Cobbenhagen summit
23 February 2015
Het Stadspaleis Tilburg
Jeroen Dijsselbloem, Minister of Finance of the Netherlands
Ladies and gentlemen,
It’s always a pleasure for me to visit this part of the country.
Anyone familiar with Tilburg will also know this curious building.
It looks like a castle, it’s called a palace, and it serves as a community centre.
Almost 150 years have passed since this once-royal building became the home of a modern secondary school, with famous pupils like Vincent van
Gogh.
Offering technical training of a high standard, this school focused on the needs of the changing economy.
In 1894 a girl enrolled here at the King William II secondary school.
Her name was Maria Bes.
She was the first girl ever to attend this school.
Later she became one of the Netherlands’ first female engineers.
Maria Bes must have served as a role model for many others at a time when a proper education was still the exception for most girls, and for many boys as well.
Fortunately, nowadays, in our part of the world, education is a right which everyone enjoys.
But unfortunately if Maria Bes had lived today she would have been uncertain of finding a proper job.
Here in North Brabant 90,000 people are unemployed at the moment.
That’s almost eight per cent of the working population.
1

In this very city over four thousand young people, who want to use their talents and skills, are jobless.
This is a waste of talent and education, and we need to address this on several levels.
Locally, nationally and in Europe.
Today I want to talk to you about how the Eurogroup is contributing to this common goal.
As you know, the euro countries have been through difficult times.
The economy is now starting to grow again, but only slowly.
So not only in Tilburg, North Brabant and the Netherlands, but throughout the entire eurozone, many people are still unemployed and are finding it hard to make ends meet.
This is one of the main reasons why the eurozone needs to regain its competitiveness: to create jobs.
For this we need to modernise our economies to achieve sustainable growth.
So our efforts to improve the economy will continue unabated.
In Europe we are facing a new reality, which is forcing us to re-evaluate our institutions, our welfare state and our expectations.
I want to stress that we are aiming for sustainability.
We must make clear that going back to the way things were before the crisis is not an option.
Because the eurozone’s prosperity in the past was partly based on irresponsible risk-taking.
And governments and taxpayers have paid the price.
We don’t want to go down that road again.
That’s why we have made a lot of changes in the eurozone.
We’ve tightened the rules and regulations, established the European
Banking Union and put our budgets in order.
2

We’ve lowered the financial risks in the eurozone and we exercise more budgetary discipline.
Over the last few years the governments of the euro countries have demonstrated their determination to overcome the eurozone’s difficulties, to solve problems and to regain the confidence of the public and the financial markets.
It’s now time to step up sustainable growth while avoiding bubbles.
In the Eurogroup we are focusing simultaneously on sound public finances, investment and structural reforms.
Because we need to connect these three policy strands that form our growth strategy.
Together with Jean-Claude Juncker, Mario Draghi and Donald Tusk, the Presidents of the European Commission, European Central Bank and
European Council respectively, I will work on improving the coordination of our economic policies.
[Sound public finances]
Now let’s take a closer look at those policy strands.
I’ll start with sound public finances.
In a monetary union, member states cannot use exchange-rate adjustments or monetary instruments.
So they have to be able to respond to economic crisis in a different way.
It’s therefore crucial that all member states give themselves the flexibility to do so.
In times of prosperity they should create scope in their national budgets to provide a buffer against economic downturns.
This did not happen enough in the pre-crisis years.
And flexibility is also crucial so that our economies and markets can respond to new developments.
The crisis hit hard after 2008 because of insufficient buffers and flexibility of this kind, and because of excessive borrowing.
3

In other words: we didn’t have the shock-absorbing mechanisms that we needed.
In the past few years financial stability has been at risk.
With the cost of financing rising quickly, several euro area countries experienced huge pressure to put their public finances on a sustainable path.
So from the moment the crisis started, the sustainability of public finances has been tackled as a matter of great urgency.
We’ve pursued a strategy of strengthened discipline and consolidation.
We’ve strengthened our set of common budgetary rules.
And we’ve strengthened the European Commission’s role in the surveillance process.
The Growth and Stability Pact is ‘an anchor of confidence’.
Confidence among euro countries and confidence within the financial markets.
[Investment]
The second policy strand is one the business world understands particularly well: the eurozone needs investment.
Private investment will stimulate economic growth.
Investment levels across Europe are too low and must be raised.
In November, the new European Commission presented a 315-billion-euro private and public investment programme.
On top of that we need to improve the investment climate further.
By improving regulation, developing a capital markets union and completing the single market.
A more closely connected energy network, for example, offers opportunities.
As will more effective use of ICT in transport, energy, climate and resource efficiency.
4

