A New European Alliance: Speech delivered by Viktor Orbán at the Conference of the International Securities Market Association (ISMA)
Dátum: 2005-06-14 13:20:00, eredeti URL: http://archiv.fidesz.hu/index.php?Cikk=39568
KCMDB-be feltöltve: 2024-05-04 21:54:49.252430, Feltöltő: fidesz_hu_scraper_v2
Good morning, Ladies and Gentlemen,
I was very glad receiving your invitation for your conference in Budapest, for it brought a number of important issues to my mind right away.
I would not have thought however at that time that the gathering was going to have such a special relevance for our topic: today, you are having a conference only five days after the French, and two days after the Dutch, referendum rejecting the European Constitutional Treaty, and only a few days after the successful British run-away from the problem.
I personally see these decisions as my own defeat as well. As a Hungarian, I have always supported enlargement of the EU. As Vice Chairman of the EPP, I have always been in favour of the Constitution, regardless of the fact that its text left out some vital values of the EPP.
In moments of shock like this, one has to concentrate on the most important issues of long-term interest. What are those issues that help us understand what is going on in Europe? What should be done in order to shape Europe to what we believe shall serve the continent's and its peoples' best interests?
From this perspective, I believe there are three points of crucial interest for all of us, discussing these issues here in Budapest.
First, what is the message of the failure of the two referenda - and the successful runaway of the British. In other words, what should be done differently in Europe.
Second, the relationship between the EU and the US. Probably no discussion of Europe's economic and political future is legitimate without touching on its relation to the world's most powerful international actor.
Third, what is the mid- and long-term impact of the "big bang", the 2004 enlargement of the EU. In other words, do the new members change the situation for the better or for the worse.
So:
First, what is the message of the failure of the two referenda?
What should be done differently in Europe?
The failure of raising popular support for the Constitution calls everyone's attention to the painful reality that we did not succeed in understanding what the people of Europe needs.
The question today is whether there will be a European Constitutional Treaty at all.
Even though the French have always been a decent but somewhat peculiar nation, even if their refusal of a European project initially supported by themselves is not new in French history, we have to realize that following these decisions, the Constitution program has failed and we have to go in another direction.
An immediate lesson for politicians it is, by the opinion of the cynics, if that politics also belongs to professions in which it makes sense to say the truth, in which every untrue word has a cost which has to be paid sooner or later. It was not helpful in this case, for instance, to boast about or work, and call it, largely overstating the text, a Constitution - which the document is not. "Over-naming" a simple intergovernmental treaty a Constitution probably backfired, already the title rose concern and distrust rather than attracting people.
The fact is that the European Union today pays a lot more attention to, and spends as lot more energy on, launching and managing political processes than on implementing its economic priorities. Who has been concerned half as much for the missing of the Lisbon goals of increasing Europe's competitiveness as for the success of the Constitution? It may sometimes seem that political processes supersede, and even drive out, the issues of economic development.
All these led Europe into an identity crisis: the text of the Constitution failed to include reference to the Judeo-Christian roots of the Continent, and now, as some Christian-democrats pointed out, the text only received what it deserved, rejection. The place and the mode of rejection only shows the good sense of humor of the Creator, they say.
Anyways: as a result of the shifting away from economic goals toward policy-goals, what is missing today is also the right focus point for the European construction: Political construction is not enough, focus should be shifted back to the economy. What is missing are the big, impressive, major common economic projects that interest people and that increase Europe's competitiveness.
What do I have in mind? Let me give you a quick list of some possible key projects.
FIRST, we have to preserve the trust in our money. The extension of the Euro-zone should today be questioned even less than before. Otherwise, insecurity surrounding the deadline of 2010, might easily create serious financing problems in countries like Hungary.
The strongest instrument of the common European economic future is the European currency, and the trust in the Euro is the strongest economic weapon of Europe. A strong Europe needs a strong currency. This is why it is not only the interest of the new members but of the Union itself as well for the new members to fulfil the Maastricht criteria and those of joining the Euro zone.
