Tagged: PolicyEconomic

Magdy Martínez-Solimán: Statement at the Policy Symposium on “Financing Asia’s Future Growth”

06 Apr 2015

Ambassador Mr.  Abulkalam Abdul Momen (PR of Bangladesh to the UN),

Ambassador Mr. Mr. Durga Prasad Bhattarai (PR of Nepal to the UN),

Ambassador Mr. Desra Percaya (PR of Indonesia to the UN) (TBC),

Mr. Lenni Montiel, Assistant Secretary-General for Economic Development, UN DESA

Mr. Shang-Jin Wei, Chief Economist, Asian Development Bank

It is my great pleasure to welcome you to this seminar on “Financing Asia’s Future Growth”. This symposium is timely and important. Timely because the third International Conference on Financing for Development, to be held in Addis Ababa, Ethiopia, in July 2015 is a historic opportunity for the international community to agree on an ambitious framework for the post-MDG era. It is also important because of the ongoing inter-governmental discussions both on FfD and on post-2015 development agenda.

I bring you warm greetings from Haoliang Xu, UNDP Regional Director for Asia and the Pacific. Mr. Xu sends his sincere and heartfelt apologies for not being able to be with you today. I am grateful for his invitation to Chair this Symposium.

I am especially pleased that this event is being jointly hosted between UNDP and the Asian Development Bank (ADB). This year’s Asian Development Outlook (ADO) will give us a reference to guide our discussions. The ADO is ADB’s flagship annual economic report, analyzing trends in and proposing forecasts for the Asia-Pacific region. ADO is smart and influential  also inside the UN’s development community and beyond.

Excellencies, distinguished delegates, Ladies and Gentlemen,

This year’s ADO has as its special theme “Financing Asia’s Future Growth.” The way in which the report approaches the challenge of financing is refreshing and extremely relevant for the broader discussion around finance for development.

In the MDG-era, financing was often conceived as tallying up the resources available from different sources (mobilized domestically as well as international private flows, ranging from FDI to remittances) available to developing countries to meet the MDGs, with the gap being filled with Official Development Assistance (ODA). Over the last 15 years, estimates abounded of the billions in ODA that would be required to meet the MDGs.

It is clear that this “gap-filling” approach is insufficient as we confront the implementation of the post-2015 agenda. The universality and broad breadth of the new agenda (from poverty eradication, to economics lifestyle changes towards sustainable patterns of production and consumption, to promoting peaceful and inclusive societies) imply that estimating gaps – which is only partially possible – will inevitable take us to amounts in the trillions of dollars. We need to think anew about how we approach the challenge of financing development. And we need to think big.

While doing so, I want to emphasize the continued importance – and value – of development aid. The Addis Ababa conference represents an opportunity for donor countries to reaffirm their longstanding commitment to allocate 0.7% of GNI to ODA as well as pledge to allocate at least 0.15-0.2% of GNI to the LDCs or more. The current draft of the Addis Ababa outcome document being considered even suggests that countries agree to meet these targets by 2020. But the post-2015 agenda cannot be achieved through aid alone. There is a need to consider other forms of international public finance for investments in communicable disease control, climate change adaptation and mitigation, science, innovation and new technologies. More public resources for climate finance are needed, but these should not come at the expense of ODA.

Even lumped together, all sources of public finance will not suffice. We need to find the right convergence between policy driven and profit led sources of development finance. Incentives are needed to ensure that private investment decisions move the world towards sustainable development aspirations. The progressive elimination of inefficient and ineffective subsidies could help to shift transportation and energy investments towards less fossil fuel intensive and more sustainable options, while releasing public resources for social and development purposes. The ADO argues that the current context of low world oil prices presents an opportunity in Asia for this type of fiscal reforms. In fact, the report shows that several countries in Asia are already seizing on this opportunity, either by reducing fossil fuel subsidies, increasing taxes on their use, or both. This is the type of policy action that sends the right incentives to people and businesses, while releasing public resources, that are important in the context of the new agenda.

Financing for development in the post-2015 era cannot be considered only in the context of ‘stable times’; there are fewer of them and we have to recognize that volatility is becoming the new normal. This is particularly relevant to Asia, a region especially vulnerable to extreme climate events. But there are many sources of risk beyond disasters, with the costs of shocks as diverse as conflict and disease outbreaks high and increasing.
And, of course, we continue to face recurrent economic crisis. Asia had a painful experience with a major financial crisis in 1997/1998. The ADO reminds us of the traumatic growth collapses that occurred in 1998: Indonesia’s economy contracted by 13 percent, the Republic of Korea’s by 6 percent, Malaysia’s by 7 percent, and Thailand by 11’s percent (from pre-crisis annual growth in excess of 7 percent in every country). The development setbacks were deep and long-lasting. But Asia also showed resilience and has put in place a range of policies to better protect countries from economic shocks. It has bounced back with energy. What we need to achieve sustainable development is for nations and communities to be resilient, not only to economic but to a wider set of shocks, so that they are able to anticipate, shape and adapt to the many shocks and challenges that can devour development gains. All development needs to be risk-informed.

Excellencies, distinguished delegates, Ladies and Gentlemen,

In this context, and without preempting the detailed presentation of the report and its special theme, I want to emphasize that the perspective taken in the ADO on how to finance Asia’s growth is particularly relevant. The challenge of financing is presented less as one of mobilizing resources (domestically or from abroad), and more as one of ensuring that the financial systems in Asia work to allocate savings to high-return and productive investments. This is the type of analysis that will enable us to think more broadly about financing, as a challenge of unlocking funding by pursuing policies that enable more efficient and effective resource allocation.

Excellencies, distinguished delegates, Ladies and Gentlemen,

Allow me, before I introduce our speakers, to elaborate briefly on the important of financing for the achievement of post 2015 as well as the importance of inclusive financial sector for the eradication of extreme poverty and reduction of inequality.

Today 2.5 billion adults – more than half of the world’s working adults – are excluded from formal financial services. This is most acute among low-income populations in developing countries, where approximately 80% of poor people do not have access. Access to well-functioning and efficient financial services can empower poor women and men. It is now well-established that giving low-income households access to formal financial services can help reduce poverty and inequality.

In the Pacific, financial inclusion is particularly challenging, where less than 10 percent of adults seem to have access to basic financial services. Challenging geography, poor infrastructure and the high costs associated with delivering services to sparse populations are barriers in this region. UNDP and UNCDF are therefore jointly implementing a Pacific-wide Financial Inclusion Programme (PFIP), which helps low-income households to gain access to quality and affordable savings, insurance, credit and other financial services and financial education. The programme, with funding from the Australian Government, the European Union and the New Zealand Government, also disburses grants to financial service providers. The programme aims to add one million Pacific Islanders to the formal financial sector by 2019 by spearheading policy and regulatory initiatives, facilitating access to appropriate financial services and delivery channels and by strengthening financial competencies and consumer empowerment.

As we consider the importance of financial systems to help finance the post-2015 agenda and the need to ensure financial inclusion, UNDP’s programme in the Pacific is an illustration of the comprehensive and inclusive development approaches that we will need to pursue to finance development.

Let me take a moment to introduce our guests here.

We have with us today, Mr. Shang-Jin Wei, ADB’s Chief Economist. Mr. Wei is a key spokesperson for ADB and oversees the Economics and Research Department. Mr. Wei previously served as Professor of Finance and Economics at Columbia University’s Graduate School of Business. Before joining Columbia University, he held senior positions at the IMF, at the Brookings Institution, and at Harvard University’s Kennedy School of Government.

Ambassador Mr. Abulkalam Abdul Momen, Permanent Representative of Bangladesh to the United Nations, New York, has been serving in this role since August 2009. Prior to that, he served as Chairman of the Department of Economics and Business Administration, Framingham State College. He also worked earlier in senior positions in the government of Bangladesh.

Ambassador Mr. Desra Percaya, Permanent Representative of Indonesia to the United Nations, New York, has been serving in this role since Feb 2012. Prior to this, Dr. Percaya was Indonesia’s Deputy Permanent Representative to the United Nations in Geneva. He has held a variety of posts related to multilateral diplomacy and international security since joining the Ministry of Foreign Affairs in 1986.

We have with us today Ambassador Mr. Durga Prasad Bhattarai, Permanent Representative of Nepal to the United Nations, New York. Prior to this, he served as the Permanent Secretary of Nepal’s Ministry of Foreign Affairs. A career diplomat, Mr. Bhattarai held senior posts in Nepal’s foreign service and government.

Finally, we have with us Mr. Lenni Montiel, the Assistant Secretary-General for Economic Development, at UN DESA. Prior to his appointment, Mr. Montiel was the Director for Economic and Social Affairs in the Executive Office of the Secretary-General, preceded by a distinguished career in development as a colleague of ours in UNDP.

Thank you.

Daily Press Briefings : Daily Press Briefing – January 16, 2015

2:07 p.m. EST

MR. RATHKE: Good afternoon, everybody. I imagine many of you were also watching the press availability at the White House, so understand why we’re a little bit late today. I have a couple of things to mention at the top – three, actually, to be precise.

First, Ukraine. It is one year to the day since Ukraine’s former government passed the so-called Black Thursday laws, draconian laws that denied the right to peaceful protest and freedom of speech. Ukraine has come an enormous distance since then to meet its people’s aspirations. And the current government remains committed to advancing important reforms, despite ongoing violence in eastern Ukraine. These steps include last year’s free and fair presidential and parliamentary elections, the signing of an association agreement with the European Union, and a focus on anti-corruption efforts, including this week’s move by Ukraine’s parliament to increase the independence of the judiciary. These are critically important steps to help the country move forward, and we congratulate the people of Ukraine on how far they have come in such a short time, especially on this significant anniversary. And we continue to stand with them as they press forward on critical reforms.

Second item is Libya. We welcome yesterday’s announcement that the UN-led talks in Geneva will continue next week, and we applaud those Libyans who are participating. We reiterate our strong support for this UN effort and urge all parties invited by Special Representative Leon to engage in dialogue aimed at producing a unity government that the international community can support. The United States remains committed to working with the international community to help the Libyan people and the government build an inclusive system of governance to address core needs, to provide stability and security, and to address the ongoing threats.

And then the last item, the Secretary’s travels. As many of you have seen, Secretary Kerry was in Paris today where he met with Foreign Minister Fabius and President Hollande to offer condolences after last week’s attacks. He also laid wreaths at Hypercache Market and the Charlie Hebdo office with Foreign Minister Fabius. And the Secretary also laid a wreath at the site of the fallen policeman near the Charlie Hebdo office. He then met with the mayor of Paris, Anne Hidalgo, and they both gave remarks. So a very moving day expressing U.S. support and underscoring our deep ties and ongoing, intensive cooperation.

Before leaving Paris, the Secretary met with Iranian Foreign Minister Zarif who was also in town for previous scheduled meetings, and they followed up on the ongoing nuclear negotiations in Geneva.

