Strasbourg 04/02/2014

Speech by the President of the Italian Republic Giorgio Napolitano to the European Parliament

1. The sternest tests in the European Union's history

When I last came to this Chamber, seven years ago, it was to pay tribute to the European Parliament shortly after my election as President of the Italian Republic. I should like to take the opportunity offered by your President to continue that tribute, based on thoughts stemming from recent events that we all have experienced.
In the past seven years, European integration has been confronted with the sternest tests in its history.

It is often remarked that, right from its outset, Europe has developed as a community through crises which have arisen one by one and which have then been overcome. However, these were essentially political crises in the relations between Member States of the Community and never - as has been the case since 2008 - structural crises in the capacity for economic and social growth, the functioning of the institutions or the bases for consensus between the European public. Never before, therefore, has the path that Europe is taking been questioned - and seriously questioned. Yet this is the backdrop against which we are moving towards the elections to the European Parliament. I therefore believe that we should reflect on the circumstances that have arisen - albeit to varying extents and in different guises from one country to another - as a moment of truth whose every facet should be thoroughly addressed.

It is quite clear that the main source of disenchantment, and of distrust and rejection of the European project, and above all of the work of the EU institutions, is the deterioration in living standards and social standings that has affected large parts of the population in the majority of the Member States of the Union and of the Eurozone. The traumatic adverse effects of the crisis are embodied in the increase in unemployment, and in the dramatic upsurge in youth unemployment.

2. Austerity policies and recession

It therefore seems natural that, in public discussions and when weighing up policies, there has been a clear focus on a turnaround that will actually restore growth and employment, as everyone considers essential and hopes. Thus it is that a policy of no holds barred austerity is no longer considered to be sustainable. That policy has been the prevailing response to the sovereign debt crisis in the euro area and has led to drastic measures being taken to keep the debt GDP ratio under control and to rebalance, in a series of enforced steps, public finances in each of the countries in the area.

Indeed, faced with a crisis that has raised big question marks over the financial sustainability of the Eurozone countries, there has been no escaping the need to establish and enforce the budgetary discipline that was so seriously lacking after the introduction of the single currency. As the European Union's parliament, you therefore quite rightly helped to launch major packs of measures that introduced a binding framework for the oversight and coordination of budgetary decisions adopted by the Member States of the euro area.

Italy, in particular, has made significant efforts and sacrifices in recent years, coming under major pressure on the financial markets as a result of the interest rates on the huge public debt accumulated over previous decades. Not even the clear improvement achieved in this respect in 2013 can induce us to renege on the commitment to gradually yet substantially reduce the debt level, since Italy's governing class cannot place this weighty burden on the shoulders of future generations.

However, the consequences of the stringent stabilisation measures adopted by the EU and pinned to the Maastricht parameters have undeniably led to serious fall out in terms of recession, lower production levels and a drop in domestic demand, especially in those countries called upon to make the greatest sacrifices. This has happened despite the brave choices made by the ECB to end speculation on the market for public debt titles and to inject liquidity into the sorely tried economies of the Eurozone.

3. A return to growth and employment

The turnaround for which many are now hoping most certainly cannot, therefore, come through demagogic irresponsibility and a fall-back to situations of deficit and excessive debt. It must be one that shows awareness of the vicious circle that has now opened between restrictive public finance policies and the downturn in Europe's economies, which today stand at the crossroads between the green shoots of recovery and the risk, if not of deflation, then at least of major stagnation.

It is now vital for that vicious circle - which is precisely what it has become in many respects, prompting one leading academic, Claus Offe, to portray a 'Europe entrapped'- to be broken, especially if one looks to the position of a whole generation currently cut adrift. For them, even a return to growth will provide few jobs and bad jobs if that growth is weak and does not target specific aims in respect of the young unemployed.
In this connection, one must take into account the ongoing radical technological changes that are taking place and the fierce competition with major economic areas outside Europe. Hence there is a need to reform training systems and the labour market - where this has not already been done - and to invest in knowledge, research and preparing the young workforce for new opportunities and new types of employment.

