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Dear Tim Huxley,
Ladies and Gentlemen,
It is great to be in Singapore. If there is one place which exemplifies the networked nature of the globalized world it is this Asian hub of commerce, finance and ideas.
My intention today is simple: to explain to you why the prophecies of Europe’s doom are wrong, to present my perspective on where Europe is going, and to sketch out what the future could hold for Europe and Asia as partners.
The year 2012 was thick with predictions of European catastrophe. Commentators, financial actors and many others from near and far foresaw a collapse of the Euro and the European Union. In the event, reports of the demise of the single currency proved greatly exaggerated.
The doomsayers are wrong on two levels: both economically and politically. They underestimated both our ability to engineer an economic turnaround and our commitment to European solidarity.
The Eurozone countries reeling under too much public and private debt and burdened by an outsized and unstable banking sector have embarked on a remarkable path of reform. Ireland, Spain and Portugal, and also Greece, have practically wiped out their current account deficits through a committed effort at consolidation and structural reforms. Economic imbalances have been reduced. Labor unit costs have decreased. Competitiveness has made enormous progress. Much remains to be done. But there is more than a silver lining on the horizon.
As important as the sustained and painful consolidation process has been the political commitment of European partners to create the space and time for reform. Those who look at the EU only as a single market cannot but go wrong in their analysis. Europe’s resilience is less astonishing to those who look at European integration as the fundamentally political project it has been from the outset.
Europe is more than the sum of its parts, more than an addition of 27 national interests. It is a community of shared values, linked by a common fate in the multipolar world of tomorrow.
The core strength of Europe’s cohesion is its reliance on the values of the Enlightenment, on the strength and creativity of the individual. We firmly believe that reason, the free expression of doubt and constructive criticism are not only acceptable but indeed indispensable for identifying the best solutions and for making progress as a society. We believe in our ability to learn from successes and from setbacks. In this spirit, we have drawn our lessons from this crisis.
At its heart the EU is the guarantor of peace on the European continent. It is the guarantor of freedom in many former dictatorships of left and right. And not least it is the guarantor of a strong European voice in a world where the center of gravity is moving East.
Let me be very clear: For Germany, the project of European integration is not one policy option among many. The EU is the cornerstone and the strategic framework of both our security and our prosperity. That is why we have done what it takes to keep Europe together and to put it on a sounder path. That is why we will continue to do what it takes in the future.
In times of crisis it can be useful to look ahead in order to identify a proper direction for your path in the midst of the storm. We have defied the doomsayers, but of course, we still have a long way to go as Europeans.
Thirty years ago, Germany exported ten times more goods than China. In recent years, China has repeatedly replaced us as “export world champion”. Brazil’s economy has just overtaken Great Britain and moved up to be the fifth largest in the world. By 2030, India’s population will be three times that of the entire EU. Germany’s share of the world population will soon fall below one per cent. In other words, Germany may be big in European terms but it is rather small on a global scale. This same dynamic also applies to our British and French friends.
As much as European integration is our answer to the horrors of war and to the catastrophe of nationalisms of the past, it is our answer to the globalization of our world today. We know that we need a stronger and more united Europe if we want a bright future for our country. We will only be able to assert our values and interests if we Europeans stand together.
Although conveniently overlooked by many, the EU remains today the world’s largest exporter, importer, foreign direct investor and recipient of foreign direct investment. It is even less well known that the EU has held on to its 20 per cent share of world exports despite the rise of new competitors. Contrary to popular belief, the EU’s industrial base remains strong. The EU has a massive trade surplus in manufacturing of almost 300 billion Euros, and a trade surplus in services as well. Despite the crisis the EU is still among the most attractive places to invest around the globe. Europe is home to five out of ten of the globe’s most competitive economies. Europe continues to set standards in innovation: US firms alone spend ten times more on research and development in the EU than in China and India combined.
But Europe’s global contribution goes beyond the spheres of trade, technology and finance. The European Union is a steadfast advocate for a rules-based international order, also in the realm of international law and international security, including non-proliferation and disarmament. It is a driver for reform in the United Nations and an inspiration for peaceful and cooperative conflict resolution. Europe is the world’s – and indeed ASEAN’s – largest donor of development aid.
Europe’s lifestyle, the freedoms and living standard enjoyed by its people have worldwide appeal. In a world ever more diverse and fragile this internal cohesion becomes a major asset.