That’s what I have at the top. Brad.

QUESTION: Since you just brought it up, do you have a fuller readout of what the Secretary and Foreign Minister Zarif spoke about?

MR. RATHKE: I don’t have a further update on or details on the conversations. Of course, they’ve met a few times this week in Geneva, and then they followed up today. Of course, the focus is on the nuclear talks. I would also highlight, of course, that as we’ve said many times when asked if other topics come up in these conversations, we always mention our concern for American citizens in Iran. And so in that regard, nothing different to report.

QUESTION: So there were already reports from Iran that the Secretary and Mr. Zarif spoke specifically about the Washington Post reporter. Do you know what the Secretary said or what he – what sentiment he —

MR. RATHKE: I don’t have that level of granularity. But of course, we continue to call for his immediate release – that is Jason Rezaian – as well as the immediate release of detained U.S. citizens Saeed Abedini and Amir Hekmati, and for the Iranian Government to assist us in locating Robert Levinson so that all can be returned to their families as soon as possible.

Okay. Anything on that topic?

QUESTION: A follow-up on Iran?

MR. RATHKE: On that topic? Yeah..

QUESTION: You saw the President say today there’s a 50-50 chance of a diplomatic deal. Given the discussions over the – I mean, Paris was the second meeting this week. How would you describe those talks going?

MR. RATHKE: Well, I’m not going to get into the details of exactly what they discussed. Of course, the Secretary is focused on the Iran nuclear issue, and that’s why he went to Geneva for those to meet with Foreign Minister Zarif. There was an opportunity today because they both happened to be in Paris and so they held another meeting, but I’m not going to characterize further the nature of the discussions.

QUESTION: So this is a matter of taking advantage of —

QUESTION: Any plans —

MR. RATHKE: Just – yeah.

QUESTION: So it was simply a matter of taking advantage of the timing to keep talking? There wasn’t any sense that there was an urgency for this meeting? I mean, people can coincidentally be in the same place and not need to meet.

MR. RATHKE: Right. No, but they both happened to be in Paris. They took the opportunity to meet. I wouldn’t go further beyond that.

QUESTION: Do you know if they said they’d meet again or when they would meet again?

MR. RATHKE: I don’t have any details like that. Of course, they’ve met a number of times in the past. But I don’t have anything to preview as far as when the next meeting might be.

QUESTION: Do you have more of a readout on the ongoing discussions in Geneva?

MR. RATHKE: Well, the discussions in Geneva are ongoing, as you say, Roz. There have been bilats over the last couple of days, not only bilateral meetings with Iran but since other P5+1 countries are there, there have been U.S. bilats with other countries that are involved in the process. I don’t have details to read out of those. And then Sunday is the day when there will be a meeting in the P5+1 format. So those are ongoing. I don’t have details to read out from them.

QUESTION: So you’re not able to say whether they’re focused on any particular technical issues or dealing with any reports of efforts to, for example, try to enhance the capability of Bushehr reactor?

MR. RATHKE: I don’t have any readout to give from the talks that are ongoing in Geneva.

QUESTION: Can I ask you about Bushehr? Because I asked Wednesday, and I think Marie said at the time that she would look into it. Do you have a response to the talk about two additional reactors coming online at some point?

MR. RATHKE: Well, we’re aware that there was an announcement, and so we’re reviewing the details that surround it. I don’t have a specific comment on that. But in general, the construction of light-water reactors is not prohibited by the UN Security Council resolutions, nor is it in contradiction to the JPOA. And we’ve been clear in saying throughout the negotiations that the purpose of these negotiations is to ensure that – to ensure verifiably that Iran’s nuclear program is exclusively for civilian and peaceful purposes. So the talks that are ongoing are focused on closing off the possible pathways to acquiring a nuclear bomb. That remains our focus. But I don’t have more specific reaction on that particular announcement.

QUESTION: I’m a little confused because – are you saying that a light-water reactor can have no effect on a potential military nuclear program? Because you’re saying that your goal is to close off all pathways, and then you say light-water reactors are essentially okay.

MR. RATHKE: No, I didn’t say that – I didn’t say that it’s okay. I said that it is —

QUESTION: You said it is not —

MR. RATHKE: — not prohibited, not prohibited by the UN Security Council resolutions, nor does it violate the JPOA. That’s —

QUESTION: So you’re not concerned by them increasing their – you’re not concerned by this activity?

MR. RATHKE: I didn’t say that we weren’t concerned. But I said —

QUESTION: Are you concerned by this activity?

MR. RATHKE: What I would say is that the whole purpose of the negotiations with Iran is to ensure that Iran’s nuclear program is exclusively for civilian and peaceful purposes, and that that is verifiable. So I’m not going to get into one part or another of the dialogue happening in the negotiations, but just to reiterate that our point is closing off the pathways to acquire a nuclear bomb. I’m not going to offer a technical —

QUESTION: Hasn’t part of that effort been to —

MR. RATHKE: — analysis of light-water reactors from the podium.

QUESTION: Hasn’t part of that effort been to lower Iran’s enrichment capacity that was seen as a major breakthrough of the JPOA?

MR. RATHKE: Again, I’m not going to get into details of the negotiations —

QUESTION: I haven’t even asked the question yet.

MR. RATHKE: Yeah.

QUESTION: I mean, if you —

MR. RATHKE: I can see where you’re going, but go ahead.

QUESTION: If you want to deny that the JPOA was —

MR. RATHKE: Go ahead, finish.

QUESTION: Okay. Doesn’t – I mean, if they’re building two new reactors, wouldn’t that imply that they need more enrichment to feed them?

MR. RATHKE: Well —

QUESTION: I don’t see how this is – you have such a neutral position on this, given that it seems to go against all your efforts.

MR. RATHKE: All I’ve simply outlined is the Security Council resolutions which have certain requirements and are – anyone can read, also the JPOA, that in our view the construction of light-water nuclear reactors is not prohibited by those two documents. That’s separate from saying whether it’s a matter of concern and whether it’s an issue of discussion. I’m not going to get into what’s being discussed in the room either in the bilateral talks with Iran or in the P5+1 talks.

QUESTION: I didn’t ask you that. I mean, I’m only talking about what’s been publicly spoken about by the Iranians, not what’s been conveyed in the room.

MR. RATHKE: Right. And what I’ve said is that we’re aware of the announcement and we’re reviewing the details. So we’re looking at this. I’m not offering a final position on what we think about that announcement. We’re aware of it and we’re reviewing it to understand it better.

QUESTION: Can I change the subject?

MR. RATHKE: Anything else on Iran?

QUESTION: Yes.

MR. RATHKE: Go ahead.

QUESTION: During this Vibrant Gujarat event where Secretary Kerry was in attendance, there was a delegation led by one of the top advisors of the Iranian president. What is the U.S. view on the cooperation and the business deals that India and Iran are going ahead with? Are they not coming under the sanctions, or we are just turning a blind eye to whatever is going on?

MR. RATHKE: I wouldn’t suggest we’re turning a blind eye to anything. But I’m not familiar with that report. And of course —

QUESTION: It’s not a report but a —

MR. RATHKE: Of course, Vibrant Gujarat was an event organized by the Indian side, so I would refer you to them for any – for any details about participation. But beyond that, I don’t have – I don’t have in front of me an analysis of Iran-India ties, so I don’t have feedback on that.

QUESTION: I’m not asking for the participation. The participation and the – Prime Minister Modi’s pictures with the Iranian guy are all over on his website, on Indian external affairs, everywhere, with the flag of Iran and India behind them. I’m asking that if the – whatever comes out of this meeting and there is a business cooperation that is – do these cooperations falls under the U.S. sanctions, or not?

MR. RATHKE: Well, I don’t know the details of whatever discussions are that you were referring to, Tejinder. So I’m not in a position to analyze them from here. But of course, our – the existing sanctions, both the UN sanctions as well as U.S. sanctions and sanctions by many other partners, remain in effect. That’s part of the JPOA approach. But I’m not going to get into the – into analyzing agreements to which the U.S. Government might not be privy and certainly which I’m not familiar with.

Nicolas.

QUESTION: Can we talk about the aftermath of the attacks in Paris?

MR. RATHKE: Yes.

QUESTION: There have been very serious clashes in Pakistan, Karachi, outside the French consulate. Three people have been injured, including an AFP photographer. One, I’d like to have your reaction to that; two, does the U.S. share the concerns or the anger sometimes of some Muslim populations about these cartoons; and would you advise the French authorities and maybe the publisher of Charlie Hebdo to be super cautious for the circulation and distribution of this newspaper?

MR. RATHKE: Well, with respect to Karachi, we’re aware of these reports. I don’t have any details that I can confirm from here, but we certainly urge all to refrain from violence, exercise restraint, and respect the rule of law. For further details, I would refer you to the Pakistani authorities and to the French Government for details of what precisely happened.

Now on the question of the cartoons, I think this is something we’ve spoken about, I know Marie addressed the last couple of days. And I think we stand by that point of view. First of all, no act of legitimate journalism, however offensive some might find it, justifies an act of violence. That’s, I think, an important starting point. Now there is content published around the world every day that people might take issue with, but that doesn’t mean that we question the right of media outlets to publish information. Our view is that media organizations and news outlets often publish information that’s meant to cause debate, to stir debate. And while we may not always agree with any particular judgment or every item of content, the right to publish that information is one that we – that is fundamental and that we see as universal. So I think that’s about as far as I would go in commenting on that.

QUESTION: Apparently there are more and more clashes. There have been clashes also in Niger. So do you fear that it could trigger more violence in the Muslim world?

MR. RATHKE: Well, I don’t have an analysis to offer on that, I think, though our view on freedom of speech and freedom of the press is clear.

Anything on the same topic?

QUESTION: On the investigative side —

MR. RATHKE: Yeah.

QUESTION: — the raids in Belgium overnight, the ongoing reports of arrests of people who may be co-conspirators in the Paris attacks – what cooperation is the U.S. Government providing to the French and Belgian Governments as they try to run these cases down?

MR. RATHKE: Right. Well, of course we are aware of the reports from a number of countries about police operations. We’re monitoring the situation in Belgium very closely. Belgium certainly has our full support and solidarity in its counterterrorism efforts. Now, you didn’t ask, but just to make it clear, the U.S. diplomatic presence in Brussels, they are – they all are open – maybe they’re not open now, since it’s later in the day. But anyway, they’re open for business as normal and we are coordinating with our partners. But I’d refer you to the Belgian Government for details. We, of course, are supportive and we’ve got active and ongoing law enforcement and information sharing arrangements with our allies in Europe, and naturally those contacts continue, especially given what’s been going on.

QUESTION: So you’re helping? Is that what you’re saying?

MR. RATHKE: Well, I’m not going to read out any specific information sharing or so forth, but we are supportive and we stand with our Belgian allies in their counterterrorism efforts.

QUESTION: What about the content of the AQAP video? Have there been any more efforts to —

MR. RATHKE: I don’t have anything new to add to what’s already been said about the video.

