''Europe is worth the trouble''

- Welcome Address -

Prof. Manfred Weber
Chief Executive Officer Association of German Banks

Summer reception Musées Royaux d’Art et d’Histoire
Brussels, July 3, 2007

Ladies and Gentleman,
Just over a week ago the German weekly “Welt am Sonntag” commented on the results of the EU summit in Brussels using the headline

“Europa quält sich zum Fortschritt”.
In English: “Europe struggles to make progress”.

• This suggests two things. Firstly, Europe is difficult. It sometimes has to do a hard job to make progress.
• But it also suggests, secondly, that progress is being made. Europe is not standing still but moving forward.

All those who care about Europe do not forget this second aspect. On the contrary, they focus on writing the next chapter of the European success story.

For a successful Europe – and successful banks in Europe and Germany – are something worth working for.

And the Association of German Banks is working for it – in Berlin, but also here in Brussels.

That’s why, ladies and gentlemen,
I am delighted that you are our guests this evening. A very warm welcome to you all to our summer reception here at the Royal Museums of Art and History!

Why, you may ask, this museum? Well, though the treasures on show are drawn from more than just our own continent, the European exhibits alone bear witness to the ample riches of the Old World.

From antiquity to the Rococo period, from Rubens to Art Nouveau: Europe has a lot to offer.

That is still true today. Not only in cultural, but also in economic terms. And it will still be the case tomorrow.

This diversity enriches Europe, but it is also a challenge, because again and again we have to find ways of bridging gaps. It is in this field in particular that Europe has done well during the past six months.

And I hope – and now I am lobbying in particular to Mr Schönfelder – you won’t suspect me of being biased if I take this opportunity, as a German here in Brussels, to thank the German European Council Presidency. It deserves thanks and respect for what has been, on balance, a successful Presidency!

Despite all the problems that still need to be addressed – and I will be mentioning one or two of these – one thing is certain:

Europe has proven over the past six months that it can get things done.

This should give us drive to also tackle the pressing practical political issues with the same resolve.

For the success of Europe is decided not only at summits, but – nobody knows this better than yourselves – also in the real world. And, looking at the European banking market, the situation here is rather sobering:

In fact, we find that up to now – despite isolated attempts – no truly European bank has managed to establish itself.
I am talking about a bank that – according to the idea of the single European market – conducts

• a significant amount of domestic business
• at several – that is to say, more than two or maybe three – locations in different countries
• with identical products and brands.

The large number of complex tax, legal and supervisory rules and regulations are still simply far too much of an obstacle.
Only very few banks overcome such barriers and do business Europe-wide on a large scale. The reason being, that this requires a tremendous amount of work:

• For example, banks have to do a legal check on customer contracts to see whether they are suitable for all European markets. And, as you know, the EU now numbers 27 member states.
• Banks also have to meet regulatory reporting requirements. Certainly, with enough manpower they can do so even in a network of more than 50 supervisory authorities.
• Then there are the different tax laws that banks have to monitor, analyse and comply with. Of course, they can manage that too, but only by deploying resources on a massive scale.

But does this make sense? Is it efficient? And is it in keeping with the spirit of Europe? At any rate, this is not yet what I understand to be a single market.

A financial market full of obstacles, a Europe full of barriers to market entry, this is not what banks have in their mind. European business models will not work as long as the single European financial market is more a desire than reality.

This is to the detriment of banks. It decelerates innovation, inhibits product diversity and keeps costs up. In short: It is bad for customers. It is bad for Europe.

This is why we should work to make the single European financial market a reality.

So that all of us – bankers and politicians alike – can tell customers and citizens that Europe is worth the trouble. That it pays to make Europe a success. Bit by bit, step by step. Sometimes troublesomely, and, if necessary, then even by struggling to make progress.

This is why I would ask you tonight: Help tear down the barriers to a real single financial market!

Ladies and gentlemen, someone who works tirelessly for the good of Europe is Professor Hans-Gert Pöttering, the president of the European Parliament.

A warm welcome to you, Mr President! I am delighted that you hace accepted our invitation.

Mr Pöttering, your commitment to Europe goes back more than a quarter of a century.

You have been a member of the European Parliament since the first direct elections in 1979 and its president since the beginning of this year.

We are eager to hear

• if you think that – in political terms – Europe is taking shape properly,
• what conclusions you draw after reviewing the past few years, particularly the last six months,
• and how you assess the future of Europe, especially when it comes to Europe’s role in the world. After all, a book of yours, published in 2001, bears the title “Weltpartner Europäische Union” (The European Union - partner of the world).

You see, ladies and gentlemen: Europe provides plenty of talking points.

So make the most of this evening.