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13 February 2017, Gateway House

GOIGD 2017: Inaugural Keynote I by Yves Leterme

His Excellency Yves Leterme, Former Prime Minister of Belgium, Secretary General, International IDEA delivered the Inaugural Keynote I on Europe at the Crossroads at 2017 T20 Mumbai meeting hosted by Gateway House on 13 February. Leterme's speech effectively explains the changing politics of global capital with the rise of new economies with respect to Europe and it's position in the world today.

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“Europe at the Crossroads”

Thank you very much, Madam. Good evening, ladies and gentlemen, ministers, ambassadors, excellencies, the organisers from Gateway House, delegates, and participants. First of all, let me thank the organisers for having me here, for organising this event. I would also like to commend the Ministry and the Ministers for supporting this initiative.

I am very proud and pleased to be in Mumbai for the first time. I know a little about India already. I always remember the fruitful, good cooperation between my country and yours during my time as Prime Minister of Belgium and the visit by my then Indian colleague. I remember also the quite impressive economic achievements of India through the port of Antwerp and the quite important bilateral trade we have with your magnificent country.

Since leaving the Belgian government, I have been working for the Organisation for Economic Co-operation and Development (OECD). At that level of the OECD, we had good working parties, making progress in strengthening the economy and competitiveness, and we could, in fact, also learn a lot from your delegates there. Currently, I am leading an organisation in Stockholm, called International IDEA, which has a mandate to promote democracy. International IDEA has 30 member states from around the world, and it is a relatively small organisation, with about 200 officials, with both large and small democracies like Barbados, Cape Verde, and others. But we were very proud also to have in our constituency of member states, your country, the biggest democracy in the world.

Ladies and gentlemen, this being said, let me enter into the subject on which I was asked to deliver a couple of thoughts, which is ‘Europe at the Crossroads’. It’s a very appropriate subject. I think that not one of our European colleagues present here would deny that indeed, our continent, the European Union, wider than the whole of the European continent, is confronted with important challenges. There is the volatility of the geopolitical environment, which has already been referred to. We went through decades of the development of evolution. We went from a bipolar world to a multipolar one to zero polar, and the future will show what it will be like for the next decades. The future of multilateralism is at stake – and I will elaborate on this.

We also see that in the whole neighbourhood of the European Union, lots of things are changing. There is, in fact, a lot of transformation, including via violent ways. There is a great deal of unrest, and as a consequence, migration or efforts to migrate towards the European Union.

Number three, of course, is Brexit, the decision based on a popular vote, in a referendum, to leave the European Union. I think this is a fact and we have to follow now on the consequences of this fact. But it is very difficult to imagine what kind of outcome the negotiations will have, how long they will last, and to what situation they will lead.

Number four is economic stagnation–not really stagnation–but, of course, compared to your economic growth, an average growth of 1.5-1.6% is not so high. There are differences within very well performing economies, like the Swedish one, Poland, Ireland, Slovak, Czech Republic, Slovenia, and others, but also with countries of the Eurozone, for instance, which are still trying to cope with very low growth figures.

There is also the need for Europe to reposition itself in its relations with a long-time ally, the nation that came to save Europe at crucial times, the U.S. There is the veil of protectionism going through the world, while Europe–in the DNA of modern Europe–free market, free trade, openness, are part of its identity.

There are other threats to security, internal security, security issues in the immediate neighbourhood of Europe and at a global level. And if I want to complete making references to my predecessors here, we also have a series of anniversaries to commemorate, celebrate in 2017.

There was already a reference to the centennial of the Bolshevik revolution, but closer to the European Union, there are the 60 years of the Treaty of Rome, 15 years since the introduction of the Euro, 25 years of the fundamental Maastricht Treaty, and so on. Confronted with all these challenges, confronted with all these facts with which politicians and political leaders have to work, I think there is a need, a very important need, number one, for a future-oriented vision, based on reality–realistic, but future-oriented. Number two, for a rational approach. Number three, for an approach based on confidence and trust. And last but not least, there will also be a need for new political systems.

Ladies and gentlemen, let me anchor my remarks to you about ‘Europe at the Crossroads’ around what I would call five inter-connected clusters of challenges and fundamental questions. Let me start by what was said by colleagues just before me. It is, indeed, a matter of fact that the geopolitical balance, geopolitical relationships, are shifting. And so, the first crucial question that the European Union has to answer—not only for the larger member states of the European Union—is, what is the position, what are the strengths, what are the weaknesses, but above all, what will be the role of the European Union in the future?

