Prime Minister Helle Thorning-Schmidt’s address at The Annual Meeting with Ambassadors in Denmark, Copenhagen, 19 April 2012

Ambassadors, Your Excellencies,

Thank you all for coming today. I am very happy to stand here before you, representing a new government and new visions for Denmark. And I look forward to discussing with you the key challenges facing not only Denmark and Europe but the international community in general.

I will focus on four issues: 1) The Danish EU Presidency, 2) The EU as a global actor focusing mainly on the Arab spring and the green agenda, 3) Our new priorities for Danish development cooperation, and 4) Denmark’s global security engagement.

But first some remarks on a key denominator – not only for Denmark but for the whole world: The Economy.

Only a few months ago many were asking: Is the EU doing enough to stem the debt crisis and restore growth?

Tough decisions have been taken in Europe since then. European leaders have shown the will to confront the challenges. Over the past months we have taken a number of steps that redefine the economic governance of the European Union. These steps have marked a turning point.

Growth prospects are still dim but there are positive signs. Positive growth is expected to return to the euro area in the second half of 2012, but with significant variation among countries.

However, this is not a juncture for complacency. We have mapped a path out of the crisis. But it is far too early to call off the crisis.

We must make sure that the decisions are fully implemented. This is a key priority for the Danish EU Presidency. Entrenching the gains in economic confidence and the trust in the new rules of economic governance depends on full implementation and enforcement of these new rules.

Like many other countries, Denmark is still marked by the crisis. The economy stagnated in the second half of last year and economic growth is expected to be modest this year and in 2013.

However, Denmark has a relatively good starting point compared to other EU countries. With a large balance of payments surplus, moderate unemployment and a level of public debt well below 60 per cent of GDP.

The economy is supported by very low interest rates. This owes to the investor confidence enjoyed by the public finances in Denmark. Danish government bonds, and to a large extent also Danish mortgage bonds, have for some time been regarded as a safe haven amid the international financial turmoil.

Within tight limits and respecting the EU’s recommendation to reduce our deficit by 2013, we are supporting growth and jobs through a targeted kick start of the economy.

The kick start frontloads public investments to underpin growth and job creation in 2012 and 2013. It boosts investments at a time when demand is weak and it will wane in 2013 when the economy is expected to be in a better shape.

Measures to stabilise the economy in the short-term are followed by reforms to ensure growth and jobs, also in the longer term.

And reforms are necessary. Danish competitiveness has declined markedly in the past 10 years and productivity growth has been mediocre. Without reforms labour supply is set to decline over the coming years. This puts our economy under pressure.

Reforms and a responsible economic policy create the basis for a strong and sound Danish economy and thereby a strong and sound welfare state.

Our reform agenda includes a fully financed tax reform, reforms of the labour market and social benefits and negotiations involving unions and employers with the aim of increasing labour supply.

In addition, we have put forward a proposal on a budget law which enshrines a prudent and medium-term oriented budget policy. This proposal is of course closely linked to the Fiscal Compact that Denmark intends to ratify before the summer break. Denmark will participate not only in “the shell” but intends to join all paragraphs open for non-euro countries. We thereby send a clear and strong signal that Denmark will continue to conduct a sound and responsible economic policy.

We need reforms if our welfare state is to survive. Reforms will strengthen our social model based on core values of solidarity, safety nets and equal opportunities. The proposals for reform will dominate the political agenda in Denmark in 2012.

Now, allow me to turn to the Danish EU Presidency.

We are now more than half way through our term. Compared with the very bleak outlook three and a half months ago, things are looking brighter. As I have already mentioned, it is still far too early to call off the crisis – but the EU has taken a number of very important steps in the last few months.

The signing and finalisation of the Fiscal Compact, the second loan agreement to Greece, and the increase of the firewall have all contributed to enhancing the stability and confidence in Europe.

This has also enabled us to turn our attention from almost day-to-day crisis management to other agendas. First and foremost the European growth and employment agenda, which is at the very core of the Danish Presidency.

