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Brussels, 10 March 2017
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Thank you very much. First of all for the invitation, but also for hosting me in this room, that reminds me of my times in the NATO Parliamentary Assembly (PA), because this is the room where the NATO PA sessions in Brussels normally take place. So this is a very familiar transatlantic set up for me. Thank you, Susan [Danger, CEO of AmCham EU], for all of these things combined.
For me this is really a very good opportunity, not only to address you, but also to have an exchange of views later on. I think this conversation is crucial, coming at a crucial time, where Europe is reflecting upon its future, the United States are reflecting on the directions they're taking, the United Kingdom is reflecting on the direction to take. And the business community in all of this has, I believe, a key role to play.
I will try to align myself with the positive mood, especially of your study, and start from a positive point. I believe that in Europe it is time we start to focus on how strong we are. And I know this can sound strange for you to hear, because we normally associate the words Europe, or European Union, with the word crisis in these times. And yet, if you look at the numbers, if you look at the reality, it's quite obvious this is still the best place in the world where you can live, do business and improve your lives.
Sometimes, us Europeans we don't realise how much we have gained over the last 60, 70 years, also thanks to the transatlantic cooperation we have put in place. And also thanks to our American friends. For which the gratitude will never end. And being an Italian I can say this, remembering parts of the history that my grandmother and grandfather were sharing with me.
This positive narrative about how strong Europe is goes beyond the discussions on Brexit. First of all, because eight months after the referendum we have not yet started even. The notification has not arrived. There is a democratic debate in the United Kingdom about that of which we are very much respectful, but again, the European Council that met yesterday was a Council at 28. I'm chairing three formations of the Council: Foreign Ministers, Defence Ministers, Development Ministers, and I have as a chair the responsibility of building consensus at 28.
And the news is, we do take decisions at 28, by consensus, the last ones, some of them very important, just a few days ago here in Brussels. So, the news is, even if everyone is talking about Brexit, Brexit has not even yet started. And it will take two years from when it will start. I know most of you know this in the room, but I'm not sure our public opinions understand that we're not there yet. So, yes we have a changing environment, but we have also some solid realities that we need to take into consideration.
Going back to how strong we are: for seventy years, Europeans have relied strongly on our Americans, on our friends and allies. They have helped us rebuild our continent after the war, they have been the pillar of our common security. And in seventy years we, Europeans, have become a global power. This is also a word that we don't normally associate with Europe. Power. But indeed if you look at the numbers, we are a real global power.
We're going to celebrate the 60th Anniversary of the Rome Treaty. So we are grown up and it's time we realise how much we have grown in this decades. We are today part of the world’s economic G3, we are the leading trading partner and foreign investor at all corners of the world, everywhere, from Asia to Latin America, and we are a global security provider, more and more so.
So, I believe the European Union is an indispensable partner for the United States. And let me take this opportunity to thank publicly, as I have done privately several times, someone who is in this room and has worked enormously on strengthening the transatlantic cooperation in these years here in Brussels and that I understand has enjoyed also your awards this morning. Tony [Anthony Gardner, former US Ambassador to the EU], grazie mille. He has been a great ambassador here in Brussels and I wish you all the best for the continuation of your wonderful career. Grazie.
This to thank him, but also to thank you for awarding him because I think you made a wise choice. He has touched first hand, and he has promoted first hand, this indispensable partnership we have across the Atlantic. And by the way, let me tell you something here that I normally say to our American friends who are not from the United States, but that I really believe is true. When we talk about the transatlantic relations, we don’t only talk about the Europeans and Washington, or the United States. Because across the Atlantic from Europe are also Canada, Mexico and the entire Latin America. And that is also part of the transatlantic relations for us.
But this partnership we have, between the United States and the European Union, is an indispensable partnership for both of us. In all my first meetings, both in Washington DC, and here in Brussels or in other parts of Europe, in these first months, I have seen great interest and respect towards the European Union. I know this is not always the public message that comes across from DC, or from other places in the United States, but in all my meetings, with Vice-President Pence, with Secretary Tillerson, with Secretary Mattis, the message has been loud and clear. Also publicly here in Brussels from Vice-President Pence.