SECOND, it is the interest of the new members as well as of the Union itself to speed up the genuine reunification of the continent, to shorten the current phase of transition especially on the movements of labour and agriculture.
THIRD, especially today, it is unimaginable to decrease the GDP- percentage of the net contributors into the common budget. The currently 1.24% (GDP-related) contribution to the common budget is necessary for the implementation of major common projects.
FOURTH, the real "Achilles heel" of Europe is its demographic situation. This is the greatest disadvantage of the Union in the global economic race. This is why the focus has to be shifted towards the strengthening of the families in the European Union. Asia is being today threatened by its overpopulation, America has successfully solved the problem of the integration of massive numbers of migrants into its society. In order to maintain the stability of the continent and to strengthen the trust of its citizens in the viability of their Union, the problem of demography has to be successfully solved. Immigration seems to offer a quick-and-easy solution, but it is in reality an extremely risky venture that shall turn out to offer only short-term solutions. Instead, we have to put the strengthening of families in the centre of our activities all around in Europe.
FIFTH, and last, the chances of the European economy are made more difficult also by the fact that even the capable work force does not find job. The European economy has to turn towards policies of job creation and increase the level of employment on the continent. At the same time, the entire logic of economy has to start to re-focus on the value of labour. The Union shall have to become capable of facing the global competition in employment, in work intensity, and in productivity.
If we wanted to sum up the message in one sentence, we would have to say that what the French, and Dutch said was that what they wanted was not a Constitution, but - jobs.
The consequences of the refusals can not be overestimated. From these events on, it is not clear how we could continue with the Constitution ratification and reiterate this processes' ongoing nature over and over again. If we were continuing as if nothing had happened, we would probably only give good grounds to the "no" votes, even further increasing the number of future "no" votes. It would be far more beneficial to face the situation and shape our future steps to it.
Ladies and Gentlemen,
Between 2001 and 2003 global economy, especially the American and European boom, cooled down, and in 2004 we witnessed a global economic upturn. At the end of 2004 and in the first half of 2005, global boom once again slowed down, partly as a result of the macroeconomic discrepancies of the American economy and their corrections. We can already feel the impact of this in Europe. We also suppose that a simultaneous boom in the global economy probably will not return before 2008.
What should we use this slow growth period for? They could chose to wait, claiming that `difficult times are coming again, let's wait for better times to make unpleasant decisions.' I however strongly believe that the European Union, and especially the new Member States, will use this period wisely if they make their difficult political and economic decisions, which will create conditions for dynamic European growth in the next boom.
I think that better times would only come for the EU economies, if between 2005 and 2008 we achieve a real breakthrough in the tax system, employment, families and children, restructuring of education and vocational training and effective integration of the new Member States. Europe can only stay in the race in the global economy, if it does not postpone due reforms.
Ladies and Gentlemen,
Second, EU-US relations.
It is impossible to outline the future of Europe itself without discussing the future of the EU-US relations.
The world shall continue to be determined by global challenges and concerns in the coming decade as well. It is enough to think of the climatic change, global inequalities, terrorism, weapons of mass destruction. The management of a large part of these challenges shall be dependent on the survival and cohesion and political weight of the Atlantic relationship. This is why I profoundly believe that the EU-US relations, more precisely, the strengthening of the Atlantic Alliance is the common interest of all Europeans.
No other Continent has such an intimate and close relationship with Europe than the US. And given the weight of the US combined with this intimate relationship between the two continents, the next ten years of Europe shall be determined more by America than by any other region of the world.
World War II and the subsequent era of communism made it evident, that Europe on its own is not capable of defeating her own demons and worst instincts, which sometimes escape from the capture of the ratio, like the bad spirit from the magic bottle, and lead the European nations into war against each other.
With the end of the Cold War and the end of external threat to the continent, some may ask, why would Europe need the US? In reality, the friendship of America helps to defend Europe's freedom, a major precondition for Europe's economic success.