Yes, Abbie.

QUESTION: Going back to Niger and the protests that he was mentioning, the U.S. Embassy in Niamey tweeted out: “Protesters burn churches, French flag, and other items in Zinder, chanting ‘Charlie is Satan. Let hell engulf those supporting Charlie.’” Is that cause for concern? Are there – is there any concern with people down there at the Embassy or is there anything on that situation?

MR. RATHKE: I wasn’t aware of that report, so we can certainly check and see if we have anything more for you. But of course, I would go back to what I said in response to Nicolas’ question – we certainly call on everyone to exercise restraint and to express their views peacefully, and we certainly reject any kind of violence.

QUESTION: Is there any expectation that the general Travel Warning that went out in recent days might be updated in light of these protests outside U.S. installations?

MR. RATHKE: I don’t have any updates to that to announce. For those who are familiar with that worldwide caution, which was updated just recently, it’s quite detailed. And so I’m not aware of any move to change it in any way, but certainly it’s comprehensive and tries to give American citizens the best information and advice before going overseas.

QUESTION: Change of subject?

MR. RATHKE: Yes.

QUESTION: Do you have any confirmation of – apparently, the Saudis have postponed the flogging of the activist?

MR. RATHKE: Yes, we’re aware —

QUESTION: Apparently, they postponed it on medical grounds, that the doctor who carried out a pre-flogging checkup said – recommended that he does not go ahead.

MR. RATHKE: Mm-hmm. Well, we are – we’ve seen the reports, and to our knowledge, they’re accurate. I don’t have anything to contradict them. I would go back to what we’ve said on this all along in our January 8th statement: We are greatly concerned that human rights activist Raif Badawi started facing the punishment of 1,000 lashes in addition to serving a 10 year sentence for exercising his rights of freedom of expression and religion. So we call on Saudi authorities to cancel this brutal punishment and to review Badawi’s case and the sentence.

QUESTION: Do you have anything – the BBC is reporting that the case of this blogger has been referred to the supreme court by the king’s office.

MR. RATHKE: I don’t have anything to confirm that. I wasn’t aware of that.

Anything on this topic, or a new topic, Nicolas?

QUESTION: Nigeria?

MR. RATHKE: Yes.

QUESTION: We have reports coming from N’Djamena, Chad about army vehicles sent from Chad to Cameroon. And apparently, the Chad parliament has voted for supporting Nigeria and Cameroon in their fight against Boko Haram. Does the U.S. – were you notified in advance about this, and do you support this regional military response?

MR. RATHKE: Well, we’re not in a position to confirm precisely what sort of support Chad has offered. And – but we certainly support a regional solution to the problem of Boko Haram, and in particular through the establishment of a multinational taskforce. And now, there is additional security assistance to countries in the region in the fight against Boko Haram. That’s under full consideration. And I don’t have any detailed updates to provide about that, but it’s certainly something we are considering. And so that’s our view on the assistance. We certainly support regional approaches.

QUESTION: So Jeff, are you talking about that you support the creation of a new force, a regional force? Because you got the Ghanaian president today talking about considering creating a military force to fight Boko Haram. It’s unclear whether that’s a regional force or whether – I doubt he’s talking about a Ghanaian one.

MR. RATHKE: Mm-hmm. I don’t have details on that. I haven’t seen that report. So we can see if there’s more that we have to say and get back to you about that.

QUESTION: And do you know, perhaps, what the Secretary was talking about, about the – a new – the possibility of a new British-U.S. initiative to fight Boko Haram that he mentioned yesterday?

MR. RATHKE: Right. I don’t have anything new to read out about that.

Yes, Scott.

QUESTION: There was some concern about the conduct of Chadian troops in the Central African Republic when they intervened in that crisis. Does the United States carry any of those concerns into potential Chadian involvement in Nigeria?

MR. RATHKE: Well – I see. Okay. So you’re asking about Nigeria, though, in this particular case. I don’t have any views to offer on that. I understand the point you’re raising, so let us check into that and come back to you.

Brad.

QUESTION: Do you have any comment on the ICC preliminary probe in the Palestinian territories?

MR. RATHKE: Yes. Well, as we’ve made clear over the last couple of weeks, we are deeply troubled by Palestinian action at the ICC. Our position on this is clear, and we don’t think that the Palestinians have established a state, and we don’t think they’re eligible to join the International Criminal Court. I would highlight that many other countries share this view, and we’ve put out a lengthy position paper on that to which people can refer. So our —

QUESTION: But wasn’t there – I mean, this is a prosecutor of the —

MR. RATHKE: Right. That’s – so that’s – no, I wanted to start, though, just to remind.

QUESTION: Oh, okay.

MR. RATHKE: So to be clear, what the prosecutor announced today is not an investigation. It’s a preliminary examination. Now, I don’t have any further comment on it, and in general, as we’ve long said, the United States strongly opposes actions by both parties that undermine trust and create doubts about their commitment to a negotiated peace.

QUESTION: Okay, but —

QUESTION: (Inaudible.)

QUESTION: No, wait —

MR. RATHKE: No, go ahead.

QUESTION: Your comment – except for “no comment,” the rest was extraneous to the question, right?

MR. RATHKE: This – well this has just happened in the last couple of hours. I don’t have any further comment to offer on the announcement by the ICC prosecutor.

QUESTION: Would you hope that, if the prosecutor moves forward, he would examine the possibility of infractions by both sides and not just one side?

MR. RATHKE: Well, I don’t think we’re in the position of giving advice to the ICC prosecutor on that score.

QUESTION: Even on impartiality you don’t give advice?

MR. RATHKE: Well, again, we – going back to where I started, we don’t believe that the Palestinians have formed or established a state, and we don’t think they’re eligible to join the International Criminal Court, so —

QUESTION: But I don’t think this investigation necessarily hinges on that, because they still haven’t joined and this prosecutor is investigating regardless. So that comment – that notwithstanding, your point’s noted on the Palestinians, they’re not a member, and this thing has been opened nevertheless. So what’s your position on the investigation, not – or the preliminary examination, not the Palestinians’ course of action?

QUESTION: Is it an illegitimate preliminary examination?

MR. RATHKE: I’m not going to characterize it. Again, this has just happened, so I’m not going to characterize it further at this point.

QUESTION: Both the Israeli prime minister and the foreign minister have condemned the ICC’s decision to open this preliminary exam. Would it be fair to say that the U.S. Government shares their view?

MR. RATHKE: Well, look, our view on the Palestinians joining the ICC I would go back to, so I’m not – I haven’t seen those particular statements by Israeli officials, so I’m not going to say anything one way or another about them. Again, this is an announcement that has just taken place. We’re looking at it. Our view is – on the broader question of the ICC, we don’t think the Palestinians have met the necessary requirements to be a part of it.

QUESTION: I’m not sure that’s the broader question. I think that’s a completely separate question, but —

MR. RATHKE: Well, I think —

QUESTION: — I don’t quite —

MR. RATHKE: — it’s certainly related, so —

QUESTION: Is it conceivable that the U.S. will appeal to the ICC to drop the preliminary examination?

MR. RATHKE: I’m not going to speculate about anything like that. As you know, we’re not a member of the ICC, but I’m not going to speculate about any particular steps.

QUESTION: Has the U.S. ever asked the ICC not to look into any particular case involving human rights violations?

MR. RATHKE: I don’t have that at my fingertips, Roz. I’m happy to look, but I don’t have that.

QUESTION: Yeah, if you could, please.

MR. RATHKE: Tejinder.

QUESTION: I’m not asking you to speculate or – but this is a subject that’s being discussed in Delhi, and – that Delhi has a thick fog in the mornings. And usually – and so when the Air Force One goes, is it going – how is it going to land if there is a fog on that day? Will it go to Ahmedabad or Islamabad?

MR. RATHKE: It won’t surprise you that I’m not going to comment on the air operations of Air Force One. I’d refer you to the White House if you’ve got questions about that.

QUESTION: But this – I raised it here because it is being discussed in the State Department.

MR. RATHKE: It won’t surprise you that we are not going to comment on air operations of Air Force One for obvious reasons, I think.

Right. Nicolas.

QUESTION: Last question about the country we never talk about, Switzerland.

MR. RATHKE: Okay.

QUESTION: Is – do you have views about the surge of the Swiss franc, which apparently rocks the global currency market? Is it a source of concern for U.S. interest and American tourists going there?

MR. RATHKE: I’m not aware and I don’t think we normally comment on currency issues in that respect. I’ll —

QUESTION: You’re not aware of conversation between the two governments?

MR. RATHKE: Not that I’m aware of.

Yes, go ahead.

QUESTION: You put out a statement yesterday that Ambassador Sung Kim, the deputy assistant secretary for Japan and Korea —

MR. RATHKE: Yes.

QUESTION: — he will be traveling to Brussels next week to attend Japan trilateral forum. And Spokeswoman Marie Harf said at a Foreign Press Center briefing that this will be a key forum for discussion on trilateral cooperation between U.S., Korea, and Japan. Can you explain what this forum means and what it’ll be discussing, who else will be participating, and how it is related to Korea-Japan cooperation?

MR. RATHKE: Okay. I think, yeah, there are two different things here. Let me make sure and I want to highlight – I think Marie said this yesterday, but I can go over it again. So Ambassador Sung Kim, who is the special representative for North Korea policy – he’s also deputy assistant secretary for Japan and Korea – he’s traveling to Brussels in the next few days, January 19th and 20th, and he’s attending there the Japan trilateral forum. This is an event organized by the German Marshall Fund of the United States. It was established with the purpose of bringing together policy makers, intellectuals, journalists, business leaders from Japan, Europe, and the United States, and for dialogue on matters of mutual interest.

There is separately a – there will be a trilateral in Tokyo for Special Representative Sung Kim. He mentioned this in his testimony earlier this week. And if you’re interested in the details of the scheduling, I’d refer you to the Government of Japan. At this point, we don’t have details on that to announce right now.

So there are two different events. There is the event in Europe, which is not a government-to-government multilateral meeting. It is a meeting that brings together policy makers as well as people from outside of government. It’s Japan, Europe and the United States. Then there will be a trilateral in Tokyo, and that’s what Special Representative Kim was referring to in his testimony on the Hill earlier this week.

QUESTION: So the meeting in Brussels, that has nothing to do with Korea, right?

MR. RATHKE: Well, I wouldn’t say – I wouldn’t put it that way. There – he will be – of course, security in Northeast Asia is an important part of our relationship with Japan, as well as with our other allies and partners in Northeast Asia.

QUESTION: Change of subject?

MR. RATHKE: Yes.

QUESTION: (Off-mike.)

MR. RATHKE: Go ahead, Lesley.

QUESTION: A new subject, or —

QUESTION: No, same subject.

MR. RATHKE: Go ahead.

QUESTION: I want to ask just about one that we already discussed here, and that is a – today, there were two analyses on – saying that last year was the Earth’s warmest on record. Given the Secretary’s interest in this, do you have any comment on that?

