Speech

Address by Prime Minister Anders Fogh Rasmussen at the Meeting with the Diplomatic Corps in Copenhagen on January, 12, 2007

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Ambassadors, Your Excellencies,

It is a great pleasure seeing all of you at this meeting today. This is an excellent opportunity to discuss matters relating to Danish domestic and foreign policy. And I am really pleased that we have now started a new tradition. This is the second year that we meet in this setting to discuss issues of common interest.

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On the domestic front the situation is comfortable.

The Danish economy is strong. We have one of the strongest economies in the EU. And future prospects are good.

The economic growth was more than 3 per cent last year – well above the European average. More Danes are working than ever before. And the unemployment rate is still decreasing - at the moment 3.3 per cent. In fact, unemployment is at a 30 year low.

We have substantial surpluses on the public finances and the public debt is falling rapidly. We have solid trade and current account surpluses and the Danish foreign debt is no longer an issue.

International surveys consequently labelDenmark as one of the most competitive countries in the world.

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These encouraging results are based on Denmark’s well-developed public sector, an efficient private sector, a well educated labour force and a sound and stable macroeconomic policy. And not the least, the unique Danish model of flexibility and security in the labour market – that is, flexicurity.

But we need to prepare ourselves for future challenges and to keep ahead of the international competition. In the recent years we have initiated a number of far-reaching reforms.

Firstly, we have introduced a welfare reform to secure the future welfare. The demographic changes pose new challenges. Soon, we will - as in many other countries - have more senior citizens and fewer people of working age.

The reform will allow a gradual increase in the retirement age. And we have made the changes in time to allow people to adapt to them.

The welfare reform is based on a broad political agreement following a long period of public debate, which was indeed intended to take place to pave the way for this comprehensive reform.

Secondly, we have started the implementation of a globalisation reform.

The purpose of this reform is to prepare Denmark for the future as globalisation places increasing pressure on Danish competitiveness and challenges Denmark’s position as one of the richest countries in the world.

The aim is to further improve our position as one of the most competitive countries in the world while maintaining our socioeconomic aims and ideals. Education, knowledge, innovation and entrepreneurship are the keys to Denmark’s future. We believe that our focus on enhanced education and research will optimize both our flexibility and social security.

The globalisation reform means that we will invest 39 billion DKK in total over the next 7 years.

Thirdly, Denmark needs a modern and efficient public sector to maintain its sound economic development. Therefore, we have also carried out an extensive reform of the public sector and local governments with effect from New Year’s Day 2007, which give us bigger and more efficient municipalities with focus on renewed and improved citizen service.

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The government has, as you can tell, already completed a wide range of reforms. Actually, the reforms completed by this government are the most extensive reforms in decades. However, we will not stop here. We are still facing new challenges that need to be addressed.

The first challenge is to ensure Danish citizens a continued high level of welfare despite the fact that it is becoming increasingly difficult to hire a sufficient number of employees in the public sector. Over the next 10 years every fourth employee in the public sector will retire. It will be a huge challenge to fill vacancies as the work force decreases.

Therefore, the road to better public service is not more money and more employees. Instead, the challenge is to achieve higher quality in the public service for the money currently spent. Therefore, the government is preparing a quality reform. The purpose of the reform is to ensure high quality public service even though we are faced with a decreasing work force.

This brings me to the second challenge. That is to ensure a sufficient labour force in general. Not only in the public sector - but also in the private sector.

Especially, we need to focus more on the immigrants and their descendants in Denmark. More than 3 out of 4 Danes are employed. Among the immigrants and their descendants it is only about 2 out of 4 that are employed. In this group we have a big labour force reserve that we unfortunately do not fully benefit from today.

At the same time it is necessary to attract more highly educated and skilled foreigners to Denmark. That is why we are expanding the existing job card system and are introducing a so-called green card system, which makes it possible, for especially qualified foreigners, to seek jobs in Denmark.

The third challenge I will mention is the future energy supply. Denmark has now a favourable position because of the large quantities of oil and natural gas in the North Sea. But we must already now prepare our selves for the time when the energy reserves in the North Sea have been emptied.

The government will set ambitious, long term objectives to make Denmark self-sufficient with environmental compatible energy.

Our point of departure is good. 15 per cent of our energy consumption comes from renewable sources. And we are a world leader in energy efficiency. Our economy has grown approximately 70 per cent over the last 25 years without an increase in the consumption of energy. In this way we demonstrate that there is no contradiction between economic growth and zero growth in energy consumption.

