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Europe supporting growth and employment

Today, the European Union is facing the most serious crisis in its history. The EU is the world’s largest economic and trading power, it has the means to overcome this crisis but it is seen as a sick continent, in decline. Even the European identity is at stake.

By: EBR - Posted: Monday, September 30, 2013

We respect the choices of those who want to leave things as they are and even of those who might decide to stand on the sidelines. But we intend to go further with the countries which have decided to forge ahead. It’s our project of mutually-supportive integration in a “differentiated Europe” where there would be distinct paces, distinct content and even distinct decision-making rules, within of course the Union of all member states as an area of freedom, democracy and solidarity.
We respect the choices of those who want to leave things as they are and even of those who might decide to stand on the sidelines. But we intend to go further with the countries which have decided to forge ahead. It’s our project of mutually-supportive integration in a “differentiated Europe” where there would be distinct paces, distinct content and even distinct decision-making rules, within of course the Union of all member states as an area of freedom, democracy and solidarity.

by Jean Loup Kuhn - Delforge*

In this critical context, next year, European citizens will vote for the European parliament. These elections used to be rather unchallenging and merely focused on national issues. However, this time, from all across Europe, we can sense a fear that their outcome might show a worrying raise of populist or extremist parties (such as the Ukip in the UK, Ataka in Bulgaria, Jobbik in Hungary, the Front national in France, not to mention Golden Dawn here …).

Why is that ? Most of our citizens have mixed feelings towards Europe, which is seen as a faraway project, disconnected from their everyday life, slow, very slow in taking effective decisions, and poorly democratic. The truth is that Europe didn’t react as fast as it should have. Worse, the European Union seemed to have as sole horizon budgetary constraint. Eventually, when Europe did react, it was somehow already late and people could not find any perspective to stand for. This has clearly fueled the perception that Europe was not able to give an answer to the extraordinary issues it was facing. Euroscepticism, or sometimes even “euro-hostility” from people directly affected by the crisis are deeply connected to their doubt and suffering. People are in doubt because Europe itself is in doubt.

Therefore, there is here and there a feeling that national solutions could be the answer to overcome the crisis.

But we have experienced how impossible it was for a single country, big or small, to be strong enough to resist the crisis.

Here lays the paradox: it is precisely when Europe is more and more necessary that people drift away from it.

The only way is to give back hope to people, to rebuild the European ideal. We need a strong message, a message of action because the European idea requires movement. We must gain a new momentum. The European dream has to be again a positive goal to fight for, especially for our young generations : Europe is definitely not the cause of our problems, it is a reason for hope in the future.

Therefore, it is our responsibility to take the initiative, in order to reactivate the European project. France is strongly committed in doing so and pledges with its partners to move in two directions: first, to strengthen the structures of our Union, by securing the economic and monetary union. Second, to address the needs of our citizens, with specific measures to help growth, investment and employment, especially for the Young.

I - First, as regards the economic and monetary union, we have taken important decisions and made significant progress, which were unimaginable only two years ago:

• we managed creating credible instruments, such as the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM), which helped reducing the financial fragmentation in Europe;

• We have ratified the fiscal compact, which strengthens fiscal responsibility;

• We are currently discussing the terms of the banking union, in order to make finance serve the real economy. It will allow, under the supervision of the ECB, the european instruments to directly recapitalize distressed banks. This is indeed a good example of what European solidarity must be, and a huge step towards a more effective coordination between Eurozone countries in order to break the link between bank debts and sovereign debts. We have set a calendar and we should have reached a full agreement by the end of the current European parliament’s term (2014).

This way, we have strengthened the Eurozone. There still is a liquidity crisis but it is not a solvability crisis anymore. There has never been a euro (currency) crisis but a crisis of the Eurozone which is over now: we are not talking anymore about the integrity of the Eurozone. France has always said, sometimes with a feeling of isolation, that our single currency was irreversible for all of its members.

France considers the euro as a major enhanced cooperation, which needs further improvements: a stabilized Eurogroup presidency, an economic government for the Eurozone, with its own budget allowing specific funds.

