 Good evening. I am Sanni Minton-Bettos from Economist. Welcome to this open forum of the Web about the future of the Eurozone, solidarity or dominance. Now I'm going to speak English because I'm actually English and the conversation will be English, but I think you all have headsets if necessary. There is general agreement I think that the Eurozone is out of the emergency room. Last year the sense at this meeting at the ref was would the Eurozone survive? We felt as though it was a crisis moment and things have improved in the financial markets, but if you look around Europe in the real economy things are still very, very tough. The economies of the periphery of Europe are shrinking, the Eurozone unemployment rate is over 11%, 18 million people out of work, particularly young people have been hit very hard, so there is a huge to-do list in Europe. How does the Eurozone grow again? How does it regain competitiveness? What do you do about austerity? How do you boost growth? And we're going to talk about that this evening. And we're also going to talk about the politics of the Eurozone. Is the Eurozone, not to put too fine a point on it, run by Germany? Is it dominance? Is it solidarity? Is it the integration and solidarity that was part of the European dream? And what I hope we're going to do, we have a absolutely spectacular panel here of people who are shaping the future of Europe and I will introduce them briefly in a second and we will have a conversation amongst the panel and then I'd like to open it up halfway through the evening to questions from all of you. So welcome to all of you and just brief introductions and you all deserve much longer introductions than I'm going to give you, but because you're all, I hope you all have the bios of these very eminent politicians but I'm just going to go now in order. On your right there is Angel Gouria, the Secretary General of the OECD in Paris. Next to Angel is Minister Luis de Guindos Gerardo, Minister of Economic Affairs and Competitiveness of Spain. Welcome. Next to him is Guido Vestavela, Minister of Foreign Affairs from Germany. Welcome, thank you for joining us. Here is Vittorio Grilli, Minister of Economics and Finance in Italy. Never have so many Finance Ministers sat, I think, together. Next to you another Minister, Stephen Vanakere. I have pronounced your name nearly right, I hope so. Deputy Prime Minister of Finance in Belgium. And I am so sorry, Deputy Minister, Prime Minister of Finance and Sustainable Development. I may ask you to define that at some point. And finally, Robin Niblett, last but not least, my fellow Brit, who is Director of Chatham House which is the, I think certainly one of the best, if not the best think tank in Britain. So welcome to all of you. And let's start with the policies. Let's start with where we go from now. And I think I'm going to start with the two Ministers who are at the coal face of this. And Minister Grilli, I'm going to start with you. Is there a tension between austerity and growth? I keep hearing here on Davos, we must have smart growth, inclusive growth and smart austerity. Is that actually possible? And is there a tension between the two? And if there is, how do you balance it? Well, thank you. Of course, there is a tension in the short term for sure. But I would, I don't like to call that austerity. I rather call it fiscal responsibility. And I think is calling the right way also give the idea of what it means and why it is necessary. And I think that when you look at potential new growth engines in Europe, in the Euro area, you have first to generate, to create the preconditions. And I think I see two preconditions that are basics to regenerate the credibility and confidence that people and market should have in Europe and which is a necessary ingredient to really restart the economy on a different basis. And one of the major preconditions is fiscal responsibility, which means to me for an advanced economy to realize that the dynamic of deficits that are possible in a high growth economy are not longer possible in an advanced economy where growth, if you are very good, is still 2%, 3% if you are really, really good. And before in Euro area, we sort of face the fact that we had to have clear responsibility. And that means balance budgets, basically. And to switch from a condition of large deficits, growing debt into a condition where you run in a disciplined way, balance budget, that means changing, at least in the short term, demand in the economy. Can I just push you a bit on that, though? Is there a risk that if you tighten, you'll cut your deficits too fast, you have, you're in recession, and so your debt burden gets bigger and you are actually running backwards? I think you're right, you know, like the math worked that way. And I think this is, to me, an avoidable price that you have to pay. Of course, different countries can have different speed of adjustment. But sometime, and I am convinced in my country, we didn't have much of an option. Our, at least when my government came in more than a year ago, the first was to stabilize our own sovereign markets. And stabilizing sovereign market was to give back confidence to the markets that Italy was a credible better. And so we had to really go and re-establish, really sound public finance policy. And we didn't have the choice, can we go slower, fast? We had to go fast, because we were facing a potential deep financial crisis. So, of course, if somebody, some other country, had luxury of choice, maybe, of course, that kind of trade-off maybe actually is one that you want to exploit. But some country in mind, I think. You had no choice. What about Mr. Degindos? Can I ask you a similar question, which is, you know, Spain has done a lot, probably a lot more to do, but you have, the confidence of financial markets is coming back, but there is a huge gap between that and what's going on in your real economy. So, do you see the ingredients for Spain to grow in this environment? Well, I am in broad agreement with what Vittorio has just said. I think that it's impossible to grow without creating the perception that you have sustainable and credible public finances over the medium term. If you don't create this perception, I think that the rest of your policies are going to be totally useless. So, I think that it's something that we have to do. I do not see adults between fiscal policy and growth. I think that, you know, this tension is an artificial, sometimes, discussion that has been created because some people try to attack the fundamentals of the eurozone. And I think that, well, we have to bear in mind that when you have a monetary, a common monetary policy, you need a fiscal framework. And I remember the times in 2003, and I'm a little bit older in the eurogroup than other people, when Germany and France breached the rules. And I think that many of the consequences that we are suffering now are the consequence of that decision, you know, because Germany and France were the countries that were the real reference, the real anchor countries for the monetary union for the future of the eurozone. Reaching the rules, if the empires, if the referees reached the rules, it's very difficult afterwards to demand to other countries as Greece, you know, to stick to the rules. So, I think that this is something that we have learned in the eurozone. We are learning by doing, if you allow me to say. We have made mistakes. We have flaws. The decision-making process in the eurozone is difficult. But what I can assure you is that behind and underneath the eurozone, the euro, there is a lot of political will. And I see the euro not only as an economic or financial instrument, that it is an economic and financial driver, but much more as, you know, a political component of the future of Europe. And in that regard, I think that, you know, this is something that we should not undervalue. And I think that sometimes we are missing the point with respect to the eurozone. That's very interesting. And we'll get to the politics of this in the second half of discussion, because I think that is a very important part of it. But just to make sure I'm clear, your view is that the broad policy framework, obviously, that Spain has, you would think it was the right one, but you are now on track to grow again. We are fully on track to grow again. I think that we are correcting our imbalances. We've had a lot of imbalances in the private sector, in the public finances, in the banking industry. And I think that Europe is helping to Spain. And I think that it's giving credibility, it's giving confidence. And I am totally convinced that over the next quarters, Spain is putting the foundations