MR. RATHKE: Right. There – we, I think, have just released a statement by the Secretary on this, and if you haven’t seen it, I’m happy to quote it for you. It’s fairly short.

The – in the Secretary’s words: What’s surprising is that anyone is surprised that 2014 was the hottest year on record. The science has been screaming at us for a long, long time. We’ve seen 13 of the warmest years on record since 2000. Greenhouse gas emissions from human activity are at an all-time high, which we know leads to a warming planet. And we’re seeing higher than ever occurrences of extreme weather events like catastrophic droughts, storm surges, and torrential rain. These events are having devastating economic, security, and health impacts across the planet. So this report is just another sound in a steady drumbeat that’s growing increasingly more urgent. And the question isn’t the science. The question isn’t the warning signs. The question is when and how the world will respond. And as the Secretary closes: Ambitious, concrete action is the only path forward that leads anywhere worth going.

QUESTION: So how do these analyses bode for an important year in climate talks that – and they hope to reach in a – or efforts to reach a deal in December?

MR. RATHKE: Well, certainly, it only underscores the urgency. And the Secretary, of course, has been actively engaged. I would also refer you to the press availability over at the White House today where this was also discussed. So this only reminds, if any reminder was needed, how important it is to work toward the goals that the Administration has set.

Tejinder.

QUESTION: Do you have any readouts or confirmations of any talks with the Belgian counterparts or the EU counterparts in Brussels about this after the attacks —

MR. RATHKE: Well —

QUESTION: — and the arrests?

MR. RATHKE: I don’t have any specific meetings or exchanges to detail, but certainly, we stand in support of and solidarity with our partners in Europe. And as I said before, we have active security cooperation and information-sharing arrangements with them, and it’s precisely at a time like this when those are most important.

QUESTION: And was there any contact with —

MR. RATHKE: I don’t have any details to read out about those.

QUESTION: Okay. Thanks.

MR. RATHKE: Okay. Thank you.

QUESTION: Thank you.

(The briefing was concluded at 2:41 p.m.)

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERETSE KHAMA IAN KHAMA,

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERET…

13/11/14

1. Madam Speaker, before we begin may I request that we observe a moment of silence for those of our citizens who have departed from us during the past year. Thank you. 2. Honourable Members, it is my pleasure to once more present an updated assessment of how Government intends to move Botswana forward by seizing opportunities to secure our future. 3. As this is the first session of the 11th Parliament, let me preface my remarks by welcoming the newly elected members of this Assembly. Let me further congratulate you Madam Speaker on your own election.

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERETSE KHAMA IAN KHAMA, PRESIDENT OF THE REPUBLIC OF BOTSWANA, TO THE FIRST SESSION OF THE ELEVENTH PARLIAMENT – “MOVING BOTSWANA FORWARD”

 

INTRODUCTION

 

1. Madam Speaker, before we begin may I request that we observe a moment of silence for those of our citizens who have departed from us during the past year. Thank you.

 

2. Honourable Members, it is my pleasure to once more present an updated assessment of how Government intends to move Botswana forward by seizing opportunities to secure our future.

 

3. As this is the first session of the 11th Parliament, let me preface my remarks by welcoming the newly elected members of this Assembly.  Let me further congratulate you Madam Speaker on your own election.

 

4. Today’s gathering is an outcome of our 11th consecutive general election. As is our tradition, the ballot was conducted in a peaceful, free and fair manner. For this we can once more thank Batswana in general, as well as the Independent Electoral Commission (IEC) and other individuals and organisations that helped to ensure the poll’s success.

 

5. In any democracy elections are the means to the greater end of forming a Government capable of translating the popular will into public service delivery. We who have the honour of sitting in this House are accountable to the hundreds of thousands who entrusted us with their votes. Although divided in their choices, the voters were united by a shared desire for a better future. It is, therefore, our responsibility to ensure that together we deliver that future by at all times putting the national interest before our own.

 

6. Last month my party, the Botswana Democratic Party, was re‐elected on the basis of a detailed manifesto that promised to secure our common future by building on our past achievements. Today, before this House I reaffirm our commitment to honour that pledge.

 

7. In as much as we recognise that a government of and by the people is not an event but a process; this administration shall continue to engage Batswana across the country about their concerns through various fora and media, from the venerable realm of dikgotla to the digital world of interactive online communication. It was as a result of wide-ranging consultation that our manifesto was predicated on what we understood to be our citizens’ core aspirations. These include achieving:

 

• Job creation for sustainable livelihoods and income generation;

• Food security through continued agricultural renewal;

• Expanded access to land and housing ownership;

• Access to world-class quality education that caters to current and future needs;

• Citizen, including youth, economic empowerment;

• Dignity for all through the eradication of poverty;

• Zero tolerance for corruption in all of its manifestations;

• Elimination of mother-to-child transmission of HIV; and

• Government reform that leverages on the application of new technologies. 

 

8. Each of these commitments is based on realistic analysis of where our country is and needs to go in order to meet the reasonable expectations of its people, while improving our global standing in an ever more competitive world. Taken together they are consistent with our broader vision of achieving inclusive sustainable development that upholds the dignity of all.

 

ECONOMIC OUTLOOK

 

9. Madam Speaker, owing to the prudent economic and financial management by my Government, the country was able to survive the 2008/09 global financial crisis and economic recession with minimum impact on the domestic economy. We were able to save jobs in both the public service and private sector, as well as continued to provide essential public services to our people.

 

10. Having successfully weathered the storm of the economic downturn, we can look forward to better days ahead, with economic growth buttressed by reduced inflation. These positive trends should allow us to revive some of our postponed projects, along with outstanding issues affecting the conditions of service among public employees. Our optimism is in part based on forecasts of continued, albeit still fragile, global economic recovery, with worldwide output projected to grow by 3.3% in 2014 and 3.8% in 2015.

 

11. Turning to the domestic economy, the gross domestic product (GDP) at current prices stood at P124 billion in 2013 and it is projected to expand to P136.5 billion in 2014. In real terms, the GDP grew by 5.8% in 2013, and is projected to grow by 5.2% in the current year, driven by both the mining and non-mining sectors.   Within the non-mining sector, retail and hospitality industries, as well as agriculture are experiencing growth.

 

12. Average national inflation continued to decline from 8.5% in 2011 to 7.5% in 2012 to 5.9% in 2013 and further to 4.5% in September 2014, which is well within the Bank of Botswana objective range of 3 to 6%. This positive trend gives us confidence in our ability to maintain a low inflation environment, which is necessary for domestic enterprises to compete in the global market.

 

13. In terms of our fiscal management, Government succeeded in restoring a balanced budget during 2012/13 financial year, after four years of budget deficits. For the 2013/14 financial year we were able to collect P 48.9 billion, up from the P 41.7 billion received in 2012/13, while total expenditures and net lending for 2013/14 amounted to P 41.73 billion. This resulted in a budget surplus of P7.2 billion, largely due to the good performance of the mineral sector. For 2014/15 a budget surplus of P1.3 billion is currently projected. These savings will allow us to reduce our debt burden and rebuild our financial reserves.

 

14. To sustain a positive balance sheet will, however, require expanded revenues. Here I can report that we were able to collect P48.9 billion in the 2013-14 financial year, up from the P41.7 billion received in 2012-13. The 2013/14 outturn for expenditure and net lending was P41.7 billion.

 

EMPLOYMENT

 

15.  Madam Speaker, to be meaningful to Batswana, economic growth has to be accompanied by expanded employment, which is why our manifesto listed job creation at the top of our aspirations. To reiterate what I said in my own message to the voters, of all our campaign promises tackling unemployment is the most important one. While there has been some progress in recent years, current estimates put unemployment among those 18 and above at just over 17%. Although this reflects a modest reduction since 2007, it has been insufficient to absorb all those seeking employment, especially among our talented youth. We can and shall do more.

 

16. Our Economic Diversification Drive (EDD) is a key instrument for job creation. Since its 2010 inception, EDD has been facilitating employment generating business opportunities by promoting the consumption of local products. While our immediate focus has been leveraging public procurement in support of domestic industries, as we move forward our emphasis will shift to developing greater internal capacity for export-led growth, while continuing to value local goods and services.

 

17.  So far a total of P13.3 billion worth of goods and services were recorded since the inception of the initiative. Out of this figure, the value of local manufacturers and service providers (EDD purchases) amounted to P590.5 million for 2010/2011, P1.8 billion for 2011/2012 and 2012/2013 and P2.3 billion for 2013/2014. Over one thousand enterprises have so far been registered under the EDD Programme, which has contributed to the employment of 28,000 Batswana.

 

18. We have already begun implementing our EDD Medium to Long Term Strategy, to develop sustainable sectors for economic growth and diversification. A leading example is the Leather Sub-sector Strategy, which is focused on the establishment of a Leather Park in Lobatse at a total cost of about P225 million. Government has agreed to finance the park’s primary infrastructure, a Common Effluent Treatment Plant, estimated to cost P102 million, while other components of the project will be financed through private sector investment.

 

19. Government had also budgeted over P20 million to provide temporary assistance for over 12 months to support 34 textile companies, employing 2,912 workers.

 

20. While the nurturing of SMMEs, support for existing industries and value addition remain critical in our achievement of job creation, we further anticipate that over the next few years local formal sector employment will be generated with the emergence of new economic opportunities through the synergies generated by the development growth nodes or clusters across the country.

 

21. In the Chobe region, for example, we anticipate an expansion of opportunities in tourism, construction, transport services and agriculture resulting from the construction of the road and rail bridge at Kazangula and phase one of the water pipeline to Pandamatenga, along with associated infrastructure. It is estimated that when completed these two mega-projects will create over 9000 permanent jobs.

 

22. Additional emerging labour intensive opportunities are already being generated in our urban areas, as reflected in Selebi-Phikwe’s development as a metallurgical hub, the continued growth of Gaborone as a global diamond as well as regional technical services centre, and Francistown’s growth as a nexus for trade and transport. We further anticipate additional jobs through synergies generated by new mining activities, the continued expansion of commercial agriculture and the development of Trans-Kgalagadi road and potential rail corridor.

 

COMPETITIVENESS    

 

23. A key to unlocking these job creation opportunities will be increasing our global competitiveness. To improve our competitiveness ranking in the area of goods market efficiency we have tightened our market monitoring for greater efficiency in the provision of goods and services, while the Competition Authority is reviewing mergers and potential cartel activity involving both local and foreign companies.

 

24. Madam Speaker, job creation is inevitably linked to investment. In this respect the latest FDI Intelligence report indicates that Global Greenfield FDI showed signs of recovery, increasing by an estimated 11% from 2012 to 2013. The increase in local investment has been even greater, with UNCTAD’s 2014 World Investment report showing Botswana having grown by 27% in 2013.

