Speech to the National Press Club, Canberra,

delivered by H.E. Ambassador David Daly,

Head of Delegation of the European Union to Australia,

24 March 2010

“Europe’s man in Canberra – one year on”

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INTRODUCTION On the other side of the globe the world's greatest political experiment has been taking place over the last 60 years. It now involves 27 European states, which have come together in a grand political venture, where they take collective decisions over a wide range of policies, with a large social component including transfers of money from the richer to the poorer members.  It is called the European Union. Because of the EU both history and political geography have been rewritten. Historically, the European Union introduced lasting peace to a continent previously divided by war; in terms of political geography we have changed the map of Europe - the Iron Curtain division has been conclusively removed with the inclusion of our new Member States.  This has, of course, not gone unnoticed here in Australia – but it could be easy from afar to underestimate just how important these changes are.

I arrived in Australia in January last year and presented my credentials to Her Excellency the Governor General in February.

As Head of the Delegation of the European Union to Australia, and also to New Zealand, I represent the 27 Member States of the European Union in those areas where they have decided to pool their resources at European level.  This still leaves plenty for the individual EU Ambassadors to do, because that pooling of resources is a joint effort and I work extremely closely with them and, in addition there are the large areas where the Member States continue to act on their own behalf.  There are two themes which shine through the various issues which have kept me busy during my first year in Australia.

• That the EU matters; it is a global player, and secondly
• That Australia and EU are natural partners one for the other.

These themes hold true across a wide range of issues; the GFC, climate change, international security, regional issues, international trade …. to name only some.

The Global economy

With a population of 500 million, the EU economy generates 22% of global GDP and is the world's largest trader in both goods and services.  The 27 Member States have come together to create an integrated Single Market where goods, services, labour and capital can move freely throughout the Union.  With the euro, the EU launched a new currency on the world, now the second reserve currency after the US dollar, with 28% of world currency reserves. In economic terms the EU is a genuine world power.

How is Europe doing right now?

Well, for a start, it is clear that the global economy has taken a hammering, even if Australia has been spared its worst ravages. We in Europe are still struggling but the signs of recovery are there. At the same time, it is clear that only through coordinated action can we come through it. Nonetheless Europe has its recovery plan and this is being implemented. A key issue now is the coordination of the fiscal exit strategies to start next year at the latest.

Like most other developed countries EU Member States are faced with rising budget deficits following the fiscal injections made. Twenty Member States are currently under our Excessive Deficit Procedure, i.e. where their deficit or debt ratio to GDP has warranted a response from the European Commission and the Economic and Financial Affairs Council requiring corrective measures on the part of the Member States. Greece’s Stability Programme under its euro zone obligations is designed to reduce its excessive deficit to below 3% of GDP by 2012 with a reduction of 4% points this year.  Very tough measures are being taken by Greece to meet these targets. In terms of greater financial sector regulation, we are creating new European level supervisory authorities.

As a currency, the euro is facing a stiff challenge but it will come through it. Why? Because workable, balanced solutions will be found to meet the challenge. The political will to ensure the success of the Economic and Monetary Union is not to be underestimated. Facing up to crises has been a key ingredient in furthering European integration across a wide range of areas.

What are the EU and Australia doing together in this regard?

International coordination has been key to the world avoiding a 1930s style economic collapse. Working together in the G20 has been important for the EU and for Australia. The G20 London summit was an important success for us all collectively; agreement on the need for stimulus packages, for greater financial sector regulation, and for strengthening global financial institutions were each crucial.

The EU supports the G20 as a key forum. This comes as no surprise; indeed, it was President Sarkozy and President Barroso who went to Washington to push for the November 2008 G20 summit to tackle the GFC. However, it is now up to the G20 to deliver.

Climate change

Last March I gave a speech on climate change at the Greenhouse 2009 conference in Perth.

Climate change is a major challenge which rightly absorbs a lot of my time.

I have often been surprised by some of the comments made in recent Australian debates about climate change and, in particular, about the EU.

The EU has been a global leader on climate change issues for a long time. Since 2005 Europe has had its ETS, the first to connect up different countries – something many people said would not work, but it did. Incidentally, it now covers 30 European countries - the EU and Norway, Iceland and Liechtenstein.

What has the EU been doing on climate change?