The very reason why the EU has been so preoccupied with the financial crisis is that only by restoring confidence in our economies can we create the foundation for new growth and jobs.

I was very pleased that we were able to place growth and job creation high on the agenda of the European Council both in January and in March. We have outlined a number of initiatives both at the EU-level and in Member States to continue this agenda.

These actions serve the overall goal of protecting our unique European social model.

The aim for our Presidency has from the start been to help deliver the concrete results that will make a difference for European citizens by creating growth and jobs.

One such result is the finalisation of the European Market Infrastructure Regulation which will increase transparency and efficiency in derivatives markets. Derivatives play an important role in the economy but the financial crisis showed that they are also associated with certain risks. These risks will be mitigated by the new regulation which will help to establish a safer and sounder regulatory framework.

Another area where the Presidency has secured agreement is the Roaming regulation which will ensure consumers significantly lower prices on communication across EU countries. Most citizens will feel the effects of this already this summer when they go abroad for their vacation.

Finally, I think it is noteworthy that the prospect of EU membership is still a key driver for progress, peace and democracy in our neighbouring countries. I am therefore delighted that we agreed to grant Serbia candidate status. I think it illustrates very clearly that the EU is so much more than economic crisis management.

A strong European economy is also the foundation for a strong Europe on the global scene.

The political world map is being redrawn. The emergence of new global actors is a historic opportunity for the European Union. More nations will be assuming responsibility for shaping global politics in the 21st century. This is good news for Europe.

The European Union must expand its relations with these emerging global partners, based on common interests and mutual respect. Yet we must also recognise that our world views sometimes differ.

The establishment of the European Foreign Service under the leadership of Catherine Ashton has been an important step forward towards Europe speaking with one voice.

We see a demand for Europe – calls from people in our neighbourhood to support their aspirations for freedom and prosperity.

And nowhere has the call for freedom and prosperity been stronger than in North Africa and the Middle East. Today, developments in the region are still unpredictable: Will the Arab spring turn into summer or, as some fear, a cold winter?

I think that what we are seeing is not a passing season, but a new political climate:

Firstly, political institutions have been empowered to play a real role in politics. Today, parliaments, political parties, trade unions and media are turning into actors and platforms for political debate. This creates a new dynamic in its own right.

Secondly, citizens demand that governments must be responsive and accountable in ways that were unthinkable before.

Thirdly, elections in Tunisia, Egypt and Morocco have shown that the public has a high degree of confidence in political actors from the Islamic groups and parties. We do not yet fully know which political agenda these new actors will pursue. But we expect them to respect the democracies that brought them to power. To promote the rule of law. To protect human rights, including women’s rights and the rights of minorities. We will cooperate with the new democracies on this basis.

Overall, the transitions in the Middle East and North Africa may be chaotic and sometimes unstable. But this should never prevent the EU from supporting positive aspirations for democracy. Nor should we ever waiver in our pressure on leaders who ignore the legitimate demands of their people and choose the path of repression and violence. Syria is a horrendous example and the situation calls for swift action.

In respond to UN ́s request last week Denmark has agreed to transfer Danish military observers in United Nations Truce Supervision Organization [UNTSO] to the new UN Military Observer Mission in Syria. I am proud that Denmark once again can respond quickly to UN ́s request.

And also the EU has acted firmly and demanded that the regime stops the violence. And we have introduced strong sanctions against the regime.

Another area with a strong European voice is the green agenda. Ensuring green growth and sustainable development is another pressing challenge we must address together. The world population passed 7 billion last year. By 2050 we expect that count to rise to 9 billion people. In the course of the next 20 years it is estimated that the global demand for resources will grow 40-60 per cent. The pressure on our global natural resources and ecosystems will be enormous.

Denmark has demonstrated that economic growth does not necessarily lead to an increasing use of resources. During the past three decades the Danish economy has grown significantly while energy consumption has remained virtually constant. Since the 1980's the share of renewable energy has been steadily rising and now amounts to approximately 22 per cent.

