"Economic integration as a transatlantic bond " - Guest lecture by Karsten D. Voigt, Coordinator for German-American Cooperation, to managers of RAG Coal International, Essen, November 13, 2003

I am delighted that you invited me today to make some remarks on transatlantic relations as we near the end of 2003.

The last two years have been a special period in transatlantic and German-American relations. Media reports on transatlantic relations have thankfully now lost some of the drama. In recent years, we saw all too many reports propagating a kind of doomsday approach as if the end of the Western world was imminent after the attacks of September 11, 2001, the dissent amongst the international community on the Iraq war and the ongoing transatlantic debate on values. I see neither the end of the West nor the end of the transatlantic alliance on the horizon. Those prophezying the "decline and fall of the West" ā la Oswald Spengler will be proven wrong. We are, however, caught in a phase of adaptation and re-orientation. When facts and thinking changed in the past, the West had also to re-define itself. Even more than during the Cold War, we, the West, today pose a challenge to other regions of the world - first and foremost to large parts of the Middle East. Indeed we even call into question their thinking and behavior. Western ideas and lifestyles were never limited to one specific geographical area, rather always had a global impact. Democracy, human rights and the Enlightenment are ideas for the world. I support these ideas and their impact. I am therefore against relativizing cultures or values. And that also means that it is right for dictators, perpetrators of genocide and religious and political fundamentalists to see themselves challenged by our ideas and policies.

Transatlantic relations thus remain just as important as they were in the past both for Germany and Europe but also for the US in its own interest. None of the major problems facing this world would be easier to solve if Europe and the US stood against one another. This is true incidentally not just for military and economic issues but ultimately also questions for democratic culture and even environmental protection. If Europe and the US stand against one another, this endangers the chances for security and democracy, for free market economy and sustainable development in many parts of the world.

Precisely because I want to consolidate the foundations for a shared transatlantic future, I am in favor of making Europe more capable of taking action. This is also true of the military sphere. Echoing the sentiments of Joe Nye from Harvard University, I would like to add that in the military sphere the US is the only real global power. In the economic sphere, it is one power of several. Economically speaking, the European Union has almost the same weight. As far as population size and the share of world trade are concerned, it is even more important. At the level of social and non-state players, the US has been more attractive than any other country in the world. It wasn't the military power but the country's social and economic attraction - not least the possibility of realizing the American Dream - that had such a major impact. After all, soft power is also a form of power. In the light of current developments in the US, Joe Nye warns that by overemphasizing military power the US may become less attractive in social and political terms, thus also losing power, because power is more than just military strength. I share this concern.

Conversely, there are reasons for cautious optimism. There is more that unites the transatlantic partners than the pessimists amongst the columnists would have us believe. When Robert Kagan, the US intellectual living in Brussels maintains "America is strong, Europe is weak" he may be right in security policy terms. But as far as the economy is concerned, a new balance is emerging between the transatlantic partners that will have a long-term impact on political relations.

Today more than half a million people fly across the Atlantic every day in both directions, one million telephone calls and 1.4 billion emails connect people in the two continents on a daily basis. Opinion polls show that Americans and Europeans do not think as differently as is sometimes suggested. I for one think nothing of the prophecies of doom that the two are drifting apart both politically and culturally. On the contrary, there is no denying the abundance of links that are an integral part of our daily lives and that are making the transatlantic network ever more dense. We might as well use the words of Mark Twain to describe transatlantic relations who once said of Richard Wagner's music "It is better than it sounds".

It is not just the values and objectives that link America and Europe that have stayed the same: democracy, fundamental rights, the rule of law, individual liberty, market economy and prosperity for all. Let's stick with the hard facts of the economy. The EU and the US put together account for approximately half of global economic activity. Some 80% of multinationals worldwide are based in the transatlantic region. Half of all American direct investment goes to Europe, while 60% of European direct investment heads for America. The United States is Europe's largest export market and at the same time its largest source of imports. Our volume of trade and investment is some US$ 1 billion – a day!

As far as German-American trade relations are concerned, this means that American firms are the largest investors in the new Länder. Some 600,000 jobs have been created by American companies in our country. German firms even created some 850,000 jobs in the US. You see, a transatlantic economic area has emerged that has led to our two continents being linked in a way that is unprecedented in history. Political differences of opinion and trade-policy conflicts take on a different hue against this backdrop. They are simply to be overcome. Given the economic integration, a long-term deterioration of relations would be neither desirable nor plausible.

But transatlantic economic relations are not just relevant for those directly involved. A further development of multilateral rules for the global economy is unthinkable without the US and Europe, in particular Germany playing an active role. After all, transatlantic partners are leaders – and – opinion leaders in the international economic institutions such as the IMF, the World Bank, the WTO and the OECD.