In Europe we see the future economy as a low carbon economy and European industry is preparing for this. Industry asks us for a stable framework within which it can assess risk and plan accordingly. One of our principle tools, the ETS, has been helping provide that framework for industry. Our ETS covers over 40% of our emissions; it gives clarity about the emissions reductions as the cap on emissions reduces over time; it is a market based system which gives a price signal and flexibility to industry. Studies show that our industry is taking the long-term view and is factoring in price signals from the ETS in its investment decisions. As you know, the EU has taken a unilateral and unconditional target of cutting GHG emissions by 20% by 2020 compared to 1990 – this is now backed by EU law. We are prepared to go to -30% if other developed countries commit to comparable emission reductions and developing countries contribute adequately according to their responsibilities and respective capabilities. As part of our overall package of measures are the target of 20% increased energy efficiency and the legally binding 20% renewable energy by 2020. The Copenhagen summit was very disappointing, especially when measured against the ambitions which the EU had for it. However, disappointment with Copenhagen does not mean that the problem has gone away:

• it does not nullify the vast bulk of the science which points convincingly to the need to take urgent action;
• it does not mean that we should just shrug our shoulders and forget the whole thing.

While Copenhagen was disappointing there were some positives which have to be recognised. Among the positives were:

• That it got buy-in from a wide range of countries, many of them for the first time in climate change negotiations;
• Another point that it anchors the vital objective  of limiting global warming to below 2 degrees above pre-industrial levels;
• That it requested developed countries to put forward their emissions reduction targets, and the developing countries to put forward their actions,  by the end of January – many have done so, including the US, China, India, Japan and Australia.

The Accord also provides for the immediate implementation of a number of actions, including the fast start financing for developing countries. The EU has committed €2.4bn per annum for this. The EU’s ultimate objective remains a strong international legal framework to address climate change and we are ready to adopt such a robust and legally binding agreement in Cancun later this year. It may be, however, that a more step-by-step approach proves necessary. What is crucial is that afterwards we should be able to look back and see that Copenhagen was a first step in a longer journey, but that finally we did reach our destination on climate change.

Have Australia and the EU been doing anything on this together?

Yes, especially when Australia ratified the Kyoto Protocol. The EU and Australia have had a very strong dialogue leading up to Copenhagen and we both are disappointed about the results. Similarly, I think we both see the need to move on from Copenhagen and see it as a first step. Important for Australia and ourselves is the search for cleaner coal. Last May, the European Energy Commissioner Andris Piebalgs signed an MoU with Energy Minister Ferguson making the European Commission a founding member of the Global Carbon Capture and Storage Institute. Australian science has made important contributions to the climate change debate globally. I wonder if there is not room for Australian and European scientists to do more together under the EU’s research programmes? In addition to spending time in Perth with Australian climate change scientists, I also went north to the Pilbara region of WA. This resource rich, isolated, challenging yet very beautiful area captivated me – I can’t wait to return.  

Europe Day – Area of peace and prosperity – EU as security provider

May is a particularly busy time in the EU calendar because there are many celebrations of what is called “Europe Day”.  I hosted a large diplomatic function and I spoke at similar functions in Sydney, Melbourne and Brisbane. Europe Day is celebrated on the 9 May every year. It commemorates the fact that the French Foreign Minister, Robert Schuman, on 9 May 1950, proposed that the countries of Europe should place their industries of war – iron, coal steel – under a joint supranational control. This led eventually to the EU of today. The EU was born out of war, to prevent war in the future such as Europe had seen every fifty years going back through the centuries. The same desire to secure peace and prosperity in Europe was at the heart of the recent enlargement of the EU to 27 made possible by the fall of the Berlin Wall – the 20th anniversary of which we celebrated last November. This desire for peace in Europe has naturally developed into a political desire within Europe to play an increasing role in helping secure peace elsewhere in the world. Being able to play a serious role in peace and security terms outside the EU has been a long, frustrating, but ultimately successful story leading to the birth of the EU’s Defence and Security Policy in 1999, influenced by the tragic Balkan wars of that decade. The Europe of the 21ss century has become a global player in terms of security. The EU has mounted some 23 security operations to date, deploying over 70,000 men and women – peacekeepers, troops, police, and other civilians across a range of missions. These missions are innovative, tailor-made solutions mixing civil with military components. This is precisely the EU value added – and this is what the complex security challenges of our time require.  These EU security missions demonstrate some important characteristics;

• Security in our own region: EU soldiers have replace NATO ones in the Balkans; the EU plays a crucial role in Kosovo;
• Speed: EU soldiers were able to get on the ground quickly in Chad to protect Darfurian refugees as a holding exercise while the UN got its force together;
• Brokering a ceasefire and making it work: Georgia. The ceasefire in Georgia, brokered by the EU, was made to stick largely because the we were quickly able to get EU cease-fire monitors on the ground quickly into Georgia, thereby reinforcing the political process;
• Helping in post-conflict situations: Aceh – the EU joined with ASEAN countries in the monitoring mission which helped implement the peace agreement.

