Atlantik-Brücke: Wolfgang Schäuble’s keynote speech

Wolfgang Schäuble gives a keynote speech at the German-American conference organised by the Atlantik-Brücke and the American Council on Germany: “Security and Prosperity in a New Era of the Transatlantic Relationship”.

11 September 2015

This year marks the 25th anniversary of two significant treaties: the Treaty on the Final Settlement with respect to Germany, also known as the Two-Plus-Four Treaty, and the Unification Treaty: two historic treaties that were crucial to German reunification during this historic period. It was also a significant period for the partnership between the United States and Germany. It was a period of major and lasting achievements by the American administration at the time. I’m talking in particular about James Baker, Condoleezza Rice and George H. W. Bush.

Two weeks ago in Kennebunkport, the Atlantik-Brücke presented George H. W. Bush with an award for his contributions to German and European unity and US-German relations.

This transatlantic partnership is very much in our minds today as we remember the victims of the September 11th terror attacks. In those dark days we in Germany felt very close to our American friends and shared their sorrow.

The title of today’s conference refers to a “New Era of the Transatlantic Relationship”. What does this new era consist of? What does the transatlantic partnership mean in today’s world, in 2015?

I would define the goal of this partnership as follows: to ensure global stability in key areas: In financial markets. In regulating the digital world. And in responding effectively to the massive movements of refugees and migrants, as well as the many old, new and ongoing conflicts, crises and wars, in Ukraine, in the Middle East, in Africa – I don’t need to list them all.

When George H. W. Bush, speaking in the German city of Mainz in 1989, invited Germany to join a “partnership in leadership”, it was immediately clear to Germany that this invitation was actually meant for Europe. And this is still true today. Europe must be the United States’ partner in the world, not just Germany.

We Europeans are working intensively to ensure that Europe is fit to play this role, and that it will be an even better partner in the future.

Our partnership has a strong basis. We share the same values: liberty, equality, and fraternity, solidarity with the weak, human rights, and the principles of democracy, rule of law and separation of powers.

These values are founded in the two Atlantic revolutions of the late eighteenth century – the American and the French. These values form the core of our Western self-image. They stem from the same Judaeo-Christian tradition. From the same European enlightenment. We stand on the same foundations of ancient philosophy and politics, which were built in Athens, Rome and Jerusalem. That is the West.

In the aftermath of terror attacks like 9/11, and the later attacks in Madrid, London, Paris and Copenhagen, our common roots became particularly clear to us. It is sad, even if it is understandable in terms of human psychology, that it seems to be mainly after terrible experiences that we become especially conscious of the things we share.

However, this feeling of solidarity should also support us and make us stronger when we want to move things forward. Earlier, I mentioned the key areas where we need to achieve global stability, and where we urgently need this common spirit.

But at times during the debate on the TTIP, for example, it looks like some people don’t realise, that Americans and Europeans share a common cultural background.

The current debate on refugees also gives the impression at times, that we don’t belong together on this issue and we don’t face the same challenges. But if we don’t feel a sense of solidarity, how can we solve our joint problems?

We Europeans are very good at pointing the finger, including on the issue of refugees. Unfortunately we Germans are particularly good in this respect.

In case of doubt, Europeans tend to say that the Americans are to blame. But that doesn’t help us make progress in terms of solving problems.

Neither the United States nor Europe are able to make progress on the urgent questions of our time by themselves. We can only find sustainable solutions if we work together.

But we manage to do just this again and again. This week, the EU and the US agreed on a data protection agreement after years of negotiations. In the aftermath of the bad feelings about the NSA’s activities, this is an important signal.

As a whole, I believe that America would benefit from having greater empathy with its partners’ situation. And I believe it would benefit if it was willing to allow itself to be integrated into multilateral structures.

I don’t know how many times I’ve already made the following point in transatlantic speeches: As a token of their good will, the US should finally ratify the IMF reforms to give the rising powers of the 21st century a say in the Fund’s affairs! I will keep saying it for as long as is necessary.

At the same time, we observe during crisis situations – such as the ones we have experienced this year and last in Ukraine and in the Middle East – that the Americans are often more pragmatic in their actions than the Europeans.

The Americans usually react much faster than us and are able to provide direct assistance on the ground more quickly. In Germany, we held long debates before we finally made up our minds to supply weapons to the Kurds so they could defend themselves against the horrors of Islamic State. Germany’s history is always the reason why we have such debates.

On the other hand, it is Germany that reacted swiftly to the increasing flows of refugees at the current time. As finance minister I can say: We acted very quickly in addressing the consequences of the situation for Germany’s federal budget. We swiftly allocated sufficient financial resources to tackling this task.