This is what we want to preserve and to build on. This is what drives our internal deliberations on the path forward. You will witness a European Union that will move in the direction of more, not less integration, both in economic policy and foreign policy. A Europe that will assert its weight as a global actor. A Europe that will focus on strengthening its competitiveness vis-à-vis the world. I firmly believe that we are more than half-way through that process of adaptation.
For all I have laid out to you - Europe’s economic resilience, technological innovation, enduring creativity, societal cohesion and its proven tradition of political integration - Europe is and remains a key partner for Asia.
Of course, we are not the only ones “looking East” these days. But we build on a long commitment to a partnership among equals.
As early as 1978, my predecessor Hans-Dietrich Genscher initiated regular ministerial dialogues between Europe and ASEAN. It was the “Nuremberg declaration” of 2007 that paved the way towards the EU’s recent accession to the Treaty of Amity and Cooperation. Germany has been supporting the ASEAN integration process with many projects.
But this is only a point of departure.
Asia has taken its economic dynamism to an entirely new level since then. And Europe has risen to the challenge. Nobody invests more in Asia than us Europeans. Similarly, Asia is the biggest investor in Europe. The EU is also Asia’s largest trading partner. Germany plays a key role in this commercial relationship: 20 per cent of EU imports from Asia go to Germany, while an even more impressive 33 per cent of EU exports to Asia have their origin in Germany.
That is why Germany now pushes for deeper and more comprehensive European political engagement in Asia – and with ASEAN. We encourage the EU to take a more strategic role and to bring Europe’s expertise into the emerging Asian security architecture. We need to consider further upgrading EU-ASEAN relations. And, with our Asian partners, we need to map out the path towards the EU’s active participation in the East Asia Summit.
In shared responsibility we need to address the challenges of our times: climate change and organized crime, new security threats and disaster relief, financial market stability and sustainable growth. After all, our mutual interdependence will only grow. Europe’s prosperity depends on stable and open trading routes across Asian waters. Our two regions share a fundamental interest in political stability and a global free trade and investment order.
We are encouraged by progress in trade negotiations with our Asian partners. Given Asia’s sustained boom there is a vast reservoir of growth to be tapped. Fresh growth that Europe needs to complement its strategy of consolidation and solidarity. The conclusion of negotiations between Singapore and the EU on a free-trade agreement is a strong and very welcome signal to the entire region of Southeast Asia. Open markets are the key to increasing productivity, improving competitiveness and raising living standards at home.
Others in the region ought to follow Singapore’s example. We are making progress in negotiations with Malaysia and Vietnam. With Thailand, the scoping exercise is far advanced. With Indonesia and the Philippines we have begun scoping talks. A bi-regional agreement with ASEAN remains our long-term goal.
Beyond Southeast Asia, our FTA with South Korea is currently being implemented with great mutual benefits. Negotiations with Japan will be launched this spring. And we hope to see EU-India trade talks concluded soon.
This path forward is not self-evident. Protectionist tendencies are re-emerging around the globe. But few places provide such convincing backdrops for the argument in favor of free trade as Singapore. Looking at Singapore’s impressive dynamism, the benefits of economic openness are obvious.
Germany will continue to push for progress in trade negotiations in Asia – but not only in Asia. We also want to embark on a truly strategic project with global implications: a transatlantic single market. No doubt, this will be heavy lifting. And yet, the benefits of a comprehensive agreement with the United States will be worth the effort. Such an agreement would set standards far beyond the transatlantic arena.
Forging new and comprehensive Partnerships with dynamic hubs like Singapore, with emerging powers like Indonesia and the Philippines, and with regional organizations like ASEAN are at the center of Germany’s new globalization strategy. The German government has committed itself to strengthen our alliances with the many new centers of economic and political gravity. Many of them are located in Asia, others, like Brazil or Mexico, in the Americas. The world of today requires a truly global perspective.
When we envision Asia as a partner in the future, we hope to see a region characterized by close political cooperation and peaceful conflict resolution. A region that is not held back in its enormous potential by nationalist sentiment and confrontation. This is Asia’s strategic challenge as much as a return to sustainable growth is Europe’s challenge. Southeast Asia’s commitment to building a true ASEAN Community and to foster regional stability has our admiration, our respect and our continuing support.
Europe and Asia have huge potential to be strong partners in shaping globalization. Let us deepen this partnership and set out new paths to growth. For a prosperous and peaceful global order and in the interest of all our citizens.
It is in this spirit that I extend to you my best wishes for a healthy and successful New Year.