Speech by Martin Schulz at the opening event in the series ‘Speeches on Germany and Europe’
I am delighted to have the opportunity to speak today at the opening event in the series ‘Speeches on Germany and Europe’. I would like to thank Sigmar Gabriel for his efforts in arranging this new series of events to be held in the Willy Brandt House. This shows that the SPD, as Germany’s most resolutely pro-European party, has understood just how important the debate on the future of Europe in the 21st century is.
The timing of today’s event is good: yesterday someone I admire very much, Egon Bahr, celebrated his 90th birthday. Egon, please accept my very best wishes as you enter your 91st year. I hope you will continue to contribute to the debates on issues you feel strongly about, because we need your good advice more than ever. Just as you, together with Willy Brandt, made the world a safer place by devising and implementing the Ostpolitik, so we today want to safeguard peace and prosperity on our continent by driving European integration forward.
Europe has never faced such serious challenges as it does today. The economic and debt crisis is continuing. Poverty and unemployment are growing. People manifestly doubt the ability of democracy to solve pressing problems, for example by reining in unregulated financial markets.
The currency and financial crisis has now become a crisis of confidence. The implications are considerable, because the future of our entire social model is at stake.
This crisis of confidence in Europe has come at a time of ruthless intercontinental competition. Other regions of the world are on the up, and Europe’s economic influence is in decline.
As a result, today we face a number of paradoxes:
- We have never needed the European Union as much as we do today if we are to address the challenges I referred to above. However, precisely because of the new crisis of confidence, for the first time since it was established the failure of the EU has become a realistic scenario. European leaders seem hesitant and disheartened and interested primarily in grabbing the headlines at home.
- Although in fact we need more Europe, closer integration in the form of a transition from economic and monetary union to a political union, Europe-bashing has become a popular pastime.
- And at a time when we should be proudly defending our social model, which is based on fairness and which is the envy of people throughout the world, ECB President Mario Draghi – if I have understood him correctly – has announced that that model is dead. This is madness!
We need to resolve these paradoxes.
Times are hard for many people in Europe. I recently visited Greece. Anyone who believes that young unemployed people or pensioners in that country can be squeezed even more is sorely mistaken. Did you see the reports that Greek parents are taking their children to SOS Kinderdorf care homes because they can no longer afford to feed them? This is a disgrace for our continent, and I feel ashamed that it should have come to this.
My parents’ credo was a simple one: ‘we want our children to be better off than us’. And we are better off! Unfortunately, we can no longer be sure that the same will be true of our own children. As a result of the economic crisis, poverty and unemployment are on the increase. Today, seven million young people in Europe have no job.
In Greece and Spain, indeed, every second young person is a job seeker. Many more are trapped in a spiral of unemployment, short-term contracts and unpaid internships, a spiral which only too often ends in anger or resignation. This is poison for our society. Youth unemployment on this scale threatens to destroy the fabric of an entire society!
For that reason, I understand the people who are taking to Europe's streets to protest against an economic system which allows a small minority to rake in the profits when times are good, and forces society as a whole to bear the losses when times are bad; a system whose workings might lead one to conclude that anonymous ratings agencies in New York are more powerful than democratically elected governments and parliaments.
It is painful, and not only for me, to recognise that the EU is increasingly coming to be seen as part of the problem, and not as part of the solution. Responsibility for this lies partly with the Heads of Government, who for many years have been taking credit, as national leaders, for all the EU’s successes and blaming Brussels for all their failures.
Here’s a recent example: ‘Europe fails to introduce a financial transaction tax’ ran the headline in many papers following the last meeting of the Council of Finance Ministers, ECOFIN. But precisely who failed? After all, the European Parliament and the Commission had agreed on the need to introduce the financial transaction tax, as a means of addressing a particularly glaring example of social injustice. But the United Kingdom, the Netherlands, Sweden and a divided federal German Government thwarted that plan. The heads of these governments failed - not the EU!
