewed confidence in Europe.

The euro continues to be of fundamental importance to Europe’s future. It has brought an unprecedented level of price stability. It facilitates trade in Europe. As a global reserve currency, it can give us substantial competitive advantages. Above all, monetary union has been intended from the outset to advance Europe’s political and economic integration and make it irreversible. This goal remains right, especially in the age of globalization.

The debt crisis has revealed the fundamental weaknesses in the euro’s construction. Monetary union cannot function in the long term unless it’s complemented by a union of economic and fiscal policies. Our deliberations on Europe’s further development have to be based on this realization. Here, too, the Future of Europe Group has drawn up concrete proposals:

- We have to further strengthen the European financial market. It’s not in our interest to allow banks and investors to shut themselves off behind national borders. We need more joint European rules.

- We have to establish much closer cooperation on fiscal policy and further strengthen the Stability and Growth Pact.

- We need more rights to intervene at European level vis-à-vis those member states which don’t comply with European budgetary guidelines.

- We should also consider developing the European Stability Mechanism into a European monetary fund.

- We have to further intensify cooperation in Europe on economic policy. The Europe 2020 Strategy as well as the Euro Plus Pact must be made more binding. We have to complement monetary union with ever closer economic union.

The issue of the further development of economic and monetary union will also play a key role at the European Council today in Brussels. The President of the European Council has submitted his first report on this.

The task today in Brussels is to identify the components which have to be dealt with and to define what steps should be taken in future. The task is not to determine actual substance.

It has to be said that Van Rompuy’s report reads like a list of what’s needed to establish models which envisage pooling debt. I’m not convinced that this is the way out of the crisis. The report doesn’t attach sufficient importance to the issue of supervision.

For me, the following applies: the further development of EMU is vital. It’s of central significance to the functioning of the European Union as a whole. The maxim here must always be: we need an adequate balance between shared European responsibility and European supervisory options.

In our view, it’s not possible to move towards joint and several sovereign liabilities on the basis of the current treaties. The same applies to a possible bank union.

This Government will never agree to joint and several sovereign liabilities.

Ladies and gentlemen,

While Europe struggles to master the debt crisis, the world is in the grip of sweeping change. In the emerging economies with their fast-growing societies, new centres of economic and political power are evolving. The influence of Europe’s individual countries is consequently declining.

At the same time, the major tasks of our time can only be mastered at global level. This applies as much to the regulation of the international financial markets as it does to combating climate change.

No European country can match up on its own to the huge challenges posed by these shifts in power structures. In order to protect our values and interests in future, we will need Europe more than ever before. This calls for an ambitious vision of Europe as a global player.

Europe must develop its strategic partnerships with the world’s other political and economic powers. We have to systematically integrate them into our efforts to overcome the economic and financial crisis.

We have to negotiate new free trade agreements, keep the global financial markets under control and enhance Europe’s access to energy and raw materials. In order to achieve this, we have to considerably strengthen the European External Action Service in the coming years.

We have to lend the Common Security and Defence Policy renewed momentum.

In view of the global shifts in power and the resulting strategic reorientation of our transatlantic partners, Europe will have to shoulder more responsibility here in future. We have to prepare for this by developing a comprehensive approach, expanding civil-military planning and command capabilities and integrating national capabilities by pooling and sharing.

In shaping Europe’s external relations we should be bolder than hitherto in taking advantage of the leeway which the treaties provide. If we were to make more decisions on a majority basis in future, that would be a considerable step forward.

In the longer term, we should aim for a joint European seat in international organizations. In my view, our ultimate goal should be the establishment of a European army and single European defence industry.

We mustn’t allow the debt crisis and our endeavours to overcome it to blind us to the overall global picture. Without a united Europe, we would be condemning ourselves to insignificance in tomorrow’s world. A Europe that is split and inward-looking lacks what it takes to be a global player.

Ladies and gentlemen,

Citizens and states will only transfer further sovereign rights to the European level on the twofold condition that this Europe represents their interests with vigour and has democratic legitimacy. We can therefore only achieve “more Europe” if Europe can build on effective institutions. They, in turn, must have solid democratic legitimacy.

We therefore now have to start the debate on Europe’s institutional shape. Europe needs streamlined institutions which make decisions efficiently.

Above all, Europe owes its citizens the greatest possible clarity on who is responsible for which decisions.

We should review the Commission’s structure and working methods. In future, we should reduce the number of Commissioners. In a highly integrated Europe with 27 or more member states, the “one commissioner per country” formula is no longer appropriate. The Council’s working methods must also be made more efficient.

It’s therefore crucial to Europe’s future that democratic oversight by citizens keeps pace with the transfer of sovereignty.

This oversight and accountability to the parliaments must always be guaranteed. We have to ensure full parliamentary oversight of executive actions in Europe which is visible to citizens.

The European Parliament’s democratic visibility must be increased. That’s why, for instance, I’m in favour of the European groups putting forward joint top candidates for the next European elections.

The national parliaments must be in a position to continue carrying out their responsibilities, especially in the sphere of budgetary law. In future, the national parliaments will also be charged with the core task of monitoring the actions of their respective governments. At the same time, however, we should integrate them more effectively into the work of the European Union.

The closer Europe grows together, the more thoroughly we’ll have to rethink the issue of the separation of powers in Europe, that’s to say European governance. The ultimate goal of a genuinely European government with a directly elected president is conceivable.

A stronger European Parliament and a second chamber of member states would be responsible for legislation.

Ladies and gentlemen,

What steps have to be taken next, and what will be the legal consequences? We should proceed at two levels in order to further develop the European Union.

We should first of all focus on steps within the scope of the existing treaties. There are still many options, for example enhanced cooperation.

However, we shouldn’t rule out the possibility of further-reaching reforms in the medium term. I would like to categorically state once more that many of the measures being called for today in Europe are not feasible on the basis of the treaties. If we take further steps here, we should initially seek to do so among the 27. If necessary, we will have to start by tackling the further development of economic and monetary union on a smaller scale, provided that all other EU member states are always free to join us.

This approach wouldn’t be new. It proved to be successful when the Schengen area allowing freedom of travel was established.

Today, too, it may be necessary to first of all carry out steps to advance European integration among a small group of member states, while leaving open the option of anchoring them in European community law at a later date. This would allow Europe to act with the necessary speed without abandoning the community approach.

In all of these issues, we have to ensure that we adhere to the provisions of the Basic Law in full. The possibility of further integration is expressly mentioned in the Basic Law, namely in the Preamble and in Article 23. However, this isn’t a basis for boundless integration.

I’m fully aware that in view of the limits to further integration set by the Basic Law, which were also pointed out by the Federal Constitutional Court, some proposals which are being openly discussed could not be implemented without further steps being taken.

However, we shouldn’t limit our thinking on Europe’s future from the outset. Rather, we have to think about our goal: where do we want to go, what’s necessary? On this basis, we’ll then have to examine how we can achieve this goal and what consequences it will have at European and national level.

Considerable efforts are still required to create “more Europe”. We also know that this isn’t the first testing time for the European project. It was conceived following the greatest disaster of the 20th century on European soil. The story of European integration is one of successive crises that were finally overcome. This experience encourages us, indeed obligates us, to now kick off the debate on Europe’s future.

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