Achieving sustained and quality growth certainly calls for structural reforms, but also requires the revival not only of private sector investment but also of well targeted public sector investment in support of projects at European and national level. To that end there is a need - beyond rigid interpretations of parameters - to award greater attention to the actual circumstances surrounding debt sustainability in each country and, in relation to this, to remain sufficiently open as to the means and timetables for a subsequent financial rebalancing.
The European Parliament provided valuable pointers in the broad reaching resolution adopted on 12 December 2013, which drew for its inspiration on criteria for renewed solidarity within the EU, and in particular within the Eurozone.
Within the framework of a relaunch of the 'differentiated integration' strategy, and with particular reference to enhanced cooperation in economic and social policies, the resolution covered issues ranging from the Banking Union, yet initiated in June 2012 by the European Council, to sufficient EU budgetary capacity based on specific own resources and strong rules on the coordination of national economic policies to ensure greater cohesion between the economies of the Member States. Neither did the resolution omit to call for the harnessing of unexplored potentials under the current Treaties or to point to future requirements that might arise from amendments to those Treaties.

4. Deep seated change in the way the European Union operates

What we have been seeing, in general terms, is deep seated change in the way the European Union is and operates. The public/electorate is not faced with what would be a misleading choice between, on the one hand, a hackneyed rhetorical defence of a Europe that has shown serious shortcomings and taken wrong turns on its way towards integration and, on the other, destructive protests against the euro and against the Union - and these are indeed purely destructive, even if they are in favour of some imaginary 'other Europe' that is to be built on the ruins of the one which we once knew. No, that is not the choice on the table.

In fact, faced with a serious financial, economic and social crisis, the EU institutions have become bogged down, displaying too much hesitation, divergence of opinion and delay - but nevertheless seeking to correct the way they used to operate.
At a seminar in Berlin in November 2013, the President of the ECB, Mario Draghi, denied that this has been 'a lost decade'. The countries of the euro area have been induced, he said, to use the second decade of the euro to undo the mistakes of the first. This was not rhetoric; it was clear, self critical awareness.
The euro is an innovation of historical importance, but for too long it has remained handicapped by a lack of the necessary flanking measures, with the only explanation for this being the outdated attempts to circumscribe and defend areas of national sovereignty which, following the introduction of the euro, could no longer be regarded as such.
The severity of the crisis has swept away much of the resistance and provided the impetus for closer integration. However, the method and legal framework of choice has without doubt been that of intergovernmental decisions and international agreements, outside the Community circuit. It still remains, therefore, for us to reach a juncture where - as Parliament has called for and as provided for in the fiscal compact - "governance of an authentic Economic and Monetary Union is incorporated into the institutional framework of the Union". This issue is key to a substantial reinforcement of the democratic legitimacy of the EU decision making process, and that is an issue which has become thornier - in political if not technical terms - in the eyes of the public and contributed to their feelings of detachment and diffidence towards the European institutions.

5. Ensuring democratic legitimacy through institutional and political changes to the European Union

I would like to say that the crisis of popular consensus which the European Union and the integration process are suffering owes much to the economic and social malaise which the Union has been unable to avoid, but also to serious political shortcomings, of various forms, in informing and involving the public when shaping the direction and choices taken by the Union. The changes proposed to the electorate must therefore go beyond economic and social policies, as must do the battle against the forces that reject and oppose European integration, its continuity and its necessary and possible renewal. A new period of economic growth, sustainable from all perspectives, is essential to restore confidence, but will not be enough in itself to ensure the democratic legitimacy of the integration process if not accompanied by further changes in the institutional and political life of the Union.
Those of us who trust in the cause of a united Europe can prepare for the electoral fray calmly and confidently, as bearers of change - all the more so if the true nature of our project and our experiences are restored in all their riches, after they have generally been scaled down and economised upon, with heavy technical bias. The vision of what has been constructed in a little under half a century is fading and should be firmly rekindled - not just an area with a common market and economic cooperation, but a Community of values and an interconnected Community of law whose watchwords are freedom and democracy. We have seen an on-going expansion of the horizons of the European project, and the prospect has now emerged of a common European approach and capability in the fields of international relations, of defence and security.

This unprecedented project was prompted by the feeling of sharing a rich common culture, and this was a feeling expressed just a few days ago when Europe bade farewell to Claudio Abbado, that great champion of European values.

6. Nothing can force us to turn back

The conclusion I draw from all this is that the construction of Europe now has such firm foundations and there are such deep rooted interconnections and permeations between our societies and our institutions, between social movements, the public and young people in our countries, that nothing can force us to turn back.
So the words of those who would dissolve what we have built in the past decades, from the Europe of 6 to the Europe of 28 are empty propaganda of little credibility. How can they speak of the 'end of the European dream', claiming perhaps that this could be avoided by scrapping the euro, thereby saving the Union? Some seem to be considering the feasibility and traumatic repercussions of doing this with disarming simplicity. Neither can I see where and what guarantees can be provided for such an improbable solution.
Indeed, despite the plethora of doom laden forecasts of the impending collapse of the euro, the EU institutions and the shrewdest national political leaderships have realised that the euro has to be protected in order to safeguard the whole European project. But it has been necessary to consider the mistakes that have been made through - it would genuinely seem - a weakening of the common political will which made that great leap forward possible, and which should have been present at all the subsequent stages of European integration, along with the processes of German reunification and the enlargement of the Union.