So we need to increase investment in Europe, and most of the increase has to come from private sources.
This requires ambitious structural reforms at European and national level, because it will increase companies’ confidence in our growth potential.
[Structural reforms]
And this leads me to the Eurogroup’s third policy strand: structural reforms at national level.
Reforms are a vital precondition for attracting private investors, but they’re also necessary because the population of many countries is changing.
That’s why many euro countries, like the Netherlands, are raising the pension age and reducing healthcare costs.
At national level we should be encouraged by what we have already achieved collectively: the reform of the banking sector.
To start with, common European supervision was established.
The European Central Bank exercises direct or indirect supervision over all euro area banks.
This enables us to apply the same standards to all banks and reflects the fact that many banks operate across European borders.
We have also created a European resolution mechanism, in case a bank gets into trouble.
This mechanism provides clarity on what happens if a bank fails, and helps to isolate bank problems.
And that means lower risks for governments and taxpayers.
Only three months ago, the European Central Bank completed its comprehensive assessment of the 130 largest banks in Europe, which are now under its direct supervision.
Thanks to this thorough exercise, we now know what condition our banks are in.
5

And that has also helped build confidence that the European banking sector is getting stronger.
But the banking sector wasn’t the only problem we had to tackle.
The crisis forced many euro countries to confront other underlying structural weaknesses in their economies.
We have combined reform with support for countries in financial difficulties.
The so-called ‘programme countries’ – Greece, Portugal, Ireland, Spain and Cyprus – have made many changes.
They have pursued strong reform agendas and continue to do so.
Other countries, like Estonia, Latvia, Lithuania, and also the Netherlands, have worked hard to strengthen their economies.
Now, the countries that have implemented tough reforms are returning to growth.
And this year, all these countries are expected to grow faster than the eurozone average.
Allow me at this point to say something about the current intervention of the European Central Bank.
The ECB is providing financial liquidity.
That should buy us time.
Time we should use to reform.
Going forward, we need more structural change to boost growth and create attractive investment opportunities.
No stimulus can replace the need to make our economies more competitive and fit for the 21st century.
We need to improve our labour markets, lower the tax wedge on labour and further improve the skills of our workforce.
6

We need to make our product markets more flexible, modernise our welfare system and improve the quality of our research and innovation.
In its ‘Going for Growth’ report, the OECD presents the achievements of reforms in Europe over the last two years.
Greece, Italy and Spain have reduced regulatory barriers to competition.
Ireland and Slovakia have strengthened incentives in R&D and innovation.
Countries like France, Italy, the Netherlands and Portugal have reduced problems in their labour markets.
But we’re not there yet.
Take, for instance, the problem of protected sectors and professions.
The European Commission has identified no fewer than 4,700 regulated professions in EU countries.
Some of these make sense, such as medical specialists.
Others don’t, like golf instructors or second-hand car salesmen.
So this is one of the issues we must continue to address, as well as the age of retirement and the costs of health care.
Implementing the right reforms is a strong instrument to boost growth.
The OECD has calculated that adopting best practices in labour and product markets could increase the eurozone’s output by more than six per cent over 10 years.
In the Eurogroup we say: let’s use this potential!
Ladies and gentlemen,
Thanks to all the measures we’ve taken, the architecture of the eurozone is stronger than it was before the crisis.
But clearly there is still plenty of work to be done.
We have put growth and jobs at the top of our priority list.
7

Because although growth is picking up, it is weaker and slower than we would like.
The peak in unemployment is behind us.
But as I’ve already said: too many people are still out of work.
I started with the story of Maria Bes.
When she was still in her twenties she worked at the Polytechnic School in
Delft.
It didn’t make her rich.
She earned just 1,500 guilders.
1,500 guilders a year, mind you.
Still, she was able to make ends meet, and she had a job that suited her.
Let’s work at every level, locally, nationally and in Europe, to make sure that all those who followed in Maria’s footsteps get the chances they deserve.
Thank you.
8