Speech by Prime Minister Mirek Topolánek to mark the opening of the second international Changes of Europe conference, 17 April 2008

This event is called Changes of Europe. As a conservative, however, I prefer to stick to things which don’t change. Things that remain constant – eternal, if you will – in a changing world. On the other hand, as Prime Minister, I am compelled to reflect on how politics and governments evolve. As a conservative, I adhere to a fundamental European value – Freedom. As a politician, I can see its inexorable decline on the old continent. I don’t want to talk here today in my capacity as Prime Minister, but on a more personal level. Please don’t regard this lecture as an interpretation of the Cabinet’s policy statement or as a presentation of what we have identified as the priorities of the Czech Presidency of the EU. This is a personal reflection on the future of Europe. On the long-term prospects for the European Union. Not just the six months when the Czech Republic will hold the Presidency, nor merely for the tenure of the present Government. I want to raise some issues which, while they are drawn from the current situation, go beyond the framework of ordinary political decisions.

Where are we and where are we headed?

A brief way of answering this question would be to offer a parallel with Europe in the 11th century. Then, we were figuratively at the bottom, clambering up. Today, we are at the top, slipping down. Obviously, I mean on a global scale. The word ‘globalization’ is very trendy these days. But that is only because the development of information technology, transport, and the replacement of goods and technology has speeded up so fast that what used to take many decades now comes to pass in a matter of years. In reality, civilization and culture have always wrestled with each other, we just didn’t refer to it as globalization. This competition had a strong economic dimension, but ultimately it was often decided by the force of weapons. Clearly, even then a country or civilization with more economic potential had greater prospects for success… Today, relations between states and their groupings are becoming increasingly economic. The global contest is played out in the economy, not on the battlefields. The state and how it behaves on the international stage are defined by economic interests. The same holds true for communities such as the European Union. In this global economic competition, Europe is falling far short of its industrial, technological, scientific, research and educational potential. Others – even those with much shakier foundations – are faring much better, not only relatively, but in many cases absolutely too. For the moment, the fact that Europe is lagging behind is concealed by its resources, its still high productivity per capita, the inertia established by past economic mechanisms. But if we fail to take drastic action, this fading glory will have a negative impact on the living standards of our inhabitants in the long run.

To be sure, Europeans are much better off than the Chinese, or Indians. For the time being. But the gloomy future in store for Europe is best grasped in comparisons with countries that belong to the same civilization, cling to the same values, and have an economic structure and market size similar to our own. The United States benefit from an economy that is about a fifth stronger than the EU economy. Yet OECD forecasts indicate that by mid-century it will be two and half times more powerful. That is the most striking, most rapid loss of influence and clout of a region in peacetime. What does it mean in practice? If the current trend continues, in 20 years’ time the average US citizen will be twice as rich as the average French or German citizen. That is a simple statement of evident fact. What lies behind it? Essentially, there is one root cause. Europe is starting to fall short of the value on which it is built, the value which has always been its greatest comparative virtue: freedom. This is most evident in the state of European education, i.e. the state of science, research and innovative potential. These are the virtues that spurred the rise of European power and glory over the past thousand years.

Of the world’s twenty most prestigious universities, just two are in Europe. One is in Japan. The rest – all seventeen of them – are in the USA. In a country which makes the least level of state intervention in university education and boasts the highest volume of private investment in education. Have we not somewhat forsaken the ideals of academic freedom, the openness of our medieval universities, the value of education as a highly prized personal asset? Other links in the innovation chain report the same situation. The number of European students graduating and earning a postgraduate academic title in the US who remain in the US is higher than the number who come home. This is because there is more opportunity for them to fulfil their potential in science, research, and in the introduction of new technologies.

The R&D abyss between Europe and the rest of the world is widening at a menacing pace. Corporate investment in this field in 2004-05 went up by two per cent in Europe, compared to seven per cent in the US and Asia. That is the difference between the level of economic freedom on the old continent and the rest of the world. The European economies have seen their comparative cost-related advantages evaporate. If we lose our advantage in education and innovation to China, India, and other countries, I will live to see Europe become a continent entirely incapable of competition. With all the consequences this entails for the quality of life of our citizens. Citizens we are trying so hard to protect today at the expense of their freedom. At this rate, we are also ‘shielding’ them from future happiness and prosperity.

What path do we want to follow?

Do we really want to keep following the path we are on at the moment? Personally, I don’t. I don’t want my children to be worse off than me. The Czech Presidency’s motto, ‘Europe without Barriers!’, expresses precisely the approach we need. Europe without internal barriers is a Europe that offers people the maximum opportunity to make full use of their skills. A Europe that is not afraid to tear down external barriers is a self-confident Europe that will exploit as much as it can from the globalization process. We do not have significant mineral or human resources, which makes it all the more foolish to lock ourselves in ‘Fortress Europe’. Nor can we adhere to the imperial slogan of ‘big is beautiful’, much favoured by supporters of rigid European unification. Much more apposite for Europe would be the Czech saying ‘small is cool’. The past forced us to rely on our individual virtues, talents, creativity and resourcefulness. We succeeded.