7. Old and new logic and emotions underpinning the European project

If what we are now experiencing and what we will see in the forthcoming elections is - as I said at the start - a moment of truth for the unity and future of Europe, then a vital precondition for success is a new, stronger and more decisive political will that can convey to as broad a public as possible the historical and current reasons for the European project, and which conveys them rationally and emotionally. In other words, the message must be impassioned and heartfelt, like the ones delivered to us in past decades, and such as that of François Mitterrand and Helmut Kohl who, hand in hand, paid tribute to those who had died in the savage Battle of Verdun in World War One.
It has been said that those "two great European figures were imbued with the tragedy of the past" - hence their Europeanism - and this continued up to German reunification and the adoption of the single currency. In fact, the same feeling imbued all the founding fathers of the European Community and signatories of the Schuman Declaration in May 1950, the champions of a prospective European Federation.
I have never feared that, when political and governmental responsibility is passed on to subsequent generations, there could be any evaporation of the inspiration, awareness and common European political will that culminated in the unification of the whole continent on a basis of peace and freedom. However, it is now, in new and different circumstances, that the garnering of strength is to be put to extreme test.
Naturally, the reasons underpinning the European project have changed and are now fully in tune with the Europeans of this century, the Europeans of today's world.

In the past, the incentive of finishing with the economic and political nationalism that generated lethal conflicts was a powerful incentive for reaching consensus on European unity. Today, a no less powerful incentive may well be that of averting the decline of our continent and what has stood for throughout history. Europe as an entity has shrunk in comparison to other continents in terms of population, economic weight and of its role in maintaining balances on the world scene. However, if it can further join its forces, it can continue to make its special contribution to shaping developments in - and the course of - world civilisation.

United Europe's new and exciting role is to nurture, amid an onrushing globalisation which is liable to submerge us as European nations, our historical identity and our unique cultural heritage, along with our example and model of supranational integration, our community of law and our social market economy.
In order for that role to be shared by the peoples of our Union and to be successfully carried forward, there is a need for greater political cohesion in Europe, and for more decisive and determined European political leadership. Let me remind you that, here in Strasbourg, precisely thirty years ago, Altiero Spinelli was able to express before the European Parliament that capacity for leadership in the form of the Treaty bearing his name. The opportunity was not taken on that occasion, but the inspiration he gave for a constitution has remained alive and continues to count - not least because his idea of a federal Europe was far removed from the demon invoked by various parties of a centralised super state. Much ground has been covered since 1984, but hard political battles remain to be won, if not against potential backsliding into aggressive nationalism, then certainly against the persistent national selfishness and stinginess, the short-sightedness, the cosy calculations and the anachronistic conservatism that one witnesses from the national governing classes on a daily basis.

8. The long term view: a European policy and a European public space

What is lacking today from too many European leaders - as Helmut Schmidt recently said - is the 'long-term view', owing to their lack of awareness of the threat of decline looming over Europe. The founding fathers and those who built the European community were not only "imbued with the tragedy of the past", but were also the bearers of an audacious and realistic vision of the future. This can only be offered today, or in the coming years, by politics that are at last European when, until now, in a continent as interconnected as Europe, politics have remained national, with their damaging limitations and generalised degeneration.

A European policy, a European public space and European political parties - what is the political Union of which we are speaking if not one that brings to life, on a European scale, democratic political debate and competition between various ideological currents and organised political movements? This is the giant leap forward we need to take and in which the European Parliament and its Members, in close conjunction with the national parliaments and their members, have a big say, so as to reach the broadest possible spectrum of the public and to involve them in better informed and more active political participation in the construction of a Europe that is more united, more democratic and more effective.

This Parliament is already home to the vital original core of European political parties. It is here that the greatest awareness and skills exist on which to base a political message on the governance of Europe to be shared with its citizens, free from the coded terminology and complex technicalism of the EU institutions. Mr President, Members of the European Parliament, it is in your hands - and largely in your hands - to generate and develop the political dimension of European integration in the new phase that it is about to enter.