 

25.  The Botswana International Trade Centre (BITC) continues to promote our country as a competitive location for investment, making business contacts and generating leads. During the 2013-2014 financial year, BITC helped realise a total combined investment capital of just over 1 billion pula, of which P 642 million was from foreign direct investment (FDI) and P449 million came from new domestic investments. In 2012/13, BITC further recorded P1.9 billion worth of goods and services exported into the region and beyond, of which P738 million was attributable to financial and international business services by the financial services cluster.

 

26. Botswana was ranked number one in the 2014 Baseline Profitability Index, surpassing Hong Kong as a location for medium to long term returns on investment. In essence the Index suggests that investors can expect to do well here once they have established themselves in our market.

 

27. Government is, furthermore, working to limit the number of licenses and permits, while allowing mixed land use zoning, adopting risk based approach for Environmental Impact Assessments and Management Plans, and decentralising the management of electricity connections.

 

28.  Government has also embarked on a National Work Ethic programme to promote productivity. So far, 254 facilitators have been assessed to implement the programme, which commenced in May 2014.

 

29. The drafting of a Bill which will provide the legal framework for the establishment of Special Economic Zones and the Special Economic Zone Authority is being finalized.

 

30. The Rural Development Council (RDC) has been upgraded as the national consultative body to promote and coordinate the implementation of rural development policies and programmes. As a result community based projects such as the Zutshwa Salt Project and the Mogobane Irrigation Scheme, to mention some, have been resuscitated.

 

CITIZEN EMPOWERMENT

 

31. Madam Speaker, it is pleasing to note that to date, CEDA has funded 5,462 enterprises with a total value of nearly P8.55 billion, in the process creating over 48,935 thousand jobs.  During the 2013/14 financial year, CEDA assisted 151 new enterprises with a total monetary value of P152 million, collectively generating 1042 new jobs.

 

32. Since its inception, LEA has also facilitated the creation of 4995 new jobs, including 568 in the ongoing financial year. The Authority has further trained a total of 9,317 entrepreneurs. In an effort to inculcate an entrepreneurial culture, LEA embarked upon the Entrepreneurship Awareness Workshops among secondary school leavers, vocational trainees and prison inmates; over 26,000 of whom have been trained.

 

33. Madam Speaker, through the Botswana Bureau of Standards (BOBS), we have encouraged our small and medium enterprises to implement quality assurance activities within their businesses. Progress has been made in certification of goods especially in the building and construction industry. To further ensure that prescribed goods entering our borders comply with domestic standards, a BOBS office has been opened at the Tlokweng Border.

 

RULE OF LAW

 

34. Madam Speaker, adherence to the rule of law remains a cornerstone to our national development. It is thus encouraging that independent comparative surveys, as well as domestic polling, consistently place us among the best in the world as well as first in Africa in terms of our upholding the rule of law while ensuring the safety and security of all our citizens. These surveys include:

 

• 2014 Ibrahim Index of African Governance, where we ranked first in the category of safety and security;

• World Justice Project’s 2014 Rule of Law Index, where we were ranked 25th in the world as well as first in Africa;

• 2014 Global Peace Index where we were at 36th place, ranking above half of European countries surveyed;

• 2014 Legatum Index for Governance and Rule of Law, where we were ranked 28th in the world; and

• 2013 Global Democracy Index, where besides ranking 35 out of 167 countries we achieved a near perfect score in the area of civil liberties.

 

35.  In light of such reputable findings it is unfortunate to say the least that some individuals, working through foreign as well as domestic media, including rumour mongering on social media, have attempted to instil the perception of Batswana living in fear. This is in an apparent effort to undermine this country’s longstanding and shared record of peace, order and good Government.

 

36. While the mass circulation of false and malicious reports intended to incite undue alarm may be aimed at promoting the political agenda of some, it is at the collective cost of tarnishing the image of the country as a whole. It is also a threat to the economy we all must depend upon for our livelihoods. Such disinformation should therefore be rejected with contempt by all peace-loving Batswana. All citizens, residents and potential visitors to Botswana can be confident that this Government will continue to both abide and uphold the rule of law without fear or favour.

 

37. Let me, nonetheless, also observe that we have not, and shall not, allow past achievements or international accolades to breed complacency as we recognise that, here as elsewhere, criminal activity is constantly evolving and increasingly sophisticated. We therefore remain determined to pursue a zero tolerance approach to all forms of criminal activity, including corruption.

 

38. To counter emerging domestic and trans-national challenges the Police Service has deployed integrated law enforcement strategies to combat all forms of criminality and anti-social behaviour. This has involved an ongoing redirection of resources to deal with violent and intrusive, cross border and cyber based criminal activities.

 

39. Whilst total recorded crime excluding road traffic violations rose by 4.7% during the year 2013, significant reductions were, however, registered in respect of violent and intrusive crimes.  Offences in this category, which included burglary, store breaking, robbery, house breaking, threats to kill, murder, rape, motor vehicle and stock theft, declined by 15.4%.

 

40. Road traffic management poses an additional policing challenge. Analysis of road accidents shows a youth bias, expressed in reckless driving, often aggravated by the influence of alcohol. As a result of the increase in the intensity of road policing initiatives, the number of detected road traffic offences rose by 32.4%, while there was a corresponding decrease in the number of fatal road accidents by 2.6%.

 

41. Madam Speaker, the Department of Prisons and Rehabilitation continues to improve security in the prisons and rehabilitation of offenders. While overcrowding has been a problem in some of the Prison institutions, there has been substantial reduction in congestion since 2008. In June 2014 there were 3824 offenders held in prisons, which was 13% below the authorised holding capacity.

 

42. Madam Speaker, the internal and external challenges of today’s constantly changing security landscape, call for a structurally aligned, strategically focused and adequately resourced, as well as highly trained and motivated, defence force. The BDF will thus continue to evolve its structures and strategies to defend the nation, while continuing to provide assistance to other law enforcement agencies in combating crime, including poaching.

 

ACCESS TO JUSTICE

 

43. Madam Speaker, as was most recently demonstrated in the Judgments of the High Court and the Court of Appeal upholding the constitutionality of the Standing Orders of this very House, our Judiciary continues to independently and effectively deliver on its constitutional mandate of settling disputes, both large and small, without fear or favour.  This Government will, as always, respect decisions of the Courts and expects all citizens to do the same.  Equally, we must all display tolerance and recognize everyone’s right to approach the Courts for the resolution of any legal issue no matter how strongly we may disagree.

 

44. To improve everyday access to justice several special court projects like the stock theft, maintenance, traffic, small claims and most recently corruption court have been put in place so as to speed up and improve the case disposal rates, while promoting greater access to justice by simplifying court rules and processes to make them more user friendly.  In addition a Court Annexed Mediation will be in place by the end of the current financial year.  This f

Two Europes or One Europe?

European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

Valedictory speech by President Barroso

European Parliament plenary session

Strasbourg, 21 October 2014

Mr President, Honourable Members,

First of all, I would like to thank you for the invitation to address this Parliament in what would be the last time I have this opportunity. In fact, we are coming to the end of my second mandate as the President of the European Commission and I am very happy to be here with you and my colleagues to present to you our bilan, since this is my second Commission, I think I can also refer to the last ten years.

I want to share with you my feelings, my emotions, what I think about the way the European Union has responded to these very challenging times and what I think are the most important challenges for the future.

I think you can agree with me that these have been exceptional and challenging times. Ten years of crisis, and response of the European Union to this crisis. Not only the financial and sovereignty debt crisis – let’s not forget at the beginning of my first mandate we had a constitutional crisis, when two founding members of the European Union rejected, in referenda, the Constitutional Treaty. So we had a constitutional crisis, we had a sovereign debt and financial crisis, and in the most acute terms we now have a geopolitical crisis, as a result of the conflict between Russia and Ukraine.

The constitutional crisis that we had was in fact solved through the Lisbon Constitutional Treaty. The reality is that at that time, many people were saying that it would be impossible for the European Union to find a new institutional setting. And in fact there were moments of ambiguity and doubt. But basically, we could keep most of the acquis of the European Union, including most of the new elements of the Lisbon Constitutional Treaty, which was ratified by all Member States including those that today seem to have forgotten that they have ratified the Lisbon Treaty.

More recently – because I learned to leave to the end the economic issues because they are still with us – we had this very serious challenge and threat to our stability, in Europe, coming from the unacceptable behaviour of Russia regarding Ukraine. And we took a principled position. We offered Ukraine an association agreement and a free trade agreement and I am happy that, in spite of all the difficulties, Ukraine was there, signing and ratifying the association agreement, and I want to congratulate this Parliament, because the same day at the same hour the Parliament in Ukraine was ratifying this agreement, you were also ratifying the agreement showing you can offer hope to Ukraine as part of the European family of nations.

At the moment I am speaking to you, this crisis is not yet solved – we know that. But I think we can be proud that we have kept a position of principle, that we have condemned in the most unequivocal terms the actions of Russia and that in fact an association agreement was ratified, not only with Ukraine, but also with Georgia and Moldova because I believe we have a duty to those countries that are looking to Europe with their spirit and their hope to share with us the same future and because they want to share with us the same values.

At this moment we are still mediating and, today, there is a meeting mediated by the Commission on energy with the Russian government and the Ukrainian government, so a political negotiated solution is possible, we are working for that. It is in the interest of all the parties to have a political agreement, but a political agreement that respects the principles of international law, a political agreement that respects the right of country that is our neighbour to decide its own future and a political agreement that respects the sovereignty, the independence of that country. So, we should be proud of what we have been doing in this very challenging geopolitical crisis.

And we also had the financial and sovereign debt crisis. The reality is that the crisis was not born in Europe, but the fact is that because we were not prepared, because the Euro-area had not yet the instruments, we were very much affected by it – not only in financial terms, in economic terms, in social terms and in political terms. I think this crisis was probably the biggest since the beginning of the European integration process in the 50s of the last century. Let’s now put things into perspective.

Dear Members of Parliament,

Let’s remind ourselves what was the main opinion of most analysts in the economic and financial media, or even many of our countries or outside of Europe, about what could happen: everybody was predicting Greek exit, Greece exiting the Euro, and, of course, Greece exiting Euro would certainly, immediately have had a cascading effect in other countries, a domino effect that was indeed already felt in countries such as Ireland or Portugal. But let’s not forget, Spain was also under very heavy pressure, and Italy. We were staring into the abyss. I remember well what happened in discussions in the margins of G20 in Cannes in 2011, I remember well when analysts were predicting with almost unanimity a Greek exit and at least 50% of them were predicting the implosion of the Euro. And what happened? Not only was there no exit of the Euro, now we are to welcome the 19th member of the Euro, Lithuania will join us in the 1st of January 2015. And not only did Greece not leave the Euro area, it has enlarged and the European Union has been enlarging as well. This is a point that has been very much underestimated in our analysis.

