Speech by President Barroso: Tackling economic crises and global challenges through regional integration and international cooperation
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1 EUROPEAN COMMISSION José Manuel Durão Barroso President of the European Commission Speech by President Barroso: Tackling economic crises and global challenges through regional integration and international cooperation Reception of the Doctor Honoris Causa, National Economics University Hanoi, Vietnam, 25 August 2014 Deputy Minister, President, Professor Phạm Mạnh Hùng, Vice Presidents, Professors Phan Công Nghĩa, Trần Thọ Đạt and Phạm Quang Trung, Distinguished guests, Students and friends, Let me start by thanking Deputy Minister of Education and Training of Vietnam and President of the National Economics University, Professor Phạm Mạnh Hùng, and Professors Phan Công Nghĩa, Trần Thọ Đạt and Phạm Quang Trung, Vice Presidents of the National Economics University. I am grateful to receive this honorary doctorate not only from a leading university in Vietnam, but from one of the leading business schools in South East Asia; Because, your university understands the importance of being forward thinking and outward looking, not least by working together with some of the best economic institutes in Europe, and taking advantage of the European Union's increased opportunities under our Erasmus + and the Marie Skłodowska-Curie programmes for students and researchers. This is what international cooperation is all about. Education, training and research are vital for successful development, but in the globalised world we live in, only by sharing our ideas, exchanging best practices, and engaging in cultural dialogue with our partners, can we hope to move forward, together. So allow me to share with you today my thoughts on how we see the world today, how Europe has moved forward, overcoming the recent economic and financial crisis by remaining united and more open than ever before, and how we can shape together our relations with Vietnam to the mutual benefit of our respective countries and our people. The world is going through sweeping changes. Globalisation as a phenomenon is now entrenched globally. There is no hiding away from it; no turning back the clock. SPEECH/14/571
2 And nor should we want to. Globalisation presents some risks but even more opportunities. So what we need to do together is to minimise the risks and embrace the opportunities. One of the key structural changes and opportunities of the last decades is precisely the prospering of Asian economies, the dynamism of your societies and the rise of Asia in global politics, which is truly shaping our world. Vietnam is no exception, and Hanoi is a shining example of the changes the world has undergone over the last decades. Since my last visit in 2007, the city has trebled in size and more than doubled in population. In the 20th Century, there has been a 40-fold increase in economic output. But while it took 155 years for Britain, for example, to double its GDP per capita, it took Vietnam less than 10. So you are proof that rather than us being at the end of history, history and progress are actually accelerating at an unprecedented pace. And one of the key areas where this is felt very clearly is the economy. The recent shock to the global economy has impacted us all over the world, from Europe to Southeast Asia, revealing to which point we are all inextricably interconnected and interdependent today. In the European Union this has led to a leap in our integration. In fact even if this crisis did not affect all European Member States in the same way, the European Union, and politicians across Europe, collectively took the decision to stick together. They did it and this is important to understand because the European Union is not just a project of regional integration; it is not just an internal market; the Euro is not just an economic project; because the European Union is all of the above and, more importantly, it is a project of values, of democracy and peace. 100 years ago this year, European leaders were sending their troops into battle against one another in what became known as the First World War. Only 70 years ago France was occupied by Germany during the Second World War. But Europe's founding fathers had a vision of a future void of the pain, anguish and tragedy which contaminated the early 20th Century. And so we came together and emerged as a Union back in the 1950's. And we have grown from 6 countries in 1957 to 28 in 2014; from 168 million people to 507 million. More than anything, our enlargement shows that the European Union was, and is, a beacon for hope, allowing us to overcome successfully old divisions, consolidate democracy and come together. I have lived this personally. My country, Portugal was a dictatorship for 40 years. I was 18 years of age when the democratic revolution provoked a regime change and democracy prevailed. And I can tell you that the main goal of the democratic politicians, the great hope of all that young generation was to join the European Union, to be able to enjoy the same freedoms, the same prosperity that European Union members had. And 30 years ago when the Berlin Wall fell all those countries in Central and Eastern Europe had as their reference and their main ambition to become members of the 2
3 European Union. The European Union has remained throughout its history a lighthouse for freedom and democracy. This was precisely why the Nobel Peace Committee decided to award the Nobel Peace Prize to the European Union in Today it is simply inconceivable that our Member States would ever go to war with one another again. Because our objective has always been clear. Without union, peace and shared values, there can be no prosperity. This is what market analysts and commentators have underestimated during the crisis, notably the fact that the European Union and the Euro represent a fundamental political choice of Europeans to stay together and build a common house together. Today I can say we are emerging from that crisis because we have turned the page; indeed I would say we have started a new chapter. Of course there are many ways we did this, but let me highlight three examples: First, we put in place a more extensive system of economic and budgetary governance at a European level. Member States' national budgets are now sent to Brussels before they are formally approved at a national level; thereby ensuring that we can correct imbalances before they emerge; Secondly, we showed solidarity within the European Union through the creation of a European Stability Mechanism worth 1 trillion USD to help Euro area Member States in need of financial support; And thirdly, we increased transparency and accountability in our banking sector by having common European rules for banks; and by giving the European Central Bank autonomous control over national banks. I know that Vietnam like other partners faces similar challenges with bank lending to the state-owned sector and a high level of bad debt. And so your decision to oversee centrally the process of bank restructuring is the right one. Central and independent regulators are essential to create a healthier financial system and attract much-needed private capital. Because only by putting our finances in order and modernising our economies, can we deliver smart, sustainable and inclusive growth and create quality jobs, rather than generate debt-funded artificial growth. But what is perhaps our greatest achievement in the European Union was not just to overcome the crisis and start growing again. This year we expect a growth rate of 1.6% and 2% next year. But it was that we have weathered the storm by remaining open, both internally and internationally by keeping our economies open. Because this is how we adjust for the future. This is why our model in Europe is one of open regionalism. The European Union represents now a 12.6 trillion economy, the largest in the world. Only the United States is in the same league, worth 11.3 trillion, while even China remains considerably smaller, at 4.6 trillion. The European Union remains the largest trading bloc in the world with over 20% of world GDP. We are simultaneously the biggest source, and destination of, foreign direct investment in the world. And today we have a greater number of Free Trade Agreements than ever before, having recently concluded negotiations with Singapore, [and Canada], and as we 3
