President Prodi's Speech at the Council on Foreign Relations

Ladies and gentlemen,

I am gratified to be here in this great and resilient City for the first time since the tragic events of September. In fact, before the attacks, I had been scheduled to arrive in New York on September 13th. Although it has taken me a while to reschedule my visit, New York has often been uppermost in my thoughts, and we in Europe have not been idle in responding to these terrorist acts. Far from it. I will return to this topic a little later.

But first, I am very happy to have this opportunity to speak about three important challenges facing Europe today:

• The enlargement of the European Union;
  
• The consequently necessary reform of its economic and social structures and its decision-making system;
  
• The arrival of the single European currency - the Euro.
  
  They are challenges, because we have to work hard to ensure their success.
  
  But they are also marvelous opportunities for Europe's future.
  
  Let me start with the Euro
  
  The meticulous preparations made over the last three years have paid off. The first two weeks of the Euro notes and coins have been a great success and a huge boost to people's sense of European identity. European citizens have accepted their new notes and coins quickly, and with enthusiasm. I would go further and say that they have been genuinely happy to have the Euro in their pockets. The Euro is now the main trading cash currency for more than 300 million people, and 90 per cent of all cash payments in the Euro zone are now being made in Euros. Practically speaking, the changeover is complete. This is a success story for everybody: the public authorities, the banking sector, the retail sector, for all European citizens, …for the European Union. The changeover has proved that European people can indeed work together, with enthusiasm and firm resolve, towards a common goal and in support of an ambitious common project.
  
  And that they can make that project a reality
  
  Contrary to what many seem to think, people are ready to embrace fundamental change in Europe when they fully grasp the underlying reasons and objectives. The Euro symbolizes the determination of the people of Europe to share a future together.
  
  Ladies and gentlemen,
  
  The euro is not an end in itself. It is only a means to achieve a stronger and more prosperous Europe. We need to go further and build up a new form of economic governance in Europe, based around the European institutions and on new co-ordination and co-operation rules. In short, we need to further develop the economic dimension of the Economic and Monetary Union.
  
  The Euro also shows that diversity and effectiveness can go hand in hand in Europe. Each Member State took responsibility for its own changeover arrangements and its own information campaigns, but the outcome in each case has been much the same.
  
  The Euro is not only the most important currency in Europe but, in future, it will play an increasingly important role as an international currency - an attractive alternative to the dollar. Indeed, the Euro-zone is already generating an income that represents two thirds of the income generated by the United States.
  
  The Euro is being used very extensively as a borrowing currency in corporate bond markets, and it will eventually play an important role in financial portfolios worldwide.
  
  The Euro provides international investors with broader opportunities to diversify their portfolios and to control their risks.
  
  The Euro is also likely to be used extensively in trade outside the Euro area, and as a major reserve currency.
  
  So the Euro is an increasingly powerful protagonist in the global economy. One that will help stabilize the international economic environment. It is solidly based on the stability-oriented policies of the European Central Bank and on sound fiscal policies in the Member States - which are permanently committed to sustained monetary and fiscal stability. This stability, and the elimination of currency barriers within the single European market, will also benefit US firms and citizens as they travel in Europe or do business in the EU.
  
  Ladies and gentlemen,
  
  The European Union is not just about economics: it is also a fundamentally political project - and the Euro symbolizes this. To millions of European citizens, the Euro notes and coins in their pockets make Europe tangible and visible in everyday life as never before. The Euro will thus become a key element in their sense of shared European identity and common destiny. Before the end of next year we will have completed negotiations to bring as many as ten of them into the Union by 2004.
  
  And enlargement will not end there: other countries are already preparing applications for membership. In a few years the EU will cover most of Europe. It will be a family of nations with a population of more than 500 million people. This major enlargement is the second great challenge - the second great opportunity - facing the European Union. It is our solemn duty to grasp this historic opportunity. To pull down the last shreds of the iron curtain, and to unite east and west in a peaceful, free and democratic Europe for all the peoples of our continent.
  
  But a Union of 500 million people cannot operate using procedures designed half a century ago for a Community of six countries. We have to reform our institutions and the way they work. In particular, we need a truly democratic decision-making system, broadening the scope for majority voting. The present situation, with 15 Member States, already makes unanimity very difficult to achieve. You can imagine how impossible it will become when 25 members sit around the table. So radical reform is needed.
  
  Last month, the European Council decided to set up a Convention to prepare that reform and to debate the whole question of the future of the Union. It will have to address fundamental questions such as what the Union is for, what its common policies should be and who should be responsible for doing what.
  
