Speech by President Barroso at the 17th Tourism Summit
European Commission - SPEECH/13/1002 02/12/2013
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José Manuel Durão Barroso
President of the European Commission
Speech by President Barroso at the 17th Tourism Summit
2 December 2013
Dear President Frenzel,
Dear Madam Minister of Tourism from Greece,
Members of Parliament,
Ladies and gentlemen,
First of all, I would like to thank you for inviting me to attend this Tourism Summit in Berlin. Berlin, indeed, is one of the favourite destinations for European and international tourism and today it could not be a better day, so sunny and so nice, to be with you sharing some of our thoughts on Europe and also on tourism.
It is in fact a new competence of the Lisbon treaty, tourism. Highlighting the importance that the European Union is also giving to tourism, and so I think it is appropriate that I share with this very important German industry, tourism, some of the ideas we have in the European Commission, about where Europe is today, what we can do together more for such a promising sector as tourism is.
If the true purpose of the European project is 'not to unify States but to unite people', then the importance of the tourism sector to achieve this goal is enormous. More than anything, over the decades, Europe's citizens travelling from their own country to other European countries has brought our continent together. In the people's experience, travel has made European unity something tangible, something beneficial and attractive. Tourism has made it ever more natural to be 'European'. Therefore it has contributed to consolidating a European identity, based on Europe's cultural diversity. Because this is what makes Europe special, unity in diversity.
At the same time, and of course I don't need to convince you, with so much business experience, that, vice versa, the importance of Europe for the tourism sector is equally vital.
Where would tourism be today without the four freedoms of the single European market? Without the free movement of goods, of services, of capital, and, of course, the free movement of persons. Where would we be today if still we had so many different currencies instead of having the euro, as you rightly said Mr President, what it brought in terms of the increase in and easier exchanges in Europe?
The freedom of travel, the convenience of crossing borders, the ease of doing business abroad and the costs of doing so: All this has fundamentally changed for the better thanks to the development of European policies. And all this has given tremendous support to the development of Europe's tourism sector.
But I am not here to talk about the accomplishments of the past. There is no time for self-complacency, neither for your sector, tourism, nor for Europe. The integration of markets to the benefit of companies and consumers, which is so crucial for tourism, is a continuing effort. So I welcome the strong European commitment and perspective of the German tourism sector. And I trust, and I hope that you will continue to play an active role in the European debate, enthusiastically and vocally, in particular in the months to come ahead of the European elections next May.
Because as we meet and speak today, the European Union Member States are still feeling the effects of a deep and structural economic and financial crisis. I know that the crisis is not felt the same way in all parts of our Union. But no country, including those, like Germany, which are better off today, are by definition shielded against the crisis. Germany will not stay an "Insel der Glückseligkeit" if it is surrounded by neighbours in crisis. It is in Germany's own interest to support the recovery of the whole European Union, economically but, even more, politically.
I am saying this because in some of our countries there are populist and, in some cases, extremist political forces emerging who try to abuse the crisis for their own sake. This is typical for any crisis. In the current situation, for some of our citizens, the benefits of Europe are not so obvious any more. Many see Europe as the root cause of the crisis while in reality Europe is the way to solve the crisis. Of course, it is no surprise that people who are particularly hard hit today see European integration as less attractive.
And this puts us in front of a great responsibility. All of us who have leadership positions, be it in the private sector or be it in the public or political domain, I think we have a great political responsibility to explain what we can do at European and what we can do at national level.
Ladies and gentlemen,
It is fair to say that where we stand today, at the end of 2013, is better than where we were some time ago. I think it is important to build on this. After more than five years of this unprecedented crisis, Europe has shown that it has lived up to this challenge. Efforts in fiscal consolidation have been made, structural reforms have been carried out, and solidarity and discipline have been shown. And all this impressive work is ongoing.
If we can now note an evolution towards recovery, rebalancing and a return to normal, this is because we have taken significant steps to strengthen our economic governance in Europe, to reinforce the political structures that underpin it and – most importantly – to review the policies that have led us into the crisis.
This has not gone unnoticed.