and sowing the seeds of growth. And I think that, you know, it will be, let's say, you know, a successful story of adjustment in the eurozone. And that it will show that despite all the difficulties, despite all the mistakes that we have made at the end of the day, what really prevails is the political world to continue creating a single currency. Thank you. I'm going to turn now to you, minister, Vanneke, because we'll have the three ministers to start with, since you're doing this. From your perspective, you haven't been in quite the same situation as the previous two speakers, but is the policy mix in the euro area the right one for, to promote, let's use the second half of your title, Sustainable Development? Mm-hmm. Yeah, I mentioned sustainable, not because I'm so idle for you to mention my whole title, but because most of the time people do not associate sustainability with finance. No, when Luis is absolutely right when he's explaining that every country needs to follow its own path, it's true that as far as Belgium is concerned, this was the very good proof that a word that has not been, you spoke about confidence. But trust is one of the key elements to get the actors in the economy back on their feet again. And why did we have to go very quickly after a period of more than 540 days of caretaker government? You know that Belgium had a very long period of quasi crisis in the Anglo-Saxon press. People wrote there is no government in Belgium. That was not exactly true. There was a government, but it was caretaking. We like to simplify. Yeah. Well, we went to Libya with the caretaker government and we took care of the European presidency with the caretaker government. So the government was capable of doing some things. But as far as the fiscal consolidation was concerned, people felt that Belgium was not on the move. And in November of 2011, 10-year yield interest rates, they were at 5.8%, which was, as far as I'm concerned, irrational if you looked at the fundamentals, but they were the expression of a lack of confidence, of trust. By doing an effort on the fiscal consolidation level of 18 billion euro, which for my country is a lot of money. It's, we're talking about 3% or 4% of GDP and taking decisions in one year's time on two budgetary years, confidence came back and the interest rate dropped from 5.8 to 2.2. Why do I say this? Because I want to give an answer to your question of, is there a contradiction between growth and what you called austerity? But I think that Vittorio is right when he calls it fiscal responsibility. It's also about sending the message that we have understood that getting your act together on the budgetary level is crucial to restore confidence. So I think that the policy mix of today, let's not underestimate the participation of some of the political messages of Hermann Varumpe and the leaders of the European Union and also some messages coming from the ECB that have contributed to, let's say, an atmosphere in which the different countries could follow their path towards fiscal consolidation. And I think everybody on his level needs to contribute and it is true, the historical reference to the past. We have made mistakes in trying to be a monetary union without having the rules on the fiscal level accompanied by real teeth. But that is a mistake that we have corrected and it's important that by now the world sees that we have been learning from our mistakes and that these episodes to which Luis made reference, they are definitely part of the past. So we are going to keep, not only get our act together, but keep our act together. Thank you. Mr. Goree, I'm going to turn to you now before I turn to Minister Vesterwelle. You run an organization which is, if you will, the kind of global umpire of all of this. No organization has done more work on what creates growth and indeed you've done a lot of work on fiscal responsibility. And when you hear the three ministers here, are you encouraged by what Europe is doing or are we going in the right direction in Europe? Does the mix need to be changed? I'm very encouraged. It's really a false dilemma. This question of austerity, it's typically cast in terms of austerity against growth, etc. It's a false dilemma because you have to do both. The question is how much of each do you do? In a hundred percent package, do you do 70, 30, do you do 50, 50, or do you 99 and 1? And that depends on each country's situation. Some of the countries here had to go and give a very, very strong signal, almost a brutal signal to the market. They ran out of time in a way. In some cases because they deferred the reforms and in some countries because the markets caught up with them. In any case, you had to shake that off. You had to say to the markets, hey, listen, focus on the reforms that I'm doing and also the budgetary question is very intractable. The markets are now gotten not only very drastic in their judgment, they sometimes act against their own best interest. And they just penalize it, they punish you instantaneously. The moment they see weakness, they are like heat-seeking missiles. This is weakness-seeking missiles. So what happens is countries have to give signals and a message of strength, of willingness and also of governance in order to deliver the policies. And this is what we are seeing now. I think some of the reforms that Italy or Spain have taken are going to put them back into the competitiveness and to the productivity race. While I have to say in the last 10 years, productivity in the case of Germany, for example, has been higher than the wages. Productivity has been higher than the wages. In the case of Spain or in the case of Italy, even in the case of France, in the case of Portugal, in the case of Ireland, the wages rose faster than productivity. Therefore, what happened is the unit labor cost, as the economists call it, meaning the competitiveness of an economy lost. And this is why you started to have these enormous differences between Germany and some of the other countries because it was, in a way, relatively cheaper to produce. And therefore, in Germany rather than the other countries. So what's happening now? There's a correction. And this correction has to take place. And part of that took place in the context also of big deficits, had to be corrected. What we're seeing now is a necessary indispensable correction in order to bring convergence in the euro area. Thank you. That's actually a very, very good segue to the question I want to ask the Minister of Estavella here, because we've talked a lot about the ministers of the countries in, let's say, the less than solid core of Europe. And you, I want to know whether this agenda, this reform agenda, is something that happens in Southern Europe or is it actually something that you need to do too? I think everyone has to do it. There's no doubt about it that the question for everything, for our success in the world, for the question of our competitiveness in the world in times of globalization, it is important that we all will do our homework and will work on our structure reforms. But can I just, I mean, I'm being simplistic here, but how can competitiveness is a zero sum game at some level? How can everyone improve their competitiveness? Well, I don't think that this is a zero sum game. I really disagree. Good. I think... So if Spain and... Thank you. Now it's my turn just to clarify this. Well, I think the first I want to say is I would like to, the surprise of maybe some who are here in this hall, I would like to agree completely to what has been said about the use of the word austerity. I hate this word austerity because it has a totally different meaning in English if you use austerity or if you use it in German like austerität. It has very bad and brutal vibrations if you use it in English and it sounds more elegant if you use it in austeritate in German, it is more discipline. So I use the word fiscal discipline. Germans love disciplines. And this is why I use this word fiscal discipline. And this fiscal discipline is absolutely one precondition for growth. So the idea growth has only one cause or you need for growth deficit spanning or this or that. From my point of view, it's absolutely simple. I don't want to ruin the agenda, but I think it is obvious in this crisis that you need three pillars to overcome this euro crisis or this debt crisis in Europe and to create new growth. The first one is fiscal discipline because you cannot solve a debt crisis by making it easier to take up new debts. And if we continue on this path, it's obvious where we end. If we have too many debts in our national budgets, we will become slaves to the financial industries, we will become