We have recently reached a broad-based and very ambitious political agreement on a new national energy strategy. Our goal is that Denmark’s energy consumption will be 100 per cent renewable by 2050.

But unilateral action is not enough. We need to act on a global level. The EU sees the Rio+20 Conference as a unique opportunity to ensure political commitment to sustainable development.

The EU has been proactive in advancing an ambitious agenda for Rio+20 and will continue to do so as Heads of State and Governments meet in Rio in June. Not only is the EU pushing hard for momentum in the negotiations. The EU has also proposed a green economy roadmap as an operational outcome in Rio.

But governments cannot advance a global green transition alone. I believe that the private sector and civil society play key roles in delivering green growth and promoting sustainable consumption.

That is also why I’m hosting the second Green Growth Forum (3GF) in Copenhagen in October where focus will be on public-private partnerships and innovation as a driver for green growth.

Strengthening Danish development policy is a key priority for my government. We see our development policy as a central part of our foreign policy and a way to strengthen our international alliances and take responsibility for development beyond our own borders.

This year, as we are celebrating the 50th anniversary of Denmark’s development cooperation – also known as Danida – we are preparing a new development cooperation strategy. Poverty reduction will remain at the centre of our efforts.

We will focus our actions in four targeted areas: 1) promoting human rights, democracy and good governance, 2) green growth, 3) social development, and 4) support for stability and protection in fragile states.

We want to move away from the traditional donor/recipient relationship. Instead we want to further engage in mutual partnerships and use our assistance to empower governments and people in developing countries, so that they can promote and protect peace, democracy and human rights.

Denmark will also continue to play a central role in international stabilisation and crisis management efforts – both in terms of military contributions and applying a comprehensive approach to crisis management.

We were among the first to respond to the UN Security Council resolution in the spring of 2011, calling for the international community to take measures to protect the civilian population in Libya. In less than 30 hours the Danish Parliament agreed on the need for swift action. The following morning, we had fighter aircrafts in the air.

The operation proved the importance and value of international partnerships in times of crisis. We continue to stand by the Libyan people in their efforts to build a new future.

Denmark remains fully committed to a strong engagement in Afghanistan up to and after 2014. Denmark is currently providing 720 troops to ISAF operating in the challenging Helmand Province. And Danish police officers are training and mentoring Afghan police forces.

In line with the gradual transfer of security responsibility to the Afghans, Denmark is refocusing from combat to training.

In order to ensure the necessary Afghan capacity needed for a successful transition, Denmark has worked hard on creating a coalition willing to commit to long-term funding of the Afghan National Security Forces. This 3C Initiative – Coalition of Committed Contributors – has gathered substantial support.

Afghanistan is a good example of our comprehensive approach, where we combine military, civilian and development assistance. And we continue our strong civilian engagement in Afghanistan, providing substantial development assistance to the Afghan people. Afghanistan is now the second largest recipient of Danish development aid and will stay a top priority in the coming years.

Another security priority for Denmark is the international fight against piracy off the Horn of Africa and in the Indian Ocean. Piracy threatens our seafarers, disrupts commercial interests and trade and challenges the stability in the region.

We contribute to counter-piracy with a comprehensive package of instruments. On the military side, we deploy naval vessels and patrol aircraft to NATO’s Operation Ocean Shield. We also play a leading role in the international efforts to find legal solutions to the challenges posed by piracy. And finally we assist Somalia and the region with building up capacity to better counter the challenge.

***

I have mentioned a selected handful of our priorities. If time had allowed, I would also have touched upon the Arctic, the Nordic Cooperation and the new emerging markets.

Allow me one last remark. As the world is rapidly changing and new global challenges occurs, international cooperation is key. I believe this is the only way to find sustainable and legitimate solutions for the 21st Century.

Diplomacy and dialogue are the focal points of Danish foreign policy and I will use this opportunity to thank you all for the excellent and invaluable cooperation with my government. Your contributions are highly appreciated.

I thank you for your attention and I look forward to your questions and comments.

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