And the message has been: United States recognise the added value of the European Union and of our cooperation. And we want to do even more together in some of the fields that are key for both of us. And I believe the fact that Vice-President Pence paid an official visit to the European Union institutions here in Brussels is in itself quite a political message. I'm going to be in Washington again for my second visit in a month next week for other meetings and for our common work on the counter-terrorism and anti-Da'esh Coalition of which we are part.
We realise there is work to do together, we realise we need each other. We need each other on security issues – Europe needs the United States, but also the United States need Europe and the European Union. We need each other because, first of all, the challenges we're facing are common and they go beyond our borders. If you think of the real security challenges we are facing today: think of the online propaganda of terrorist groups, think of terrorist financing - and I could go on with a long list - you don't really tackle these issues within national borders. The threats go transnational and our work to face them and to fight them has to be based also on international cooperation.
Isolation is not giving an answer to the threats that our citizens are facing, first of all in the security sphere. And in fact the cooperation, the data cooperation of our agencies, among our agencies, for instance on counter-terrorism is getting more and more intense by the day. So when you look at the practical cooperation of our people on the daily work they do, counter-terrorism for instance, is growing, is increasing every single day.
We need each other also because we are complementary. There has been a lot of discussions around the burden sharing across the Atlantic, on defence for instance. This is more of a NATO debate, that I will leave to my friend Jens Stoltenberg [NATO Secretary General] to manage. But there are a couple of examples I always use, both with my European and my American friends.
No matter of how much of the GDP a Member State of the European Union or a NATO ally spends on defence, invests on defence, there is one number - actually two numbers - that tell us a lot. Europeans invest 50% compared to the Americans on defence. The output of this investment in Europe is 15% of the output in the United States. This means that, yes, we have to have reflection on how much Europeans spend on defence, but we can have an immediate work on bridging the gap on the output. This can be done immediately - and what is the difference? Why is our output on defence so poor, compared to the one in the United States? Simply because of the economy of scale. The Europeans do not invest together on defence, while the economy of scale in the United States is definitely more convenient for better output of investments.
If you want to tackle this issue, then you need the European Union, because the European Union is the only one that can incentivise defence cooperation among Member States. Most of them are also allies within NATO and this will increase the burden sharing across the Atlantic. So if you want to improve the defence cooperation within NATO you have to use EU instruments to incentivise cooperation on defence among Members States of the European Union. This is how we are interlinked, this is how we can work together. This is why also our work on strengthening the European defence is making NATO stronger and a stronger NATO makes also America strong.
Also, because no country has the resources to address today’s crises alone. If you take Syria or Iraq, for instance, military power is essential, but it is not enough – neither to end the war nor to win the peace. And we have learned some lessons in the past. Europe’s diplomatic network, power, work - we are the only ones who talk to all the players in the region and beyond. And also our humanitarian support: we are the first donor worldwide and we are by far the first humanitarian donor for Syria and Iraq.
This work is essential. Our European Union experts are demining the liberated areas in Iraq; our engineers are working at the Mosul dam; our investments are supporting the economy of countries hosting millions of refugees around Syria – and I could continue. When the reconstruction of Syria will begin, and at a certain moment we will get to post-conflict also there - even if we are not there yet -, the European Union will be there to accompany a political transition. We will host a conference here in Brussels less than in one month from now, together with the United Nations, to look at the positive economic incentives that can be put on the table of negotiations to create the peace dividends for the Syrians to engage seriously in a political transition.
America needs this power of Europe as well as Europe needs the power of America – not just in our region, not just in the Middle East, but even inside the United States. During last year’s Louisiana floods and Hurricane Matthew in Florida, the European Union put at America’s disposal our Copernicus satellite system, one of the most advanced technologies on earth for high-resolution maps: a tiny example of things that we do together.
And beyond security, the European Union remains – and here I get to economy - the most attractive market and the largest source of investments in the world, including in the United States, and including without the UK in the moment when this will happen and, again, I stress, this has not even started yet.
We know the numbers – actually I guess you know the numbers better than I do, and I am sure in that report you will find many of them -, but let me just mention a couple of facts. European majority-owned firms employ more than four million Americans inside the United States, and more than two and a half million jobs depend on exports towards the European Union in the United States. Almost three quarters of Foreign Direct Investments - three quarters - in the United States come from Europe and the share has been rising in recent years enormously.