2004, the year I had the pleasure and the honour to assume the leadership of the European Commission, do you remember that we were 15? Today, we have 28 countries. So we have almost doubled the membership of the European Union during this crisis. Is there a better proof of the resilience and the capacity of adaptation of our Union? The fact that we were able to remain united and open during the crisis I think confirms the extraordinary resilience and the strength of the European Union and this should not be underestimated.

I know that, for some, these things do not count for much. They are in a way making an idealisation of the past; they dream probably of a closed Europe; they think Europe was better when half of Europe was under totalitarian communism. I don’t think that. I think Europe today is better than when half of Europe was under communism. The fact that the European Union was able, during all this crisis, to open, to consolidate and to unite on a continental scale almost all of Europe around the values of peace, of freedom and of justice, I think it is a great thing we should commemorate and not to be ashamed of, as some seem to be.

So, this is I think also a reason to commemorate. Many people were predicting, as you probably remember, those of you following these issues at that time, that the European Commission would not be able to function with 25 or 27 or 28 Members, that the European Union would be blocked. The reality is that the European Union was not blocked by the enlargement; the reality that I can share with you now is that sometimes it was more difficult to put together some of the founding Members of the Union than all the 28 countries of Europe.

So I think we should be proud of that as well, collectively, because the European Union was able to remain united and open during the crisis. And when I say open, I mean it in all senses of the word, including with an open attitude towards the world. For instance, when we have promoted a proactive climate agenda after the failure of the Doha Development Round and the Doha trade talks. And we are now leading in that sense, because I believe that trade can be one of the best ways to support growth globally and in the European Union. Or when we, because it was an initiative of the European Union, went to the former President of the United States of America, inviting him and convincing him to organise the first G20 meeting at Heads of State or Government level, because that was a way of having a global cooperative approach and to avoid the return to ugly, nasty protectionism. That could be a temptation in times of crisis. So we were able to keep Europe not only united and, in fact, enlarging its membership, but also open to the rest of the world.

But now, are we stronger or are we weaker? I know that the most critical people today will say that we are weaker. But are we really?

In fact, when the crisis erupted, we had almost no instruments to respond to it. We were facing, as it was said at that time, an unprecedented crisis. Yet we had no mechanisms, for instance to support the countries that were facing the immediate threat of default. A lot has been done. We have collectively, the Commission and the Member States and always with the strong support of the Parliament, we have created a new system of governance. We have today a much more reinforced governance system than before, including with unprecedented powers for the community institutions, and we have done everything to keep the community method at the centre of our integration. For instance, the Commission today has more powers in terms of governance of the Eurozone than before the crisis. The European Central Bank has today the possibility to make direct supervision of the banks in Europe, something that would have been considered impossible earlier; it would have been almost unimaginable before the crisis. And I remember when we spoke about the banking union, when I gave an interview saying that we need a banking union, I received some phone calls from capitals saying ‘Why are you speaking about the banking union? This is not in the Treaties’. And I responded, ‘Yes it is not in the Treaties, but we need it if we want to fulfil the objective of the Treaties, namely the objective of stability and growth’. And today we have a banking union.

Honourable members,

If we look at things in perspective and we think where we were ten years ago and where we are now, we can say with full rigour and in complete observance of the truth that today the European Union, at least in the euro area, is more integrated and with reinforced competences, and we have now, through the community method, more ways to tackle crisis, namely in the euro zone. Not only in the system of governance in the banking union, but also in the legislation of financial stability, financial regulation, financial supervision.

We have presented around 40 new pieces of legislation that were all of them approved by the European Parliament. And once again I want to thank you, because in almost all those debates the European Parliament and the European Commission were on the same side of the debate and were for more ambition, not less ambition for Europe. And so today, I can say that we are stronger, because we have a more integrated system of governance, because we have legislation to tackle abuses in the financial markets, because we have much clearer system of supervision and regulation. So, I think we are now better prepared than we were before to face a crisis, if a crisis like the ones we have seen before should come in the future.

Of course, you can say that there are many difficulties still. Yes, and I am going to say a word about this in a moment regarding the prospects for growth, but please do not forget where we were. We were very close to default, or, to use a less polite word, to a bankruptcy of some of our Member States. And look at where we are now. From the countries that had to ask for adjustment programmes, Portugal and Ireland exited the programme successfully. Ireland is now one of the fastest growing countries in Europe. And in fact all the others that were under the imminent threat of collapsing, are now in a much more stable mood. Spain, that asked for a programme for the banks, also has improved successfully. So in fact only two countries of all those, because we should not also forget the Central and Eastern European countries that also had adjustment programmes, even if they were not yet in the euro area, only two countries are still completing their adjustment programmes.

The deficits now on average in the Eurozone are 2.5%. This is much less than in the United States or in Japan. So, in terms of stability, we are much better now than before. By the way, the Eurozone has a trade surplus. The European Union in general now will have a surplus in goods, in services and, for the first time in many years, in agriculture.

I am saying that because very often the opinion in some of the political sectors is that we are losing with globalisation. This is not the case. Some countries of our Union in fact are not winning that battle, but on average we can say that Europe is gaining the global battle in terms of competition, namely in terms of trade and investment.

But of course, growth is still timid. I think that basically we cannot say that the crisis is completely over, because threats remain, but we have won the battle of stability. Today nobody in the world will honestly bet on the end of the euro. The euro has shown that it is a very strong, credible and indeed stable currency. The reality is that our growth is still timid and clearly below expectations.

So what can we do for growth? This is the important question. And for that I need to make a reminder once again. I know very well that very often the European Union policy and namely the European Commission policy has been presented as completely focused on austerity. I think this is a caricature.

We have constantly asked at least for three important lines – fiscal consolidation certainly, for the countries that are feeling the pressure of the markets. It would be completely irresponsible if they could not frontload a programme of rigour to correct their public finances, but we have always said with equal vigour, probably some would not like to listen, the need for structural reforms, for competitiveness, because the reality is that even before the crisis we were growing under our potential, that is the reality, and with serious problem of lack of competitiveness in some of our countries and so that is why we needed more ambitious structural reforms.

But we have also argued in favour of investment. I have always said that we need more investment, public and private investment. Private investment will come the more we show that we have competitive economies that we can attract private investment. Indeed I am now happy to see that most of our countries, certainly at a different pace, but they are pursuing ambitious structural reforms that would have been considered completely impossible before the crisis.

And the reality is, if we want to be honest in terms of the analysis that the countries that have suffered the most during the financial crisis were precisely those that have lost in terms of cost competitiveness before the crisis. And now, for instance the reforms that have been made by Spain, by Ireland, by Portugal, by Greece, are impressive.

Now, apart from the political consolidation and the structural reforms, we have always seen the need for more investment. Private investment, but public investment as well. You will remember the debate about the MFF. President Schultz remembers certainly. We were together in many meetings asking the Member States to do more in terms of investment and the most important instrument we have at European level for investment is the Multiannual Financial Framework, that is around one trillion euros.

So if there is not more ambitious investment it was not because of a lack of ambition of this Commission, or a lack of ambition of this Parliament. It was because of the opposition of some capitals. This is the reality. We are for solid investment, targeted investment for growth. Not only with the MFF. Remember the proposals that for instance here in the State of the Union speeches with you I have put forward. The increase of the capital for the EIB that finally was agreed. The project bonds that the Member States have accepted, but only as pilot project bonds. The facility that we have created for SMEs with loans from the EIB and funds from the structural funds, from our budget. Unfortunately only two countries wanted to pursue that line.

Or, for instance, the programme for youth, the Youth Guarantee that we have proposed and that the Member States have agreed. But now with the Youth Employment Initiative, only two countries have accepted to have a dedicated programme for youth employment.

So, my dear colleagues, let’s be clear: we are for investment. I wish all the best to the new Commission and to my friend and colleague Jean-Claude Juncker, to have the support of the Member States for a more ambitious investment programme for the next years. I believe this is possible now, I believe the awareness is much bigger on this matter. But once again this is part of a comprehensive strategy that combines fiscal consolidation with structural reforms and investment, and, of course, all the measures taken by us in terms of the banking union and in terms of financial regulation for stability.

And I’m saying this with this vigour because I think it would be now a mistake, after everything we have done, to give up, to show less determination, to abandon the road of structural reform. I think we have done a part of the job, stability is broadly there, growth, even if it is slower than what we would like to have, but now we need determination to complete the reforms so that sustainable growth, not growth fuelled by debt, excessive public or private debt – because such growth is artificial, it’s a fictional growth, and afterwards, sooner or later, we would pay the price – but sustainable growth – that I believe it is possible if we continue the courageous path of reforms and a stronger governance for the European Union.

I don’t have the time now to go over all the other policies we have been developing over the years. But let me just highlight one or two, because I think they are very much at the moment of decision, and I think they are important.

I’m extremely proud that is was my Commission in my first mandate, in 2007, that put forward the most ambitious programme for climate protection in the world. And we are still leading in the world in terms of the climate agenda.

In fact, we were able to join the climate agenda with the energy security agenda, and I’m saying that because this week we are going to have an important discussion in Brussels at Heads of State and Government level, and I hope that the European Union will keep its leadership role – of course not to be isolated but to have others, because we have a responsibility towards our planet. And this is was certainly one of the great advances of these years, that the European Union was able to make the most important and bold steps in terms of fighting climate change.

Another area where I think we could very proud is – in spite of all the restrictions because of our financial situation – that it was possible in the MFF to get 30% more for Horizon 2020, for research and technology. I think there is a great opportunity now for us to do more in that area, as also in the culture side, with our Creative Europe programme.

The reality is that in some areas it was possible, in spite of the economic and financial crisis, to increase investment at European level.

But I’m also very proud that in spite of the pressures of our budgets, we could always be there in terms of development aid and neighbourhood policy.

Whenever there was a big tragedy in the world, from the tsunami in Indonesia to the recent Ebola crisis, from the Syrian refugee crisis to Darfur, we were there, we were among the first. And I think we, Europeans, should also be proud of that, because we are still, together with our Member States, the most important donor for development aid in the world. That is something that corresponds very much to our values and I’m happy that in spite of all the crises we did not abandon our obligations in terms of development cooperation.

I have already said a word about trade. I think it is very important to keep an ambitious trade agenda, an open Europe but for free and fair trade. And the Commission has concluded a record number of agreements, not only with South Korea, Singapore, Central America – the first region to reach an agreement -, Peru, Ecuador, recently with Canada, with Western Africa, Eastern Africa and Southern Africa. And I could also mention some others that are now progressing, like Japan, the United States and also an investment agreement with China.

So we are the most important trade bloc in the world. We are the biggest economy in the world.

And I’m saying that because today I know it’s very fashionable the pessimism, the defeatism about Europe, what I call the intellectual glamour of pessimism. But I believe that we have a good record to show and I believe that together, collectively, we are much stronger and we can better defend our interests and protect our values.

Dear colleagues – I call you colleagues because I believe we have been sometimes in discussions but we have been colleagues in this great enterprise that is the European project -, I think politically we have some lessons to draw.