We have staved off an existential threat to the euro. As you know, some time ago, one or two years ago, in the financial markets many were predicting the end or the collapse of the euro. This is no longer the case. Financial markets are stabilizing. Consumers and investors are regaining confidence about the future. And growth is slowly but steadily returning. In the second half of 2013, the European economy is expected to grow by 0.5% compared to last year, while growth is forecast to gradually gather pace up to 1.4% in 2014, reaching 1.9% the year after. Certainly, not very spectacular figures of growth, but when we believe how big were the challenges we had to face, I think it is worth while noting this progress, because confidence is also part of the equation for growth.
I think we can say that we are today developing a European Union that will be more competitive and more balanced, more resistant to global challenges and better equipped to deal with its first ranking role at the heart of the world economy. Because, in spite of all the difficulties, the European Union as such is the biggest economy in the world by value.
And we are fundamentally changing our growth model towards a smart, sustainable and inclusive growth, as sketched in our Europe 2020 strategy. That is certainly a demanding exercise both for political leaders and for citizens - and we are doing so in a way that we believe will certainly benefit German businesses and the German tourism sector as well.
First of all, because we have given unmistakeable and indispensable political reassurances that we mean business, when we say that we are making everything needed to support the euro and to support European integration. At the most critical moments during this crisis, and there were a few of them, Europe's political leaders and the European institutions have demonstrated resolve and commitment to do whatever it takes to maintain our single currency, the euro, and to preserve the integrity of the euro area. Contrary to the fears of some and the expectations of many, as of next January not only will the eurozone be stronger than one year ago, it will even have more members. We will have our 18th member – and not less members, as some were predicting.
Also, there are now less Member States struggling to balance their books. These countries have been sending clear signals that they have learnt their lesson. Unsustainable deficit and debt levels of the past are being corrected. At the height of the crisis in 2011, there were only three Member States whose debts were not what we have marked as excessive. Currently, there are already twelve, and many others are steadily moving in the right direction. Overall debt levels are finally peaking and will stabilise next year, at about 90% in the European Union and 96% in the euro area, which certainly is still a high figure, but much, much lower on average than the figures of the United States or Japan.
All this indicates the political commitment and consistency that were necessary to halt the crisis remain as necessary as ever. That political commitment exists.
What is now needed not just to stabilise but really to get us out of the crisis, is a further reinforcement of the way we do business. This, too, is happening, and we are starting to see the effects. Two of our Member States most hit by the crisis - Ireland and Spain – are successfully concluding their support programmes. In the case of Spain, it was a programme only for the banking sector, but nevertheless it was a programme.
Other countries still under a programme of financial assistance have also been making notable progress, namely in correcting their external imbalances. Investments are again coming in, while exports are once again taking off. In Portugal, my country, for instance, the external current account, which was structurally negative, is now expected to be broadly balanced and growth is picking up after many quarters in the red.
The same could be said about Greece, that has been, of course, facing specific challenges but we have to say, this government has been able to face them with great courage and determination.
And let me turn back to the case of Ireland, because it is specifically important. Ireland will exit the programme during this month of December. Certainly, it was mainly an effort of the Irish people and the Irish political leaders. They have shown consensus and resolve, but let's be honest, Ireland would not have been able to achieve that without European solidarity. So, we have to congratulate Ireland and the Irish people, but we also have to congratulate the countries, like Germany, that have shown solidarity and the institutions that have worked hand in hand with Ireland so that Ireland can now return on its own feet to the markets.
So, internal and external adjustment in Europe is continuing, on the basis of the significant structural reforms and fiscal consolidation implemented in recent years. This has improved the conditions for domestic demand to gradually become the main engine of growth in Europe. However, against the background of a weakened outlook for emerging market economies elsewhere, the return to solid growth will only be a gradual process.
Let me tell you that some weeks ago I was in St Petersburg for the G20 Summit and it was the first time in several years that Europe was not the centre of attention, as the sick man of the world, but now other economies are feeling the pressure and they recognise that, they recognise that efforts for reform should not be only in Europe, that some of the emerging economies also have to do their homework and by the way they were extremely supportive and very, very appreciative of the efforts that we have made in Europe to stabilise the financial markets, and to restore confidence in our currency and in our way forward.
Nevertheless, we must not forget or underestimate that we have come a long way since the start of the crisis. Let me say this to you very sincerely, because the last five years I have been living in crisis-mode day and night, working sometimes with the Chancellor of Germany, Chancellor Merkel, but also with other leaders, and it has been an extremely challenging time.
