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Amb. Richardson's (2001-05) speech on the State of the EU and its implications for the US

Sumario: April 3, 2002: Speech by Amb. John B. Richardson, Head of the Delegation of the European Commission to the United Nations (2001-05), on "The State of the European Union and its Implications for the United States" at the EU Center of the University of Illinois.

Ladies and gentlemen,

I've been asked to present today the "State of the European Union" - a tall order when one considers the complexity of the EU and its institutions, the diversity of issues and policies it deals with, its evolving character and growing membership and the general state of the world - a world in flux, filled with trouble spots, a far cry from the certainties of our former bipolar world. But it is worth the effort. So what is the current state of the Union?

To some extent this depends on your point of view.

So let us look first at the Brussels view, the insider's view, the view from the press room back home at headquarters. It's probably another damp and miserable day in the institutional seat of Europe, and the State of the Union seems as gloomy as the weather.

Recent headlines illustrate this view:

So, as you might gather, for some it looks very much like gloom and doom from HQ.

What does it look like then from my vantage point in New York, how should you regard it from the outside?

First, what does it look like historically? What has happened in Europe in the last half century?

In the aftermath of the Second World War, European politicians were sobered by the experience of war and conscious that the unbridled pursuit of individual national interests had contributed largely to it. They were also conscious of how little each of them individually were masters of their destiny, how little individual sovereignty was worth if it could not deliver practical results. A new world required a new solution. And the idea of sharing sovereignty within what is now the European Union was born. To my mind it is by far the greatest experiment in human governance since the American constitution, and it has been a rousing success.

And the experiment is a continually growing, dynamic one, with membership of the Union increasing from the original 6 in 1951 in the European Coal and Steel Community, to 9, 10, 12 and to the current EU15. And soon, as early as 2004, up to 10 more countries, mainly former communist states in Central and Eastern Europe will join, with Romania, Bulgaria and, yes, Turkey waiting in the wings, and with other Balkan states working towards the same goal.

So we are talking about the expansion of our zone of peace and prosperity to include some 500 million people, a shining example of conflict resolution.

John Hume, Nobel Peace Prize winner and one of the architects of the Northern Ireland Peace Process, has called the European Union the finest example of conflict resolution in the history of the world, saying that it is the duty of everyone in areas of conflict to study how it was achieved. People whom twice fought each other in wars last century are now united and working in a single economic market and on a single political project.

"Central to European peace is respect for diversity and working together in common economic interests, thereby building the trust and creating a process which brings about the political resolution," he said.

It is precisely because the Czech Republic, Slovakia and Hungary are on the road to EU membership that the Benes Decrees belong in the dustbin of history and that is where they will land.

And it is perfectly normal for Poland - or any other candidate country for that matter - to negotiate toughly its terms of accession; we want wholehearted acceptance of membership by the Polish people, not just by the citizens of our current Member States.

And what about all the contradictory statements and shifting alliances on the future of the EU, especially as its Convention gets underway?

This is not a sign of disarray and doom, but rather a great and healthy debate, not unlike that which gave rise to the Federalist Papers and then over a very hot summer in Philadelphia a while back (1787). But unlike the Philadelphia experience, the EU's Convention will not be behind closed doors at all, but in full view and with the participation of civil society.

Interestingly, each successive enlargement of the EU has gone hand in glove with eventual institutional change: Now, with the biggest ever increase in EU membership nearing, it is both logical and necessary to have the biggest and most vigorous debate on these institutional issues in our history - surely the mark of a vibrant, democratic society.

That is why the European Convention has now got underway. It is chaired by Valery Giscard d'Estaing, former president of France, and brings together a total of 105 eminent personalities, representing the governments and parliaments of all member States and candidate countries, the European parliament, and the Commission.

Alongside it a Forum has also been established, a structured network of organizations representing civil society - social partners, business, NGOs, academia, etc. It has two purposes. It allows civil society to follow the proceedings of the Convention, but also to contribute to its deliberations. I recommend that you follow this process through the Convention's website, accessible through the overall Europa website.

So the great debate on a constitution for Europe has begun. What are the issues?

There is already a broad measure of agreement on the thesis that Europe's design must reflect Europe's values. Some of these will be familiar to you. We, too, want a society based solidly on the rule of law. We, too, want prosperity generated through the operation of competition within a market economy. We, too, want a vibrant democracy, in which the will of the people is supreme.


But we do not want to make Europe into a melting pot, designed to forge a single national identity within a European superstate. In that sense there will never be a "United States of Europe", on the American model.

Our Europe will respect and build on the strong national identities, which characterize our member States. It will be at one and the same time a union of peoples and a union of states, dedicated to the maintenance of its cultural diversity as it develops its capacity for common action. And its legitimacy will be derived both from the will of its peoples and from the sovereignty of its member States.

It will also differ from the American model in anchoring the principle of solidarity among all its citizens alongside the principle of individual liberty. Our market economy will remain a social market economy. And it will reaffirm the overarching goal of striving for sustainable economic growth, of good stewardship of the natural resources, which we will bequeath to future generations.

