France Holds the Rotating Presidency of the European Union for Six Months

Head Table Guests

Willis Blair, Secretary, The Empire Club of Canada; Woganee Filate, grade 12 student, Harbord Collegiate Institute; Father Pierre Jean Courtot, Pastor, Eglise Sacre-Coeur; Jose Antonio Zorilla, Consul General of Spain; Roland Fournes, Consul General of Germany; Bill Whittaker, Q.C., Partner, Lette, Whittaker and Honorary Director, The Empire Club of Canada; Michel Finance, Vice-President, Finance, Connaught Laboratories Ltd. and President, the French Chamber of Commerce; Bernard Lette, Partner, Lette Whittaker and Vice-President, the French Chamber of Commerce; and Pascal Notte, President, Paribas Bank of Canada.

Introduction by John Campion

Richileu's Toast

At the dawn of Western European history, in the northern part of North America, permanently stands France. Cartier, Champlain, Richileau, Colbert and Talon. These names stand as giants of action and policy which continue to affect the world and Canada today.

When Prime Minister Chretien spoke to the French Senate on December 3, late last year, he spoke under the watchful gaze of one man, who to many, most idealise the best in public service and who, with others, was a major force in the founding of Canada. Colbert's statue holds the central position in the Senate Chamber. Colbert organised Talon and others to save a struggling, small colony at Quebec and helped make Canada what it is today.

But predating that famous French civil servant was another man who not only had an enormous impact on Canada, but on our entire modern world. That man was Armand Jean Duplessis--otherwise known as Cardinal de Richileu.

Few statesmen can claim a greater impact on history. Richileu was the father of the modern state. He promulgated the concept of raison d'etat and practised it relentlessly for the benefit of his country. Henry Kissinger has noted that under his auspices, raison d'etat replaced the medieval concept of universal moral values as the operating principal of foreign policy and French policy.

Initially, Richileu sought to prevent the Hapsburg domination of Europe but he ultimately left a legacy for the next two centuries that tempted his successors to establish French primacy in Europe. Out of these ambitions, a balance of power emerged, first as a fact of life, and then as a system of organised relations between countries.

That balance of power transmuted over the centuries to the Congress of Europe in the 19th century and held sway as one of the central diplomatic and political policies in the world, right up until World War I.

Pope Urban the Seventh is alleged to have said of Richileu:

"If there is a God, the Cardinal de Richileu has much to answer for. If not, well, he has had a successful life."

Mr. Kissinger is confident that the great Cardinal would have been pleased by this comment because he knew that his policy transcended the essential pieties of his age. Perhaps he did not know that he would be one of the great founders of our modern world.

As I indicated, Richileu has had his hand in Canada and those early connections have continued to this day. Our Prime Minister visited France in December. The Premier of Quebec visited France this week. These meetings highlight the long and striking relationship between the people of France and the people of Canada. It is a powerful and emotional one. France stands as a founding nation of Canada. Citizens of Canada are part of the French diaspora.

While no direct governmental links have existed between France and Canada since the mid-18th century, France has remained connected to our country emotionally and practically through origins, language, culture, diplomatic exchanges and joint interests in the Francophonie in the world outside France.

For all civilized people of the world, the French have a special place in our hearts through their interest in high culture, their special personal sense of confidence, the participation of their citizens in the Enlightenment and its impact on Western political and economic traditions. French art continues to inspire us through the impressionists and many other schools of painting. French cooking, wine and cheese are standard bearers of excellence. French philosophical perspectives, as illustrated by Camus, dominated the post-World War II era as the world contemplated the futility of the violent world in which we lived and the hopeless terror of the early atomic era.

Paris is one of the cities that is a mecca for those interested in the history of building architecture and city planning. French sportsmen have become household words around the world and French fashion is everywhere in our lives. France has a powerful industrial base and is an important trading partner in the world.

Mr. Doutriaux has been the Consul General of France in Toronto since 1992. He graduated from the University of Lille with a degree in economics, graduated from the Institute d'Etudes Politiques de Paris with honourable mention, graduated from the Ecole Nationale d'Administration and finally, the University de Paris with a postgraduate degree in economics.

