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Speech by Dr. Wolf­gang Schäu­ble, Ger­man Fed­er­al Min­is­ter of Fi­nance, “On the Fu­ture of Eu­rope” at the Con­sumer Goods Fo­rum

  • Date 21 June 2017
  • Location Berlin

The European Union is facing a paradox: On the one hand, there are ever more demands placed on the EU by increasing global challenges. But as the demands grow, so too, on the other hand, do the doubts regarding the EU’s ability to tackle these challenges. The willingness of many member states to accept majority decisions made at European level is certainly not increasing at the moment.And neither is the willingness of many European citizens to accept European institutions as their own,democratically legitimized representatives.

And yet it remains true that the European Union is perhaps the best idea that we Europeans had in the 20th Century, and remains the best idea to deal with the challenges facing us in the 21st Century. European citizens know this, too. We saw this in the result of the recent elections in France, which itself is just the latest in a growing number of pro-European outcomes, following the regrettable decision of the British last year. People have not all of a sudden become more radical. They are merely looking for answers to difficult questions. One of these questions involves the future of the EU. We have to answer these questions, not with unrealistic ideals and false hopes, but with serious and responsible solutions. And we have to get better at communicating these solutions, openly and transparently, so they are rightly accepted by the people of Europe as democratic, legitimate and representative. 

I share many of the views expressed by President Macron – we have to strengthen the EU and make it more efficient. The EU is the world’s largest trading block. A properly functioning EU is vital for shaping globalization. It is unclear how the United States of America wants to engage with the rest of the world. If you listen to the pronouncements of the new administration, one could certainly get the impression that the U.S. is going through a phase in which it sees a less active engagement for itself in shaping globalization and meeting the challenges facing the world as a whole. But regardless of the direction the US government ends up taking, the EU has to grow up and take on more responsibility. The question is how to achieve this. If, as has been the case to date, there is no appetite among European voters for treaty change, then we have to find other, pragmatic solutions. 

I do not believe that many people are looking for a centralized European super-state. What we need is a clear definition of responsibilities in the European Union. One that makes us more efficient, can respond to the global challenges we are facing and respects the principle of subsidiarity. Those things that are best addressed at the national, regional or local level must be addressed there. And those things that are best addressed at European level should be addressed at European level. In essence, the question is what structural model do we want for Europe? Do we want a model like in Germany, where central government makes the laws and the regional states execute them? Or one like in Switzerland, where each level of government not only has the power to make laws but is also responsible for executing them? That is also how it more or less is in the United States, too. Currently we have common European rules which must be implemented and executed at the national level. If we can ensure subsidiarity so that as much as possible remains at the local, regional or national level – similar to the Swiss system – we would probably also see more willingness from the member states to pool sovereignty in those areas where the EU is better acting together. 

We have to improve our ability in the EU to act together. If this is not possible to do within current primary law, and there is no majority for treaty change, we will just have to do it through intergovernmental agreements or enhanced cooperation, whether you want to call it variable geometry, multi-speed Europe, or coalitions of the willing. As long as each future step towards integration remains open to other Member States who may wish to join at a later stage, it conforms to the principles of European unity and solidarity. And with every successful step we take along the way, the EU will become a more attractive proposition, even to those who today might count themselves among the doubters. 

In my view, there are three areas to concentrate on and where we can make quick progress:

  • migration policy,
  • security and foreign policy,
  • and economic and monetary policy.

In each of these areas, the EU can achieve more when its member states act together.

With regard to migration policy: If we want to continue without internal border controls – and European unity depends on this – then we need to control our external borders. We have to reach common asylum procedures and standards in the EU that make it clear who has a chance of obtaining asylum in Europe, and who does not. And we have to find a solution for distributing refugees within Europe in a way that is fair and politically acceptable. Work is already underway on this. 

In terms of security and foreign policy, we need more cooperation among our national security services to combat the threat posed by terrorism in Europe. Europe must make a bigger contribution to global security, regardless of how the United States chooses to engage, and do more to stabilise neighbouring regions. We can gradually intensify cooperation and work towards a European Defence Union. Surveys show that many EU citizens support this. The European Commission has launched a European Defence Fund, which is a move in the right direction. In addition to the Fund, we will need joint military forces, with their own command structures. Again, work here is currently underway.

And finally to economic and monetary policy: If Europe is to remain competitive, its member states must continue to work together, and stick to the rules we have agreed upon. There is still much economic potential in the EU, we just have to harness it. For example, we can create a real digital union or a global role for Europe as a hub for communications in logistics and infrastructure, both traditional and digital. Smart investment that contributes a real added-value is also crucial. This is why we have created a European Investment Fund, which is a step in the right direction. We have to do more to create the right conditions to ensure that the EU remains attractive for investment, especially for private investment, which comprises the lion’s share of investment activity. And we have to do more for mobility within Europe, particularly for our young citizens, and especially where job and training markets are concerned. 

Another key factor for Europe’s role as a global player is its common currency. In the euro area, members share a common monetary policy, set out by the politically independent European Central Bank. Since there is no common economic and fiscal policy it is important here that the rules the euro area member states have agreed to

are also adhered to. But some politicians and governments shy away from this, as it is not always popular among voters. This is why the EU as a whole needs to continue to exert pressure on national governments to implement these much-needed reforms. And the simple fact is that those countries which received help under European assistance programmes, and have had to actually implement unpleasant reforms, and those countries which have kept to the agreed rules are among the most successful countries in the EU today. The problem is not with the rules, but with the lack of implementation of them. 

We have learned in Europe that isolationism and protectionism are never the right answers. Multilateralism, openness, participation in global trade and improved competitiveness – these are the drivers of economic succes and prosperity. Everybody wins by multilateralism. As representatives of business and trade, you already know this. And most politicians do too. I am confident that the political discussions we are having at international level – in the G20 group for example –  will lead us to workable, pragmatic solutions, in all of our interests. For Europe and for the global community as a whole. 

Thank you.

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