The geopolitical reorientation with the United States has meant, very clearly, pulling out of some debates. With the European Union surrounded by conflicts, or by fragile states, we have a lack of stability, and with some power play from the Russian presidency, the geopolitical reorientation has taken place.

But, in fact, to go back to history, parts of the globe other than Europe have been at the centre of the geopolitical situation on a global level. And so it is obvious, it is not more than normal, that due to the economic facts with emerging economies, stronger economies with more economic growth and potential than Europe, parts of the globe with a different demography, will strengthen their position, and by doing so, try to catch up with European evolution.

This means more competitiveness, more competition for Europe. In this geopolitical balance, this is, of course, also an important debate about crucial values. Europe is, and wants to stay, the continent of the Enlightenment, of values, of human dignity, of equality, secular states, with freedom of religion, and so on. And this is being challenged today.

This brings me to security: external security, which I already mentioned, but internal security too. As far as internal and external security are concerned, there is, of course, also a very important institutional aspect. Do we have the capacity as member states of the European Union to speak with one voice? Do we have the capacity to really build a European foreign policy and a diplomatic presence all over the globe? And in terms of internal security, do we trust enough, believe in European cooperation, do we share data and defend our freedom and basic values together?

One crucial, urgent and an important aspect with which I will close this first cluster of problems concerning geopolitical balance, is the issue of military security. Well, let’s be open and frank. The European continent, and certainly the western part of the European continent, has been kind of outsourcing its security issues to NATO–the de facto U.S. allies. Currently in NATO’s expenditure, more than 70% of the funds comes from U.S. contributions. There is, indeed, in that domain, a need to rebalance. We–nations, politicians and European citizens–will have to take the responsibility to defend ourselves in an insecure world, not to unleash violence, not to create more insecurity. But just as a show of solidarity with the alliance, with NATO, it was, at a certain moment, agreed that 2% of GDP would be invested in security–collective security and external security–with rare exceptions.

Not one of the European member states of NATO realises it–and I will come back to this later–that with Brexit, France will be the only remaining permanent member of the UN Security Council and also a member of the European Union. I think that this means something for the debate on the restructuring of the UNSC.

Ladies and gentlemen, let me conclude this first cluster by putting forward at least three or four objectives we should pursue. Number one, I just mentioned it: as the European Union, as member states of the NATO alliance, invest more in defence towards the 2% to which we committed ourselves, to have a more active European pillar within NATO. Number two, develop a real, unequivocal neighbourhood, to have a clear vision of the conflict surrounding the European Union. Number three–and I think this is important for those who are in debates with the new U.S. leadership–let’s support multilateralism. The European Union is a multilateral creation: let’s support multilateralism as one of the most important tools with which to combat the challenges of today.

Last but not least, as a priority for discussion in this cluster is, as I mentioned already, the suggestion to become a more active member, a more active partner in the debate about restructuring the multilateral structure of the United Nations, including membership of the UN Security Council. So this is the first big challenge, cluster of challenges, for the European Union, for Europe at the crossroads, the whole of the European continent. The European Union is not more than a kind of peninsula of Eurasia: we share this Eurasian continent with two-thirds of the world’s population.

I think we sometimes have difficulty drawing the right consequences of this fact, of these figures. Besides, the EU is positioned above what I call a kind of demographic ticking bomb which is the African continent. Migration is now at the centre of the concerns about not only the political leadership, but also of citizens. Well, it’s here to stay for the next decades.

So, in the course of the next year, a very important challenge for the European Union is the one of demographic change, of the pressure of migrations towards the European Union, and to give the problem a positive spin. In my opinion, migration should be seen more as part of the solution, than as part of the problem. Of course, this comes with conditions, but it is part of a solution for a continent where, today, for one person older than 65, you only have 2.4 persons at work. There will be a need to finance retirement schemes, healthcare and so on.

It is a matter of urgency to act because we are living in a continent in Europe where fertility rates don’t go lower than 2.1, which is, so to say, the turning point or the tipping point for replacement. There is a need for immigration, there is a need for new people—and of course, as I mentioned, under certain conditions. These conditions range from integration in terms of language, vocational training, employment, the rights of people and so on. It’s time for us in Europe to have a positive, open approach, standing on conditionality, on the one hand, but on the other, giving opportunities to people that want to make their lives in Europe, to take chances and to become really integrated inhabitants of our continent.