  The Convention will represent not only the Member State governments but also the national and European parliaments. The candidate countries too will be represented. After all, the future of the Union is their future too.
  
  The Convention will lead to an Inter-Governmental Conference in 2004 that must produce a new Union Treaty. A Treaty that sets out our agreed answers to the fundamental questions, and does so in simple and clear terms that the European citizen can understand.
  
  Ladies and gentlemen,
  
  The enlarged Union needs more than institutional reform or even a single currency. It also needs a dynamic modern economy that generates jobs and prosperity.
  
  Two years ago in Lisbon, the European Council decided on an ambitious goal: to turn the European Union into the most competitive and dynamic knowledge-based economy in the world. The Lisbon agenda should be seen as completing the microeconomic dimension of the Euro, and it is directly linked to our effort to maintain and modernize the European social model.
  
  We are determined to maintain our commitment to social justice. Europe must be a caring and competitive society. A sustainable society too. Sustainable development and protection of the global environment is one of our top priorities. These are not just vague ideals: we have a detailed strategy for achieving them. A strategy of far-reaching economic and social reform. There's still a lot to do but the Commission is carefully monitoring progress and I'm pleased to say we're well on track.
  
  Ladies and gentlemen,
  
  An enlarged, reformed, economically strong and politically united European Union will be a major player on the world stage. A force capable of spreading peace, stability and prosperity far beyond the EU's new borders. We are starting by exporting stability and prosperity to our immediate neighbors. Neighbors that include the Balkan countries, Russia and Ukraine. We are entering into special partnerships with them, establishing with them common policies on things like energy, the environment, immigration and the fight against organized crime. To increase stability in the region, we are promoting democracy and respect for human rights in those countries. To increase prosperity in the region, we are giving them privileged access to our enlarged Single Market.
  
  But the new Europe can also play a major role in bringing these benefits to other troubled regions of the world. The Middle East, for example. Despite the continuing violence in that region, I still hope the reasons for dialogue will prevail. I am convinced that Europe can make a substantial contribution to strengthening dialogue in the Mediterranean and to the mutual understanding and mutual knowledge which are essential if there is to be lasting peace in the whole area.
  
  This is the moment to show that Europe is on the side of the peacemakers in both camps. It is also the moment to bring to bear all the resources the EU can muster in terms of capital, investment, technology and people. This, ultimately, is the best way to fight terrorism - and in the wake of 11th September 2001 this is a top priority for Europe.
  
  The barbaric attacks that struck New York and Washington last September were directed not only against the United States but also against the whole free world and our common values. We knew then, as we know today, that those cowardly acts could not break the resilience of this great city, nor the courage of its people. Since 11th September, European institutions and governments have been working closely together with our American friends and partners in the UN-coordinated effort to combat terror and to defend freedom. I am proud that EU Member States have contributed politically and militarily and in other ways to the campaign in Afghanistan, and that Afghan leaders chose a European country, Germany, as the venue for their conference on the future of their country. Europe will not allow terrorism to triumph. We shall not allow terrorism to divide the world, as its perpetrators intend it to. We shall deny them this victory.
  
  The September 11th attacks were the acts of extremists who represent nothing but extremism. But we are keenly aware that terrorism exploits political tension in the world's troubled regions. Tension to which lasting political solutions will have to be found. The EU intends to play its full part in finding those solutions.
  
  The 11th September attacks were also an economic shock that accelerated the global economic slowdown. But here too there are signs that things may not be as bad as originally feared. First, the economic discipline imposed on the EU by its single currency has been extremely healthy. Our economic fundamentals are in good shape, and the Euro has helped us absorb the external and internal shocks of last year. This puts Europe in a better position to recover from the current downturn.
  
  There are also signs that the downturn may be short-lived. According to our estimates, the economy will start improving early in 2002, and growth will accelerate during the year.
  
  Ladies and gentlemen,
  
  I have described to you what I see as the three major challenges and opportunities facing Europe: enlargement, reform and the birth of the Euro.
  
  I firmly believe that an enlarged, reformed and modernized European Union will be a powerful force for good in tomorrow's world. This can only be in the interests of the United States. The US needs a strong ally that shares and promotes the same values: democracy, freedom and respect for human rights. An ally that plays a key role, here in New York, over on 1st Avenue at the United Nations - an organization whose work is needed now more than ever. We must be allies not only in the fight against terrorism but in the battle for a fairer world, a sustainable world, for future generations.
  
  Thank you.
  
  
  
  
  • Ref: SP02-001EN
  • Source UE: Commission Européenne
  • UN forum: 
  • Date: 11/1/2002

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• EU Presidency Statement - Introduction of the euro in the IAEA (21/1/2002)