We will in the near future present a long term energy plan. The energy plan will include a markedly extensive use of renewable energy. We will set ambitious objectives for more energy efficiency. We will also increase research, development and innovation with the purpose of developing further the existing as well as new renewable energy sources.

We will combine political regulation and market mechanisms. We want to get as much clean energy as possible for the money spent.

But - and it is important to underline that - a long term energy policy also depends on international cooperation. Therefore, we need to agree on ambitions objectives within the EU. Denmark believes that the aim of a common Energy Policy should be to reduce the EU’s dependence on fossil fuels. This will significantly enhance the EU’s energy security and its contribution to the fight against climate change.

Denmark also attaches great importance to the realisation of a genuine and liberalised internal EU market for gas and electricity.

Energy and climate change are closely linked challenges. As you may be aware, Denmark recently offered to host and chair the UN Climate Change Conference in 2009. We hope that we can contribute to facilitate an ambitious post-Kyoto framework. It is indeed a global task. We should aim at taking on board all the major emitters of green house gasses in a post-2012 framework.

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Ambassadors,

Naturally, having an open economy and being part of a globalised world influences the way we act in our foreign policy. In my opinion the best way to address the challenges from globalisation is through an active foreign policy based on clear values and strong engagement. Let me mention three important elements:

  • Free exchange of goods, services and ideas to further prosperity and the dynamic use of foreign aid to foster such development.
  • Strong multilateral cooperation.
  • Further European integration.

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Many have predicted the 21st century to be the century of Asia. And there can be little doubt that many of the Asian countries are benefiting tremendously from globalisation. There are those who think that we in Europe would have an interest in trying to slow down this development through a protectionist approach.

My approach is the exact opposite. Rather, we must actively take part in the positive development in Asia through increased cooperation and more trade.

My visits to the region during the last couple of years have been an important source of inspiration to the work my Government has undertaken in preparing the Danish society for globalisation.

This spring I plan to visit two countries in Latin America: Argentina and Brazil. I am looking forward to getting a first hand experience of a region that has become an important global player.

There are parts of the world which are not reaping the benefits of globalisation. We need to support the African countries in getting integrated into the global economy.

I can assure you that Africa will be very high on our agenda in the coming years.

The private sector in Africa must be strengthened and the regional trade among the African countries must increase. And the developed countries should demonstrate a much stronger political will to ensure inclusion of Africa into the world market. The EU has already taken initiatives in that regard, and I urge other countries to follow. The planned EU-Africa summit in the second half of 2007 will provide a very good opportunity for a strong focus on this and the important issue of dealing with illegal immigration.

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Multilateral cooperation is a cornerstone of Danish foreign policy. Being an active member of the United Nations, NATO and the European Union allows us to exercise an influence that far exceeds what can be expected from a small country with around 5 mio. inhabitants.

For the past two years Denmark has been a member of the UN Security Council. Allow me to highlight some areas that we have put special emphasis on or that I find have been important achievements for the international community.

Combating terrorism was one of our main priorities and the chairmanship of the Counter Terrorism Committee (CTC) played a central role during our two years in the Security Council. We took a number of initiatives to assist those countries willing but not able to counter terrorism. But we also achieved concrete results concerning the protection of human rights in the fight against terrorism.

The establishment of the Peacebuilding Commission was another Danish priority.

The unanimous Security Council decisions concerning North Korea and Iran were major achievements for the international community.

The Security Council also reached a unanimous decision on Darfur, but unfortunately we still do not have an agreement that allows us to send UN troops. It is an utter disgrace that we are forced to stand back as the killings continue.

We intend to follow up actively on the results of the Security Council membership with a continued strong focus on Africa, conflict solution and the promotion of human rights.

Thus, Denmark is a candidate to the UN Human Rights Council in the up-coming elections in 2007. As a member of the Council, Denmark will continue to contribute to making the Council credible, effective and operative. I very much hope you will support us in our efforts to ensure election.

Active multilateralism also implies the willingness to contribute with military means. Our main contributions are in Kosovo, Afghanistan and Iraq.

In Kosovo we fully support the UN Special Envoy Matti Ahtisaari in his efforts to determine Kosovo’s future status. We must ensure that the settlement in Kosovo promotes a multi-ethnic and democratic society based on rule of law. In order to achieve this, a continuation of the international presence will be needed. And we are ready to contribute.

Together with NATO, Denmark is engaged in solving a vital task in Afghanistan. It is of utmost importance for our own security that Afghanistan does not – once again – become a safe haven for terrorists.

