Tal
Growth and Jobs - the Challenges for Europe. Öppet seminarium med Storbritanniens EU-minister Caroline Flint 28 april 2009
Cecilia Malmström, EU-minister

Anförande på engelska av Cecilia Malmström: Challenges for the Swedish Presidency

Ladies and gentlemen,

I am very glad to be here with Caroline to talk at this seminar on Growth and Jobs. I can more or less assure you that the issue - Growth and Jobs - will continue to be at the core of the EU agenda for years. The reason is obvious, within the framework of Growth and jobs we have some of the fundamentals for a well functioning society. And this is why we also will give this issue high priority during the Swedish presidency.

Ladies and gentlemen,

In October 2008 the world once again experienced a crash in the financial sector. The real economy is again taking a merciless beating from the global financial crisis, causing great difficulties to a growing number of people worldwide. Differences between the 1930s and today's crisis are many and obvious. But unfortunately we can also discern a lot of similarities.

The global financial crises dramatically affected the real economy. And Europe is no exception. Today we are in the midst of an economic and financial crisis, an economic recession unprecedented in modern times - the consequences of which we still cannot fully foresee. Far too frequently we receive reports of redundancy notices, job cuts and company closures. Unemployment rates are rising by the day, with all that this means in terms of economic and social suffering and problems for society and individuals.

Unfortunately the forecasts for economic growth in the near future are bleak. Many countries, not the least in the EU, are implementing extensive stimulus programmes to diminish this negative trend. In EU we have to collectively and in a coordinated manner tackle this challenge. The EU provides us with the tools we need to take action effectively and rationally. The measures already taken to deal with the economic crisis have shown this, particularly the agreement at the European Council in December 2008 to launch the European Economic Recovery Plan. A plan that sets out, among many things, an immediate budgetary impulse amounting to 200 billion euro or 1.5 per cent of GDP to arrest the pace of the downturn and create conditions for an upturn.

At the European Council in March this year, good progress was made in implementing this plan. A fiscal stimulus of more than 400 billion euro was reported by the European Commission. Huge amounts of money, which hopefully will generate new investments, boost demand and create jobs.

But along with the requisite fiscal stimulus packages, we will have a major impact on public finances. Most Member States will experience a steep decline in their public finances. Many will have a growing budget deficit and thus a rising public debt ratio.

In such a situation, it is essential to safeguard the long-term sustainability of public finances. One important instrument - and here I speak from our experience in Sweden - is good fiscal rules that are observed even when they are under pressure. This applies to both the common rules we have in the EU and to existing national rules.

In crises there is always a tendency to call for protectionism. But protectionism must be fought down! In EU we have an instrument for that as well - State Aid rules which prevent a subsidy race between Member States, which could result in jobs lost which would never return. Protectionism is never part of the solution, we will all loose if we try to isolate our economies.

Ladies and gentlemen,

We knew all from the beginning that we would have a difficult presidency. With a new Parliament and a new commission our traditional partners will not be fully operational. We have a uncertain situation concerning what treaty will be in force the coming year. The big climate conference in Copenhaguen in December will be an enormous challenge. The economic crises will overshadow all other political issues. And in addition, just when you thought it could not get any worse, the Czech government fell in a motion of no-confidence in Prague... This government will leave office in a few days to will be replaced by a technocrat government. The Swedish Presidency will thus face double challenges, an economic and a political one.

We will be occupied with the acute economic problem and the recovery plan. But in these trying times it is even more important to continue with the structural reforms. The European strategy for growth and jobs, the Lisbon strategy, has been and should continue to be a key instrument for Europe to respond to the economic downturn.

The strategy is about creating conditions for sustainable growth and prosperity for the citizens of Europe. It does so by promoting open and dynamic markets, investing in human capital, promoting a dynamic business climate and increasing labour supply but also to fight climate change. We need to do this together; the successes and shortcomings of economic and structural reforms in one member state are no longer only an issue of national concern.

