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European Commission

[Check Against Delivery]

Olli REHN

Vice-President of the European Commission and member of the Commission responsible for Economic and Monetary Affairs and the Euro

Keynote speech by Vice-President Olli Rehn at the Committee of the Regions

Committee of the Regions

Brussels, 31 January 2014

Ladies and Gentlemen, dear colleagues,

Thank you for this opportunity to participate in your Plenary session. The Commission is and I am personally very pleased to see that the Committee of the Regions plays such an active role in the shaping of the European economic governance. At the same time, you share our commitment also to the deepening of the Economic and Monetary Union, as demonstrated by the two important resolutions which you adopted last year.

Europe has faced tough times in recent years. The present Commission took office in the middle of the financial and debt crisis. Our main task has been to tame the crisis and build a lasting recovery in Europe.

We in the Commission, the Council and the European Parliament, and in many instances with the input of this Committee, have worked hard to:

  • reinforce economic governance

  • pursue free trade

  • boost green growth

  • advance the digital single market

  • expand student exchange and

  • support the innovation economy.

These are all essential workstreams for the economic revival of Europe, for sustainable growth and job creation, for helping Europe to recover from this crisis and emerge from it stronger.

So, what next? How do we go on to build a stronger recovery in Europe?

First of all, our efforts to tackle the crisis have brought results, and we must build on that. The existential threat to the euro is over.

The first weeks of 2014 have offered further encouraging signs that the European economy is now clearly strengthening, albeit still gradually.

Economic sentiment in the euro area has returned to its long-term average for the first time since July 2011. Consumer confidence in the European Union as a whole has reached its highest level since 2008. There is growing evidence that unemployment has reached its peak and, in many countries, is now falling. It is, in many countries, still at intolerable levels, but we have clearly reached a turning point.

In fact, this overall economic context was illustrated in the recent meetings of the World Economic Forum in Davos at the end of last week and over the weekend, when there was a new situation, for me at least, in the past four years. Why so? Because Europe was not in the limelight. I felt almost a bit like a backbencher – which, rarely though, I this time did not mind and have no complaints about. The focus in Davos was clearly on the emerging market economies and global adjustment challenges in the world economy. Not on Europe.

Of course, this is not to say that there are no challenges ahead for Europe or for the euro area. Not at all. In fact, it is now essential that we stay the course of economic reform, both in the Member States and at European level. For instance, we need to complete the work on the Banking Union on time.

At the same time, it is true that financial markets have continued to normalise, bringing down borrowing costs and easing pressure on public finances in the countries hardest hit by the crisis. But the current turbulence in global currency and stock markets – especially in the emerging market economies – should serve as a reminder that risks are still present and that we cannot simply afford any degree of complacency.

That is why it is essential to maintain the momentum of economic reform, to continue to lift competitiveness and boost private and public investment, and pursue consistent efforts to ensure the sustainability of public finances. That's the way we will win the most important battle of all, the battle to create more jobs for Europeans.

The Cassandras or doomsday prophets have been proven wrong, but we cannot claim victory yet. The recovery is still fragile. We need to do all it takes to restart the engine of growth and jobs.

In other words, we have to do everything we can to tap Europe’s growth potential, to create the jobs that especially our young people need.

Ladies and Gentlemen,

Europe needs to be big in big things and small in small things. Yes, we needed reinforced economic governance to ensure macro-economic stability. But equally, we need to unleash the entrepreneurial drive and competitive innovation by the single market and better regulation.

Back in the 18th century, in 1765 or ten years before Adam Smith and a hundred years before Karl Marx, the leading Finnish-Swedish priest-turned-parliamentarian, Anders Chydenius, wrote to the point:

"Free enterprise abroad and at home revives the smallest branch of trade, prevents foreigners from fleeing the country and one citizen from enriching himself at the expense of another."

In this spirit, Europe needs to look beyond its borders for growth. This plea for free trade is as valid today as it was centuries ago. The Transatlantic Trade and Investment Partnership is of paramount importance.