And we think that we should recognise efforts that so many of our citizens and our businesses also have made to get out of this point. Thanks to these efforts, we have now entered a recovery phase. What is now important is to make sure that this recovery is sustainable, that we are not going to make the same mistakes of the past.
The European Union's tourism sector is a good indicator of our growth performance and consumer confidence, showing both resilience throughout the crisis and a sense of optimism over the last year. In 2012, tourism did well in comparison to the previous year, both in terms of arrivals (which went up 2.3%) and in receipts (which increased by 1.9%). Data for 2013 point to slow but continued growth in international arrivals and nights.
Tourism has resisted and is now recovering from the crisis better than most sectors. On top of that, its particular characteristics make it a powerful engine for domestic demand-driven growth, for instance in Germany, where this is currently the subject of an important debate as shown by this summit today. But it is equally important in the wider European rebalancing exercise, since southern Europe has performed even better than average in recent years. This region is the top holiday destination worldwide, with an 18% market share. Spain is the biggest market of the region in absolute terms, with 34 million tourists between January and July, and it had a 4% rise in international arrivals compared to last year. But other countries have performed in an impressive way. Greece with +9%, Malta +10 %, Portugal +8%, all reported impressive growth. Another reason to cherish the tourism industry's economic potential!
It is of particular importance for me to pass on this message to you, even if I know that many of you are already well aware of this. These are countries - I'm now speaking about countries like Portugal, Greece or Spain – where you are doing a lot of business, And we can make this a win-win story. Your investments and your clients in these countries help their recovery, and in turn their recovery brings new business opportunities for you and for the economy in general. So tourism can be one of the keys for sustainable recovery in Europe, making it a win-win case between, let's say, the most affluent countries, like Germany, and some countries in the south of Europe.
And if I may be a little bit patriotic – why not? – Portugal, what a marvellous destination it is; with its great weather, its safety and security in the country, with very hospitable people, with many things that probably you don't know yet, including my own region in the north of Portugal, the Douro valley that is now very trendy, from Porto to the Douro Valley, and of course the trendy and historic city of Lisbon. What a great destination it is.
The same I could say of Greece but I know the minister of Greece, she is here, and she will speak with you and she will tell you that with much more charm than I can do. But I really mean business there; there are huge opportunities in these countries that are now making important reforms also in terms of competitiveness, in terms of how they can attract more tourism. So I see this as a very important win-win for the German tourism industry and of course for the tourism industry in general. And we at the European Commission are trying to give this more momentum. I will come back to this in a moment.
At this stage, when the economic upturn is still moderate and fragile, we need to continue our reform efforts and provide whatever impulses we can to our economy, and in particular to those who need the recovery the most. Because a lot of our citizens throughout Europe are not yet feeling the improvement. The threat of a jobless recovery is still haunting us, and especially young people demand hope and opportunities.
This is why tourism can be here, once again, of great help, because tourism is something that it's difficult to delocalise, for obvious reasons, and that creates also a lot of jobs.
One of the initiatives that the European Commission and the European Council are taking, is a Youth Guarantee scheme to ensure that Member States offer all young people up to 25 years old a quality job, continued education, an apprenticeship or a traineeship within four months of leaving school or becoming unemployed. The aim is to support young people but this is good for business too, and in particular for the tourism sector, which is a good example, since about 10% of all apprenticeships in Germany are offered by tourism companies in one form or another.
The future strength of European companies will also increasingly depend on how well people and businesses are connected and at what cost. This is why we are investing considerable time and money in the digital agenda. The digital sector already plays a key role in the European economy and it can provide plenty of new jobs, with a potential shortfall of up to 900,000 ICT professionals by 2015. So there is an obvious need to support that transformation and the adaptation of skills required for these new jobs: by 2015, 90% of jobs will need at least basic computer skills while today, according to Commission polling, almost half of Europe's population between 16 and 74 still have little computer skills or none at all.