In all of these cases the EU remains as a major donor in the countries concerned.  We have not gone away after the crisis. Overall, we can be very pleased; we have gone farther in this area in ten years than most people ever imagined possible. However, we should remain balanced in our appraisal. The EU has made important progress but there is still much to be done and the Lisbon Treaty brings further improvements in terms of streamlined instruments.

How does this affect Australia?

Australia has troops in Afghanistan; so too do over 20 EU countries with around 27,000 troops serving there. Overall EU and Member States assistance to Afghanistan is around €1bn per annum. Addressing the Somali piracy problem, which the EU is helping out on, is important for shipping safely in the Indian Ocean. Australia is concerned about security and terrorism in this region and so too is the EU. For that reason we have been working together in Indonesia jointly funding the Jakarta Centre for Law Enforcement Cooperation in the fight against terrorism. Australia and the EU are generally on the same side of the votes in the UN on issues such as human rights, WMDs and other such issues. Together we have been working on anti-radicalisation issues as part of the security threats which have to be faced. That the EU, as EU, has any security capacity at all comes as a surprise to many Australians I meet. Let me assure you today there are more officials wandering the corridors in Brussels wearing military uniforms than there are dealing with trade distorting agricultural subsidies. Please come to my next Europe Day reception to hear more!

Pacific region…another area of EU Australian cooperation Winter in Cairns is lovely - beautiful balmy tropical weather where to wear anything other than a tee-shirt is to be seriously overdressed… Last August a large high level EU team came to the Pacific Islands Forum meeting in Cairns. Why this European interest in the Pacific? Three reasons: Firstly, because the EU collectively is the largest donor of development assistance globally – giving some 60% of all donor aid, around the world, some €50bn annually to around 160 countries.  The EU is the global player in development. Secondly, because the EU collectively is the second biggest donor of assistance to the Pacific region after Australia. The EU has over €450m for the region in the current period to 2013.  Over the past 30 years we have allocated some €2bn to the Pacific region. Thirdly, because Europe is in the Pacific – through the overseas territories of certain EU countries, such as France and Britain.

What is the EU doing in the Pacific?

In 2006 the EU adopted a Strategy for the Pacific based on a Blue/Green analysis – that is to say the focus of our aid should be on maritime and environmental issues, especially related to climate change. Also getting the Pacific region to be better organised itself is an important part of our policy – hence a lot of EU support for the PIF Secretariat in Suva.

Again, how does this relate to Australia?

The EU, together with Australia, New Zealand, the US and others, is at the forefront of global debates on aid; how can we as donors make our aid more effective? In the Pacific, we recognise that we can learn a lot from Australia and New Zealand.  We also have our own experience of dealing with small and fragile states in Europe – we should share our experiences.  We are doing exactly this; Australia, New Zealand and the EU now meet annually to discuss the nuts and bolts details of our respective aid programmes in the region. The EU supports the Cairns Compact endorsed under Australian chairmanship. We agreed last year with Australia on the reciprocal untying of some of our aid programmes in Asia. We started work on even deeper cooperation on our aid implementation – eventually enabling Australia to implement some of the European aid programmes and vice versa. The situation in Fiji continues to concern the EU, as it does Australia and New Zealand and others.  We urge that there be a meaningful internal political dialogue in Fiji preparatory to holding democratic elections there as soon as possible.  Among other considerations, Fiji is in breach of its agreement with the EU and has already lost €32m of support for the sugar sector and another €28m could be lost this year. With these sorts of issues to be discussed with over 20 countries last August, I need to return to Cairns to in order to put on a tee-shirt.

Trade The completion of the Doha trade round is a key issue with obvious benefits for the global economy. Australia and the EU are among the main drivers for a Doha deal and call on partners to return to the negotiating table – this was the sense of the joint article penned last June by Trade Minister Crean and European Trade Commissioner Cathy Ashton. The EU has put its agricultural export subsidies on the table if others do likewise.  We are able to propose this because of the huge transformation which has been made in European agriculture over the past 18 years. Today over 90% of EU agricultural payments are not trade distorting, as judged by the WTO. Naturally the EU and Australia do not agree on every trade issue and we still have robust discussions about things such as Australia’s Luxury Car Tax or the new Australian import procedures for beef…. Australia too has its list of issues with the EU. However, the key thing is for us to find solutions for these issues; just as we have done recently for Australian exports of wine and of beef to the EU.