This goes by or passes via a management of migration flows, it goes through concrete decisions on a common border, on strengthening already existing systems to manage common frontiers. Borders like Frontex. This comes with an acknowledgement of the difficulties to defend these borders. This comes with an acknowledgment of the instability of the neighbourhoods of the European Union. It also goes with a positive formulation, common formulation about the European Union, citizenship and about the core values, and a very clear, not stricter, but better enforced, internal common security policy.

So, the second cluster of challenges that a Europe at the crossroads has to face are the dilemmas related to migration. It has to see it as a positive chance to rejuvenate, and to answer the problem of the ageing of the home population in the European continent.

Number three: I put this, on purpose, not as the first challenge–because Number one and two are more urgent today—but Number three is, of course, related to the economic situation and the European continent. We have a very mature economy. The European Union is still the biggest consumer market in the world, but we sometimes have difficulties in exploiting our capacity to perform well. Or our export capacity is endangered by rigidities–due to high prices, due to a lack of mobility on the labour markets, and due to the very long time it takes in Europe to bring innovation to consumer products, to the markets.

So these too are difficulties we should face—and they call for courageous decisions to do with fighting red tape or lowering taxes. Of course, we must aim to strengthen the European economy because we also share the concept of the social welfare state that brought many positive consequences, many pluses to the daily lives of our citizens. But we can’t take it for granted, we have to deserve it. Also, from that point of view, in order to be able to protect, to strengthen the function of our welfare states, we have to act.

Angela Merkel recently said that it wasn’t sustainable to have 8% of the world’s population with 25% of the GDP and 50% of the social expenditure. I think this summarises very well the kind of challenges we are confronted with in the field of the economy, and in protecting these social welfare states, which is a fundamental value within the European Union and which brings chances for equal development of quality education for all and healthcare and so on.

Ladies and gentlemen, the fourth cluster of challenges for a ‘Europe at the Crossroads’ relates more to the core business, so to say, of the organisation I currently work for. It is about the political decision-making within the European Union–not in terms of the technocracy in Brussels, but more in terms of the interaction in Europe between the political leadership and citizens. Today, we have to be frank, we have to be open, we have to be conscious of reality. And that reality is, to a certain extent, that the legitimacy of governance is undermined.

We have been building up, through the last centuries, systems that today are only partly functional. The democracies, most of the liberal democracies in Europe, emerged in the 19th century. We have the creation in the 20th century of mass political parties, popular political parties; today, we see that based on these tools of the 19th and 20th centuries. We’re a bit short on addressing the challenges of the 21st century. And so, we have to restructure, we have to reform the way we do politics. We have to find a place for the non-electoral democracy. For democracy beyond elections, we have to answer the rise of populism–when people have to sit together to make coalition governments.

To give an example, people are not clear any more about what the difference is between a Social Democrat and a Christian Democrat. Take even mainstream liberal parties: it is, of course, obvious that there are people that don’t agree with political proposals, with decisions by governments formed by these mainstream parties, and that these people would tend to opt for the extremes. This is what is currently happening in the European Union, the European continent–and we should find an answer to that.

There is also the replacement of the traditional distinction between Left and Right. By ‘distinction’, I mean the “web people” on the one hand. Those who are assertive will educate people that are open, feel strong enough to fight for their ideas, that see a bright future in front of us.

On the other hand, there are not only the “web people”, but the people that just stand aside and see things happening and want to be part of democracy, want to also be part of society to a full extent, but don’t have the opportunities to do so. And this can sound theoretical, but I think together with the pro- and contra-European integration, that this is a divide which now goes through the democracies. This will be asked for in an election, in the elections that will take place in the course of the next month. In March, we will have important elections in the Netherlands, in April and May in France, and in September in Germany, the latter two the big founding fathers of the European Union.

There too, it is about a confrontation–between those people that want to go step by step in accordance with the Truman Doctrine, completely for more integration, for strengthening multilateral cooperation in the European continent–people like Angela Merkel, and similarly, the mainstream popular parties; maybe Mr Macron in France, and, on the other hand, more extreme, more populist parties that, in fact, want to distract the European Union for all kinds of reasons.