However, the novelty of our days is that apparently America also needs Europe in keeping her bad instincts down. Those that are far stronger than others may easily turn defenceless against their own excesses. So, I think we need to work together, we need wisdom, friendship, understanding and insight.
This is of special importance following the war in Iraq, where the US put common action on the side and preferred to place cooperation on bilateral basis. Clearly, it had the right to chose so. But through doing this, Trans-Atlantic cooperation was seriously challenged.
My point is that the Atlantic relationship needs to be strengthened and revitalised. As long as the long-term economic relationship - probably integration - is outlined, the security policy aspect remains in the main focus and it cannot be weakened. The focus of this Atlanticism has to be placed back on NATO again.
True, Europe and the US compete with each other in many ways. However, at the same time, in the new, global world of the 21st century, the US and the EU also complement each other very well in most political and economic fields. The global community has a real need for these two different, but allied partners.
As far as global economic data are concerned, Ladies and Gentlemen, you are far more knowledgeable than myself, regarding the EU-US relations. The facts that reveal that the EU and the US are in reality twin engines of world economy. For instance in the year of the war in Iraq when the press was full of the tense American French relations resulting from their differences, and reported in detail the American pouring French wine out, US investment inflows and profits from France rose to the highest in a decade.
Ladies and Gentlemen,
The 21st century, as we can sense already, has introduced a new game: the increase of win-win situations. In the age of global investment flow and global trade, we could argue whether all parts of the world win all the time, but we can definitely see that many different parts win more often. The global gap have been narrowing for the past 10-15 years as a result of global trade and capital investments. China, India and the new Member States of the European Union are clearly winners of this new global business logic, as many of us used to be losers of the former dictatorial logic.
Third, what I would like to speak about is the mid- and long-term impact of the "big bang", the mega-enlargement of the EU in 2004. In other words, do the new Central European member countries change the situation for the better or for the worse.
The global cooling between 2001 and 2003 and the American and European recessions have produced an interesting new phenomenon: Central Europe and practically all emerging European economies came out of the recession better than the developed economies of the EU.
What happened? We could turn disadvantages into benefits, and thus the elimination of bottlenecks in the transport infrastructure kept public investments dynamic, housing construction increased which was reflected in higher construction industry performance and good results in the financial sector.
The entire region completed the transition to market economy and was able to turn their significant investment and consumption drawbacks compared to developed EU Member States into benefits. The driving force of EU support on investments could not be felt yet, but the dynamism of the reconstruction and growth phase following a successful market transition already existed.
With these actions, the Central European region proved that the EU enlargement switched on a new engine in the European economy in rather difficult times. It is good news that faster growth of the emerging economies will represent a stabilisation factor for the entire European Union.
We can see that compared to the developed countries of the European Union, there is stronger capital concentration in Central and Eastern Europe after the transition to market economy and the birth of parliamentary democracy. The public sector has a smaller and the private sector has a higher share in the emerging European economies than in the developed Member States of the European Union. Capital concentration is higher in the private sector with a higher market share too, which results from the logic of the transition to market economy. The building of the market sector and elimination of public assets in 10-15 years created higher capital concentration due to the very short period. The small and medium-sized enterprises are not strong enough yet all around in the region. To strengthening them is the major job for the governments in the future everywhere in Central Europe.
Ladies and Gentlemen,
We can also see that although the majority of the European emerging economies are now over the phase of economic reconstruction and have launched the economic realignment process, compared to the old Member States of the European Union, these Member States are significantly poorer.
When trying to adjust figures to ideals, it may sometimes feel like overweight people confronted with the optimum body-weight table: their weight is all right, but how should they grow the lacking extra twenty centimetres for their body-size?
Ladies and Gentlemen,
An attractive feature of our region is that investments of the public sector and private consumption will dynamically increase in the next 5-10 years.
