Speech by François Fillon Ambrosetti seminar: "An economic strategy for Europe"
President of the Italian Republic,
Madam President of the Republic of Latvia,
Mr. Chairman Spain, Felipe Gonzales,
Mr. Chairman Italy, Massimo d'Alema,
Chancellor, Wolfgang Schüssel,
Mr. Minister, dear Mario Monti,
Ladies and Gentlemen,
The crisis has not only economic consequences, it changed the ideological landscape of Europe.
If, two years ago, you had heard the French Prime Minister talk about economic strategy, you would have said, this is still a very French idea, here again, barely disguised their fixed ideas, industrial policy, intervention government, etc..
These prejudices have no place to be: the crisis has forced countries around the world to intervene, even the United States. It has become essential strategies proactive.
I recently read a paper on "the future competitiveness of the European Union. He said that opening markets is not enough, it requires investment in national and European research and innovation, and an ambitious policy of standardization should complement these investments.
Who wrote this? The British Government.
When a French politician can take over entire passages from an official British document on the European economy, we say that the world is not the same!
With Germany also, our agreements have proliferated. Agreement on the supervision and financial regulation - was far from clear there are only a few months.
Agreement on the need for a trade policy based on reciprocity - that is a real novelty.
Agreement on the importance of energy and green growth - particularly on the crucial role played electric vehicles in coming years.
Italy and France, meanwhile, have never been far apart on these issues. But I also noticed that the Italian debate on European economic policy resemble more and more to those we have in France.
Everything leads to the economic strategy of the essential theme of the moment.
The calendar also.
With the introduction of the new Commission, the commitments will be made before Parliament on economic objectives.
In this spirit, the program that President Barroso has sent to Parliament insists on a "strong economic strategy and coordinated across the EU.
In spring 2010, we are redefining the guidelines of the Lisbon strategy - the only economic strategy which Europe has officially today.
The context of efforts to end the crisis makes this appointment an exceptional significance. We know that the future Spanish Presidency is convinced of the importance of this deadline.
The Lisbon Strategy was a good one, full of ambition, but we must admit defeat when redefining our method.
To boost Europe, I propose a proactive economic strategy that revolves around three ideas: investing in research and innovation, the reorientation of EU policies for growth and competitiveness in the European mondialisation, le rétablissement de nos finances publiques par une programmation concertée.
The first of these, I said, it is investment, research and innovation. It is the most crucial.
Since the 1970s, Europe was faced with three shocks that every time halved its growth rate.
We have taken a big step, if, together, we prevent the crisis permanently weaken our productivity - and therefore our potential for growth in coming years.
We are not disarmed.
Have confidence in everything that we can make public policies for research, innovation, higher education. Here we resource our growth.
France has decided to identify strategic areas that will grow tomorrow and focus its resources on them. We have entrusted this task to two former prime ministers.
This is essential because it is true that economic prospects are improving in the short term, thanks to various stimulus plans, forecasts further afield are not favorable to Europe.
They give us only 1% of GDP growth in 2010. In the U.S.: more than 2%. And Asia: over 4%.
Unfortunately the prospect of sluggish growth. And with the sluggish growth, we can not preserve the European social model, nor reduce our public debt.
Therefore it is necessary to create "new GDP" and develop "new products for growth." This means, in particular, invest more in research and innovation for the most strategic sectors.
And in addition to efforts by states and businesses, do not be afraid to use by using the Community budget.
It also means the continuation and strengthening sectoral excellent work already undertaken by the Commission - the round tables organized industry for several years in Brussels, which have unfortunately often resulted in decisions.
Who would, in effect, define the European automobile? When developing large-scale electric cars, which are measures of standardization needed?
What Happened to the recommendations of the roundtable ELECTRA? They stated, however, two or three flagship projects in the field of electricity and electronics.
And what gave those of the Round Table "European chemicals?
Without commitment, though necessary actions remained in boxes.
I understand that the birth of an industrial strategy in Europe raises concerns and fears and is likely to face the dogma of "technological neutrality".
But what that means, while the competitors of the Union organized large state-enterprise partnerships - for example the electric car?
While the British government does not hesitate to designate the industries most strategic for European growth - CO2-free vehicles, aerospace engineering, biotechnology and nanotechnology?
Brussels has it become the only place where one refrains from thinking about the future?
The history of Europe calls for it or do anything!
In truth, the Union has stopped making sector. From the outset, with the ECSC and Euratom, more recently, with major technology programs like Galileo and ITER. The European Union has always been the appropriate level to support the development of strategic sectors.
One of these strategic sectors, the energy and climate. The European Union, fortunately, has not ignored.
Much has already been made: a European very ambitious fight against CO2 emissions has been adopted and efforts to promote energy efficiency have been committed, the Commission issued proposals to strengthen the security of our natural gas supply, the development of common standards of nuclear safety has been revived.
I think we should go even further.
We must ensure that the European economy of energy supplies at reasonable cost. This involves coordinating our investment capacity, improve the transport of electricity and gas to develop a real policy of supply, including bulk purchases of gas.
Even that should be part of a global "green growth", whose potential is enormous, provided that the EU can surround flanking policies.
Take care of any "environmental dumping" of third country exporters who would not agree to substantially reduce their CO2 emissions.
Without an inclusion mechanism carbon border, a premium would be unacceptable given after Copenhagen, who refused to play the game
That would be bad for the climate - and bad for the European economy.