Here’s another: the former Portuguese Prime Minister, José Sócrates, says ‘no, we don’t need any help’, only to seek the loving embrace of the bailout fund a few hours later. The Irish President, Brian Cowen, refers to stress tests which have supposedly been passed, immediately before gratefully accepting a rescue package worth EUR 80 billion. The Federal Chancellor always plays the national card first, before reluctantly giving up one untenable position after the other at three-monthly intervals. This is not a way to build confidence!
For months now, the Union has been stumbling from one crisis summit to another. Decisions which affect us all are being taken by heads of government behind closed doors. To my mind, this is a reversion to a form of European politics which I thought had been consigned to the history books: it is reminiscent of the era of the Congress of Vienna in the 19th century, when Europe’s leaders were ruthless in their defence of national interests and democratic scrutiny was simply unheard of. For the first time in the history of the EU, the trend towards ‘summitisation’, the fixation with meetings of the Heads of State and Government, is leading to the ‘destruction of democracy’ as Jürgen Habermas put it.
The appropriation of power by the European Council is undermining democracy. The European Parliament is being largely excluded from decision-making. In fundamental terms, national parliamentarians are also being reduced to the role of rubber stamping agreements reached between governments - even in the one area which every parliament regards as its exclusive preserve, the budget. My friend Frank-Walter Steinmeier knows exactly what I am talking about.
Under the European Semester arrangements, the national governments first submit their draft budgets to Brussels, where officials examine them before national parliamentarians have had any opportunity to take a look. The European Parliament can scrutinise neither the officials involved nor the draft budgets. This can only be termed systematic deparliamentarisation, the destruction of democracy.
This Europe in which decisions are taken by faceless bureaucrats is destroying the people’s trust in democracy. Only if people understand where and when decisions are taken, and by whom, can lost trust in politics be won back. What is more, politics can only be called democratic if the alternatives to a decision are clearly explained. Don’t try to tell me that there was no alternative to the decisions which the mostly conservative Heads of State and Government have taken over the last two years as part of what they claim is a strategy to combat the crisis! Of course there is an alternative - and a better one!
For that reason, I intend to use my two-and-a-half-year term of office as President to raise the European Parliament’s profile as a forum for informed, partisan debate about the future direction the EU should take. Where necessary, we will challenge decisions taken by the Heads of State and Government. I want to pay greater heed to the views of EU citizens and give them a stronger voice in Europe. In keeping with that approach, on day one of my presidency I invited the Hungarian Prime Minister Mr Orban to the European Parliament to face the kind of opposition he has essentially silenced at home. It was a heated debate.
More Europe necessarily entails more democracy. But the reverse is also true: in an increasingly interdependent world, at a time when global financial markets wield far too much power, more democracy necessarily entails more Europe. After all, we don’t want democracy which bows to the dictates of the market; we want a market which abides by the requirements of democracy. Politicians can only regain the power to act which they long ago forfeited at national level if sovereignty is pooled at European level. When Member States transfer sovereignty to the EU they are not - as the eurosceptics claim – giving up sovereignty, but instead regaining the power to shape policy.
The crisis has changed nothing. Three years after speculators plunged the world into the most serious financial crisis for 80 years, casino capitalism is still the order of the day. The bankers have not just gone back to ‘business as usual’, they have also gone back to ‘profits as usual’. High salaries and bonuses are once again enticing traders to enter into highly risky deals. Only a few days ago hedge funds tried to use credit default swaps to pocket millions by betting that Greece would be forced out of the eurozone.
Because the crisis has changed nothing, we must push ahead with proposals for the effective supervision of the financial markets. Only in this way can we free politics from the stranglehold exerted by speculators. Only in this way can we prevent a repeat of the crisis.
If you will allow me this brief digression, unlike many other individuals and bodies who have only talked about this issue, the European Parliament has acted: we have adopted laws on the regulation of ratings agencies, on bank supervision, on investment security, on higher levels of own capital for banks and on derivatives trading. It also thanks to the European Parliament that speculation involving credit default swaps, the weapon the hedge funds recently employed against Greece, will soon no longer be possible.