The economic prospects of Central Europe for this decade are based on two pillars: a significant increase in private consumption and the start of investments missing so far in the public sector. These two factors will attract investments to Central Europe in the next few years in contrast to former attractions represented by privatisation and green field industrial investments based on cheap and trained workforce. Compared to the formula of the 1990s, based on cheap public assets and cheap but trained workforce, the economic character of this decade is now based on increasing consumption and increasing public sector investments. In the next few years, a robust increase in per capita consumption can be projected all around in Central Europe.
The transition to market economy and consumption are asymmetrical: consumption declines in the most intensive years of the transition to market economy, while it increases strongly in the more balanced phases of the transition. Continuous consumption increase is one of the instruments of the legitimacy of parliamentary democracy, as well. In the next 5-10 years wage, pension and salary increases will be the hottest political subjects in all Central European countries, because the transition to market economy in the 1990s involved a consumption deficit.
Significant investment deficits were put off in the public sector and the budgets of the Central European countries will not be capable of financing all investments that are needed in the public sector in the future. The EU investment support will mean an important contribution to fill the gaps, but we need capital from the business community as well.
Ladies and Gentlemen,
In our region, investments follow the workforce instead of the workforce going after the capital. Most migration is not aimed at developed countries, but capital movements within developed countries seek areas rich in knowledge and vocational qualifications.
A global economic trend in the Central European countries means that investments will sooner or later find free workforce and the workforce receives an increasing part of the profit generated by investments, which indicates a promising trend of consumption increase.
There is a new and decisive source of global economic growth, which makes the economic prospect of the first decade of the 21st century promising - the two billion new consumers of Asia, primarily China and India. They offer attractive business opportunities for the European Union as well, but we must not forget that there are new business opportunities for Europe within Europe, too. The new EU Member States, the next wave of enlargement and the former Russian, Ukrainian, Belorussian and other economies changing into market economies, represent the internal source of growth on which a new European boom can build in the next decades.
If you add to this that, maybe within a year from now, in Central European countries, political leadership shall be provided by centre-right, people's parties' governments. As empiria shows, these governments have a much better sense of the logic of the market, introduce far more market-oriented economic policies and promote economic growth, we have the best chances that business and politics can act together for the benefit of the forthcoming several years.
This is how, I believe, it shall turn to be a historic chance that in Germany, Austria, Poland, Czech Republic, Slovakia - not to speak about Hungary - probably centre-right, peoples party's governments will be formed. This is why I believe that this political phenomenon can give a new impulse to the European integration, as well as to the global competitiveness of Europe.
Ladies and Gentlemen,
The European Union made a historical step towards the political and economic reunification of Europe when it completed the biggest enlargement in its history. Earlier, the single European currency had been introduced, representing a milestone for financial unification of Europe.
Reunification could bring together Western and Eastern, developed and developing, rich and poor nations of Europe. But now, more is needed: not a marriage of convenience, but a real New Alliance, one in which the focus of Europe shall shift to the real need of Europeans, the creation of labour.
On this basis, the New European Alliance may and should be formed between politics and the business community, because this is the alliance of success. We have already learnt in Central Europe that we can only be successful in an alliance, and this is what we are now offering for the global and European business community too.
Ladies and Gentlemen,
To sum up the challenge ahead of us and the things we need to do, let me remind that old man who arrived at the station late, just as his train was leaving.
`Just you go' he waived calmly after the train, `I have the ticket.'
This is the last thing we in Central Europe can do today. I believe one of the paradoxes of the 21st century is that in order to achieve economic success you need more and more non-economic factors: in addition to global trade and international investments, high-quality national educational systems, protection of national culture, support of families, social and business ethics can lead us to successes. Apart from innovative reforms, protection of these values is the key factor of European success.
A New Alliance among peoples of Europe, together with a New Alliance between business and politics for creating labour, can offer the successful framework for answering the challenges ahead of us.
Mr. President, thank you for your attention.