Opening Remarks by Angel Gurría,
OECD, France, 9 May 2017
(As prepared for delivery)
Dear Ambassador Schlegelmilch, Commissioner Moscovici, Members of the Panel, Directors, Ladies and Gentlemen:
It is a great pleasure to participate in this opening of Europe Day 2017, to reflect together on the challenges of the European Union after 60 years of integration.
It is very timely that we have this discussion today, in such an important day for Europe. Just two days ago, the people of France, our host country and one of the central pillars of the European project, decided to say no to isolationism, to say no to exclusive nationalism, to continue to be part of this historic project of European integration. It was a call for change, for improvement, for speeding up the reforms, and I am sure that the European institutions are taking this message quite seriously.
The European Union is always a work in progress. As I often say: it’s about the scaffolding. You save for years to come visit Europe with your family, and you arrive to Notre Dame, Il Duomo, the Cathedral in Cologne and you notice with disappointment that the monument is covered because they are repairing it or cleaning it. But you come back in two years and then the scaffolding is gone and you stand in awe before an amazing creation. That is what the integration process is about, constant repair, constant reform, constant improvement, constant reinvention, constant strengthening, and a lot of scaffolding.
This should not overshadow the enormity, the relevance, the consequence of this project. The European Union is the bedrock of peace in a continent battered by recurring wars over hundreds of years. This peace is built with and sustained by strong integration dynamics. The EU is the regional economic block with the most intense intra-regional trade flows. Indeed, intraregional exports represent 64% of total EU exports. Intra-EU FDI inflows are also powering this integration, having increased by 40% in 2015 to reach 365 billion euros.
Strong intra-regional flows of people are another cohesive force: the majority of international migrants living in Europe in 2015 came from another European country. And let’s not forget the crucial role of structural and investment funds, promoting regional cohesion, innovation and development with a budget of 638 billion euros between 2014 and 2020.
However, these remarkable achievements don’t make great sense if the quality of life of people does not improve. The economic performance of the EU has been weak in recent years: regional average growth between 2012 and 2016 has been close to 1%. Although the economic recovery has now taken hold in most European countries, GDP growth forecasts for this and next year are still modest (both around 1.8%). Investment as a share of GDP still remains 10 percentage points below its pre-crisis peak in the Euro area, and well below its historical trend.
This is certainly not sufficient to create the millions of jobs that the EU needs. Unemployment has fallen slightly, but still stands at an average 8%, with youth unemployment at over 17%. The EU has some of the most advanced social security systems, but still close to 24% of the population in the EU-28 is vulnerable, at risk of poverty or social exclusion. These numbers undermine the integration project.
In the last Eurobarometer, only 33% of Europeans reported to trust the EU. And we have seen that an important number of European countries have developed strong anti-globalisation or anti-European political parties or movements. Brexit is a major setback in the European construction, but it is also a very telling story, full of warnings. We recently had a close call in The Netherlands, and even here in France the anti-integration, anti- European forces have visibly increased their strength.
The message is clear: European integration must be a bottom-up process. The EU needs to promote a more resilient and inclusive growth. For this, it will be critical to increase public investment and leverage private investment. This is what the Juncker plan is aiming to achieve and it should be pursued. A faster implementation of Europe's energy, telecom and digital single markets is also vital to foster investment, productivity growth and trade.
Addressing remaining problems in the financial sector, notably taking bolder action to resolve non-performing loans and completing the Banking Union, will help ensure that financial resources are channelled to productive ends, with special focus on SMEs.
The EU needs to better support its citizens in the face of globalisation through more effective up-skilling, re-training, guidance and job-search support for youth and the long-term unemployed. This is crucial in order to rebuild people’s trust in the European project. Increasing the focus of education policies and life-long learning would facilitate a swifter transition of workers between jobs and the adoption of new technologies.
Migration will continue to be a top challenge so it will be necessary to improve the integration policies, providing skills identification, accelerated language learning, and vocational education and training. We have long held and documented that migration is a medium and long-term plus for host countries, that it is a net positive even fiscally, provided that the appropriate initial investments are made.
The OECD is helping many European countries to design and implement reforms and policies in these and other key areas. Our work with Italy and Spain on their labour reforms, or our work with France on the Loi Macron, are recent examples. We are also collaborating more and more with the European institutions, through joint initiatives on Governance and Management (SIGMA), the Inter-generational Aspect of Integration of Immigrants, or the work we are doing with the European Commission to help Greece in areas like competition, anti-corruption and education. There is so much we have achieved so far, and so much more we can achieve together!
Commissioner, Ambassadors, Ladies and gentlemen:
Europe’s integration is an irreversible process. Beyond treaties and Brexits the European economies will keep trading and investing with each other, the European banks will keep negotiating deals among each other, the European people will keep travelling, studying, exchanging ideas and innovations in and with other European countries, the European politicians and political parties will keep interacting with each other.
This doesn't mean that the key objectives of integration will be automatically achieved. This doesn’t mean that the benefits of integration will be widely distributed. This doesn’t mean that Europe will achieve the resilient, inclusive and sustainable growth it needs and deserves. We have to struggle for this. We have to improve our reforms, policies and cooperation mechanisms. We have to adopt new approaches to economic challenges.
This is both a commemoration of the past as well as a new beginning. We will continue working for a more democratic, more welcoming, more inclusive, more resilient, more sustainable, more open and more dynamic Europe. Remember how the OECD was born. Remember its initial raison d’être: the reconstruction of Europe after World War II. We have always been there for you, even before the Treaty of Rome. And we are still there for you today! Count on the OECD to help Europe design, develop and deliver Better Policies for Better Lives!