There is also broad agreement that all three pillars of the Union, as defined at Maastricht , must change. The first pillar, the classical Community approach to economic integration, will be rethought, to ensure that only those subjects will be dealt with at European level, which really cannot be dealt with nationally.

There is also broad agreement that the third pillar, dealing with Justice and Home Affairs, needs to be strengthened in the aftermath of 9/11. We may well see the creation of a European force of border police, of coastguards, and Europol will surely come to look much more like your FBI.

The debate is likely to rage fiercest with respect to the second pillar, in the field of foreign and security policy. Many of our citizens, and not just the political elites, would like to see the EU play a more assertive role on the world stage, and are dissatisfied with the operation of current arrangements in the area of our Common Foreign and Security Policy. The problem here is that our member States are reluctant to see their own separate roles in the world diminish without being sure that the EU will indeed be an effective actor. And yet the Commission is still struggling to regain its reputation after the debacle of the last year of the Santer Commission, and the institution of the rotating Presidency is now coming under heavy fire. The intellectual battle is joined, but the outcome is difficult to predict.

What is certain is that it will be an exciting year in Europe.

It certainly started that way, with the introduction of Euro notes and coins.

So what about the euro? Is it destined to be a weak currency? Here, too, some sense of perspective is called for.

On this side of the Atlantic, the many prophets of doom were simply wrong. They said the Europeans would never be able to agree to merge their national currencies. At Maastricht, we did agree.

They said that only a handful of member States would be able to summon the political will to adopt policies of rigorous fiscal restraint. Twelve member States have done so to date.

They said that the technical complexity of changing billions of notes and coins would cause havoc, lead to a wave of counterfeiting and robberies of shipments. None of this happened.

We have succeeded in bringing about a monetary union unprecedented in world history in its size, scope and complexity.

The meticulous preparations made over the last three years have paid off. The first three months of the Euro notes and coins have been a great success and a huge boost to people's sense of European identity. European citizens have accepted their new notes and coins quickly, and with enthusiasm. I would go further and say that they have been genuinely happy to have the Euro in their pockets.

The Euro is now the main trading cash currency for more than 300 million people. The changeover is complete. This is a success story for everybody: the public authorities, the banking sector, and the retail sector, for all European citizens, and even for the Commission. The changeover has proved that European people can indeed work together, with enthusiasm and firm resolve, towards a common goal and in support of an ambitious common project.

The Euro is not only the most important currency in Europe but, in future, it will play an increasingly important role as an international currency - an attractive alternative to the dollar. Indeed, the Euro-zone is already generating an income that represents two thirds of the income generated by the United States.

The Euro is being used very extensively as a borrowing currency in corporate bond markets, and it will eventually play an important role in financial portfolios worldwide allowing international investors broader opportunities to diversify their portfolios and to control their risks.

The Euro is also likely to be used extensively in trade outside the Euro area, and as a major reserve currency. Because of this it will help stabilize the international economic environment. It is solidly based on the stability-oriented policies of the European Central Bank and on sound fiscal policies in the Member States - which are permanently committed to sustained monetary and fiscal stability.

This stability, and the elimination of currency barriers within the single European market, will benefit the world economy by providing a sound foundation for a European contribution to renewed economic growth. And it will benefit both EU and US firms as they do business in Europe and EU and US citizens as they travel in Europe. So the Euro will be an increasingly important element in the interdependent global economy.

And the euro/$ exchange rate? Well, we believe in markets, just as you do - part of the bedrock of common values we share - so we are unworried by the decline in the euro's value vis-à-vis the dollar. Let the market decide. And it has delivered big swings in exchange rates in the past.

In 1985, the ecu, the euro's predecessor, was worth $0.76, so we've still got a way to go for truly record lows. Further, as recently as 1995, the ecu was worth $1.31, much higher than the euro's launch value. The moral of the story: currencies go up and down, including the dollar, and largely as the result of economic forces. What counts for consumers in Euroland is to know that their currency is stable in terms of its buying power, that inflation is low. And indeed it is. Nevertheless, from a NY perch, Europe does appear to be on the move and my contacts in the business world of New York see this clearly.

Moving now from New York, the great American business center, to New York, the seat of the UN on the East River, the EU is seen as the foremost proponent of the multilateral system in world affairs; our view is that the same analysis, which has led us to embrace shared sovereignty in Europe, applies mutatis mutandis to the wider world, albeit across a narrower range of policy fields. The argument goes as follows.

First we must recognize that the growth of international trade in goods and services has made almost all national economies more sensitive to economic events in other countries, and to the movements of world markets.

Second, the remarkable growth in Foreign Direct Investment, which has taken place over the last two decades or so, has led to increasingly large parts of our economies being owned by and subject to control by increasingly large multinational companies. This makes it more and more difficult for governments to attempt to control the investment decisions of companies. Indeed in Europe this type of active industrial policy has almost disappeared, to be replaced by policies aimed at influencing the operation of the markets, which are assumed to be the main determinants of company decisions.