slaves of the markets, and this is what we have to avoid. It will kill every political opportunity, every political responsibility at home. The second is solidarity. We need solidarity. We are a community in the European Union. This is what I always tell some friends, northern parts of Europe, to whom it may concern. Solidarity. If you are part of a community, of course, you know that you have to stand united in better days or even in bad days. So I think solidarity is the second pillar. And the third pillar is growth. But growth is not the result of deficit spending, it's not the result of new debts. Growth in our times, in times of globalization, is the result of competitiveness, is the result of structural reforms. And this is the reason why I answered your question with a clear yes. Everyone, every day, every country in the European Union has to work permanently on own competitiveness. Otherwise, we will not survive with our European lifestyle in times of globalization. It is so short that we will see in India three times more of citizens like in the whole European Union together. I mean, what we see at the moment is the early bird, the changes in the world. And therefore, I think we have to stay together in the European Union. We have to work day by day on our competitiveness. Otherwise, I think we really will lose our lifestyle and we will lose the capability to protect our values and our freedom and our liberty here in Europe. Thank you. Thank you for that. Can I just ask you, I doubt anyone in this room, and you put it extremely eloquently, but I doubt anyone agrees, disagrees with the idea that each country should be doing as much as it can to boost its sustainable growth, whether you call that competitiveness or whatever you call it. But do you think the components of that agenda are different in different parts of Europe? And particularly, what are the things that you should be doing as Germany and are they different to what you are as being done in other countries? Of course. I mean, one size fits all will never work in such an important European Union and in this variety. And our variety is also our advantage because it creates creativity, which is very good if you want to compete with other regions worldwide. So I don't see this negative. I see this very positive. Of course, we have to look to historical backgrounds to the infrastructure and to this and to that. We have to differentiate. There is no doubt about it. But I think there are two issues or two political areas which is decisive and which will become more and more crucial for every single country, for every region worldwide and especially here in this very well educated Europe. The first one is education. Education, science, research, investments in education. This is the investment into the future because I mean, we do not have raw materials here in Europe. Not too much. We do not have too much fossil energy or raw materials. We do not have raw materials at our feet. Our natural resources is not under our feet. Our natural resources is between our ears in Europe. So be smart, wise and intelligent, creativity. This is I think the result of a good education system. So I think the competition of education systems will be absolutely crucial in our new world. And the second pillar or the second answer is which we all have in common, education, science, research in times of globalization to enable the young generation for the new time of globalization. And the second is energy. Energy is becoming more and more important for all over the world. And this is why we have to be smart early enough when we see, for example, what we can do with renewable energies and many other things. We should be the first continent who has good ideas about this and who will sell one day the new technologies worldwide. Thank you. Robin, I'm going to turn to you last as my fellow Anglo-Saxon here. Whether we, and let's not get into a taxonomy, but we're going to agree to call it now fiscal responsibility, right? Fiscal discipline, fiscal responsibility, whatever it is, you've listened to this discussion. And we have a similar debate going on in the UK, but do you listen to this and do you think that the policymakers here are on the right track with the eurozone and it will start growing again and this agenda is the right one? Simply, I think there has to be austerity in Europe, including the UK and throughout the eurozone. The EU is not the US. We can't just grow our way out of a very large debt. We don't have the demographic profile. To be frank, we don't have the open market quite yet to be able to do it. And so where's, and the currencies as well, whereas the US has some flexibility to grow its way fairly rapidly out of high debt, I think in Europe it's a much, much bigger gamble and this point has been made clearly, I think, by each of the ministers. What worries me is that it's easier to focus on austerity than it is on structural reform for many governments. Austerity is simple. We raise some taxes, we cut spending and then we talk about structural reform. But structural reform, and I think Ido Vestavela put it very clearly, has some very difficult parts to it. It's about three things. It's about the environment for doing business and he touched, I think, on key points, infrastructure, energy, education. It's about labor laws. I think in many cases these are now being undertaken. The ease of getting people into business, into employment. The EU has not just got high employment, it's got huge under-employment. Not enough women in workforce in large parts of the south of Europe, not enough elderly people in many cases in the workforce. It's also about the ease of doing business. There's some shocking statistics. About where certain EU countries stand on ease of registering a business. Literally getting your electricity bill set up, setting up a company. There is still some, frankly, third world type bureaucracy that exists in Europe. It's tied in a little bit with the structure of business. But the most important one, I think, is the ease of the scope of doing business. The scope. The EU is 70% GDP as services. Now here I'm going to sound a little bit like a British angle here. Competitiveness is not just being able to all be like Germany and export top-end cars. And it's not just about competitiveness in terms of getting the human capital ready. The human capital has to be doing something. And the doing cannot all be manufacturing. The service sector remains, as Mario Monti pointed out, before he became Prime Minister, 70% of EU GDP, only 20% of it is open in the single market. And no one is really taking this bull by the horns and opening up an area where people could really do business. Why? Because politically, to take on lawyers, to take on the transport sector, to take on communications, to take on insurance, these are really difficult things to do politically. But if you don't do that, you won't create the employment opportunities, however competitive you are. My last point I'd make is about the concept of solidarity. It worries me a bit. Guido Vestavella said it very well. I think in Germany still, more broadly, for some people solidarity is collective responsibility. Do like we do. We should all do like each other, and preferably as Germany is doing quite well, do like us. And that, you know, it may be doable up to a point, but clearly we're going to need solidarity and hard cash as well a little well on the line. I think Minister Vestavella deserves a response there. Is solidarity, do it like we do? We are in Davos. And in Davos I want to quote Thomas Mann, just to repeat what I said about education. That's not the question I asked. I can't precisely do your question. And Thomas Mann was it who said, Ich möchte kein deutsches Europa, sondern ich möchte ein europäisches Deutschland. I'm not seeking for a German Europe. I want to have a European Germany. And this is my answer to against all these cliches and stereotypes. Can I then quote you, Thomas E. Garten-Ash? We are a very modest nation. That is a great line from Thomas Mann. Can I just ask you to then respond to it? But we do not hide our opinions. I believe it was Thomas E. Garten-Ash, a British historian who said recently, using Thomas Mann, he said, What we now have is a European Germany in a German Europe. Is Germany running European policies? That's too complicated for my simple English. No, it's not. I'll put it very straight then, because what I'd like to do, that was actually a great discussion on the balance of policies. Let's move now to a slightly, perhaps more contentious topic, which is the politics of all of this. I'll give you a break now, perhaps. Minister Degindus, where is