One is that we have shown great resilience. I think we can say that the forces of integration are stronger than the forces of disintegration. And I believed that day and night, sometimes in very dramatic moments, sometimes when I had to make dramatic appeals to some capitals: to the richer countries, asking them to show more solidarity; and to the poorer countries asking them to show more responsibility.

Sometimes we have done it very discretely, it’s true. The European Commission is probably more discreet than others. I did not want the Commission to be part of the cacophony of different voices during the most acute moments of the crisis. It was extremely market sensitive that situation. But I can tell you, in my full conscience, that we have done everything we could with existing instruments to avoid the fragmentation of the euro or to avoid a division in the European Union. And I very often had to call on my colleagues in the European Council, Heads of State and Government, to show the ethics of European responsibility.

But one of the lessons I draw from this is that if eventually it was possible to come to decisions, it is true that it was sometimes extremely painful and difficult. And took time. We have said also, and I think it is something that we can all agree: democracy is slower than the markets are.

The Commission would have preferred, and I’m sure this Parliament as well, decisions to be bolder, more comprehensive, faster. But we are a Union of democratic states, we are not a super state. And we have to respect different sensitivities.

One of the conclusions I draw from these ten years of experiences is the need to cooperate between institutions. I know sometimes it is more popular to put forward impossible ideas and to criticise others. But I firmly believe that we need to engage with different institutions, that it is not a solution to oppose the countries to the European Union. On the contrary, we have to show to our countries that they are stronger if they are part of the European Union. That we are not diluting their national identity but, on the contrary, we are asking them to share their sovereignty so they can project better their interests globally. I’m firmly convinced of this.

And I’m saying this to you now, as I am leaving in a few days: my only interest is that these lessons are learned so that we do not repeat some mistakes in the future. At the same time, I think we can say that it is not through confrontation but through cooperation that we can attain our objectives.

At the moment I prepare to hand over this very challenging and interesting job to my good friend Jean-Claude Juncker, I want to say here, on my behalf and on behalf of all my colleagues of the Commission, that we wish the new Commission all the best, that they have a great challenge ahead of them but that they could count also on our support. And I’m sure of the support that this Parliament is going to give to them.

Because, Mr President, the relations were not always perfect. But I think you can agree that we were able to establish a fruitful relationship between the Parliament and the Commission.

I’ve been in this Parliament more than 100 times. There was never a Commission that was so often represented in the Parliament as my two Commissions. We have established this cooperation and I’m so grateful because this Parliament, sometimes with very strong demands, was always supportive of the community method, was always supporting the community institutions. And I believe this is very important for the future of Europe.

My dear colleagues of the European project,

The way to solve the problems we have in Europe is not through revolution and even less through counter-revolution. It’s by compromise, it’s by reform. Evolution and reform. We have to reform to adapt to the new challenges but not with new clashes between the institutions, not with clashes against our countries. And I believe that if this idea of strong cooperation putting the European common good above all else, I think my colleague and friend Jean-Claude Juncker and his new Commission will have success, of course based on the support I’m sure you are going to give them.

Because the European Union is a union of values. In these last days I had to face many journalists and they asked me ‘what was your most emotional moment? Which moment did you prefer?’ And I have many, and I also had very difficult ones, to be honest. But one of my most emotional moment was when, on behalf of the European Union, together with Martin Schulz and the President of the European Council, Herman Van Rompuy, we received the Nobel Peace Prize on behalf of the European Union.

I think this was a powerful reminder sent to us from the global community that we count in this world and that what we do is very important. That the values that were at the origin of the creation of our Union, namely the value of peace, are still at our essence today. And that we have to fight for them.

And I think is the moment I really said I want to share with all those in the different institutions, including this Parliament, that have been working for a united, open and stronger Europe. And when I leave this office, with all my colleagues at the Commission, I can tell you that we have not achieved everything we could, or everything we would have liked to have achieved, but I think we have worked with the right conscience, putting the global interest of the European Union above specific interests. And I believe that now there are conditions to continue to do work for a united, open and stronger Europe.

I thank you for your attention.

Auf wiedersehen, goodbye, au revoir, adeus.

Muito obrigado, thank you very much.

Following the statements of the Members of the Parliament, President Barroso made the following closing remarks:

Mr President,

I should like to take up a number of the points raised by the previous speakers. Firstly, I believe that proof that we – and by “we” I mean the Commission of which I have had the honour of being Presidentare on the right track lies in the fact that the criticisms have come from the opposite ends of the spectrum, though often couched in the same terms, resolutely ignoring the difficulties and extraordinary challenges that we have had to face and failing to put forward any coherent response.

The truth is that we have been through possibly the worst economic and financial crisis we have seen since the countries of Europe began to come together and that it was not the European Union or Europe that spawned the crisis. This is what some defenders of national sovereignty, as they like to call themselves, do not or will not understand. It was not Europe that created excessive private debt or caused the financial sector to behave irresponsibly. Quite the opposite – this all took place under national scrutiny, or rather lack thereof. Europe is the answer. We now have one of the most ambitious regulatory and supervisory systems in the world, if not the most ambitious. In other words, saying that Europe is worse off because of the European Union is simply not true. It shows a complete lack of respect and a lack of intellectual rigour. Europe is not responsible for the financial crisis, which had its roots in the United States. Europe had its weaknesses, but what the European Union did was to respond. The blame for this does not lie with the European Union, and I believe this is something that all those who share the European ideal – be they at the left, right or centre of the political spectrum – should have the courage to state, because by remaining silent we will be reinforcing the populist rhetoric of the extreme right and extreme left.

I listened carefully to those of you who said that populism was on the rise and who laid the blame for this at the door of the European Union. Ladies and gentlemen, this is not true. It is abundantly clear that populism and xenophobia exist outside the European Union. Look at the anti-immigrant incidents that have taken place in Switzerland. Look at what happened in Norway when that terrorist killed all those young people because he was opposed to a multicultural Europe. Look at the Tea Party movement in the United States. Is Europe to blame for America’s Tea Party movement?

We are currently seeing an aggressive form of populism around the world, which espouses arguments from both the left and the right. Sometimes it is difficult to tell the difference. So to say the European Union is responsible for this shows a lack of intellectual rigour and a lack of political integrity. What we have to do, as Europeans, is to demonstrate that it was not Europe that caused the crisis or the public debt in the Member States. There was little that Europe could do when, for example, one Member State falsified its accounts. This is something Europe had to face. The first initiative of my second Commission was to ask the Member States to give us more powers to supervise national statistics, because in my first Commission this was rejected. And not by Greece. It was rejected by the big Member States, which were reluctant to hand more powers over to the European Union. So if we really want to have a debate, let us be quite clear and strict in terms of intellectual integrity and political candour.

Ladies and gentlemen, there is one thing that I would like to say to you with the greatest of conviction. The team that I have had the honour of heading has worked with enormous commitment and diligence, whilst always putting Europe’s interests first. There is something that I want to say to you, since this is a political assembly with a wealth of political dynamics, but where the emphasis is always on the common European good. My Commission was not made up of colleagues from the EPP, socialists or liberals. It was made up of people who worked for Europe. My party is the EPP and I am proud of that, but, as President of the Commission, my party is Europe and that is the message I wish to convey, in particular to the major forces of the pro-European centre-left and centre-right.  Differences must, of course, be aired, but they must not be allowed to weaken the pro-European camps. We cannot hand the extreme right or extreme left anything else on a plate. Pro-European forces must come together. They must have the courage to defend Europe. They must do so at national level, and not just here in Strasbourg. We need a major coalition of this nature for Europe because I believe that we have the strength to win the battles of the present and those of the future.

Thank you very much for your attention.

Daily News of 2014-07-31

MEX 14 / 31.07

DAILY NEWS

31 / 07 / 14

G-7 Leaders Statement on Ukraine

G-7 leaders joined yesterday in expressing their grave concern about Russia’s continued actions to undermine Ukraine’s sovereignty, territorial integrity and independence. “This week, we have all announced additional coordinated sanctions on Russia, including sanctions on specific companies operating in key sectors of the Russian economy. We believe it is essential to demonstrate to the Russian leadership that it must stop its support for the separatists in eastern Ukraine and tangibly participate in creating the necessary conditions for the political process.”, said G-7 leaders in a joint statement. “We remain convinced that there must be a political solution to the current conflict, which is causing rising numbers of civilian casualties. We call for a peaceful settlement of the crisis in Ukraine, and underline the need to implement President Poroshenko’s peace plan without any further delay.”

Read the full statement online .

June 2014: Euro area unemployment rate at 11.5%; EU28 at 10.2%

The euro area (EA18) seasonally-adjusted unemployment rate was 11.5% in June 2014, down from 11.6% in May 2014, and from 12.0% in June 2013. This is the lowest rate recorded since September 2012. The EU28 unemployment rate was 10.2% in June 2014, down from 10.3% in May 2014, and from 10.9% in June 2013. This is the lowest rate recorded since March 2012. These figures are published by Eurostat, the statistical office of the European Union.
Eurostat estimates that 25.005 million men and women in the EU28, of whom 18.412 million were in the euro area, were unemployed in June 2014. Compared with May 2014, the number of persons unemployed decreased by 198 000 in the EU28 and by 152 000 in the euro area. Compared with June 2013, unemployment fell by 1.537 million in the EU28 and by 783 000 in the euro area. European Commissioner for Employment, Social Affairs and Inclusion László Andor commented: “The unemployment figures for June 2014 confirm the first signs of economic recovery we have been seen in Europe over the past year. But while job destruction seems to have come to a halt, the reduction of unemployment has only been very modest so far. Our objective must be to create the right macroeconomic conditions for sustainable recovery and for Member States to implement structural reforms such as the Youth Guarantee to ensure that the recovery is job-rich. Only then will we see the creation of hundreds of thousands of jobs every month, and an end to these excessively high and unacceptable levels of unemployment.”

Other news

Bank transfers: Single Euro Payments Area to bring easier payments and transfers in euro area from 1 August

The Single Euro Payments Area (SEPA) creates a true European Single Market for retail payments in euro where and transfers, direct debits and payments between Member States are as easy and fast as the equivalent domestic transactions. It will become operational in all eurozone countries on 1st August 2014. It will also apply to euro-denominated transactions in non-eurozone countries from 30th October 2016. SEPA will greatly facilitate euro payments for citizens and businesses and increase competition between banks.

Commission adopts French programme to use €499 million from Fund for European Aid to the Most Deprived

The European Commission has approved today the French Operational Programme to use the new Fund for European Aid to the Most Deprived (FEAD). France, the first Member State to have its FEAD programme adopted, will receive 499 million euros in current prices in the period 2014-2020 to support the provision of food aid to those most in need in the country (complemented with €88 million from national resources). Commissioner for Employment, Social Affairs and Inclusion, László Andor, commented: “I welcome the swift adoption of the French operational programme. The Fund for European Aid to the Most Deprived will play a key role to help Europe’s most vulnerable citizens with food or other basic goods. In many Member States severe material deprivation is on the rise and many households cannot afford a meal. I am looking forward to approving the programmes of all the other Member States, so that the rest of the 3.8 billion euros available can be put to the best use in our fight against poverty”.

