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Viviane Reding

Vice-President of the European Commission,

EU Justice Commissioner

A New Deal for Europe

Deutsche Bank's 13th Women in European Business Conference

Frankfurt, 14 March 2012

Ladies and gentlemen,

It is a pleasure for me to talk to the Deutsche Bank's 13th Women in European Business Conference. I congratulate you on the theme that you have chosen – "A New Deal". This is a very timely debate. As the Vice-President of the European Commission, I know how important it is to balance corporate and public needs. So thank you for giving me the opportunity to kick-start your discussions. I will focus on what has been our biggest common political endeavour for the last 60 years: that is the united Europe. I will share with you my thoughts on what could be "a new deal" for Europe and how we can get there.

The crisis has given Europe an opportunity to grow stronger together and I would like Europeans to seize this opportunity. How can we make this happen?

First, let us look at where we come from.

  • Only 70 years ago, three generations ago, our continent was on fire.

  • Less than 25 years ago, only one generation ago, an iron curtain kept us apart.

  • Less than one generation ago, the 1992 objective of the Single Market cemented by a Single Currency was ahead of us.

Three generations. Three extraordinary challenges. Three dreams that have come true.

Our history clearly shows what Europeans are capable of doing when they put their differences aside and work together. The proven record of Europe makes me confident in our future. Let us therefore not forget what we have achieved:

  • A Single Market and an area of freedom for 500 million citizens.

  • A trade power representing 20% of world trade – by only 7% of the world population.

  • The European Union is the world's biggest development aid donor.

  • The European Union has its own "bill of rights", with the Charter of Fundamental Rights.

  • And we have a single currency: the Euro is the currency of the European Union and it is irreversible. It is the second reference currency in the world in terms of reserves and a currency that has ensured low interest rates and delivered a decade of low inflation and stability in Europe.

So, what about the crisis? Yes, we have a crisis. It is not the first time that Europe faces a crisis. And what do we do? We take action! We build on the experience from our past achievements – and we take action to grow stronger together.

Since we started the European integration 55 years ago, we had to deal with a number of crises and challenges.

Let me give you an example on how seismic political events allowed us to strengthen our Union: the fall of the Iron Curtain and Germany's reunification reinforced the political will to bind Europe's nations together in a common European Union. The introduction of euro banknotes 10 years later and the enlargement to Central and Eastern Europe crowned this process. In times of historic changes, Europeans have worked together. They have bet on Europe and came out stronger. So we know that a united Europe will overcome any crisis.

Today is no different.

Together, we have taken determined actions to combat the current crisis. Europe has had hard lessons to learn. Initially the Union may have struggled to find the best responses to the crisis – and to find them quickly. But we have come back and put together a "new deal" for Europe. As a result we have shown that the doomsday expectations that forecasted the Euro's demise and the collapse of our Union were wrong.

European leaders have taken bold decisions and put all necessary measures in place, putting Europe back on track:

  • the European Commission, the European Parliament and the Member States' governments worked tirelessly for European legislation to bring about a strong system of financial supervision and credible European controls over budgetary and macroeconomic policy;

  • Member States agreed on a fiscal compact and a European stability mechanism, providing strong firewalls to protect our currency against speculative attacks.

  • the European Central Bank has contributed to bringing down the costs for governments to borrow money from bond markets by unprecedented liquidity injections and lending to more than 800 banks;

These are the central pieces for a solid culture of financial stability which is a condition for a true economic union.

The European Council two weeks ago was a real turning point. From crisis management, the spotlight is now on growth and job creation. Financial stability is indispensable but is not sufficient. We need financial stability and economic growth - one and the other.

This forms the basis of our European "new deal". A "new deal" based on stability, solidarity and growth.

The recipe is not to grow by borrowing and spending our way out of the crisis. It is not by charging the daily expenses to our credit card that we bring stability and create conditions for growth. Some countries, like Germany over the last decade, have understood this and put in place the necessary structural reforms. Others started later but are now putting reforms in place, with the assistance and solidarity of their European partners. This is part and parcel of the "new deal".

And we need to continue to implement our economic growth agenda – Europe 2020 – in its various elements. These include structural reforms, deepening of the Single Market, targeted investment, and boosting trade with foreign markets.

And this requires Member States to do more to close the gap between political will and implementation on the ground. It is not sufficient to speak about Europe 2020 only in Brussels. It is not sufficient to talk about Europe only in Brussels. We need Europeans to own our common agenda at all levels including the social partners, the regions, civil society.

