Tal
Bologna Universitet, Italien 26 mars 2009
Carl Bildt, Utrikesminister

Europe in times of crisis

Check against delivery

Ladies and gentlemen,

It is a great honour for me to stand before you in this magnificent University of great thinkers.

Throughout the centuries, Bologna University has not only contributed to the expansion of invaluable knowledge in a wide variety of fields, it has also played a central role in forming Europe as we know it today.

It is no coincidence that the process of creating a single European academic area was named after this city, and the Erasmus programme after one of your most distinguished scholars.

Scientific progress has always been strongly connected with development. In the age of globalisation this is more true than ever. Therefore, the Bologna process and the Erasmus programme constitute essential building blocks in the creation of a Union able to compete globally in a future where knowledge and 'know-how' will become even more essential conditions for economic and political success.

The list of prominent figures who have studied here in Bologna, such as Erasmus, Dante, Petrarch and Copernicus, have all added, in their own ways, to a tradition of classic thought which centuries later culminated in the scientific revolution and the Enlightment, the very core of European political and cultural identity.

Among these famous and immortal names, there was also an unknown canon named Nicolaus from the Swedish town of Skara, who according to the annals, in 1285 registered as a student at this University.

Nicolaus has no place in the history books, his name is long since forgotten.

But I think he deserves better. It was people like him that brought new ideas from the continent back to my country, thereby connecting splendid cities such as Bologna, Florence and Paris with the then relatively backward periphery of northern Europe.

It is partially thanks to Nicolaus and the men and women that came after him that I can stand here today as a representative of a country which has chosen to be a core member of the European Union.

Ladies and gentlemen,

On 29 October 1929 the New York Stock Exchange crashed and the Great Depression took a firm grip on the global economy.

Between 1927 and 1933 international lending dropped by over 90%.

In the United States, industrial production fell by 30% between 1929 and 1931, and car production was halved. Developments in other industrial countries were similar.

As a consequence, unemployment rose to an unprecedented level and during the years 1932 to 1933 amounted to 23% in the United Kingdom, 24% in Sweden, 27% in the United States and almost 45% in Germany.

Loaded with bad debts, banks refused new housing loans. Nearly half of all US home mortgages were in default and a thousand properties a day were being foreclosed.

These were the years of soup kitchens and social distress. These also became years of political turmoil eventually leading to the worst catastrophe in human history - the Second World War.

The Great Depression demonstrated the close links between economics and politics, how economic distress can lead to dangerous politics, but also how flawed political decisions often lead to poor and sometimes catastrophic economic consequences.

During these years, mass unemployment created fertile soil for extremist ideas both to the right and to the left. Hitler may have been the child of the Versailles Peace Treaty, but his ideas of hatred and destruction were nourished by the profound social and political effects of the Depression.

Unfortunately, political decisions profoundly contributed to the economic and political abyss. What we saw was broadly speaking a policy of nationalism and protectionism - a disastrous course of de-globalisation.

States erected high barriers to protect their national markets and currencies. The world system of multilateral trade was dismantled and world trade fell by 60% in the four years between 1929 and 1932.

The years of catastrophe between 1914 and 1945 are a legacy that has shaped Europe. Fortunately we also have another inheritance, that of integration and peace, which has been the dominant trait from 1945 until today.

In October 2008 we once again experienced a crash in the financial sector, and 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 similar tendencies.

Protectionism, so far in a more creeping form, is once again constituting a threat to the world trade system.

The link between economic development and security policy challenges is growing stronger.

It is an alarming situation indeed, and the economic crisis just adds to other major challenges that dominate the world of today such as global warming, international terrorism, political conflicts and the danger of proliferation.

The years to come will therefore certainly be years of significant risks - risks that are greater in scale and scope than for a very long time.

This being so, let us not repeat the mistakes of the past, but instead make sure that the recovery of Europe is firmly anchored in the legacy of integration and peace.

First, what we need, in order to turn the turmoil of today into a hopeful future, is more cooperation, not less.

Since the collapse of the Soviet empire, many borders have been opened. Let us not now raise new borders and walls. As stated in the World Bank development report from 2009, the best way to promote economic development and a stable political environment is by promoting institutions that unify, infrastructure that connects, and interventions that target.