Protecting Intellectual Property Rights: Customs authorities detain nearly 36 million fake goods at EU borders in 2013

Customs authorities in the EU detained almost 36 million items suspected of violating intellectual property rights (IPR) in 2013, according to the Commission’s annual report on customs actions to enforce IPR. Although this is less than previous years, the value of the intercepted goods still represents more than € 760 million. Today’s report also gives statistics on the type, provenance and transport method of counterfeit products detained at the EU’s external borders. See also the Q&A: MEMO/14/501 .

EU develops new driverless car parking system – so you never waste another minute looking for a space

There are only a few minutes before your flight check-in closes, or before your train departs, but you now have to spend precious time hunting for a free space at the airport or station car park. Imagine leaving your vehicle at the main entrance and letting the car do the rest on its own. Researchers from Germany, Italy, the UK and Switzerland are working on this, and successful tests took place at Stuttgart airport earlier this year. €5.6 million of EU funding is invested in the system which will be available in the coming years. Vice President Neelie Kroes said:We need to think ahead and find smarter ways to move, to save time, money and our environment. Who wouldn’t want to save time parking their car?

Compromise found: Part of EU fleet can continue fishing in Mauritanian waters until end of 2014

EU vessels fishing shrimps and small pelagics in Mauritanian waters in the framework of the EU-Mauritania Fisheries Protocol will be able to continue to do so until 15 December 2014. This is part of the compromise which EU negotiators found last night in Nouakchott after the Mauritanian authorities had upheld the position that all EU vessels would have to leave Mauritanian waters as of 1 August 2014. According to the agreement found, Mauritania accepted EU fishing activities for a period of 24 months as part of the bilateral Fisheries Protocol, hence the shrimps and small pelagics fisheries which started in January 2013 can continue, whereas those EU vessels which had been fishing tuna and demersals since August 2012 during a transitional period will need to leave Mauritanian waters today. Furthermore, the EU and Mauritania agreed to continue the discussions for a renewed Fisheries Protocol so to allow the full EU fleet to resume their activities soon. More information

Flash estimate – July 2014: Euro area annual inflation down to 0.4%

Euro area annual inflation is expected to be 0.4% in July 2014, down from 0.5% in June, according to a flash estimate from Eurostat, the statistical office of the European Union. Looking at the main components of euro area inflation, services is expected to have the highest annual rate in July (1.3%, stable compared with June), followed by non-energy industrial goods (0.0%, compared with -0.1% in June), food, alcohol & tobacco (-0.3%, compared with -0.2% in June) and energy (-1.0%, compared with 0.1% in June).

Aides d’État: la Commission conclut que la cristallerie belge Val Saint-Lambert a reçu des aides d’État incompatibles; autorise la vente de certains de ses actifs

La Commission européenne a conclu que certaines des mesures d’aide octroyées par la région wallonne à Val Saint-Lambert SA (VSL) ont conféré à l’entreprise un avantage indu sur ses concurrents, en violation des règles de l’UE en matière d’aides d’État. VSL doit à présent rembourser ce montant, majoré des intérêts, pour atténuer les distorsions de concurrence engendrées par l’octroi de ces aides incompatibles avec le marché intérieur européen.

Mergers: Commission approves acquisition of Pirelli’s steel tyre cord business by Bekaert

The European Commission has approved under the EU Merger Regulation the proposed acquisition of the steel tyre cord business of the Italian company Pirelli by its Belgian-based rival NV Bekaert SA. Steel tyre cord is used to reinforce radial tyres and has a major impact on their safety and performance. The Commission concluded that the acquisition would not raise competition concerns as the merged entity’s customers, which are large, multinational tyre companies, have countervailing buyer power which is further strengthened by over-capacity in the steel tyre cord market. In addition the Commission found that Bekaert will continue to face effective competition from a number of other strong competitors located outside the European Economic Area (EEA), in particular in Belarus, Korea and China. The transaction was examined under the normal merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.7230 .

Mergers: Commission clears acquisition of Uniqa Life by Uniqa Insurance Group.

The European Commission has approved under the EU Merger Regulation the acquisition of Uniqa Life of Italy by the Uniqa Insurance Group (Uniqa) of Austria. Uniqa Life is a life insurance company active only in Italy, while Uniqa is an Austrian-based insurance group offering products and services in all insurance sectors (life, non-life, re-insurance) in a number of European Economic Area (EEA) countries. The Commission concluded that the proposed acquisition would not raise competition concerns given the very low combined market shares resulting from the transaction. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.7298 .

Mergers: Commission clears acquisition of GEA’s heat exchanger business by private equity company Triton

The European Commission has approved under the EU Merger Regulation the acquisition of sole control over the German heat exchanger business of GEA by the private equity company Triton of Jersey. Triton invests in medium-sized businesses in Northern Europe, in particular in Austria, Germany, Switzerland, and the five Nordic countries. GEA’s heat exchanger business manufactures a broad portfolio of heat exchangers serving different applications such as power, climate and environment or oil and gas. The Commission concluded that the transaction would not raise competition concerns, because the overlaps between the activities of Triton’s portfolio companies and GEA’s heat exchanger business are limited. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.7306 .

Mergers: Commission approves acquisition of Doeflex by INEOS in plastic compounding sector

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Doeflex Compounding Limited (Doeflex) of the UK by INEOS AG (INEOS) of Switzerland. Doeflex is a PVC compounder with a single manufacturing facility located in Swindon, UK, controlled by two individuals. INEOS is a global manufacturer of petrochemicals, speciality chemicals and oil products. Among other activities, INEOS produces commodity S-PVC E-PVC, plasticizers and S-PVC compounds in the European Economic Area (EEA). The Commission examined the effects of the merger on competition in the area of S-PVC compounding and more specifically for the manufacture and sale of dry blended and gelled compounds in North Western Europe, Western Europe and the EEA. S-PVC compounds are intermediate products between S-PVC and end-products. They are obtained by blending additives such as plasticisers, heat stabilisers and pigments with S-PVC. S-PVC compounds are then further processed to produce end-products such as pipes, window and door frames, cables, etc. The Commission concluded that the transaction would not raise competition concerns because the merged entity would continue to face strong competition after the merger and customers would still have sufficient alternative suppliers in the market for S-PVC compounds and its sub-segments. The Commission found, in particular, that other strong players, such as Kem One, which recently acquired Solvay’s compounding business, and Begra will continue to compete with the merged entity in these markets. The Commission also found that in spite of the vertical links between INEOS’s upstream activities in S-PVC, E-PVC and plasticizers and its compounding business, the proposed transaction does not affect INEOS’s ability and incentives to shut out competitors from the S-PVC compounds market or customers from access to supplies because INEOS was already vertically integrated pre-transaction and the addition of Doeflex’s business has limited impact on the pre-existing situation because of its limited size. More information will be available on the competition website, in the Commission’s public case register under the case number M.7132 .

Mergers: Commission clears acquisition of Bull by Atos

The European Commission has approved under the EU Merger Regulation the acquisition of Bull S.A. by Atos S.E., both of France. Atos delivers IT services, including managed services, business process outsourcing, consulting & systems integration and cloud & enterprise software. Bull is active in the development of High Performance Computing (HPC) supercomputers and uprange servers, in the design, building and managing of data centres, HPC infrastructure and cloud computing solutions, in the consulting as well as integration and maintenance of critical business applications and in the design, consulting and integration of end-to-end security solutions. The Commission concluded that the proposed acquisition would not give rise to competition concerns, given the parties’ moderate combined market positions resulting from the proposed transaction and the presence of a number of strong players that are active on the respective markets. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.7308 .  

Commission points to innovation reforms to sustain economic recovery

European Commission

Press release

Brussels, 10 June 2014

Commission points to innovation reforms to sustain economic recovery

The European Commission has today highlighted the importance of research and innovation (R&I) investments and reforms for economic recovery in the European Union, and made proposals to help EU Member States maximise the impact of their budgets at a time when many countries still face spending constraints. Increasing R&I investment is a proven driver of growth, while improving the efficiency and quality of public R&I spending is also critical if Europe is to maintain or achieve a leading position in many fields of knowledge and key technologies. The Commission has pledged support to Member States in pursuing R&I reforms best suited to their needs, including by providing policy support, world-class data and examples of best practice.

Olli Rehn, Vice-President of the European Commission responsible for Economic and Monetary Affairs and the Euro, said: “The European economic recovery is gathering speed while the pace of fiscal consolidation is slowing down, in line with the EU’s reinforced fiscal framework. Nonetheless, budgetary constraints will remain, which is why.it is more important than ever that Member States target their resources smartly. The EU budget is helping drive growth-enhancing investment in research and innovation and today we are putting forward ideas to help maximise the impact of every euro spent.”

Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science, said: “Fostering innovation is widely accepted as the key to competitiveness and better quality of life, especially in Europe where we cannot compete on costs. This is a wake-up call to governments and businesses across the EU. Either we get it right now or we pay the price for years to come.”

The Communication published today highlights three key areas of reform:

  • Improving the quality of strategy development and the policy-making process, bringing together both research and innovation activities, and underpinned by a stable multi-annual budget that strategically focuses resources;

  • Improving the quality of R&I programmes, including through reductions of administrative burdens and more competitive allocating of funding;

  • Improving the quality of public institutions performing research and innovation, including through new partnerships with industry.

The Commission has also called on Member States to prioritise R&I, as public authorities regain margins for growth-enhancing investment. With current R&I spending across the public and private sector worth just over 2% of GDP, the EU remains well behind international competitors like the United States, Japan and South Korea, with China also now very close to overtaking the EU (see graph). Increasing R&I spending to 3% of GDP therefore remains a key target for the EU, but the Communication today shows that improving the quality of public spending in this area is also essential in order to increase the economic impact of investment. The Communication points equally to the need for the EU needs to put in place the right framework conditions to encourage European companies to innovate further.

Public and private R&D intensity in 2012 in the EU and some third countries

Background

Innovation is central to economic growth and business competitiveness, and is at the heart of the EU’s Europe 2020 strategy. Today’s proposals follow those of the 2014 Country Specific Recommendations where a number of Member States received recommendations to reform their research and innovation policies. The Commission has also issued today a State of the Innovation Union report demonstrating progress against the 34 commitments made and highlighting the need for further efforts.

The EU budget for 2014-20 marks a decisive shift towards R&I and other growth enhancing items, with a 30 % real terms increase in the budget for Horizon 2020, the new EU programme for research and innovation. A further EUR 83 billion is expected to be invested in R&I as well as SMEs through the new European Structural and Investment Funds.

Innovation Union: http://ec.europa.eu/research/innovation-union/index_en.cfm

Horizon 2020: http://ec.europa.eu/programmes/horizon2020/

MEMO/14/405