So the fourth cluster, besides this issue of the place of Europe on the global stage, is the international security policy, apart from also issues of demography and migration, and strengthening the economy. The fourth cluster is about reorganising, improving political decision making, strengthening the legitimacy of policy to have inclusive democracies and make a clear choice in favour of strengthening European integration, a Europe that can be improved in terms of delivery, in terms of legitimacy.

Europe is big on small things, and sometimes, small on big things. This has to change: we are aware of the problems, but let’s not unfold what, through decades, has been built up step by step, and which now brings many positive aspects in the daily lives of people.

Last but not least—and I will be very brief because the room is full of specialists. There is a need, as far as Europe is concerned, to be in accordance with its identity. European integration is based on the principle that when you make people work together from an economic point of view, when you open markets for each other, then you avoid the repetition of conflicts. This multilateral construction of European integration is all about that. And if you want to avoid its history to restart again, to come back again, well then, we should, as the European Union, continue to fight for free trade. And block to block negotiations are difficult, especially in the European decision making system. It’s not always easy. We’ve seen even with the treaty between the European Union and Canada that there were some difficulties. But protectionism is not the solution. And being said to be in favour of free enterprise: building walls and being against free trade, this doesn’t go together in a sustainable way. You can have such a narrative for a couple of weeks, for a couple of months, but I’m sure that even in the U.S., at a certain moment, common sense will come back. Progress goes together with free trade, of course in acceptable conditions.

In terms of the European Union being at a crossroads, let’s be clear: Europe should choose to enhance, deepen the free markets.

Let me just say a couple of words about the Brexit decision from this point of view. Ladies and gentlemen, I think that for all politicians—and this goes also for me—that when a nation chooses to take a decision which is a little contrary to what our own opinions are, we should fully respect it, such as the outcome of the referendum and Great Britain leaving the European Union.

But I’m convinced that it will be very tough times, not only to reach an agreement on a calendar of negotiation, but also to reach goals, to reach agreements for that negotiation, and doing so in the course of two years. It seems to me quite unrealistic. And so, my hope is that in the coming three, four, five years, as many as may be needed to work to reach an agreement on the conditions of Brexit–the consequence of the choice that Britain has made–that there will be enough common sense, and that all parties around the table will keep at the centre of the discussion, the interest of the population.

To cite just one figure to do with the trade between the U.K. and European Union: as of today, 45% of the exports of the U.K. are towards the European Union. For the European Union, it’s only 8%. I hope that people in London realise that this is really not the best position from which to start negotiations, and that they will (need to) go beyond the quite popular, sometimes populist, positions they have taken without thinking about the next steps nor about finding an agreement, not within their own, but with 27 other member states of the European Union.

I conclude. In my opinion, in terms of the European Union, when you take the agenda of a ‘Europe at a Crossroads’, there is a very big necessity to make up our minds regarding our position on the global stage. What is our role in guaranteeing peace in the neighbourhood of the European Union and further too? How do we take the NATO alliance seriously, including putting enough money on the table to take up the duty of solidarity?

Number two, it is about managing migration, and trying to make a shift towards a positive approach to migration as one of the solutions to the aging of the population on the European continent–of course, under certain conditions.

Three, it is about reviving our economy. Four, it’s about strengthening the political system, trying to find answers to the wave of populism in almost all the member states of the European Union, but in 2017, very importantly, in Germany and France, the founding fathers and the pillars of the European construction. Last, but not least, it is about continuing to fight for free trade because, at the end, there is progress for all nations concerned.

Let me conclude by pointing at the specific interaction between India and the European Union. I would like to refer to some good discussions that took place last year between the European Union and India that had some good conclusions. I hope that these conclusions of the EU-India summit of 2016 provide us with a roadmap to strengthen the interaction between the Union and India. We are sometimes a little envious of the progress you make. We can’t make so much progress anymore, but we have lots of things to learn from your dynamism, and we are, of course, also at your disposal to try to help make that progress and to make such progress available also to the whole of your population, as your minister has underlined it should be.

Thank you very much.

His Excellency Yves Leterme is former Prime Minister of Belgium. He is currently the Secretary General at the International IDEA.

This speech was delivered as the Inaugural Keynote address on Europe at the Crossroads at The Gateway of India Geoeconomic Dialogue 2017, held in Mumbai on the 13-14th of February 2017.

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