October Ministerial EU-OZ in Stockholm

Last October Foreign Minister Smith participated in the EU-Australia Ministerial meeting in Stockholm.  He sat across the table from three politicians on the EU side – Swedish Presidency Foreign Minister Carl Bild, a representative of EU High Representative for Common Foreign and Security Policy, Dr. Solana, and European Commissioner for External Relations Mme. Ferrero-Waldner. The Lisbon Treaty simplifies things – now Foreign Minister Smith will just have to sit across from one EU politician – HR/VP Baroness Catherine Ashton. On top of the shared values and like-mindedness which I have been constantly referring to, yes, the EU is also Australia’s biggest economic partner. While China has just dislodged the EU as Australia’s largest partner for trade in goods, the EU is still the largest partner for trade in services and for investment – with EU investments accounting for around a third of all foreign investment in Australia and for around 1.4 million Australian jobs directly and indirectly.  And, again yes, when talking of trade in today’s world you do have to add up all the trade data for all 27 EU member countries. Recently we gave ourselves a new tool for increasing our cooperation – the new EU-Australia Partnership Framework agreed 18 months ago in Paris. This outlines the broad range of areas where we are developing further our cooperation. We already have concrete results – like in the new Security of Information Agreement or in the new eVisitors programme helping all EU citizens to get Australian visas…. We have other actions ongoing – like the current negotiations on a comprehensive air services agreement which would free up air links between Australia and the EU, or the new dialogue on higher education … And we are exploring other, new activities to take our cooperation even further.

Lisbon Treaty – new tools for today’s challenges

The Lisbon Treaty, which entered into force on 1 December last year, is all about making the EU stronger and more efficient both internally and as a global partner.  Decisions can be taken more efficiently, even in a Union of 27 or more Member States. The democratic underpinning of the EU is strengthened through increased roles for the European Parliament, national parliaments and even through a citizens’ initiative. Through this treaty the EU equips itself with new tools for meeting today’s challenges. This matters to all our partners with which the EU shares values and is likeminded. – such as Australia. The headline change has been the creation of two important new posts – the permanent President of the European Council, Mr. Van Rompuy, and the High Representative for Foreign and Security Policy who is also a Vice-President of the European Commission, Baroness Ashton. Much has been made of the personalities of the three actors; Mr. Van Rompuy, Mr. Barroso and Baroness Ashton. However, at this juncture, we need the new Lisbon institutional arrangements to work - and work well. This is a great team to do exactly that. The HR/VP will have a new EU diplomatic service to help her – called the European External Action Service.

Conclusion

In today’s world we all face the same basic global challenges such as those which have kept me very busy throughout the year. In facing these challenges the EU looks around the globe to see where there are partners who share our basic values and are likeminded on these issues. Inevitably we view Australia as a natural partner. Australian foreign policy is of course right to focus on important areas such as the relationship with the US and the rising economic power of Asia. So too do we in Europe. For example, China is now the EU's second trading partner behind the US and it is our biggest source of imports. The EU for its part is China's biggest trading partner.

Russia, Japan, Korea are important trading partners as well. The EU conducts annual summits with these other countries as well as regional fora in the Asia-Pacific region. Our engagement takes us into issues beyond those of trade and investment to issues of foreign and security policy, human rights, international crime.  All of this is of interest to Australia.

But this is not a zero-sum game where the rise of Asia is necessarily at the expense of others, and especially not of Europe.

It is true that we all have to adjust to changes in economic and political power as the developing countries reach new levels, in fact the levels which our policies encourage them to strive for. However, the rise of Asia has been paralleled not by decline but by positive developments in the power and influence of the European Union, precisely because of the reasons I mentioned at the outset, namely Europe's collective decision making over an ever wider range of policies. This includes foreign and defence policy, where Europe is no longer in its infancy. As I have said it is in fact rapidly reaching early maturity along lines which generally chime with those of Australia.  And, while Europe has been challenged by the GFC, it is really far too early to predict our demise.  I have heard some voices here say that Australia should consider a fourth pillar of its foreign policy – a strategic cooperation with Europe.

I would just say, “Good on ya’!”

This page updated April 6, 2010