Let me share one good story with you in a field that normally is not taken into consideration as top priority, wrongly so: research. A few years ago the European Commission launched an international consortium for research on rare diseases and the idea was to join forces among institutions, the business sector and NGOs, on both sides of the Atlantic, and to develop 200 new therapies for rare diseases by 2020. Well, they have managed to achieve their result last year, four years ahead of schedule. And thanks to our transatlantic cooperation, in a field such as research. So, transatlantic cooperation makes us strong – for sure stronger – on research and technology as much as on defence. Three quarters of research performed by foreign companies in the US come from Europe.
And there are three times more American students in European universities; I have the impression that the Italian universities contribute a lot at least for the attraction that Italy can have on the American students. So there are three times more American students in European universities than European students in American universities. Our top class public education – let me say so because I am proud of that – is incredibly attractive for Americans. I guess also our food, our way of life, our weather - maybe not here in Brussels, but in other parts of Europe - and they are bringing back home in the United States the knowledge, the expertise, the lifestyle they get here in Europe and that many in the United States appreciate, including in the new US administration. Europe is attractive for Americans. Everyone in this room understands this perfectly well. And Europe will continue to be attractive even after Brexit, when, eventually, it will happen.
I really don’t want to underestimate the impact of the UK decision. The referendum was painful and we all wished here in Brussels for sure that this was not going to be the decision that the voters in the United Kingdom would have taken. Because we know perfectly well the enormous contribution that the United Kingdom gave to our economy, to our foreign policy, to our strong transatlantic relations. Before the vote, as I had said, we hoped the British citizens would decide to remain. But I believe their decision to leave will have tougher consequences for Britain than for the European Union. It is not a wish, it is looking at reality of what is happening already now and what kind of impact this will have on the United Kingdom itself.
We will still be in the European Union the leading foreign investor in the world, and the main donor for international development or humanitarian aid. We will still be the largest global market on earth including for American businesses, and you know that well. More than 400 million people with the same rules, the same protections and the same standards. Something nobody else in the world can compete with in terms of attractiveness of unique market.
Some believe the European Union is too big to be an efficient system; I know that this is quite common as a narrative: bureaucratic, it doesn't work, it is too slow, it is too complicated. Part of it is true. I was fighting myself in the first couple of days because you do not really have much time to take time at the beginning of this job just to look at the organigram of our institutions. It is complex. Let me tell you that being expert in complexity in the world of today is not a minor issue. It gives you some instruments to understand complexity also outside of yourself.
Let me tell you something: two days after the British referendum, I presented a Global Strategy for foreign and security policy of the European Union to the Heads of State and Government of the 28 Member States. That was in the end of June. Eight months after, the British government has not even notified us of their decision to leave the European Union. I am not talking about setting up the negotiations. I am saying that: that the referendum – that was a clear political choice – did not have an institutional translation. It did not have an impact in our lives; and Theresa May [Prime Minister of the United Kingdom] was sitting at the [European] Council yesterday as all the other Member States.
Why? Because - and I have great respect for this - democracy can require time, including the UK democracy. There are procedures, there are systems to be put in place and things to be prepared in the United Kingdom that is an important country but one country. So democracy takes time, democracy takes decision-making, democracy takes discussions, voting and if you take this to the continental scale of the European Union, you will understand easily that you can make the comparison. If it takes more than eight months for the United Kingdom to notify a political decision that was taken by referendum, you understand that European Union procedures can take time.
And yet, in the meantime, in these eight months, the implementation of that Global Strategy I presented back in late June has moved fast, with unity and with determination. And last Monday we agreed unanimously to set up a first unified command structure for our military missions of the European Union. We are creating a European Defence Fund to promote cooperative procurement, have larger research programmes and more predictable investments in the field of defence. And you understand how important this can be for the European defence industry. And in this field, we have achieved more in these eight months than in the previous 60 years. So are we sure that we are so slow? Are we sure we are so divided? Are we sure it [the EU] is such a dysfunctional body?
I am actually seeing a lot of potential in our Union and I belong to that generation that has lived the European Union as the dream of the European identity. My mother and father were the ones betting on the European Union as the way to peace and they won this bet. My generation has seen the peace becoming a reality, we have it for granted. We should look at the Balkans and not have it too much for granted. But the European Union has brought to our continent sixty years of peace, because we have simply realised that making business was much more convenient than making war. It is a very basic principle you would all share.
