Impact of the Crisis on the Union: Bruised and Battered? - Minister of State Michael Roth at the 155th Bergedorfer Gesprächskreis of the Körber-Stiftung in Athens

15.03.2014 - Speech

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Vice-Minister Kourkoulas,
Ladies and gentlemen,

It’s wonderful to be back in Greece. This is already my fourth trip to Greece since I was appointed as the German Minister of State for Europe in December 2013. I can assure you: This is not pure chance. Rather, this is a clear signal that the German government wants to show its respect for the enormous efforts of the Greek people in fighting the crisis. I feel personally committed to strengthening bilateral relations between our countries and assuring our Greek partners that “solidarity with Greece” is more than just a phrase for the new German government.

First of all, let me thank the Körber-Stiftung for the invitation to the Bergedorf Round Table. I am particularly grateful to Klaus Wehmeyer, to Thomas Paulsen and to their team for organizing this event in these wonderful premises in Athens.

I would like to make clear from the start: Yes, the crisis has left the Union “bruised and battered” as the title of this session suggests. The Union is in a deep crisis of confidence, as polls in all member states prove. European elections are coming up in May which will also be a vote of confidence on the European management of the crisis. A rise of eurosceptic, populist and nationalist parties is a real danger we have to face. And who has suffered more in the last few years than the Greek population? Many Greeks are – in the true sense of the words – “bruised and battered” by the traumatic experience of the crisis. They are still facing the results of dramatic cuts in salaries, pensions and health care services.

Still, I am more confident than the title might suggest. Our common European efforts in the crisis are bearing first fruits. 2014 started with good news: Latvia joined the Eurozone, Ireland has left the bailout programme and Portugal has returned to the financial markets. And I’m sure that Vice-Minister Kourkoulas will agree that Greece has made astonishing efforts: For the first time in years Greece has achieved a budget surplus (before interest payments) in 2013.

Of course, I do not wish to gloss over the problems we are still facing, particularly here in Greece. Much remains to be done. No doubt: We have to continue the path of reforms in Europe. We know that this is a very long and bumpy road and that it requires great efforts and sacrifices of the people in Greece, Portugal or Spain.

I. Lessons to be learned from the crisis?

So what are the lessons to be learned from the crisis? The first lesson is that our answer to the crisis has to be more than just fiscal consolidation. Instead, we need a comprehensive policy approach that takes the difficult social and economic situation in Europe into account. It is unacceptable that 35% of the Greek population is at risk of social exclusion and poverty. The new German Government puts a strong emphasis on strengthening social cohesion and promoting growth and employment in Europe.

Of course, we need an economically strong Europe in order to survive and prosper in today’s globalized world. But that is only one side of the coin. The internal cohesion of our societies is the other, equally important side of the coin: A politically and economically strong, but socially just Europe is our trademark. It is what makes us unique and what we are known for around the globe.

The most pressing issue is the enormous youth unemployment in many EU member states. In Greece more than 60% of the young are without work. We cannot afford to lose a whole generation of young Europeans, many of whom are highly qualified. Today, too many people see Europe as part of the problem – of their problem – and not as part of the solution. We need to turn this perception around. If we get it right, Europe can be the solution to the problems we face.

The new German government will mobilize available resources bilaterally and within the EU for the fight against youth unemployment. As you know, we have already agreed to the front-loading of 6 Billion Euros of EU funds in 2014 and 2015 to fight youth unemployment. Now we need to work very hard on concrete projects. In addition, we continue to exchange best practices among member states.

We have to make sure that structural and social funds are absorbed quickly so they can effectively and without delay reach the projects and people who need them. We need to give Europe’s youth the future they deserve. This has to be the top priority for 2014.

The second lesson is that we need to strengthen the Economic and Monetary Union. Important steps have been taken: We have established the European Stability Mechanism. We have adopted an ambitious pact for growth and employment. We have agreed on a fiscal compact. Currently, we are working hard on completing the banking union and efforts are underway on making economic coordination in the Eurozone more binding. As you know, this will be on the agenda of the European Council in October.

But this alone will not suffice. EMU reform must have other dimensions. We need to come to a closer coordination in spheres beyond the fiscal and economic field: We need to cooperate more closely in the field of labour policies, taxation and social protection. We have to improve our common analysis of the social and employment situation in the EU. In the future, if we want be able to take countermeasures at an early stage of an emerging crisis, we will need to look beyond fiscal indicators like the budget deficit. We also have to have to look at levels of employment or public investment in the educational systems. This is my understanding of strengthening the social dimension of the EMU.

The third lesson is that we must not restrict ourselves to EMU reform now that we see light at the end of the tunnel. Europe as a political project must emerge stronger from the crisis than it was before. I am sure that a broad debate on the future of European integration will start after the European elections.

We need to strengthen the democratic structures in the EU with a strong role of the community institutions. I very much believe in the Community method. Summits alone will not solve the problems in the EU. In the medium term, we need progress not only regarding to the inner functioning of the EMU and the EU, but also in other policy areas, such as the EU’s Foreign and Security Policy.

II. How to react to the rise of populism, nationalism and euroscepticism?

These lessons are also very important if we look at the rise of populism, nationalism and euroscepticism in many member states. We must not ignore people’s concerns. Instead, we need to prove with facts where those concerns are unfounded. And where specific problems have arisen, we must find common solutions without endangering our basic European freedoms and fundamental values. In this we differ from the populists who claim that Europeans would be better off if everything was dealt with at the national level.

As you are all aware many Germans love the “s-word” – subsidiarity. Well, I certainly am not particularly fond of the word. Maybe I am not a typical German. Of course, the EU does not have to regulate everything. Many problems can be solved at the national, regional or local level. But to renationalize everything would be a great mistake. We need to find the right balance. Instead of entering into academic discussions about “more” or “less” Europe, we must think about how to make Europe “better”.

The EU must be active in those fields where it can add value to the citizens. In an increasingly globalized world the nation states encounter their limits in more and more areas. Neither Germany nor any other single country can cope with the great challenges of the 21st century on its own. In those fields where we politicians think we need joint action we must explain our reasons to the citizens – and vigorously defend our joint approach against the eurosceptics.

Recently, there has been a lot of fuss about the free movement of people. Populists and nationalists like to give the impression that their countries face the sell-out of national social systems and massive job losses unless immigration is strictly limited. Of course, this is nonsense. But these allegations are very dangerous. They are shaking the foundations of Europe. The right of European citizens to freely choose where they want to live or work is one of the greatest achievements of the EU.

Again, we need to find the right balance. We must do everything possible to overcome the wealth gap within Europe by improving growth and employment in all EU countries. If we achieve this, there would be less pressure for a “brain drain” in some countries and less fear of “poverty immigration” in others.

We Europeans have it in our hands. I am deeply convinced that by truly applying the lessons we have learned during the crisis – strengthening solidarity and social cohesion, reforming the EMU, making Europe more democratic – and by confronting Europe’s enemies with good arguments and decisive action we will succeed to make the European Union stronger than ever and win back the hearts and minds of our fellow European citizens. Thank you.

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