Second, we must strengthen our efforts to open up the international economy.

Putting obstacles in the way of globalisation - which over the past few decades has contributed at an unparalleled pace to greater prosperity and freedom worldwide - would be a dangerous and destructive course of action. Instead we should lay the foundation for a globalisation that is economically, socially, politically and environmentally sustainable.

Third, equally important is to ensure effective institutions backed by a firm political will to promote peace, stability and democracy worldwide.

Democracy and open societies are not only the best guarantee for peace within and between nations, but also the only political system able to provide for sustainable economic dynamism, as well as to accommodate social tensions grounded in economic realities.

By pursuing this path Europe will continue to serve the wider cause of global recovery and further development.

This is a duty which we must pursue without hesitation; here lies one of our most urgent tasks.


*********

Let me underline: our ability to overcome the current crisis is now far better than in the past; the global institutional setting is much more robust, our understanding of economics more solid, democracy has shown its supremacy, and is not seriously threatened by either communism or fascism.

And in Europe we have managed to create a Union which has contributed to consolidating peace among states that throughout history saw war and destructive competition as the normal state of affairs.

It is a Union that has brought prosperity to a growing number of people. A continent previously marred by structural deficiencies and inefficient economies has been turned into the world's largest integrated economy, accounting for some 30 per cent of global production and constituting the largest trading partner of more than 130 countries.

It is also a Union which has become an increasingly important actor in global affairs and which has helped to create peace and stability, not only in its own neighbourhood, but also in more remote places around the world.

The European Union is our best opportunity to overcome the crisis of today - to strengthen cooperation, openness and peace when needed most.

But progress and recovery will not come automatically. The EU provides us with a unique and wide set of instruments to meet the challenges before us. But it is up to us to use them, and use them wisely.

As Schuman once said: Nothing can be achieved without individuals, nothing can last without institutions.

Now it is time for political leadership and to strengthen those institutions which have so far served us well, but which must be further developed to meet the requirements of tomorrow.

Let me just mention a few areas where wise decisions are urgently needed.

1. We must continue to insist on the importance of free trade, greater openness and more economic cooperation. It remains vitally important to work for a conclusion of the Doha negotiations as well as to achieve increased efficiency in the internal market with its four freedoms. Our goal should be to make the European Union the most open economy in the world.

Protectionism must be fought down!

2. Enlargement is still the European Union's primary instrument for creating security, democracy and prosperity in Europe. We must therefore seek to push for progress in the ongoing accession negotiations with Croatia and Turkey and promote genuine progress in the closer relationship of the Western Balkans with the EU.

In this context let me especially underline the strategic importance of Turkey becoming a member of the EU. Closing the door to Europe for Turkey would be a mistake of historic proportions. We all have reason to intensify our efforts to explain the significance of this step.

3. It is of the utmost importance that the EU's neighbours to the east and south develop into stable and open democracies with functioning markets and legal systems.

The European Union's strategic interests, however, must go further than this, for those neighbours that have European aspirations. These countries should be invited to be part of the internal market and its four freedoms.

They must be given the opportunity to adapt to EU legislation in all the important sectors of society so as to become part of a larger and ever more integrated European Union.

Last year, the process previously known as the Barcelona process was further developed into the Union for the Mediterranean, which we hope will create better conditions for cooperation between the European Union and the other members of the Mediterranean Union.

This year decisions will be taken on the Eastern Partnership, which aims to promote sustainable European integration for Ukraine, Moldova, Belarus, Georgia, Armenia and Azerbaijan.

Considering the depth of the economic crisis in many of our neighbouring countries, not least in the east, the actions of the European Union in this field will be vital to prevent further downturns which eventually could lead to significant political instability and geostrategic turmoil.

4. The climate issue must not be sidelined by the economic crisis. Intensive preparations are required ahead of the UN Climate Conference in Copenhagen. We must work for the conference in December to result in a comprehensive global agreement with forceful measures to curb climate change and contribute to stronger and broader international cooperation.