In many respects the strategy has been successful, reflecting the challenges that Europe faced in 2000. Major reforms and decisions have been taken, both on EU and national level to improve the internal market, to increase competition and to modernise the labour markets in the Member States. The strategy has also provided a forum for EU to discuss and formulate common challenges and policy approaches, as well as to exchange experiences.

But I would not be honest if I didn't admit that the results have been mixed and left room for disappointments. Especially during the first years of the strategy, the EU and the Member States showed limited progress due to lack of political commitments and slow implementation in the national policy. The results are uneven and fragmented between policy areas and between Member States. In the complexity of the strategy, it is easy to get lost among sub-targets and indicators. Goals and means often get mixed up.

This breaking point of the strategy will therefore offer an important opportunity to invigorate the strategy, to rethink aims and priorities, develop the strong parts of the strategy and improve the weak parts based on the experiences from the last 10 years.

Ladies and Gentlemen,

To my mind, Europe needs a more focused strategy, a strategy that consists of coherent reforms and measures paving the way for smart growth, combining long term growth and full employment with an eco-efficient economy. It needs a strategy which increases the ability of Europe to anticipate, embrace and adapt to the challenges ahead. I would like to highlight three major ways this could be done:

- reaping the benefit from globalisation, expanding new markets and competitors. Europe must stay at the cutting edge of global competition, research and innovation.

- Europe must transform to an eco-efficient economy. Economic development must not lead to climate deterioration. We can and must do both.

- and finally, increasing labour supply and hours worked in order to safeguard our social model meanwhile ensuring sound and sustainable public finances.

How do we do this?

Well, we need to create and maintain internal and external openness. We need to continue developing the internal market to ensure free movement of labour, goods, services and capital. The single market is without doubt one of the greatest achievements of the European Union. But we must also increase our access to third countries markets and theirs to ours - we must suppress the belief that we can solve our problems by raising barriers towards the outside world.

Furthermore we need to make crucial reforms to the labour market and the welfare systems to strengthen the incentives to work and to provide people with the opportunities and skills to adapt to changes and facilitate their return to paid work.

We need to make Europe a global leader in developing a climate and environmentally sustainable society. A progressive and coherent policy within the EU to safeguard sustainable environmental development, a sustainable energy supply and tackle climate change is crucial for long term growth and quality of life in the Member States.

But this will also set the standards globally. Reducing green house gas emissions and adaptation to climate change requires action from by all countries. It calls for a strong commitment from the EU to promote research and development of new energy sources and new technology. We also need to facilitate transition to a more energy efficient society.

And finally, we need investment in human capital. An ageing population as well as globalisation requires Europe to make full use of the labour force potential as well as increase productivity growth through investment in knowledge. High standards in education and research as well as labour immigration will be necessary if Europe is to cope with its demographic challenges.

Finally Ladies and Gentlemen,

During the Swedish Presidency we will, among many other things, focus on a renewed strategy for Growth and Jobs.
A high level conference is planned to take place in Stockholm at the end of October. The objective is to discuss the importance of increased access to employment and creation of more inclusive labour market.

Another conference, which will be held in November, in Gothenburg on the theme of involving regions and municipalities in the Lisbon Strategy objectives.

Furthermore, I also would like to take the opportunity to promote the conference "What does gender equally mean for economic growth?", which will take place in October here in Stockholm.

Last but not least, we have scheduled for Council conclusions on a renewed strategy for Growth and Jobs to be adopted at the European Council in December 2009. These conclusions will be followed up by the Swedish successor - the Spanish Presidency - with the intention of adopting a new strategy at the spring summit in March 2010.

All this together - a common coordinated approach, a stronger Lisbon Strategy, continued national efforts will hopefully arm Europe for the future and make us come out of this crisis stronger and more competitive. We are looking forward to contribute to this during our presidency in close cooperation with Caroline, the UK and other member states.

Thank you!