Of course, a genuine transatlantic partnership can only be built on full confidence. That's why we expect the U.S. to rebuild trust following the intolerable spying practices that were recently unmasked. And that's why it makes sense to take time for a three-month public consultation on the investment protection part of the TTIP agreement, as the Commission did at the initiative of my colleague Karel de Gucht.

Likewise, we Europeans must all stand up when it comes to defending the fundamental freedoms upon which our Union is built, including the free movement of workers, which has benefited millions of Europeans over the decades and helped the economies of each and every one of our Member States.

Dear colleagues,

We must also work hard to reinforce Europe's global role in line with our democratic values.

Let's be honest - the economic crisis has turned Europe more inwards than outwards. The crisis has consumed the political energy necessary for deploying our power of transformation in our neighborhood and our input to global security.

The European Union has brought peace and stability, liberty and prosperity, to our previously war-torn continent. The 2012 Nobel Peace Prize was a valid and worthy recognition of Europe's achievements.

You may recall that a key argument for the Nobel Prize was the peaceful democratic and economic transformation of Central and Eastern Europe, which has been facilitated by the EU's enlargement policy. When you look at the transformation of Warsaw or Tallinn, Vilnius or Bucharest, Bratislava or Riga, you can see why EU enlargement is a major success story.

We must keep that perspective alive and credible.

Today this work goes on in South-Eastern Europe, especially in the Western Balkans. In the past 10 years, this historically conflict-ridden region has been stabilized ― and as the former enlargement Commissioner I am convinced that the EU accession perspective has greatly supported the economic and democratic transformation in the Western Balkans and Central and Eastern Europe.

Moreover, Europe played a key role in the long negotiations for the landmark agreement on the nuclear programme of Iran. It marks a major breakthrough for global security and stability.

Next we need progress in Syria and with Ukraine. The thousands of Ukrainians who continue to brave the cold in an increasingly tense situation are a reminder to us of the continued magnetic power of Europe. We must be ready to respond to their call - if we really believe in European values.

The only solution to this crisis can be a political one. A genuine dialogue is needed in order to build a new consensus on the way forward. We have been very clear that any form of violence is absolutely unacceptable. There must be a political solution in Ukraine.

This brings me to the nature and role of the EU in global governance.

I believe that the political scientist Ralph Miliband saw it very clearly almost half a century ago in his book in his book "The State in Capitalist Society", where he spoke of the then EEC as a bridge between a compartmentalised political system of nation-states and an interdependent and integrating world economy. So he recognised that the world economy was going to be deeply integrated, while states as governance structures were lagging behind.

The European Union is an answer to that challenge. It is the bridge between these two levels of governance. Choices that have a direct impact on the future of European citizens are increasingly taken at local, regional and global levels. The European Union needs to evolve to reflect that development. Which means that the role and responsibilities of local and regional authorities and of the European Union are set to increase.

The EU will have to be able to defend and pursue the interests of its citizens at all levels, including regionally and globally. This requires a united Europe that can act as one on the global stage, and defend our interests in a world where none of our Member States alone will be among the big players anymore. We need a united and stronger EU to defend our common interest at the global stage.

Dear friends, ladies and gentlemen,

Let me conclude. I would like to thank the Committee of the Regions for your contributions to the deepening of the Economic Monetary Union over the past few years, I would like to encourage you to continue with your active participation in shaping the future of the EMU. This year will be a critical period in defining Europe's future.

What we need is a reformist yet responsible, visionary yet functionalist agenda. We cannot look too much inwards and allow ourselves the luxury of institutional wrangling. That would not help us to address the daily concerns of Europeans. In the end of the day, what matters is that our policies can deliver concrete tangible results that really improve people's lives.

We have much work ahead in the coming years to continue to modernise Europe's economic and social model.

Not nostalgically clinging to the status quo, since that would only lead to a permanent economic decline of Europe.

Not dismantling the European model, because we believe in the combination of entrepreneurial drive, stability culture and social justice.

But instead, genuinely reforming and modernising Europe's economies and societies for the sake of sustainable growth and job creation, and for the sake of future generations of Europeans.

Thank you very much.


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