In order to deal with the refugee situation we need, more than ever, an economically strong Europe which is capable of taking action.

That is another reason why we are working to keep Europe together and to solve Europe’s economic and institutional problems, especially in the eurozone. We have a clear agenda, with three main priorities:

First, we intend to make sure that government spending grows more slowly than tax revenue. This generally means that government spending must not grow faster than GDP does. This will enable us to reduce the debt-to-GDP ratio.

Second, we will continue to implement structural reforms. The goal of these reforms must be to improve economic conditions, and especially to boost the innovative capacity of European economies. That is what structural reforms are for. Reforms aren’t just about making the labour market more flexible or ensuring the viability of social security systems.

Rather, our reforms aim in particular to improve education and training and to improve institutional frameworks: streamlining administration, ensuring an efficient judicial system, and reducing bureaucracy – all of which are decisive for improving economic performance.

Third, we are boosting investment wherever we can. We have been setting up a new investment fund in Europe, which aims to spur private investment of about €300 billion. We are also starting to build a capital markets union in Europe, which will open up new sources of financing for new, innovative companies.

We are adapting regulations in Europe in order to encourage insurance companies to invest more money in infrastructure. Government investment is also going up, including in Germany, thanks to our success in consolidating the budget in recent years.

We have been putting this agenda into action in Europe for quite a few years now, sometimes more successfully, sometimes less, but we are headed in the right direction.

And the formula is working. The European countries that have already implemented real reforms are starting to see their efforts bear fruit. Countries that have successfully completed their assistance programs – that’s Ireland, Spain, and Portugal – are growing faster than other countries. Unemployment is starting to decline as well.

Europe is succeeding in changing itself. Sometimes this change comes slowly. But then sometimes it comes surprisingly fast: We saw this last year when we launched the European banking union: Now Europe has a single banking supervisor and a single mechanism for winding up troubled banks.

When we call for structural reforms in return for financial assistance, this isn’t some narrow-minded mantra being repeated by people who have lost sight of the big strategic questions of the future. In fact, this may well be the most important long-term strategic question we face today.

We in Europe will be able to cope effectively with today’s global crises only if our member states have strong economies and resilient societies. Since 2010, we in Europe have been working hard to fight our internal economic weaknesses.

Yes, we face external challenges, such as the current massive movements of refugees from the Middle East and Africa, but we face internal challenges as well. If we let ourselves become weaker internally, we won’t be able to overcome the challenges from outside the EU. And we can’t allow this to happen.

In the long term, the conflict with Putin’s Russia will be decided only on the basis of economic strength. Military power can stop an opponent, of course. We see this – and we are working together on this – in Iraq and Syria in the fight against the “Islamic State”.

And of course we in Europe continue to depend on the United States for our security. But the conflict with Putin’s Russia has features of a new systemic conflict, and it is a conflict that will be won by the side with greater soft power and economic strength.

The conflict with Putin’s Russia is also a conflict over what constitutes power in the twenty-first century. Is it domination over territory and physical space that counts? This is what Putin’s Russia stands for. Or is it the power to shape global structures, networks and the world-wide exchange of goods and ideas that counts?

This is what the United States, Europe, and the shared project of the West stand for. In our joint efforts to ensure the success of the West, Europe can be an effective partner for the United States only if it maintains a successful economy. That’s what we are trying to do. But we are following our own formula. And we will succeed.

When it comes to making sure that Europe is successful, Germany has a special responsibility, simply because of our economic strength and our position in the heart of Europe. We Germans have always found this role difficult, and we still do. But this management role – as I would like to call it – has fallen to us, at a time when Europe is in crisis and is also surrounded by new crises.

Others have high expectations of us. These expectations surprised us at first, and we weren’t exactly happy about them. This, too, is not least a result of our historical background. After 1945, we didn’t want to be bothered by questions of power or responsibility.

Above all, it is important to view this role in the light of Europe’s special nature. This is something that some Americans sometimes find hard to understand.

What is this European context? It is 28 countries with equal rights that are in principle sovereign states. There are no “leading” or “subordinate” nations in Europe. There are 28 countries that have to reach agreement.

In the European Union, we have to act differently than in the union that makes up the United States.

But being different doesn’t mean that we can’t be partners. And with our joint goal, which is to ensure global stability in an increasing number of fields, we need our transatlantic partnership more than ever – today and in the future. That is our task. Let’s do it well! And let’s do it together – in America and in Europe.