EU Commission President Barroso Calls for Cooperation on Energy, Trade

Daimler Chrysler and Monitor Group Chairmen Offer Suggestions

BRUSSELS (April 29, 2006) — European Commission President José Manuel Barroso today said that relations between the European Union and the United States have improved on several levels, but that inevitable globalization make trade, energy, and democracy the foremost areas of concern.

Opening the second day of Brussels Forum: Transatlantic Challenges in a Global Era, Barroso said energy is of central importance to the prosperity of the global economy, but that lately it has been used as an instrument of political corruption. Barroso said that by 2030, energy demand will rise by 60%, so the EU and US should lead in this field. “If the transatlantic market leads, the global economy will follow,” he said, adding that the U.S. and EU cannot exhibit “narrow-minded chauvinism” when it comes to protectionism and globalization.

Gunter Thielen, CEO of Bertelsmann AG, who introduced Barroso, emphasized the shortcomings of the European national economies. Research and development, entrepreneurship, and innovation should be promoted, he said, and Europe should be an economic benchmark.

Barroso, who also spoke about security, said the U.S. and EU have a shared responsibility for the Doha Round of the World Trade Organization, and that includes the need for an ambitious but realistic outcome for all 149 members.

In the following session, DaimlerChrysler Chairman Dieter Zetsche called for economic reform, and said European and U.S. business must increase their competitiveness in the face of globalization. In reference to recent layoffs in the U.S. auto industry, Zetsche said, “If we don’t get it right, the European auto industry will be facing—in less than a decade—an upheaval every bit as chaotic and destructive as that hitting the American auto industry right now.”

Zetsche called for companies and unions to work together to reduce costs, as he said his company had already done, by creating “a leaner, more flexible and effective organization…. In a global environment, you simply have to accomplish more with less.”

Governments are also responsible for enhancing competitiveness, Zetsche said, in particular through multilateral efforts to remove trade barriers to imports in countries that export manufactured goods to Europe and the U.S., such as Japan and Korea. “Globalization requires a level playing field,” Zetsche said. “Hidden non-tariff barriers must be knocked down once and for all. When you have a highly competitive market, as we in Europe and America, some growth has to come in other international markets.”

Mark Fuller, Chairman of the Monitor Group, followed Zetsche’s comments with a discussion of the importance of competitiveness on a microeconomic level. An “iron triangle” of investments in three areas—specialized human assets, R&D processes, and entrepreneurship—by groups in the public and private sector will prepare developed economies to compete in the global marketplace. “Creating new companies is the single best thing you can do to ensure you have a competitive economy,” Fuller said, adding that Europe lags behind the U.S. in that area.

Companies must be able to compete with their counterparts in the developing world, Fuller said. As today “all industries are high-tech industries,” the creation of knowledge-based industries will allow developed economies to compete. “People, knowledge, and entrepreneurship flourish in high quality of life, environmentally friendly places.”

EU Commissioner for Enterprise and Industry Günter Verheugen said that the pain of making economies more competitive “is always local,” and in Europe would be born more by national governments than policymakers on the EU level. This “pain of change” must be explained to citizens by national politicians, he said.

During a question and answer session, panel participants agreed that policymakers must make more use of existing transatlantic frameworks for multilateral cooperation. As Fuller said, “unilateral actions by government are unlikely to enhance competitiveness in a sustainable way.”

Brussels Forum is an annual high-level meeting of the most influential American and European political, corporate, and intellectual leaders to address pressing challenges currently facing both sides of the Atlantic. Heads of state, senior officials from the European Union institutions and the member states, a U.S. Senate delegation, and European Parliamentarians are among the 280 participants.

Today, the United States and Europe are striving to deepen transatlantic cooperation on a vast array of distinctly new, global challenges from fostering the growth of democracy to confronting pandemics and terrorism, yet there is no single transatlantic forum focused on this broad and increasingly complex global agenda. Brussels Forum provides a venue for the transatlantic community to address these pressing issues.

The German Marshall Fund of the United States (GMF) has launched the inaugural Brussels Forum in partnership with the Bertelsmann Stiftung as a key intellectual partner, the DaimlerChrysler Corporation Fund, the Federal Government of Belgium and the Government of Brussels-Capital Region, and the Monitor Group.