policy being made for Spain? Is it being made only in Madrid? Is it being made in Madrid and Brussels? Is it being made in Madrid, Brussels and Berlin? Well, I think that is a package. It's a package because we have given in sovereignty. Well, we have transferred our monetary policy to the European Central Bank. We have lost the possibility of modifying our nominal exchange rate. But the point that I would like to make is that in Spain, for instance, what we have realized over the last three, four years, that we have had a lot of sufferings for the population, a lot of difficulties, and we have taken a lot of tough measures, is that whenever we see that uncertainties, doubts, jittery about the future of the eurozone, about the possibility of having the euro falling apart, immediately Spain suffers. And the other way around, whenever we have a reduction in uncertainty, a reduction about the doubts of the future of the project of the eurozone, immediately Spain takes advantage of this situation and it's quite visible. We see, for instance, how our euro spreads start to narrow. So it's curious, because sometimes we have this discussion about ONT, austerity, etc. But what we see is that whenever we start to realize that there is much more political underpinning beneath the project of the eurozone, immediately Spain goes ahead. And I think that this is something that we have to take into consideration, because I think that sometimes this possibility or this discussion about putting adults austerity versus growth is something that is quite detrimental to the political agenda. But to answer, to reply to your question, what I have to say is that in Spain, we make our own policy, but we are fully convinced that we have to share part of this policy with our partners, because our partners is part of the future of the European economy and not only the European economy, that's part also of Spain. So we feel profoundly pro-European, despite the fact that sometimes we have to take, we have taken tough measures that have created difficulties for the population, but they know that the more Europe, the better for Spain. So to use the two words that are in the title of this session, solidarity or domination, you would say the formal. I think that is neither solidarity nor domination. I think that we are on the same boat. I think that whenever Italy makes things right and Italy recently has made a lot of things right, that's good for Spain. And when Spain makes things right, that's good for Italy, for Belgium, and for the rest of the Eurozone. This is not a question of only solidarity. Solidarity is a different, a different concept in my view. What I see is that we have a common interest, that we have a common will, that we have a common destiny, and I think that to share this project is worthwhile, despite the difficulties that we might undertake in the short term. Thank you. Minister Grini, let me pose basically the same question to you. And Italy is, you have done a huge amount. You have an election coming up in your country. The question of the legitimacy of this and where policy is being dictated, is it not being dictated, is in some sense a sort of subtext of this, what's your sense that, where would you come out on this solidarity or domination, and have we got the right institutional basis for policy to be made? Yeah, that's a question that is important to us, but I think Louise has put it in the right context. I think it's not an alternative solidarity and domination, but it's a question of success. And I think we have to have a successful model in Europe. And I think that what it looks like somehow tension across country about decision to take, I think is a consequence, is a reasonable consequence of different level of success that right now different country have. So we are now in the Eurozone, especially clear differences of across country. But we, I think, nobody is so naive to believe that they can thrive and have success alone with the other country in the Euro area, not sharing that success. So I think right now the diversity of initial position makes that debate look like, well, there is huge disagreement, but I think that what we have all in mind is we have to have in Europe a common growth model, a common social and economic infrastructure and structure to guarantee Europe to be successful in the world. And what we have to do is converged over the model and I think the big question is what is that model? And I think we already heard some major ingredients and I think those are ingredients. Some of that we already basically all agreed and we talk about fiscal responsibility and that we all agree that is a precondition. I think I would add financial stability. That's a big crisis show, but without stable financial market and well-regulated and functioning financial market and I think we also agree on that and this process of let's call it banking union in a simplified way, we just show that there is a lot of agreement that we have to pursue sort of well integrated and regulated common financial markets. Then there is a third one that is we have to, through structure reform, reform Europe and there is a more difficult, I think that most of the reform we all agree that are necessary. Political implementation is very difficult in some cases but I think one have to have in mind that regaining competitiveness means really changing in some country deeply the structure of our society which means changing how the private sector and of course I think was very right shifting or at least making the service sector much more competitive and integrated in Europe. We are living on the table a lot of money because without integrating in a huge service sector, European service sector, we are really not being very efficient but then is about restructuring our public sector. We know that in some country the public sector is too large, inefficient and built on somehow not having thought through very well what kind of incentive you put in the economy when you structure for example entitlement program, taxation program a certain way and I want to add one of the problem that we have is right there. We have a huge demographic problem that translates in age and population and in young people not being well used in our economy early. I mean my country, another country, have huge youth unemployment and this is clearly something that is incompatible with a credible growth model in Europe. So those are the things to tackle, a huge change in our economy and in our social structure that has to be done in what was called solidarity. I would call it more like fairness, the sense of fairness that as you move away from what we are used to be to a new stage of development of our society, this transition and usually where you get caught in the complexities, how you make the transition then you have to do it in a fair way and that is a fair way across country, a fair way across the population and a fair way across generation. You have all laid out the broad kind of comprehensive challenging set of things that we need to do and you all are a remarkable agreement about it and you all say it's going to take a long time and it's tough and it has to be done in a fair way. Mr. Venakar, I want to just push a little bit on the politics of this though. You all agree on this agenda but it is politically difficult and when you are sitting in your Eurogroup meetings, who is running this? Is it really the happy-clappy we're all in this together or are actually some players perhaps more central than others? What is the dynamic of the politics? I promise you I will be very straightforward about this. The law on gravity, where is the law on gravity voted? In what capital? There is a lot of us and Guido said he, Germany is a modest country and I know Guido as being a modest man at least but all politicians, all politicians in the 21st... That's why I'm a journalist, the reporter is at home. I hope I'm on record here. All politicians need to have the modesty to recognize that some of the mechanisms, they have something of the character of the law of gravity or other physical laws. So if you see some consensus, probably, it is because a lot of things are plain to see. It is not necessarily plain to explain it to your audience, to your public opinion. And Guido already said the citizen is like the voter, he's like a sick man within his bed and he thinks that things are going to get better by changing sides. And it is true that you have an alternance in politics, you explain and then the next guy probably has to deal with the same realities. All this to say that when you ask the question on dominance, in fact, what we have to recognize as European politicians, that