We respect the choices of those who want to leave things as they are and even of those who might decide to stand on the sidelines. But we intend to go further with the countries which have decided to forge ahead. It’s our project of mutually-supportive integration in a “differentiated Europe” where there would be distinct paces, distinct content and even distinct decision-making rules, within of course the Union of all member states as an area of freedom, democracy and solidarity.

II - Second point, No more crisis of the Eurozone but there is still a crisis in Europe. If we want citizens to get closer to Europe, we need to address their difficulties. Europe needs to “speak” to them.

In this regard, the social dimension of the European Union is obviously of vital importance.
As you know, France has asked for Europe to reorder its priorities. We strongly wanted the European Council to take a balanced approach by adopting a series of coherent measures to stimulate growth and employment, improving solidarity and cohesion. The social agenda has eventually been put forward, starting with the “Growth & Jobs Pact” (worth 120 billion €) adopted by the European council of June 2012. We are pleased that European leaders have realised that budgetary restraint and austerity alone were not enough. Jacques Delors used to say that constraint can be no substitute for impetus, rules can be no substitute for Politics.
The European council last June has confirmed this priority: growth, investment and employment, especially for the Young, 14 million of which are unemployed.

Inspired by the franco-german contribution last May on the social dimension of the EU, the Council took decisive action:

• As a first example, the EU leaders agreed to “front-load” the €6 billion that had been earmarked for the Youth Employment Initiative so that these funds are concentrated on 2014-2016, the first two years of the current Multiannual Financial Framework (MFF), instead of being spread over its entire seven-year duration. On July 3rd, the first summit on youth employment was held in Berlin. A second summit will be held next November in Paris.

• Regarding mobility, we welcome the significant raise of the funding to the Erasmus programme (from 8 to 13 billion euros) which in particular will benefit apprenticeships.
Several european instruments will also be mobilised:

• the European Social Fund (ESF) or the European Bank for Investment (EBI) whose lending capacity has been raised by 10 % compared to 2012. This will allow a series of investments to be co-financed, especially in infrastructure.

• France has been particularly proactive in defending the Fund for European Aid to the Most Deprived, which received 1 more billion euros to secure its funding.

We are also committed to define european social indicators and start discussions about the statutory minimum wage, which has gained new relevance in the recent years. Our duty is to adopt measures that will ease people situation and help restore confidence.

So much still needs to be done: it will be particularly uneasy while pressure seems to be lighter on all member States. There is a sense of fatigue in our States.

But it would be unreasonable to stop the movement: the risk we are facing now is to be consistent in mediocrity. We have come to a crossroads: either Europe is able to draw up a project for itself again, or slowly but surely it will undergo a process of disintegration and declining in status, which will not just be fatal for Europe but will harm the whole world, because Europe is a benchmark, a framework, even an example of regional cooperation.

In conclusion, allow me to broaden my idea: we also have to affirm Europe’s position in the world. Europe is a major partner able to disseminate challenging ideas in every field. It has a role to play, values to defend and a model of society to promote. The current negotiations between the EU and the USA, aiming to lift trade barriers and “promote growth”, are particularly emblematic. France had made it clear that some sensitive areas should not be part of the negotiation mandate. The cultural sector, including audiovisual services is one of those, defence industries another one : we cannot afford to be naïve and Europe has a role to play as a regulatory power so that trade serves growth, sustainable development and human dignity.
Our responsibility is to allow Europe, continent of peace and democracy, to play its role to contribute to the global security.

There is no country in the world investing as much as we do in preventing and managing crises (in the last Multiannual Financial Framework 49 billion euros were allocated to development, cooperation, neighbourhood). Nonetheless, although we are a major payer, we are not a major player…
It seems that Europe has almost withdrawn itself from the world. Domestic issues over the financial economic, and debt crisis have thwarted European policymakers from keeping alive the strong ideal of Europe, at a time when myriad challenges, from the escalating civil war in Syria to the Middle East talks or global climate change, demand a European response.

We’ll pursue this objective through a more active common security and defence policy. The next European council in December will be focused on this only issue.

The challenges are considerable. However, the current european crisis is an invitation to political creativity and clear vision towards an ambitious horizon.

No doubt that the future Greek presidency will be part of it.

* Ambassador of France in Greece

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