A more integrated single market, serving as a springboard for more competitive European companies, will allow Europe to remain at the heart of the world economy. Let us not forget that the European Union still remains the first market in value and the first world trading power. For that reason, our ambitious trade agenda is a natural complement to our internal reform efforts. We have finalised free trade agreements with, among others, South Korea, Singapore and Canada and we are now pursuing bilateral negotiations with partners such as Japan, India, Malaysia, Thailand, Vietnam and we have opened broad negotiations for a Transatlantic Trade and Investment Partnership (TTIP) with the United States, covering not only tariffs but also regulatory convergence. Last but not least, we have just recently opened negotiations with China for an investment agreement.
Open trade, which has always been an engine for Europe's jobs, growth and competitiveness, will continue to be a core element of our growth strategy and I have no doubt this will benefit your industry as well.
Ladies and gentlemen,
The tourism industry also offers plenty of opportunities to breathe more air into the European economy.
Tourism already represents 8.4% of European GDP. More than 9% of the European workforce is employed in the tourism sector, mostly in small and medium-sized enterprises. And what makes it particularly attractive is that it provides a lot of prospects, especially to those that have had a hard time as a result of the crisis: young people, on the lookout for their first job, or people with a wish to develop their qualifications and potential through in-house training.
Today, despite the economic downturn, the contribution of the tourism sector to our economy even surpasses that of the food, automotive and chemical industries. So it's really one of the very important contributions to our wealth in Europe. And let us not forget that, for very good reasons, it is an industry that cannot be delocalized.
Europe has a lot to offer: it is the most visited region in the world, with very diverse, sustainable, and high-quality destinations and businesses. The European Union recorded more than 400 million international tourist arrivals in 2012 - representing a share of almost 40% of world tourism - and more than 286 billion euro in receipts.
Germany is one of the countries that have greatly contributed to this excellent performance record. Over the last years, Germany has really set the standard in tourism, directly providing some 2.9 million jobs and indirectly accounting for around 9.7% of German GDP. As a destination, Germany is more popular than ever, which is reflected in the numbers of overnight stays that have increased year after year, to reach a volume of 400 million in 2012. With 45.8 million trips, Germany is now firmly established as the second most popular destination for European travellers.
And I wish to add that I personally have contributed to this German success story. During my nine - almost ten - years in office as President of the European Commission I visited Germany more often than any other European Union member state, apart from my home country, Portugal.
There are many good reasons for this outstanding record: the generally positive image that Germany enjoys, its outstanding infrastructure and the high quality of its services. It is much more affordable for tourists, compared with other international destinations, for example when it comes to hotels in major cities.
And if you want my personal, unofficial appreciation: the fact that the gastronomy in Germany these days is better than ever before will have something to do with it as well.
On the back of Germany's overall economic performance, the business travel segment in particular has experienced very strong growth. The volume of promotable business trips to Germany, including for trade fairs, incentive activities, conventions and events, rose by a very impressive 16.7% in 2012 to reach more than 6 million.
This being said, at times when competition is as fierce as ever and more global than before, while consumer standards are high and economic evolutions change fast, we need to continually adapt and support the tourism sector as well.
Today half of all tourist arrivals are diverted to emerging destinations. Ten years ago, this share was only 40%. So our leading position in Europe is not a given.
Almost five years ago, the Lisbon Treaty entrusted the European Union with a new competence for tourism: to support, coordinate and complement the actions of the Member States by measures that add real value at European level. And the Commission is aiming at fostering the competitiveness of the tourism sector by creating a favourable environment for enterprises and for cooperation among Member States. For this purpose, we are implementing an agenda based on three key pillars:
First, attracting more international tourists, for example by dedicated international tourism communication campaigns, but also through adequate visa facilitation measures for bona fide travellers from targeted third countries. In this sense, in the upcoming review of our common visa policy, we will take into account the economic opportunities that travel facilitation could offer, while maintaining a high level of security.
Second: diversifying the tourism offer, in particular through new transnational tourism opportunities that can be equally profitable during the medium and low seasons. Investing in cultural and industrial heritage or in senior citizens travelling across the EU, are only a few examples that I'm sure you know very well.
Third, investing in talents and training for excellence. Our tourist sector needs professionalism, commitment, passion and management capabilities. We are working to make sure that the sector can quickly access the skills they need to thrive.