And we can be successful again. All it needs is for European statesmen to return to the roots of that success. For them to concentrate on the important issues and not get bogged down in harmful pseudo-problems such as global warming. That is not just a tremendous waste of time, but also money, and is a huge step on the way to an uncompetitive Europe. Politicians must not be afraid of resisting unification and anti-liberal trends and doing what people really need, not what they think they need based on corrupted information. The Europe I want is a liberal and free Europe. A Europe that internally adheres fully to the four fundamental freedoms of the Union: free movement of persons, goods, services and capital. A Europe which, in external relations, will not place hurdles in the way of free trade within the WTO, but which will push for the dismantling of barriers. A Europe that will be open to new members, that will remain faithful to its civilization mission to spread the area of freedom, security, stability and prosperity. A Europe that will not be a rigid, unified monolith, but a flexible unit enabling individual countries to exploit their comparative advantages and act according to their economic conditions and interests. Europe’s problems are exaggerated regulation, complicated and high taxes, high social expenditure and labour costs, low efficiency in terms of higher education, science and research, expensive common policies (especially the CAP), protectionism and aversion to the rest of the world. Besides these internal problems, there are also, of course, external challenges: energy security, migration and terrorism. We must tackle these issues. We have behind us a protracted trench war on institutional reform, which ended with the signing of the Lisbon Treaty. Theoretically this has given us leeway to address those acute problems.

The Lisbon Treaty brought closure to the issue of how the EU would function institutionally in the future. Yet is this institutional set-up, which encourages the tendency towards steadily deeper integration, consistent with the needs of Europe I have outlined here? Will it stop us from falling further behind the USA and the rest of the world in the next ten or fifteen years? Does it offer prospects for the next 50, or 100, years? Europe will continue to expand – it has no choice. On the other hand, in certain field the cooperation if its members will intensify and become more specialized. What are the boundaries of these contradictory processes? Enlargement, i.e. greater heterogeneity of Europe, and deeper, more specialized cooperation? Simple logic clearly indicates that this will work only if that intensified cooperation is also flexible. If each state voluntarily joins in with or eschews that cooperation based on its own requirements and possibilities. The right to choose the extent to which it will become involved in the Union’s common policies. The flexible Europe I have described here is in stark contrast with the theory of a hard core. A situation where a group of states – the avant-garde, as Delors would have it – progresses ever deeper with integration while directly or otherwise forcing integration latecomers to join that core, otherwise they will be left on the margins and become some sort of second-class members. This form of variable integration would not support heterogeneity and the dismantling of barriers, but would ultimately lead to unification and the construction of new institutional political and economic walls. We must reject this.

Yes, I know that the path of flexible integration is still very much untried, but its seeds exist in the history of European integration. Cooperation in the Schengen area, the European Monetary Union, the Prüm Treaty on police and border cooperation. I am in favour of a more disparate Europe where different groups of states can pursue their, naturally, varied interests. If we are talking here about the changes of Europe, then I see the future of the EU n a change to the current unification-targeted trend of integration. It is axiomatic that a precondition for this mechanism to function is agreement on the largest common denominator, on a definition of competences and rules that will apply for everyone. The common market with its four freedoms serves as a good example. To put it briefly, a flexible Europe is a Europe that expands the space of common freedom, not the scope of regulation. A Europe which increases internal competition, not unification. This is the sort of Europe that will be able to find effective solutions to the problems I have outlined here. What should that joint basis of flexible European integration consist of? What should that highest common denominator be? The current policies incorporated into the acquis? Or simply issues relating to the functioning of the internal market? Or shall we go further and try to transfer other powers back from EU level to national level?

The future direction taken by the European Union will provide the answers to those questions. They will play a significant role in determining whether the next change of Europe will see it edge towards the status of an insignificant third-rate power, or whether we will embark on a journey back to the summit from which we are now sliding (or perhaps even plummeting). As I have indicated, I know which way I plan to go. I will head the way the needle on the compass of freedom is pointing. Nevertheless, at least by way of conclusion, I would like to return to my role as prime minister of a country soon to assume the Presidency of the EU, so I will say this: these are issues we need to discuss intensively with our partners. Indeed, we have already started. And the initial results are clearly better than the pessimists had been predicting. The atmosphere within the EU really is changing. More and more politicians are realizing that we must go back to our original values, avoid intervening too forcefully in the market, make liberal reforms, foster competition, and restrict high public spending and the bureaucracy of Brussels… That is a change that I, as a conservative, would embrace.