4 continue to make progress with the United States, Japan, India, Malaysia, as well as with Vietnam. History shows that people and countries prosper when they open up to the world, when they expand their trade, when they exchange ideas, not when they turn inwards or disconnect from the rest of the world. Ladies and Gentlemen, This is why we want to have a strong partnership with Vietnam; This why I am visiting your country once again. Because we believe that only through cooperation, political dialogue, economic exchanges can we create the bonds that will make peace a common cause, and can we help each other to deliver what our people expect from us, greater freedom and wellbeing. I am proud to have launched the negotiations for a Partnership and Cooperation Agreement with Vietnam back in 2007 when I visited the country for the first time. These negotiations were concluded, with the agreement signed in It is now the basis of our cooperation, ranging from political dialogue to education, science and technology, environment and climate change to human rights. The European Union is also the largest export market and the second largest trade partner of Vietnam. But also here in the economic field, I believe we can and must do more. This is why in 2012 we launched negotiations for a Free Trade Agreement (FTA). We need to aim at a comprehensive and ambitious agreement covering tariffs and non-tariff barriers, as well other trade related aspects, notably procurement, regulatory issues, competition, and services. This agreement has an enormous potential, and once concluded will create crucial jobs and opportunities for both of us. But a genuine partnership cannot be forged only at official or diplomatic level. Our civil societies need to be part of it too. The greatest asset that any country has, and Vietnam is not exception is its people, in particular its youth. You have a very young and dynamic population, with a median age of 28 year (one just has to look into this audience to realise that). And it is you, the younger generation that will determine the future of the country. It is therefore important that the State and societal structures are shaped in a way where the aspirations and hopes of the young can be best fulfilled. Human Rights and the respect for the rule of law are also fundamental and need to be secured through open dialogue, political pluralism and a vibrant civil society. This is an important dimension of our partnership and is very important for the deepening of our bilateral ties. Ladies and Gentlemen, The world is changing. And with such great change come great challenges, global challenges that require global responsibility too: 4
5 Climate change, energy security, scarcity of natural resources, poverty, education, universal health care all these issues require regional and global, as well as local and national, action; This is why we must remain steadfast in our commitment to international agreements; It is why we must make every effort to reach an agreement at the United National Climate Change Conference in Paris next year; It is why we must support green growth as you are doing yourselves, leading the way in South East Asia with your own "National Green Growth Strategy"; And why we are focusing on 'sustainable energy' in our development cooperation with Vietnam from , as part of our increased financial support which will reach 400 million euros over the next years; It is why meeting the Millennium Development Goals is essential and I want to congratulate Vietnam on the remarkable progress you have made in fulfilling some of the MDGs way ahead of the 2015 deadline. It demonstrates an absolute understanding of what we are all required to do; And it is why we have stepped up our cooperation efforts with ASEAN countries on security, including on non-traditional security a priority for both our regions. This brings me to my next point. We cannot hope to achieve sustainable growth and tackle global problems without peace and security. They are the foundations for human and social development, and a fundamental precursor for realising the values of democracy, rule of law, and respect for human rights. Recent events on our continent, such as Ukraine, as well as elsewhere, in Gaza or Syria, demonstrate that peace is far from guaranteed. It must be cherished and protected. It cannot be taken for granted. And where there are current tensions, they need to be de-escalated and resolved peacefully. I know that here, too, tensions have emerged due to maritime disputes with neighbouring countries. I want to say clearly that the European Union supports a political-diplomatic process and a peaceful resolution of the dispute in accordance with international law. We also support the ongoing efforts to reach a legally binding Code of Conduct that would guide and frame the claimants' actions. Respect for international law and regional cooperative approaches are the best ways to de-escalate tensions and seek negotiated outcomes. This reality is why the now 37-year old partnership between the European Union and ASEAN is especially important to us, not least that together we are the two most successful regional integration projects in the world; But because regional integration brought peace to Europe, and through peaceful means, at a moment where all could have been lost. ASEAN community building is what unites a diverse South East Asia; It is why the European Union remains committed to our partnership with ASEAN. I want to thank Vietnam especially for its role as ASEAN's coordinator for EU-ASEAN relations; It is why we have, in line with the 2012 Brunei Plan of Action, turned our relationship into a more strategic and more substantial partnership; 5
6 Why we have more than doubled our financial assistance to ASEAN integration, from 70 million euros to 170 million; And why I believe that with our record of strong and tangible support for ASEAN, the European Union can make a substantial contribution to the East Asia Summit. We have big challenges ahead of us. As I can never say too often when I talk about our recovery in Europe, now is not the time for complacency. We must look ahead, but act now. Thich Nhat Hanh said that "We have to continue to learn. We have to be open. And we have to be ready to release our knowledge in order to come to a higher understanding of reality." The European Union has this principle at its core through our relationship with our Member States and our international partners - if we are to continue to learn we must do so by learning from one another. Thank you very much for your attention. 6
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