20 November 2013

Eurogroup/Dijsselbloem: Europe House Lecture

In his speech President Dijsselbloem described the eurozone as a community with solidarity among its members and an understanding of each other’s responsibilities. The euro crisis has put this community to the test. Doubts were raised about Member States’ commitment to the rights and obligations within a monetary union. But the eurozone has assumed its responsibility - it has made significant efforts to help weak members and strengthened fiscal policy legislation at the same time. The work on the future design of the system is ongoing.

European economic governance is about accepting that members of the euro area have a clear interest in other Member States’ economic affairs. And it is about accepting that there is a European interest in your own budget. We realised that having a set of rules is not enough. Members need to point out to one another their common responsibilities in order to keep the community sound and stable.  And even though every now and then a government leader tells the European Commission to mind its own business, the work of the Commission has been successful. During economic hard times we have managed to stabilise and lower deficits. The Eurozone budgets are now more sustainable than in the UK, the US and Japan. So we have made significant progress in shaping a more robust community...

Our economies need to be revived and our social systems need to adapt to the new economic reality. It is simply a necessity at a time when jobs are easily shifted to other parts of the world and the population of Europe is ageing. Obviously, every country in the eurozone, without exception, needs to strengthen its competitiveness. We need to improve our earning capacity.

Clearly, the European level has a major part to play. Despite everything that may divide the European countries sometimes, politically we have a lot in common. Raising the retirement age is not only an issue in France or Italy, but also in Finland and Germany and basically in all other countries. And Ireland and Spain are not the only countries that were confronted with trouble on the housing market. In Slovenia, the Netherlands and in many other countries too, the housing market is under pressure. We can learn from one another’s experiences. But perhaps even more important: as in every community, the members must have the courage to confront each other with inconvenient truths. We need to make one another aware of our weaknesses and put forward best practices for solving them. We need to lead each other firmly to the right solutions and the best ways to implement them.

Now, let me be clear: the main responsibility for these reforms lies with national politicians. They understand the national economic challenges best. They are best placed to engage in a dialogue with society, with social partners, with citizens, with voters. But across Europe we should adopt country growth strategies that address the specific growth problems. These should include the crucial reforms required. The instruments Europe provides should support these reforms and be part of the country growth strategies. For example, by making structural reforms a condition when setting deadlines in deficit procedures. Or by using European structural funds to implement and support structural reforms.

In the past few years the eurozone community was put to the test for the first time. It was difficult, but in the end the members responded by shouldering their responsibilities. We have laid a stronger basis that has created new hope for Europe. Now we have to pass the next test. Moving out of the crisis, leading politicians must maintain the sense of urgency and take their countries through an inevitable transition phase. Let’s use our full potential and make our economies more dynamic. Let’s pursue the path to sustainable growth and modernise our social model. Let’s go forward with confidence to the next, post-crisis phase and turn Europe into a convergence machine again.

Full speech

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