The further we move away from the transatlantic turning point of 1989/1991, the clearer it becomes that economic integration is becoming the new transatlantic bond. The two sides are increasingly recognizing one another as equal partners. The fact that the world's largest single market is emerging in Europe and that the euro was able to establish itself successfully as a second anchor currency alongside the dollar surely played a pivotal role. Early skepticism is gradually giving way to respect amongst American observers. And all those who remember presidential campaigns in the US know that Bill Clinton, a previously completely unknown governor, defeated a successful victor of the Iraq war with the slogan "It's the economy, stupid". Similarly, they will understand that particularly now, one year before a new presidential election, stable transatlantic economic relations are also important in domestic terms. This does not rule out candidates engaging in protectionist campaigns but it will limit their scope.

Given the development that Europe has seen in recent years and decades, it is understandable that the concern is growing, particularly in the US, that with Europe a second rival pole is emerging in the West - and not just in economic terms. Yet I do not feel there is a very great danger of Europe trying to define itself against the US. After the enlargement of the European Union there will be no majority for such an approach. Defining Europe against the US would not be in the German interest. Yet I also contradict those in the US who take a negative view of Europe's stronger position in the sphere of foreign and security policy. The very opposite is the case! Europe's current lack of ability to act is one of the central problems in transatlantic relations. A Europe that is not relevant in terms of action has little global influence and is of minor interest to the US as a partner. The US would lose interest in a weak Europe. Such a Europe would also lead to a weakening of transatlantic ties. A Europe that in its weak position sees no way of exerting influence on the US would get frustrated and turn away from or even turn against the US. Remarks over recent months from the US that Germany is irrelevant didn't increase but decrease the German public's readiness to follow American initiatives.

For the transatlantic dialogue this means we Europeans have to make clear that our aim is not to turn away or detach ourselves from America. On the contrary. It is in America's fundamental interest to have Europe as an economically and politically stronger, more independent partner. The ongoing partnership with the US is in Europe's interest. We want the US to remain a European power, a power that is present in and closely linked to Europe.

Nurturing and intensifying economic relations as an indispensable part of transatlantic dialogue is the responsibility of all economic players: companies, associations and governments alike. Particularly you as managers are called upon to help shape these relations. The high-level bilateral business summit in May 2003 organized by the German Embassy in Washington together with the US Chamber of Commerce, the Federation of German Industries and the German Association of Chambers of Industry and Commerce is a prime example of how to hold an economic dialogue that is more in the public eye. This German-American Executive Summit brought cabinet ministers, business leaders, lobbyists and diplomats together and was very well received.

The strategic dimension of German foreign policy will have to develop further above and beyond the economic sphere. This is undisputed in the German Bundestag and the Federal Government. But the question will come up time and again as to the framework in which we Germans want to act and have to act. Given its geostrategic position, its roots in NATO and the EU and its history, multilateralism and international law as the fruit of a rational weighing-up of interests and goals will play a greater role for Germany than it does for the US. For us, multilateralism is a must, for the US, it is one option of many. These conflicting interests are nothing new but they were further accentuated by the Iraq war.

It is an old idea that the world is by nature and definition a place where states have to be rivals and in which a state can only reduce its security dilemma by increasing its power and not by networking different states through common rules or shared values. This idea which has many advocates today in the US is one that I consider to be fundamentally refuted by Europe's post-war experience and the development of a transatlantic security community in the same period. I feel this is the case even although large parts of the world are still under the spell of a traditional logic of power. Just like the American realists and unlike many Europeans, I am convinced that the use of military force is unavoidable in certain cases. But unlike the American realists, I am also convinced that our world can be changed with the perspective of a new reality, as witness the development of Europe in the post-war period. We should not give up hope that we can change the world. Otherwise politics would be merely going through the motions without the aim of a better world. It will take generations before fundamental changes can be effected in other parts of the world. But an understanding of the reality of power and the pursuit of the rule of law, realism and teleological action are not mutually exclusive. Therefore an international order in which law grants power and in which no advantage can be gleaned from power is a legitimate vision.

So there are weighty questions looming in the transatlantic debate. We have to try to respond to them: many together with the Americans, almost all of them together with our European neighbors and some of them we have to answer for ourselves. Ultimately it is a question of what Germany is to be in the European and global context, what risks we are prepared to take, what influence and power we want to have and what financial resources and instruments we are ready to use to achieve our goal. The results of this German debate will depend not only on the discussions between us Germans but also decisively on the arguments of our European and transatlantic partners. It is precisely this strategic debate that I believe to be the primary challenge of the coming months and years.

Thank you.

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