There is plenty of potential in our tourism sector across Member States, from Europe's rich cultural heritage to our countries' contemporary creativity, from our gastronomic traditions to the beauty of our landscapes, from historic cities all over Europe to our beaches and our mountains. I think – and I'm a frequent traveller all over the world – that we can, without being arrogant, be proud. I don't know any continent where you can find such a rich diverse cultural heritage than in Europe. So I think we really have a lot to work with in order to really make tourism an efficient, powerful engine that generates growth and jobs in a sustainable way.
In the Commission, Vice-President Tajani, who is directly responsible for tourism and is giving his enthusiasm for this very important agenda, can be a very good interlocutor for the German tourism industry.
To achieve our goals, specifically towards the tourist sector, we also need to bear in mind accompanying policy fields that have a huge influence on the costs and competitiveness of our tourist industry.
Transport in particular is tightly interconnected to tourism. It is an obvious and fundamental driver - driver in the proper sense of the word - of the tourism industry. Efficient and affordable travel is a precondition for tourism. In a country like Germany, renowned for its Autobahnen and its logistical efficiency, not to mention its position as the second passenger air traffic market in Europe and the fifth biggest in the world, that almost goes without saying. But it is not at all something to be taken for granted.
Two Commission initiatives in this field deserve to be mentioned here.
The Better Airport package, drawn up by the Commission and hopefully the basis of an agreement soon after the European elections, aims at addressing two key challenges: airport capacity and quality. It includes legislative proposals on slots, ground handling and noise. In order for Europe to stay competitive, scarce airport capacity must be used to the best extent possible, airlines should have greater choice in the number of service providers for ground handling, and noise restrictions must be decided in a balanced approach.
The second, even more recent Commission plan is the update of the Single European Sky proposal, which is intended to drive air traffic management performance. Improved air traffic management will increase capacity and reduce costs to the benefit of both customers and airlines, and help the airline industry get back to a more sustainable path.
The United States handles more traffic in the same size of airspace, with roughly the same number of air traffic controllers, but at half the cost. The estimated potential savings of up to 5 billion euro from a Single European Sky could make an important contribution to bringing airlines back to profit.
Another complementary field is – as I mentioned before and as the next panel will discuss – the digital agenda and its impact on tourism.
Over the last decades the emergence of new destinations, the exceptional growth of travellers and new technologies have revolutionised the way we travel. The transport and tourism services have been pioneers in making use of new digital technologies: the development of Global Distribution Systems for the management of travel reservations, the use of the internet as an outstanding tool to offer tourist opportunities online and the more and more widespread use of mobile devices are only a few examples.
Undoubtedly, the internet has revolutionised the travel industry already, and future developments will be just as impressive. Mobile applications offer tremendous service to the traveller: from flight booking and check-in to guidebooks and tailor-made tourist information. Social networks and other online sharing platforms have also massively gained in importance, notably in destination management and marketing and promotion.
The travel and tourism industry have continuously been at the forefront of these changes. So far, Europe did well and Germany, in particular, has been an exemplary model on the e-tourism market. However, the online travel share of the total travel market varies significantly by country, with micro and small enterprises being the most vulnerable in terms of online travel penetration. We therefore should strive to reduce digitalisation barriers and encourage with appropriate incentives, a wider adoption of digital technologies throughout the whole sector and across the European Union.
Ladies and gentlemen,
The European Union is facing challenging but exciting times. We are not only adapting to changes in the global economy, we are just as much rediscovering the economic and innovation potential that we have within us, and finding new ways to get more out of it. I really believe that the crisis is indeed an opportunity that we should never lose.
We have confidence that 2014 will be the year when we see even better that our economic reform efforts are paying off and are getting us back on the path to growth. Let us join efforts to show to the doomsayers that they were wrong. Let us work for a positive agenda for Europe, one that after the next European elections in May will remain on that positive track. Or to put it in your professional timeframe: we have a lot of work to do before our next summer holidays.
Tourism is one of the sectors with such innovation and growth potential. A sector that not only offers new economic opportunities but also brings together our heritage and our creativity, a sector that can unite our citizens, beyond their diversity. This is a strength we should never underestimate.
As the European Commission, we will do what we can to support the sense of initiative and inventiveness the sector harnesses.
And I do not doubt that, whatever may come next for the tourism sector, the journey will be an exciting one.
I thank you for your attention.