We need hard work and determination in implementing our growth strategy to sustain the European social market economy. Our European social model is one of Europe's key achievements. It is alive but living in a more challenging environment.

Reaching the potential of our Europe 2020 growth strategy requires structural reform in line with our social model. It also requires solidarity to go hand in hand with obligations and expectations of reciprocity.

Europe can only grow stronger together when both the burden and the benefits are shared. This will enable a more competitive Europe that delivers stability and growth through responsibility and solidarity.

Making a successful exit from the crisis is challenging enough, but we cannot stop at that. We need to solve the crisis, but not at the expense of being short-sighted. We need to look further ahead and set priorities in a longer term perspective. We need to set goals for where we want to be and how we want to be after the crisis.

Long-term growth must be based on sound macroeconomic foundations, just as competitiveness must be built on innovation and education. Put differently: we do not want just growth, we want sustainable growth which cannot be built on deficits and excessive debt levels.

Let me give you three examples of what can be done.

First, let us stimulate small business. There are 23 million small and medium-sized enterprises in the EU. If every SME could create one job – just one single job – unemployment would be solved! This is not so simple but we must create the best possible conditions for European SMEs.

Second, the North of Europe hosts the largest windfarms in the world. The largest solar power station in the world is in Spain. Let us connect them and provide cheaper and more efficient energy to the world's largest plane manufacturer, Airbus, which is itself a true European champion, connecting French, German, British, Spanish and other European technology.

Third, another way to improve Europe’s competitiveness would be to ensure a more balanced representation of women and men in economic decision-making positions. Economic studies demonstrate that this can contribute to a more productive and innovative working environment and overall improved company performance.

For example, the very interesting Deutsche Bank study from 2010, "Towards gender-balanced leadership" shows there is a clear business case for more women on boards. Other studies also suggest a positive correlation between a higher number of women in senior positions and companies’ financial and corporate performance. Today 60% of university graduates are women.

Yet, only 13.7% of the board members of Europe's largest publicly listed companies are women. So there is room for improving the economic performance by increasing the number of women on company boards. This is an issue worth tackling.

Dear friends,

The European Union is made for the benefit of citizens. It can develop and prosper only with their support. Let us not take citizens' trust for granted. The citizens expect concrete results, not only words. And rightly so!

We have already come a long way forward with the Lisbon Treaty. Now the national Parliaments are closely involved in monitoring European policy and decision-making, through the subsidiarity control mechanism. And the directly elected European Parliament speaks with a stronger voice.

Ladies and gentlemen, dear friends,

Our European house stands ready to weather further storms, but it is also high time to consolidate what we have built and to look creatively, optimistically and realistically at what the future holds.

And we need to do more to regain the hearts and minds of European citizens.

It is now time to consolidate what has been achieved 55 years after the signature of the Treaty of Rome, 20 years after Maastricht and 5 years after Lisbon. This is why I propose a vision for Europe, a five-point plan for a stronger Europe.

First, in 2013, European governments should begin an open debate in their national Parliaments, within political parties and with citizens about the Europe they would like to take responsibility for by 2020. Next year is the European Year of Citizens and it would be a good opportunity to begin this.

Second, the European Parliament elections in 2014 are an occasion for a broad debate: should we move towards a full-fledged political union? Can we do it with all Member States or just with euro area countries? European political parties should develop their visions and propose candidates to become the next President of the Commission

Third, before the European elections, leaders should agree that the next Commission President would also become the President of the European Council. The current European Treaties allow for this.

Fourth, European leaders should agree to convene a Convention to draft a Treaty on a European political Union. This should give the European Parliament the right to initiate legislation and the exclusive right to elect the Commission.

Fifth, from 2016 to 2019 the Treaty on political Union would be subject to ratification in all Member States by way of referenda. Citizens should be given two alternatives: either to accept the new treaty, or to reject it and remain in a close form of association, notably by continuing to participate in the single market.

Planning for a post-crisis Europe gives us the opportunity to develop our Union into a strong political union. With a strong currency and the world's largest internal market, by 2020 our continent can play a central role on the international stage.

To this end we need to be more united than ever and to have the citizens fully on board. We need to have the courage and patience for institutional reform and we need to have the determination to roll up our sleeves and act.

Now we have a chance to make it happen.

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