probably the last two years we have been progressing more than the 18 years before that, since Maastricht, probably, but it was unfortunately not by design by tremendous political will, but it was probably pushed by crisis and by lack of good alternatives. So I'm not saying that politicians do not choose their path. I'm not saying that politicians cannot be wrong because if you would have no liberty, you would not be able to make mistakes. And we do make mistakes, but most of the time the discussion on dominance is more about has everybody understood where we are? And of course one has to take into account the differences between our countries. And I agree with those who said be careful with the word solidarity because in many respects, it is very often well understood self-interest. And that is something that knowledge has grown, at least within the European leadership, unfortunately not enough within the European populations and public opinions. People seem to think we're giving money to the Greeks while very often we're lending money to the Greeks which is not exactly the same. And there is, of course, there is, of course, no, no, there is an aspect of effort and shared effort and I'm not going to say that the AAA countries and Guido is not the only one, the other AAA countries, Finland, Austria, Holland, etc., they all put their AAA at stake. So you cannot say that this is nothing to them. So when they do that, it is an act of solidarity but in the same time, it is well understood that the European project which is an economic project but not only an economic project because it's in history of a continent that has chosen not to go to war with each other but to work together. And it's important to keep that spirit alive and to make sure that these aspects are put forward to a public opinion who has it more and more difficult to understand that there is an advantage for them to stay within that logic of communality. Thank you, that's very interesting and I'm going to turn to you now, Minister Vestival and then I'm going to open to questions in just a second but this view that it's giving to Greeks, it's bailing out, it's hard earned German cash bailing out profligate people in the periphery and that is a view held by some in your country and you gave a very eloquent, you quoted Thomas Mann, you gave a very eloquent view of Germany and European Germany. Is there a tension between those two in Germany and how will it be resolved? I think in every country in Europe you have politicians which you wouldn't like to have. So I think that's normal and of course every quote in this direction, every arrogant quote from Germany is reported European wide and then some people think this is the mood in Germany and the opposite is the truth. I mean just imagine Germany guarantees with one national budget of a complete year, one national budget of a complete year. This is the guarantee, the size of our guarantees we put on the table and all these decisions has been taken in Germany with a majority, minimum 80% of the MPs and after three years of fiscal discipline we started at home first of solidarity, of structural reforms, of being criticized and sometimes attacked in a very unfair way. There is no upcoming populist party in Germany. There is no mood in the German opinion against Europe. Every poll proves us that there is a clear pro-European spirit in our country and I think this is something which we should realize and I'm very grateful for what the German taxpayers did but I'm also very grateful as a European patriotist. Patriot, I'm very grateful for example what Portugal did, what Spain did, I have been the day before yesterday in Madrid I have been this morning in Lisbon and discussed this with the government there, what Ireland did and also and especially what Greece did. Don't think that we in Germany do not feel solidarity with the young unemployed people. Don't think that we do not feel sympathy with so many families who are suffering now but we are convinced if we will not continue on the path of reforms, sustainable reforms, we will not resolve this crisis, we will probably help for a few hours, probably some days but we will not give the answer in terms of globalization to new centers of power. This is now the time where Europe has to understand that we are not any longer the center of the world, that there are upcoming centers of power and their economic success has one consequence, political, social and economic participation. And this is the reason and what I'm telling really every day at home in my own country, to my own citizens, to my own people, in the parliament, in my own party wherever, in the government wherever, in the government wherever. I always tell them in Europe, Germany may be relatively big. In the world we are relatively small. And I have this, if you allow me this little bit more which it reminds me to what Stephen and knows him, like I know him very well, this is Jean Asselborn, the former, I'm sorry, the former minister of Luxembourg and he's really a very experienced foreign minister of Luxembourg and he told me when I started my office how he has been in China for his introduction visit and he stood in the press conference together with the Chinese foreign minister and he said in this press conference, Excellency, Mr. Minister, we too, we are now representing one quarter of the population worldwide. And sometimes I think we do not understand what kind of change we have to handle in the world and this is why I think Europe is more than the answer to the darkest chapter in history. Europe is our life insurance in times of globalization. It's also a cultural community in which we live. Thank you. I have many more questions but I think I will save some of those for later and I'm now going to open it to the floor because I'm sure this will provoke many interesting questions. Please keep them short or your comments, I will cut you off if they're too long. Gentlemen there, six rows back, yes. Michele Odzam from EUChamp European Chamber, organization representing businesses. To simplify the explanation of the rules of living together in Europe, let's imagine a basic social concept, a family. A family where we have many brothers and sisters. If one brother starts to think or act in his own interests only, this affects the others too. And if the other brothers and sisters think that he's seeking his own interests only, then this will undermine the solidarity and the mutual help to each other. So to remind the governments when they make the policies, like some are doing with the populistic or nationalistic policies, they should remember that Europe is much more than just a geographic concept, a political or economic union. It's a family. Thank you. Thank you. I doubt anyone would disagree with that on the vote. Yes. I tend to agree because I don't know whether you know how much money, for instance, Spain has put on the table for Greece. 25 billion euros. In an economy that is having difficulties, sufferings. And I think that it has to do with the concept that I mentioned before. The concept that I mentioned before is that we have a common view, that we have to share a project. And I think that in order to understand why, for instance, when there is a relief program for Greece, Spain or Italy contribute more than other countries, it's because, for instance, in order to fund these 25 billion euros, Spain has to pay more than other countries, in terms of cost of funding of this money. So this is something that sometimes we overlook, but I think that gives you an idea about, well, that the concept of solidarity is, perhaps, implicit and embedded in what we are doing, but that simultaneously, well, we have to take into consideration that some countries are making important efforts, not only in terms of austerity, but also in terms of contributing to try to relieve the difficulties of other countries. So it's not only Germany, if you allow me to say. I'd like to be modest. I only brag about the Spanish national team of football. Do you imagine why? But the point is that not only Germany, not only the AAA rated countries, are making contributions for the future of the eurozone. Other countries that have even more difficult situations are making a contribution, because within that we are in the same boat and that we share the same project. Thank you. I think the metaphor of a family is a good one, but I think it's only half of the story. I think it's right asking old brothers and sisters not to be behaving selfishly, but also you want to make sure that nobody goes out and go nuts and spend all your money. So I think that has to be a balance. And I think what we're doing in Europe is exactly that, making