The success of the European Union in agreeing on an ambitious climate package with commitments to reduce greenhouse gas emissions by up to 30 per cent by 2020, assuming an international agreement, lays a good foundation for continued international climate efforts. We must convince other industrialised countries to make comparable commitments, and the rapidly growing economies to take action, to enable the global trend to be reversed.

A successful conclusion of the Copenhagen conference would constitute a cornerstone in the creation of sustainable globalisation, and would be an important step towards a green recovery from the current crisis.

5. In times of great challenges we must ensure an effective global policy of peace.

We see growing tensions across the entire area from Palestine to Punjab.

Last year's Annapolis process did not lead to a peace agreement. Instead the ceasefire in Gaza was broken and a war began that has further complicated the already difficult situation in the region.

The isolation of Gaza is neither defensible from a humanitarian perspective nor acceptable in political terms. A stable ceasefire and the reconstruction of Gaza require open borders, effective measures against arms smuggling and an end to the rocket attacks against Israel. In collaboration with the United States in particular, the European Union must step up its initiatives for a comprehensive peace in the region. Israel's occupation and settlement policy must cease, a contiguous and viable Palestinian state must be created, terrorism must stop and Israel's right to exist within secure and recognised borders must be respected.

The parties must live up to the commitments they have made. Only in this way can sustainable peace and security be established in the region.

The Arab Peace Initiative is a stable basis for negotiations to lead not only to a Palestinian state but also to peace between Israel and the entire Arab world. This would lay a new foundation for development in the region as a whole, as well as for combating terrorism and reducing cultural and political tensions in other parts of the world. All forms of terrorism, regardless of their origin, must be met through international cooperation, based on respect for international law and human rights. The European Union has an important role to play in this cooperation.

The disagreement between Iran and the rest of the world regarding the country's nuclear programme must find a peaceful resolution. I strongly welcome the signals from the new US administration that they are willing to negotiate, and that Iran should respond with tangible steps designed to foster trust in the country's intentions. A solution to the nuclear issue would - despite any other differences of opinion - open the door to improved cooperation between Iran and Europe.

The risk of further proliferation of weapons of mass destruction remains one of the most serious security threats facing the world. International efforts must therefore be stepped up, with the aim of maintaining and strengthening the non-proliferation regime.

To reduce the risk of the peaceful use of nuclear power leading to the proliferation of sensitive technologies, the initiative to establish internationally monitored facilities for critical parts of the nuclear fuel cycle should be pursued. At the same time, Sweden emphasises the responsibility incumbent on the nuclear powers of today to reduce their existing arsenals. A new nuclear disarmament treaty between the United States and Russia and US ratification of the CTBT treaty would create considerably better conditions to prevent the proliferation of nuclear weapons in the future.

Developments in neighbouring Afghanistan are deeply worrying. Despite progress following the fall of the Taliban regime, the security situation in parts of the country is very serious. There are major shortcomings in governance and the reconstruction of this ravaged country is progressing slowly. Unfortunately, the consequences of this situation are both serious from a humanitarian point of view and dangerous from a security perspective. Terrorism and drug production with roots in Afghanistan threaten people far beyond the country's own borders. This is why it is important to pave the way for the European Union to take greater responsibility for the wider process of state-building in the country.

The list of threats to peace and security could unfortunately be made much longer by adding countries such as the Democratic Republic of the Congo, Somalia, Sri Lanka and Sudan, just to mention a few.

When Sweden assumes the Presidency of the European Union in the second half of this year, we will bear a great responsibility to meet these challenges in front of us.

It is a responsibility we will shoulder in the firm conviction that the European Union also provides the best platform for Sweden's foreign policy action, and that more cooperation, open markets, and a strong policy of peace must constitute guiding principles of the Union also and not least through these times of crisis.

When Swedish Nicolaus went to Bologna, more than 700 years ago, he took part in a European community held together by ideas and institutions of faith and Church. Those were golden years in the history of Europe. The seeds of the scientific revolution were sown at that time, as was the idea of the nation state. These were also the years of the first great voyages of discovery.

At that time, there was a parallel process of internal European consolidation and outreach towards the rest of the world, two pillars upon which the success of Europe still rest.

Thank you once again for letting me speak in this University, which has played such a prominent role in the history of Europe.