The European economic strategy is investment in innovative industries that benefit our growth and our environment.
But this investment makes sense only if it is inseparable from a coordination of EU policies: the second part of our strategy.
One of the failures of the Lisbon strategy is to have overlooked this point.
She insisted on policy coordination within the states, but it did not require quite the political community to contribute to European economic strategy.
And why the "roundtables" sector which I have already talked about the automotive, electronics or chemistry, they have not really resulted in concrete actions?
Because it lacks a capacity for coordination and monitoring in Brussels.
The new Commission will address it. This coordination obviously concerns, in particular, the trade policy of the Union.
Europe's prosperity was built on a strong internal market, but also the opening of international markets. This is truer than ever. The temptation of protectionism would be suicidal.
But the opening of markets must be mutual!
When some of the major EU partners to introduce new measures of discrimination in the public markets, when they continue to massively violate the rules of protection of intellectual property, we can not go unchecked!
Commercial competence States has long been transferred to the European Union: it is the duty of the Union of these States to ensure a truly reciprocal opening. I welcome President Barroso when he said that in this area "we can not be naive."
Our coordination must be our strength in external relations.
It must also ensure within the Union. All EU policies that structure the market require the union of our will to be redirected towards growth.
Because growth must be our golden rule. Regulation, training, competition, financing: it whenever growth that must guide us.
Any new regulatory proposal must demonstrate its contribution to growth. We must avoid our business expenses unjustified! Many sectors that require a regulatory moratorium of two years. SMEs are by far the largest employer in Europe: do not suffocate!
Let us make the Services Directive an instrument of growth, without reopening a debate anxiety, which made such havoc in our states, and all but meaningless, on the social sectors of member states.
Adapt the European Social Fund, in organizing training policies, the profound changes that accompany the crisis.
Rethink our competition policy in the light of the current situation.
Be aware, finally, access to our corporate finance.
The subject is more topical than ever. The latest figures show that in July, the development of private sector credit in the euro area recorded growth rates among the lowest in its history.
I hope that the Commission consider, in conjunction with central banks of EU countries, ways to encourage the distribution of credits to the economy and ensure that financial institutions do not unnecessarily hoard deposits.
Moreover, the systemic risk that threatens the financial system is far from gone.
The errors reported by all six months ago are back - including the granting of reckless extravagant salaries that encourage excessive risk taking. Efforts to control and supervision are underway at the European level and must be completed and extended to all partners in the G20.
Recent statements by Lord Turner strike me as a source of hope.
And finally, do not afraid to use community resources to support growth.
The European Investment Bank has done much, especially for SMEs and the automobile sector mobilize it even more!
The EU budget should also play its role in this investment for growth. This is an opportunity for us all to reflect on the structure of budget and management practices of the Commission. It should in particular the European research programs are priorities better defined and less numerous, and it simplifies procedures.
Better spend "this must be our watchword. This must be our ambition when negotiating new financial perspectives.
The European economic strategy, the deployment of our existing strengths in order to regain growth.
But to be sure of our forces, we must be sure of our public finances. This is the third component of our strategy.
The situation is serious.
The public debt of the ten richest countries in the G20 was increased from 78% of GDP in 2008 to almost 100% this year.
Part of this debt will be resolved mechanically with the economic recovery. But it is essential that the authorities engage with EU Member States a concerted program to restore their finances. If we ask countries to monitor programs that are not realistic, we might be facing a debt spiral that soon we will remove any control over our destiny.
In France, the government concedes nothing on this point.
While the deficit has been occasionally dug by the capital expenditure recovery plan: already 18.2 billion euros into the economy. But the early results are there: the activity increased in the second quarter after a year of decline.
The battle for control of public finances has never been abandoned. The height of our structural deficits threaten the sustainability of our economy.
To reduce them, we will not increase our taxes, already among the largest in Europe, but we'll be continuous effort to reduce state spending.
For 2010, government expenditure remained at zero volume and the rule of non-replacement of staff on two retiring will be respected.
With President Sarkozy, we decided to promote investments that demonstrate their future performance and take seriously the state expenditure.
The national ownership of public expenditure, it must be part of a European movement.
Take care of any possible tension.
We all have the same goal: restoring the balance of our public finances. It would be dangerous if we miss by not coordinating our actions are not enough.
If France and Germany are sometimes expressed differently in this respect, there is no ideological difference between our two countries, nor the importance of controlling deficits, nor the need, often referred to by Merkel to invest still more in sectors that will grow tomorrow.
We need to discuss within the euro area but also outside the eurozone. We would put at risk the coherence of our market if we were diverging paths of our respective public finances.
The European economic strategy, is the concerted fight against any drift uncontrolled public debt.
Ladies and Gentlemen,
The big lesson I learned from my experience of the French Presidency in 2008 is that the EU has much more resources than previously believed.
What it lacks is too often the political will to act. Our president has, I think the challenge of giving.
In the present crisis is in economics and finance that will is essential.
All instruments for growth are there in Europe. Let us not be afraid to use it decisively and collectively.
In 2008, Europe was saved the financial system, which was on the verge of collapse. She returned to the control. Do not forget this start, and this power that we discovered in disarray!
We still need to overcome the crisis and to ensure tomorrow, our jobs, our growth and radiation together.