He has had an active career since 1979 in the Ministry of Foreign Affairs for France, serving in Tunisia, the Bureau of Economic and Financial Affairs de France as second councillor in France to the permanent mission to the European community and a participant in the Maastricht Treaty negotiations. He is the author of several books and many articles on European institutions and affairs. I am delighted to introduce him to the Club and ask you to welcome him.

Yves Doutriaux

What is France's perspective on the economic, financial and commercial policies of the European Union?

It is not very easy for a Consul General to represent his Ambassador. It is more difficult today, because my Ambassador was supposed to speak on behalf of his 15 European Union colleagues. I hope my weak shoulders will support such a heavy weight.

Europe has experienced a number of jolts since the decade began, some economic and some political. In Eastern Europe, new democracies have undertaken the difficult transition to market economies, in hopes of providing a better quality of life for their citizens and living in peace with their neighbours. To the south, the war in Bosnia continues, while other countries, most notably Algeria, are confronting Islamic fundamentalism and the occasional violence associated with it (such as the Airbus hijacking in Algeria last Christmas).

Within the European Union itself, there are those who doubt it is possible to move toward a single currency while enlarging the Union to include new members in Eastern Europe.

France is presiding over the European Council for six months, after Germany and before Spain. Six months is a short span of time to make an impression. Furthermore, French voters will be electing a new president of the Republic this spring. However, France, Germany and Spain are concentrating their efforts for the longer term.

Europe has recently admitted three new members to its ranks: Austria, Sweden and Finland. A new European Commission has been appointed and Jacques Santer, former Prime Minister of Luxembourg, is the new President of the European Commission, replacing Jacques Delors. A new parliament was elected by universal suffrage in 1994.

What are Europe's economic and financial prospects at the beginning of 1995?

Without a doubt, the economic recovery in Europe has begun; recent estimates have been revised upwards: +5 per cent in 1994, +3 per cent in 1995. Behind North America by about a year, the European economy is recovering as both investment and exports increase. Even though unemployment rates have recently started to fall, Europe is still struggling with joblessness. The considerable efforts by industry to increase productivity will likely postpone a quick decrease in unemployment rates, at least in the short term.

In this respect, France has the following three priorities for Europe: a return to economic growth and job creation; the establishment of a single currency, the ecu; and the continued opening of Europe's economy to the outside world. Europe is not an inward-looking fortress.

We must reduce structural barriers to job growth: too many national and European regulations stifle the creation of jobs. A greater level of flexibility will help create employment. In this area, it would be useful for Canadians and Europeans to share their experiences.

We must begin work on the 14 European infrastructure projects, such as the high-speed train linking Paris-Strasbourg-Germany or Paris-Madrid. In the great single market of 400 million consumers, stronger and more rapid transportation and communication links will facilitate inter-European travel and the opening of markets.

We must build the information highway; millions of jobs can be created by the "information society." Europe must encourage innovation and private investment in this rapidly changing area to ensure Europeans are catching up with competitors in North America and Japan. For this reason, France would like to update European regulations ("television without borders") to reinforce Europe's ability to produce audiovisual material. France, much like Canada, is concerned about its ability to maintain its own audiovisual and cultural production in the face of an invasion of images from Hollywood. It is not only job creation that is at stake but, indeed, how we educate future generations and how we shape our children's imagination and awareness. Our world needn't be one of uniform images that ignores cultural diversity.

The great single market where products, workers, services and capital circulate freely has now been enlarged to include consumers and producers of three new countries. However, trading in the single market is hampered by fluctuations in exchange rates, a source of uncertainty for businesses who are obliged to pay higher transaction fees.

It is for this reason that Europe must actively prepare for the establishment of a monetary union and a single currency, the ecu. The economic recovery in Europe--especially in France, and in Germany--provides an opportunity for the convergence of Europe's economies. There are, of course, several economic and financial prerequisites which, under the Maastricht Treaty must be satisfied before this can happen: we must limit budget deficit to three per cent and limit public debt to 60 per cent as a percentage of gross domestic product. Under the French presidency, the Union will continue the multilateral process of examining the economic policies of member-states, in addition to beginning practical discussions on the technical aspects of introducing the single currency, the ecu. The introduction of the single currency should take place in 1997 or 1999, at least for those countries observing the criteria of Maastricht at that time (initially, perhaps six countries).