sure that everybody takes responsibility to be well-behaved and not selfish. And I think the two things go together. Robin, you put your hand up, and I can't resist now that we have the family metaphor. What's the deal with the brother or the sister in the UK? When he was laying up that question, I just thought it was coming like a laser to the UK, but it didn't. It went off in a beautiful pan to European integration. Maybe the UK is the prodigal son. The UK may be the prodigal son if we're lucky. Look, from my point of view, both as a Brit, but also as a European, I think the EU is about national interests. Hopefully it's about shared national interests. And so far it has proved to be about shared national interests. And I think that has been the amazing and wonderful achievement. It was, as Guido Vestavela said, at one point the end of the Second World War, the unification of Europe, and ultimately then the unifying of Western East. And now it's about globalization. So I think it's about shared national interests. But let's not forget, when you get to a budget negotiation, it's not just the Brits. Everyone is fighting for their share of this, that and the other. Same on trade. I think what's interesting is that the deeper level of integration that's likely to accompany, that is accompanying this crisis of the single currency, is going to need a much deeper level of political responsibility and connectivity between politicians negotiating on behalf of Europe and populations that need to be taken along. I'm relatively optimistic. I think that populism is not turning out to be as bad as perhaps some people had feared a year or so ago. But I think engaging national parliaments is going to be the bridge that's going to be needed between the reality of national interests and hopefully the reality of shared national interests at the same time. Even in the UK, I think there's an awareness of this. And you heard in David Cameron's speech, he's trying to calibrate a realization that the UK is going to have a tough time if it's out there by itself. But a fear that, at least in the UK, there hasn't been the shared sense of being part of a family. The UK has taken a much more utilitarian view. But I don't think the UK is way off on the edge. It's part of a spectrum. We might be on the far end of the spectrum, but there is a spectrum. This is where the Federalist Belgian takes the floor and says this is a different view than what a lot of people in Europe think. What we heard here was we are a market. What we are prepared to say is we have a market, but we are not a market. We are more than that. It's not only about tackling free trade issues or things like that. It's also a project that deals with one of the realities of the world of today. We're all too small to make a real difference on the global issues today. And not only talking about the Euro crisis, but climate change, peace, demographics, things like that. Every country individually is too small to make a difference on its own. And it is only by cooperating that you can make the difference on the political level on all the issues that are, besides the whole idea of having a good market functioning well, are, I think, more crucial for a lot of citizens of the 21st century than only a free trade logic. I don't think that... Did I say the word free market? The minute you let the British side of this thing, this could take over the whole thing. I'm not going to let you do two very interesting perspectives. I suspect some people, whether shared national interest goes beyond market or not beyond market is part of the issue. But it's a bit of a straw man. I think it's straw man in the market. Mr. Goree, you've been very patient. I think if you would not have a sense of shared self-interest, of the national interest, you would not be able to put together this alliance that is Europe today. Why? Because solidarity can be a fleeting sentiment. And a change in government can produce less solidarity or more solidarity. You have to have objective indicators of why it is in the best interest of each one of the countries to maintain the union and to go forth. And that includes, by the way, the UK. I think if there is a referendum in the UK in 2015 or in 2017, whatever, by that time we'll have five more years of integration. The UK, of course, is going to find it absolutely in their own interest to stay within. And they will. I have absolutely no doubt about that. But because it will be in their interest and every one of the countries makes that bet every day, regardless of the increasing feeling of belonging to the same project. When I was 18 years old, that was some time ago, in Mexico, in the Federal Electricity Commission, I was working on a bond issue in Europe, in European units of account. This is not the ecu or the snake or whatever. It's a very, very, very far. And this is 43 years ago, 44 years ago, mama. The Europeans were already trying to get the common currency. They were doing a common, you had to wait 14 different currencies in order to calculate the payment of interest. You're already doing that 14 years ago. It's admirable what the Europeans have done. But they skipped a few phases. For example, they went to the common currency without necessarily going to the banking union and going to the budgetary union. Now they're picking up, they're filling in the gaps. Let me just say the following for Europe. The question of Europe is the scaffolding, okay? Europe is always reinventing itself. Europe is always strengthening itself. Europe is always finding new institutions, modernizing itself, if you will. But it's covered with a scaffold, you know? And then it's dusty and it's noisy and you can't see. But then when you remove the scaffolding after three or four years, you stand in awe. It's the Duomo in Milan or the Cathedral in Cologne or whatever. This is the organizations of Europe are like that. The only thing you cannot blame Europe for is being too fast. They take their time. Thank you. Next question. Lady here, three rows back. We had a lot of good things. I'd like to ask the auditory how and why can you accept politicians who do not know anymore what is man and woman and are best seeming God into the face every day and practice abominable things. Thank you very much. We might go straight on to another question. Yes, gentlemen here, three rows to report. Thank you very much. Mr. Guria, you explained to us the problem of competitiveness, that productivity is the cause of the problem if productivity rises or rises less than the wages. My question is, are the capital markets bashing the wrong people? They are bashing politicians and countries. Should they not bash enterprises and unions because they are the social partners who are agreeing on the wages normally? Very fast, let me just say, I think this is critical. This is a very important point. The ones that did the wage settlements and the arrangements in order that were higher than the productivity were the companies and the unions, the two. Perhaps even the governments who either promoted it or tolerated it or maybe encouraged it. So nobody is innocent here, but clearly the private sector has a very, very serious responsibility and they are the ones also who now have to participate. Now, what is the difference in the culture? What happened in Germany again, and in some other countries, but mostly in Germany, there was a very clear understanding between the unions, the private sector and the government that if you kept the wages moderate, up below the rise in the productivity, everybody gains, because you gain more market share, you export more, your products will be cheaper, whatever. Okay? Now, if you add some technology, some innovation, whatever as they have done, it makes even better. The others are now correcting because the situation is unsustainable. And then last but not least, the question of who finally has to take the decisions. In the end, yes, it's the companies, yes, it's the unions, but it's also the government in there. Let me just give you one information. Today, in order to correct the imbalances within Europe, all these countries here have adjusted their current accounts, okay, except Germany. Germany's current account is like Johnny Walker, you know, it's still going strong. And so the question is perhaps that part we have to focus on because of course the question of to what extent can Germany now help a little bit in the efforts that the other countries are doing in order to compensate. It's not that we will all become Germans, but they are the big guy and maybe therefore they can do a little bit more. Thank you. In the interest of getting more questions, I will not ask you to respond