One promise made at the height of the crisis was that the people who had caused the mess would be made to contribute to the cost of clearing it up. This is a simple matter of social justice. It is unthinkable that the people responsible for our current problems should escape with billions of euros in profits in their pockets, leaving ordinary people to pay the bill for their unsuccessful speculations. This is why we need the financial transaction tax. Justice demands it.
The much-needed billions of euros in revenues which would flow into state coffers and the deterrent effect the tax would have on particularly risky speculative transactions can almost be seen as welcome side effects.
It is amazing to me that Angela Merkel should allow herself to be fêted in Germany as the most powerful woman in Europe, someone who can force through a stringent austerity policy against even the strongest opposition. Yet it is the very same Angela Merkel who repeatedly fails when the goal is to distribute fairly the cost of dealing with the crisis or tackle youth unemployment. Is Angela Merkel as powerless as she seems, or is she just determined to stand shoulder to shoulder with the other conservative Heads of Government and bar the way to the introduction of a financial transaction tax? I should very much like to read some detailed investigative journalism on that topic.
In addition to the regulation of financial markets, there is another issue which we must address as a matter of urgency: a growth initiative for Europe.
As I said earlier, three weeks ago I was in Athens. I have rarely been so moved when visiting another country. Greece is in the throes of a deep recession. Unemployment has reached 20 % and is set to rise even further. The major sacrifices which the people of Greece have been asked to make in order to reduce their country’s debts must now be matched by a message of hope from Brussels: Greece needs a growth initiative!
For too long, our crisis management has erred too far in the direction of austerity. Ever deeper savings are being demanded, exacerbating the problems of poverty and lack of jobs. We must therefore take care to ensure that untempered austerity policies do not continue to suck the life out of our economies. The mantra-like calls from the members of the European Council for a debt ceiling as a panacea for our economic ills reminds me of something a wise man once said: ‘If the only tool in your box is a hammer, then every problem looks like a nail’.
Although there is no alternative to reducing government deficits – it is a matter of intergenerational justice that we should not find ourselves bequeathing to our children a mortgage, rather than the house for which it was taken out – we must be honest enough to recognise that the current orgy of cuts will not generate growth. But without growth the countries facing a debt crisis will barely even be able to meet their interest payments.
For that reason, the first stage in our response, austerity, must be followed by a second, growth. We need a stimulus programme for southern Europe, using EU funds which have long been on the table. We need a kind of Marshall Plan to help us develop, say, renewable energy sources in order to create economic prospects for the southern European countries whose climates lend themselves to such measures and reduce the dependency of the EU as a whole on expensive oil and gas. I am also an advocate of a growth package of this kind because it will increase the likelihood of the ‘debtor countries’ finding their own way out of the crisis by generating sustainable growth from which Europe as a whole benefits. Why do the EU Heads of State and Government not have the guts to take such a decision?
The SPD has shown that it is aware of its responsibility towards Germany and Europe. In the Bundestag we have eschewed petty spoiling tactics and instead supported the rescue packages needed to stabilise the eurozone. We will also support the Fiscal Pact if the federal government does what it should in a situation where it needs our votes: it must at long last make concessions to the opposition and, in future negotiations, lend its backing to the calls we have made: we want, firstly, a financial transaction tax, secondly, a growth package for Europe, and, thirdly, a role for the European Parliament in the discussions on the fiscal pact, in keeping with democratic principles. I strongly urge the federal Chancellor to take up this offer.
I have a further worry in connection with the current crisis: backward-looking debates on the renationalisation of policies are encouraging attitudes based solely on national self-interest. Stereotypes, prejudice and even feelings of enmity are once again coming to the fore in many parts of Europe. The people who in recent years have made headlines with their chauvinistic, uninformed criticisms of Islam have now turned their sights on Europe.
What is particularly worrying is that some outlandish ideas have been taken up by mainstream society. I am appalled, for example, that newspapers in Greece should have printed pictures of members of the German Government in Nazi uniform. I have made my feelings clear to my colleagues in the Greek Parliament.