Afghanistan is a prime example of the way security and development goes hand in hand. Therefore, we put special emphasis on ways to enhance civil/military cooperation.

The situation in Iraq is grave and the need for reconciliation among the Iraqi people continues to be the key political task for the democratically elected Government of Iraq. I share the vision of President Bush of a free, united and democratic Iraq.

I hope that 2007 will be the year when the Iraqis are able to assume responsibility for the security in Southern Iraq, where United Kingdom and Denmark are currently cooperating. As the Iraqis themselves gradually take over responsibility, we shall be able to reduce the number of British and Danish soldiers and adapt the nature of their assignments. But I would like to underline that Denmark will continue its support to Iraq.

Denmark was among the first countries to decide to contribute to the enlarged UNIFIL force in Lebanon in 2006. We are ready to continue with this assistance in 2007 and are considering the possibilities for financial assistance in other areas.

Progress in the Middle East is highly dependent on the peace process. And it is my hope that the peace process will be reactivated in 2007 through the Quartet. It is crucial that progress is made. Denmark would like to see two democratic states – Israel and Palestine – living side by side in peace and security.

In general, we will continue our strong engagement in the Arab world. This engagement is not limited to government to government cooperation but involves dialogue at all levels of society; youth, media, religious communities and religious authorities, political parties and NGOs.

To further this approach we are planning to open three new embassies in the region in 2007 in Morocco, Jordan and Lebanon. At the same time, we are also continuing our efforts within the Partnership for Progress and Reform programme.

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Let me conclude by outlining three important issues on the EU agenda during the German Presidency.

Firstly, the question of the new EU treaty. My government and a very broad majority of the Danish parliament believe that the Constitutional Treaty is an excellent basis for the future cooperation in the EU. It should be the natural point of departure for the negotiations ahead on a new EU Treaty.

The Constitutional Treaty addresses the main challenges Europe faces. Most importantly it contains provisions for more effective and democratic decision making. These provisions are necessary if we are to enable the enlarged EU to deliver the results that the European citizens are expecting.

At the same time, however, we have to respect the outcome of the referenda in France and the Netherlands. And frankly speaking we cannot expect the French and Dutch governments to present the same text to their electorates again.

It will not be easy to find a solution to the question of the future of the Constitutional Treaty. But I am confident that the German presidency will be able to bring the matter forward.

Secondly, the need for an enhanced EU Neighbourhood Policy. The EU has to make a much greater effort to develop an attractive Neighbourhood Policy. A policy that offers instruments for reform leading to increased stability in the countries East and South of the EU that may not be considered for membership of the EU or only have a long term EU accession perspective.

The EU should offer increased access for the neighbourhood countries to the EU’s internal market, increased economical support for reforms, lay the ground for increased people-to-people contacts, and initiate agreements with the neighbourhood countries on cooperation in special areas such as energy, environmental and climate change issues, border control, and migration.

Denmark will support efforts to strengthen the Neighbourhood Policy along these lines.

Thirdly, the German Presidency has also highlighted the need for closer EU-US cooperation, especially in the economic sphere. I fully share this view.

Today, we often focus on emerging economies particularly in Asia. And as I have already stressed this is an important focus point. But we should not forget that the EU and the United States are responsible for two fifths of world trade and we are each other’s largest trading and investment partners.

I have on several occasions promoted the vision of a Transatlantic Marketplace. We need a Marketplace without barriers to trade and investment. This would bring increased economic prosperity on both sides of the Atlantic.

However, the Transatlantic Marketplace is a long-term vision that can only be achieved through cooperation and dialogue in concrete areas. A step-by-step approach is needed.

I therefore share the German Presidency’s ambition of initiating a dialogue focussing on increased convergence and cooperation in a few concrete areas to begin with. These could be intellectual property rights, financial regulation and harmonisation of standards as well as energy and environment.

During the German EU-presidency – and in the years to come – we should make the vision of global free trade and a Transatlantic Marketplace a key vision.

The need for free trade is as important as ever. We have a common interest in giving the WTO-negotiations priority. What is needed to make progress, boils down to political will.

We all have an interest in free trade. Rich as well as poor countries. We in the more prosperous countries should open our markets to the developing countries. And – not least – the developing countries should open their markets to each other.

There is a huge potential for increased prosperity and stability in increased free trade across the world.

At the same time free trade is the best way to enhance cooperation and enhance cultural understanding between our nations.

I see free global trade as a common challenge for all of us. And I invite all of you to take part in the important mission to bring down trade barriers and to expand the area of freedom and free trade.

Thank you.