The recent devaluation of the Mexican peso has shown that an economic union and the convergence of economies are prerequisites to the establishment of a monetary union; the economies of Europe are much closer to one another than are the three signatories of NAFTA to each other. The improving economy in Europe is well-timed, given the next necessary step toward monetary union.

The European Union that we are in the process of constructing is open to the outside world. Europe is not an inward-looking fortress.

To begin with, Europe under France's presidency will establish a working dialogue with the countries of Eastern Europe (Poland, Hungary, Czech Republic, Slovakia, Romania, Bulgaria) in anticipation of their joining the Union somewhere around the year 2000. The purpose of these talks is to prepare these countries for the constraints and discipline of the great single market as well as for the rigours of free trade.

In co-operation with these countries, the European Union will try to address their pressing security concerns in the face of political and economic turmoil in the former Soviet Union.

At the political level, France will host a conference in Paris in March to adopt a pact on stability. This pact will promote good neighbourly relations and respect of minority groups throughout Eastern Europe. Indeed, the European Union wouldn't consider admitting new members that have not yet settled border disputes with their neighbours.

The European Union will continue to strengthen its relationship with Russia, Ukraine and the other former republics of the Soviet Union, to reinforce market policies and the rule of law. In Ukraine, the EU will ensure that previous agreements are carried out, notably the closing of Chernobyl.

France will also ensure that the prospective integration of Eastern European countries does not lead Europe to neglect its neighbours to the south. The Mediterranean area is a zone of primary importance for the EU, being a part of its development and security area. Under the French presidency, Europe will actively negotiate co-operation accords with the countries of North Africa, a customs union with Turkey, and an aid package for Middle Eastern countries that agree to join the peace process.

A conference will be held gathering the European Union and countries bordering the Mediterranean during the Spanish presidency.

Europe will be an active contributor in the setting-up of the World Trade Organisation (WTO), a body of regulations that guarantees open international markets as well as new rules and practices ensuring fair trade. Throughout France's presidency, the European Union will play a key role in ensuring a smooth transition from the 1947 GATT accord to the WTO, the establishment of committees to ensure trade rules are respected, the appointment of a new Director General, and implementation of dispute settlement mechanisms, including a body for hearing appeals.

In addition, the Union will negotiate China's and Taiwan's membership in the WTO and the inclusion of new sectors (aeronautics, steel, services). Our objectives in linking commerce with the environment and commerce with social standards will be discussed.

The European Union--which plays a pivotal role in world commerce (20.7 per cent of exports, 22.4 per cent of imports)--will hold its just place in the World Trade Organisation.

The EU and Canada have similar interests to defend within the WTO: with the possibility of unilateral action by the United States, Canada and Europe can both benefit from a reliable system of dispute settlement mechanisms.

The economic recovery underway in Europe allows us to plan new initiatives: eventual enlargement to Eastern Europe, a free trade zone with the Mediterranean region, the promotion of multi-lateralism within the WTO, and movement toward a single currency.

Europe must also, however, renew its institutions: how can the EU hope to play a leading role in world affairs when its structure was set up in 1957 for the six founding members? Numbering 15 at present, more than 20 by the year 2000, the Community must update the way it operates. Europe must also focus its attention on other ambitious projects: establishing a European army, for instance, in close collaboration with NATO and, therefore, with Canada.

The task is formidable. Care must be taken, however, not to give the impression to the world that Europe is too preoccupied with improving how its institutions function, to play its essential role in international affairs. Europe can, and will, fulfill its role in conjunction with its partners, among whom Canada has a pre-eminent place.

As a European, I am happy to see that the famous principle of subsidiarity enshrined in the Treaty of Maastricht could be exported to Canada: a week ago, Daniel Johnson at The Empire Club referred to this European principle of subsidiarity as a way to settle the matter of the relations between the federal government and the provinces.

Mr. McLaren, Minister of International Trade, has proposed to refer to the principle of subsidiarity to deal with international trade relations in the framework of the new World Trade Organisation.

The appreciation of the meeting was expressed by Bill Whittaker, Q.C., Partner, Lette, Whittaker and Honorary Director, The Empire Club of Canada.