But my generation was the generation that was betting on the common European identity: Erasmus, Schengen, the currency, the dream. Today, we have the peace - not sure if we have the dream anymore -, but we still have the Erasmus, the Schengen, the euro plus today we live in a time of the indispensable European Union. There is no other way in which the Europeans can regain sovereignty in the global world if not through the Union. I know there are a lot of talks about regaining sovereignty, but if you look at the continent sized powers in the world, from the Americans, the United States, to China, India, Brazil, I often say that there are only two kinds of Member States in the European Union: the ones that are small and the ones that have not yet realised they are small. So you need to be united if you want to count to protect your citizens, to make good trade agreements and to play the role you can play in economy, in trade, in foreign policy, in defence, in security, in energy, in culture.
And, by the way, let me tell you something on trade - and then I will finish: I know that there is a bit of misunderstanding across the Atlantic about a story that the Member States of the European Union cannot conclude or negotiate trade agreements bilaterally with third countries. I know President [of the United States of America, Donald] Trump was impressed – to say diplomatically – when Theresa May explained to him that the United Kingdom cannot negotiate a bilateral trade agreement between the United Kingdom and the United States as long as they are a Member of the European Union as this is going to be at least for the next two years plus, whenever they will start the notification process.
And I know the perception might be: ‘this is a prison, if you cannot even negotiate a bilateral trade agreement’. No, it is not a prison, it is a guarantee. It is a guarantee for us because we are much stronger if we negotiate as European Union, so big and so powerful. So it might be natural for the ones that you negotiate with that they wish you were weaker and negotiate bilaterally, nationally, but it does not defend European citizens as much as negotiating as the European Union, because this gives you the strength to negotiate a good deal. So we are also good negotiators. We know how to make deals and we know how to protect our citizens and we are stronger if we are together as European Union.
It is a matter of size, it is a matter of economic power, it is a matter of relevance. But it is also – and here it comes another element – that it is very important for us, it is also the guarantee that whatever trade agreements we conclude with partners around the world we do it as the European Union and this guarantees European citizens that there is no distinction, there is no inequality on the positive impact that trade agreement will have in one part of Europe or another. This is the way of protecting Europeans in the world as globalised as it is today. This is why I have to tell you I am proud our trade agreement with Canada – CETA [Comprehensive Economic and Trade Agreement]; I am proud we are moving fast and well with others partners in the world on trade agreements, from Mexico to Japan and I could continue - both in Latin America and in Asia. And I see that our partners in the world are looking at the European Union today as a reliable, indispensable partners, also to strengthen the system of free and fair trade in the world.
We believe it is possible to have a trade that is free and fair and we believe that is essential to build, to protect and promote rules of the game that make sure that trade benefits equally everyone. This is our idea of free and fair trade. We can push for better protection for workers, higher standards on food safety, stronger recognition on trademark products, with more opportunities for the entrepreneurs.
As a Union of half billion people we have the size, we also have the impact globally to work for that. When we say rules-based global order, we do not only refer to multilateralism and security, we also refer to global system of trade that is guaranteed by rules, because rules are not something that are limiting or binding our freedom - rules are the guarantees for all that the play is fair. So this is our idea for free and fair trade. This is what we propose to our friends all over the world. These are our principles, our values, our interests that we believe we share with our American friends. And this is the foundation that we want to use as we engage with our partners, including with the United States of America.
I know we might not always agree on everything and we are probably entering into a time of a more pragmatic approach, but we are ready to be extremely constructive and not only pragmatic, because I believe our interests converge - in the economic field, in the security field. When we look at our citizens’ lives, I think we have much more that we can do together than issues on which our ways will go apart.
We know where we stand and what we want to achieve. For all those who share the same goals, the European Union is, as I said in the beginning, an indispensable partner for Europeans and an indispensable tool to play our role in the world. And we will be even more indispensable in the future as a force for multilateralism, for a fairer globalisation, for an open and cooperative global order and I believe, also, for an economic growth that can benefit businesses, trade but also the life of our citizens. I thank you very much and I am looking forward to our exchange.