Third, the explosive growth in international telecommunications of the last decade, driven by an enormous, technology-induced reduction in the costs of transmissions, has not only allowed a corresponding growth of trade in all those services, particularly business services, which can be transmitted via a telephone line. It has also given us a new phenomenon, the Internet, which is in the process of changing forever the way our societies and the global community operate. I will come back to that point in a minute.

What I want to emphasize here is that this increasing economic interdependence means that in most countries governments are largely powerless to impose their will on their economies if this implies acting contrary to international markets. The history of the last decade is littered with the failed attempts of governments who have tried.

Growing interdependence has another consequence. It means that the actions of those governments, whose economies have the strongest links to other economies, will impact on the well being of the citizens of others. This is also true outside of the area of strict economic interdependence in the field of the global environment.

Here the evidence is now incontrovertible: greenhouse gas emissions in Europe or in North America can contribute to the magnitude of floods in Bangladesh, to the incidence of hurricanes in the Caribbean, or to the recent collapse of part of the Antarctic ice-shelf the size of Rhode Island. In the Twenty First century economic acts have become in practice instruments of foreign policy.

In the face of the increasing inability of nations to act effectively in pursuit of their interests on an independent basis, there are three possible alternative reactions: In the last fifty years, the global community has chosen to pursue the multilateral route and reject the others. More and more areas are now subject to multilateral rules, from trade and finance through telecommunications and global environmental issues to non-proliferation and human rights. All are areas in which the ability of a single state to achieve its aims on its own is severely limited. Multilateral rules also represent the only feasible means for small countries to impose restraints on the world's large economies.


So I think it is probably correct that Europeans are now the foremost proponents of multilateral governance. After all, we have seen that sharing sovereignty is both effective, and politically acceptable.

It is probably also true that the analysis I have presented is least palatable to large, powerful nations. Some countries, such as India or China, continue to have a relatively small proportion of their economies involved in international trade, although this is changing. They can still try to insulate their economies from the influence of world markets, sometimes successfully. More importantly, the size and power of some countries do give them a greater ability to realize their aims. This is surely true of the United States, but also of China and of Russia, and indeed more generally of any large neighbor of a much smaller country.

For some countries more than others there is also, perhaps, a cultural element: it may be, for example, that the idea of being able to act independently is an important element of American identity, associated with the concept of liberty, so dear to our American friends. Certainly, within the European Union it is my own country, the United Kingdom, which has the greatest psychological difficulty in accepting that its political future is as part of a larger entity, including nationalities in opposition to which it has spent hundreds of years cultivating a separate and distinct identity.


Nevertheless, I think you will agree that the trend of the last fifty years has been towards a generalization of the use of multilateral agreements across an expanding range of subjects of interest to the global community.

And in all these emerging areas the process of European integration provides a magnificent laboratory, within which new ideas and new answers can be tried out, allowing the more successful ones to contribute to the future peace and prosperity of the global community.

Not only do we believe in the UN system, we put our money where our mouth is:

While the EU (28%) and US (28.6%) have nearly the same share of world GNP (1999 data), the EU far exceeds its economic weight in financing the UN: So, from UN headquarters the EU is seen as important. In addition it has been remarkably cohesive within the UN. To wit: on average, in 95% of UN General Assembly resolutions, there is a common EU position, a testament to EU coordination and to the much maligned CFSP actually working rather well on the ground.

Also in the UN context, and in the face of mounting evidence of global climate change, the EU has led on the implementation of the Kyoto Protocol, even without the US on board.

Now the US likes to see itself as a benign power, that great Wilsonian notion - indeed, given its overwhelming power in the military field, we can certainly describe it as a benign hegemon, and we in Europe see it as having used its power and its economic weight very largely for good over the last half-century. And we are grateful for that.

But climate change is an area where perhaps the US most risks this benign reputation.

The world is seriously worried about global climate change, and has reacted to it by deciding to reduce - as a first step - the emissions of carbon dioxide by the rich countries. Let us remember that the US was part of that consensus in Kyoto; it, too, committed itself to stabilizing emissions at the level of 1990.

Your President has now introduced a plan to reduce greenhouse gas emissions relative to GDP. But US GDP is now rising again, and hopefully sustained growth will continue into the future. The likelihood seems to be that by 2012 (10 years) US emissions will be one third above those of 1990.

This means two things: There is at present much talk in the US of multilateralism "à la carte": acting unilaterally when it can; rounding up a coalition of allies when it is convenient or useful.

For the world's leading power this a temptation - to have its cake and eat it too. But there is a price to be paid. Every time the US ignores its allies it will increase their reluctance to go along with the next US-led coalition. . We often say there is no such thing as a free lunch; well maybe there is sometimes…but not a la carte.

So, seen from this side of the Atlantic, on the East River, the EU's commitment to multilateralism gives the US a choice: either it stays the course of the last 50 years, and the bedrock of common values is maintained; or, it succumbs to the unilateralist urge to go it alone. We in Europe would greatly regret that.

So as you watch Europe continue to evolve, I think it is worth asking not just what it tells you about the state of our Union, but also what questions it throws up for the state of yours.



  • Ref: SP02-209EN
  • Fuente UE: Comisión Europea
  • Foro NU: 
  • Fecha: 3/4/2002


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