to that. Gentleman there, yes, in the white shirt or white sweater. I am very short-sighted, but it's something light-colored. Me too. My name is Fernando Morales de la Cruz. I'm the father of two European daughters. I was born in Guatemala and in Guatemala, which is an underdeveloped country, we say, well, if you get an education, you have it made. Well, 30 years ago they used to say that in Spain and many people who have great educations don't have a job. So the question is to the politicians, how do we inspire these young people to make themselves their own job? I used to live in New Delhi. And in New Delhi, one thing I learned when I arrived, they said, you know, we have Gandhi, but we also have nuclear weapons. But the most important weapon we have is that we have to work. We cannot wait for anybody to solve our problem because if we don't do it ourselves, nobody else will. And that goes for hundreds of millions of Indians who have to feed themselves in whichever way possible. So my question is very tricky because I think that the problem in Europe, and this is what I used to think when I was living in New Delhi, is lack of inspiration, not among these people because they do have their goals and they are doing it. But among millions and millions of Europeans, including perhaps my own daughter who just turned 18, who doesn't see what Europe is and doesn't understand what it can become. And of course, it's very difficult for her because Mr. Vesterveld doesn't come to give her class every day. You know, he can't. He's busy. Thank you very much. Thank you. You raise a very important point. And if I might just broaden it, because I think this question, and you all mentioned, and I mentioned the scale of the youth unemployment issue. And if you sort of put this together, the young people of Europe, their aspirations, their inspirations, what needs to be done and what do they need to do? I think that's a sort of important theme that you highlighted very well. And maybe, Minister Vesterveld, I'll start with you and then to the other two ministers, three ministers. What can you do? Surely the current situation where you have so many young people not working, not able to work in some cases, maybe not inspired, but this is a huge, huge cost to this continent, surely. Just please allow me just to make a remark before I come back to your question, to your remark answering the first question of the audience. I thought a bit about this description of a family, Europe as a family. And I came to the conclusion, I think, what Louis said, we sit in the same boat or we are in the same boat is a bit better. Because if you want to use this description, a family, the second question is whose father, whose mother? And you can imagine that I wouldn't like this. For many reasons. My serious point is that I wanted to say, I think your question is personally for me the key question. Because I think a social and democratic stability will not work, will not stay sustainable, reliable, without young people in jobs, without that they have the personal conviction I can make it. No one guarantees me that if I'm lazy, that I have success, but I have fair chances and it doesn't depend where I come from, from which country in Europe, which parents I had, where I was born, I can make it. Sometimes this is described as the American dream, I think it's also a European dream. It's part of our success story. And therefore I think once again with all modesty, my personal conviction is I'm not here to give any advice to politicians of other countries. But my personal conviction is that we have to convince the young generation to widen their horizon, whether they are in an academic career, or for example, they need vocational training. So this academic debates are, are too limited. The clear majority of the people, they need perspectives in normal jobs, in non-academic jobs. For example, this is the reason why Germany offered, we just offering it, to tell our friends in Europe, what excellent experiences we had in our history with our system, vocational training, dual education system. I'm not sure if I translated it correctly, but I think it's understood. So the combination between theory and practice, the qualification of the young generation. And if I would, please allow me just to say this, and I don't want to sound like the teacher, but if I would be a young girl or young man now, like you said your daughter is, probably you were very international, and you told this, her and your children. I think an international orientation by learning languages is absolutely important. Absolutely important. If I look back to my time when I was young, this was not the case for everyone. It was a privilege of the better schools, which I couldn't visit in those days. So I think it's very important that we convince and tell our young people, learn languages, are interested, be interested in the world, try to widen your horizon. And it is right what you said about competitiveness, labor laws, and all this is true. Of course, it's true that we had in the last decades successful governments, not only now, also our predecessors, but when we really ask for the reason for the German success story, after we have been, 10, 12 years ago, the sick men of Europe, which was, I think, the cover of your magazine, if I remember correctly. I mean, the main reason is that the German economy is based with a priority on medium and smaller-sized companies, which gives you a lot of flexibility to new developments on the markets in the world, and secondly, that in the 90s, when those companies were blamed for it, they weren't irritated, they went with investments all over the world. They invested in China, and they were attacked because they invested in China. They invested in India, in Latin America, they invested in Africa, Nigeria, South Africa, so these normal companies in Germany, they worked earlier than others on the international network, and this is the reason why they can sell their products now in these markets, and why they are well-known, and this is probably, which is becoming of more and more importance in our days for the young generation. So this international orientation is, I think, the key answer to your key question. Thank you. Thank you very much. We're going to run out of time, I know, but lady here, yes. Student from the college, student from the United States, I was just wondering, compared to the United States, why has Europe in general had more success in terms of austerity and fiscal responsibility? Who would like to say that? How about you, Taylor? Maybe because the U.S. hasn't tried it, but... I think Zany's comment is absolutely serious. I think in the United States, a debt was built up, which today is unsustainable. It's going beyond 100% of their GDP, and the problem that you have today in the United States is that the governance is so difficult that the political situation is so polarized that it's very difficult to arrive at what is a very obvious and very necessary consensus. You have to do something about not only the deficit of the year, but also the accumulation of debt, because as far as the eye can see, you're going to get into beyond 100% before you start stabilizing and then coming down. And the question is, how long does the market or the markets keep giving the United States a lot more room, a lot more tolerance, a lot more patience? Well, maybe for some time, but don't test it, because if you find out the answer to my question, it'll be too late, okay? Thank you, Anna. So I would say I hope that besides having kicked the can to May, in May, or as soon as possible, they actually arrive at a consensus, which will give a medium and long-term context in which they're going to address this issue, and austerity is going to be in the cards. Already it is in the cards because some taxes have been raised and then a lot of expenses are going to be cut. So they're going to be in the club. Can I stop you there? Just simply because we have a big enough task discussing the future of Europe. If we start getting onto the future of the United States, I'm sure we would all disagree, and it would be a terrific question. Thank you. There was a gentleman there who had a card up for a long time. That Nigeria was chosen by Great Britain and the USA to reduce development aid. Is this question about Europe, about the Eurozone? Yes, exactly. Yes, it is good, it's good. It goes back to the microphone, doesn't it? Yes, it works. It works. Yes, it works. Or so, Nigeria was chosen by Great Britain and the USA was chosen to reduce development aid, to reduce development aid or to introduce the homosexual marriage. That's why it became known. Thank you, I have... Why