But I am also appalled that there should be politicians and commentators in Germany who are prepared to speak so condescendingly about other nations. The suggestion is that people in southern Europe are lazy. ‘Europe is dancing to Germany’s tune now’, they claim.
This is not the way forward!
I am appalled that it is once again possible to exclude minorities, to incite hatred against the Roma, to discriminate against workers from eastern Europe, to make closing Europe’s internal borders an election issue. And that Angela Merkel should endorse Nicolas Sarkozy’s right-wing, populist programme is just plain embarrassing.
I could never have imagined that these demons, which I assumed were a thing of the past, would raise their ugly heads again. But unthinking populism is back in fashion. In many Member States, extreme right-wing parties are gaining ground: Gert Wilders’ Freedom Party in the Netherlands; Jobbik in Hungary; the Front National in France. And we stand idly by. For evil to triumph, it is necessary only that good men and women should do nothing, said Edmund Burke. Freedom and democracy must be defended anew every day.
We must join forces to prevent a return to ways of thinking which have always spelt disaster for the peoples of Europe, ways of thinking which can also destroy the European Union.
I do not want to end on a pessimistic note, for the last few months have brought at least one positive development: we have started to take a greater interest in what is happening in neighbouring countries. Suddenly we are talking about when people in other countries retire, about youth unemployment in other countries and what that has to do with us. What might be termed European public opinion is taking slightly clearer shape.
The controversial ACTA agreement on copyright provides another example. The agreement is the subject of a heated debate on the internet. A total of 2.5 million people signed a petition to the European Parliament. That impressed me, and it also demonstrated that the European Parliament is increasingly establishing itself as the forum for debate on political decisions in the EU, as a forum in which the concerns of ordinary people get a hearing. We want to listen to what ordinary people have to say, that I can promise you.
For that reason, let me summarise my thinking in the following six points:
1. Let’s stop badmouthing Europe, whose values and prosperity are the envy of millions of people worldwide. I want us to defend our social model, based on freedom and fairness, against the assault of globalisation.
2. Let’s not succumb to the temptation of short-sighted renationalisation of policies, for the sake of a quick headline. Everybody knows that if they were forced to stand alone, European states would be condemned to obscurity in the face of competition from the emerging powers of the 21st century. European solidarity is the only means of safeguarding our way of life.
3. Let’s take responsibility for one another. It is not healthy if high interest rates in some neighbouring states lead to negative interest rates for the Federal Republic of Germany – negative interest rates mean that the body which lends us money does not charge us interest, but instead offers to pay us interest. Eurobonds are one important way of putting the financial sector in Europe on a healthier footing.
4. Let’s finally introduce the long overdue financial transaction tax. It is unacceptable that a German Chancellor should be keen to introduce such a tax, but that at the same time she should be forced to pretend that this is only her ‘personal opinion’, in order to save her fragile coalition in Berlin. No, we need this tax now in order to create vital impetus for growth and we cannot allow a small government party facing disaster at the polls to stand in the way of progress in Europe.
5. Let’s draw up an investment programme for southern Europe which, by focusing on sustainable energy and the infrastructure required to exploit it, gives highly qualified young people in southern Europe an incentive to remain in their home countries. This investment programme must be at the heart of an expanded European industrial policy.
6. Let’s reduce our dependence on US ratings agencies which have no compunction in downgrading to junk status bonds issued by European countries which have the entire EU behind them.
For all these reasons, I have this to say: we need Europe, but we need a different Europe. We need to talk about this idea, to discuss it and argue about it, since not everyone who has reservations about the decisions and measures taken in Brussels is anti-European.
Europe is a fantastic idea, but one which has lost some of its appeal. I want us to rediscover what makes Europe so fantastic, to make its appeal irresistible once again.
To that end, we need an open, honest discussion and I would like to thank Sigmar Gabriel and the Willy Brandt House for providing a forum for just such a discussion.
Thank you for your attention.
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Armin MachmerSpokespersonMobile: +32 479 97 11 98