don't you let me speak out? Because we don't have much time, this discussion, I'm sorry, it's about the future of Europe. I... You have a lot of things to say, but I really want to keep the discussion going. Turning to the next question. Yes, gentlemen, gentlemen there. As long as it's about Europe. It's maybe Germany, what I want to mention. Also, as Lehman Brothers' plighting was in Triple A, we have to say that. And these suggestions that I heard tonight, that there is a crash from Europe, that's a very clear case. Innovation and creativity are missing, that's clear. And the growth in the growth is just... It just doesn't work here anymore. Germany has the weapon export in the last five years, doubled worldwide. That's a growth, but what is that for a growth? The quality of life. The life... We are a democracy. We can say questions and we can say comments. This is a democracy. You can, but if you could keep it brief, please keep it brief, because there are a lot of people who want to ask questions. The growth feels essentially in the destruction of the foundation of life of nature. And when you use a growth, acceleration law, then it's not about the quality of life, but it's about the increase of the rendition. Thank you. And now the question is for Mr. Westerwelle. I would like to know why the rich in Germany almost don't pay taxes and why they are poor. 45 billion, that's the second largest cost in Germany. If you let the minister answer, you may get your question answered. I'm sorry, but Mr. Westerwelle, you would like to respond to that briefly? I think I have to. You see, there is more propaganda in your questions and more representation than real knowledge. Thank you very much. It makes no sense. I just want to give you an example. The number of weapon exports to the total exports of Germany is in the year 2011, which has been so low since 2002. So I just have to ask you that you make yourself the joy of what you have put into your questions and simply check the Internet through a simple look at it. I would like to know what you have put into your questions and what you have put into your questions and what you have put into your questions and simply check it through a simple look at the Internet and then it looks different. I have just been given a sign that we have five minutes. Gentlemen here, you've had your hand up for a long time. I'm so sorry, we're not going to be able to get to all of you. Third row. I just have a small question to Mr. Grilly. Have you asked a question already? No. I did, yes. I'm so sorry, we can't have two questions. I said I was short-sighted, sorry. Yes, at the back there. Yes. Sorry. Tough leadership. Sorry. Well, I would try in English because of the others. My English is not so good and my question is simply, do you believe really that we, well, we, the Swiss, we are in a good place but you, the European Union, you can become a real family with all these different languages and these different cultures. Thank you. We're trying our best here with two. Yes. Actually, maybe Mr. Grilly, the others first. Whatever you want. Well, Switzerland is a great place to start. You know, you have many different languages, right? So, I don't think that languages per se are a barrier, actually is a richness and having a different culture is in fact a richness. So, the political challenge and our economic challenges to continue to make that richness to be an asset you can profit on. Of course, we know that there is just more than just languages as we know that our social institution, economic institution are still fragmented but we have been doing a great job in trying to integrate them. So, I think that they have to go both way. You know, countries and different cultures have to find a way to merge and this is a complex process but this is the game we are playing and I think we are going to be and we are showing to be successful. I would simply like to add the truth that before the United States of America became a singular and not a plural that it was something where we used the verb the United States is going to do this a lot of decades have passed in history and I know that not everybody shares the view of moving on towards more integration and I respect that and I think that a lot of us can go a long way without thinking that one day Europe will really become a singular and not a plural and on the condition that we also take care of the democratic aspects of this project we can do it. The only thing is today I think there is more conviction in what you can call political or economical or financial elites on the shared interest of doing things together by the people and you cannot make a project without the people or against the people so what we desperately need is more pedagogy and less demagogy so more people explaining that this is really not only a question of elites wanting to go forward towards integration but it is also a dream that can for real families be very dangerous but real families have an interest to be on a continent where the political energy, the economical energy is much more combined and I'm convinced of that but it will take more democracy as well and for example a stronger European parliament for example. I think there are three reasons why Europe actually will succeed number one, no choice we've got no choice and I include the UK in that by the way in having to be part of this to succeed in the changing world that has been described secondly let's not forget shared values I think the kind of values that Europe represents all European nations tolerance, democracy coalition type politics and a social market and again I include the UK in this with a very large national health service which is nothing like anything you'll find in the US thirdly the one a key strength that Europe has is the rule of law there's a reason why in London we find so many people from around the world the great emerging economies buying houses over in Europe they trust their money over here they trust they will get a fair shake in the courts of law and I think actually the rule of law the stability of our political system is a huge strength in Europe watch the Ryder Cup when Europe gets together I'm not a big golf player but I watch it once a year very strong I'll take your word for it, thank you Minister of the Kindos I think that diversity is not a weakness it's a strength and well we are diverse, we have different cultures we have different languages we have different traditions and despite all that we have been able to create institutions and we have a common project which is the most clear sign and the most clear signal about the political world that we have put in the future of the Euro and the future of the European Union we are diverse and this diversity as I have told you before is our strength thank you Minister Vesterwelle I've had a large sign saying we have one minute left I'll give you the last word for one minute Oles No, I agreed to everything what has been said with one exception that we do not have a choice about Europe we have a choice, we always have a choice but if we wouldn't, we are not forced to live in Europe and we are not forced to live in the European Union but if we wouldn't have the European Union we should immediately start to work on it, to found the European Union immediately, it's urgent and this is my first remark, this is also what I think we have to discuss in Great Britain this is not a question that someone is without any alternative, forced to have Europe, if you want to have joint benefits it's necessary to understand you also will have joint obligations these are two sides of the same coin and what you said about the differences in Europe, languages you mentioned I mean this is just a question of the perspective here in Europe we think what big differences we have between North and South and West and East just go to China and look to Europe from their perspective there are so little, so small differences in Europe we are a community, a cultural community more than one things like it or not, we have more in common beyond all borders then probably one things in this whole, at the moment in China there are more native languages than in Europe if you go to India there are more different native languages than in Europe and so on and so on we can make it and a bit more optimism for the young generation is necessary young men thank you technically I am supposed to summarise this discussion I am not even going to try it was a spectacularly interesting energetic discussion, we used metaphors family boats, I am not sure which I prefer but I am inspired by this discussion about the future of Europe it was really terrific, thank you all so very much