Fiscal Adjustment to the Euro-Med Challenge
Opening Remarks of Ambassador Peter Wittig
His Excellency, Mr. Minister for Economy Trade and Industry, Dr. Saidi; Dr. Salem; Dr. Samira Atalla; Mr. Köndgen; Ambassador Kourkoulas; distinguished guests.
I am honored to be asked to make some opening remarks at the outset of this workshop – all the more considering the two institutions responsible for it. On the one hand, the Lebanese Center for Policy Studies and on the other hand the Konrad Adenauer Foundation. Immediately after my arrival to Lebanon I became a great fan of the LCPS, a fervent reader of its publications and a beneficiary of its conferences. I am particularly delighted that the well-renowned Konrad Adenauer Foundation has been cooperating with the LCPS: a beneficial liaison indeed. I still recall vividly their conference on “Joint Ventures” within the Euro-Mediterranean Partnership of July 1997. Also, the conference on Lebanon and the Euro-Mediterranean Partnership in July 1996 resulted in an excellent publication that is still worthwhile consulting.
I have to commend the organizers for their political clairvoyance that almost amounts up to a prophetic ability. First because of the timing of the conference. It seems that the political events in Lebanon were predicted, and this a time of a political re-adjustment and a new government. Second because the right people were chosen, your first speaker was just appointed Minister of Economy, Trade and Industry. He will be at the steering wheel of this new government, hence also his economic and fiscal policy. I am delighted to see you, Mr. Minister, here and I am of course – as all of us – most anxious to hear your speech in a minute. Let me add also how satisfied we are to see you at the helm of this most important government portfolio.
Just a couple of words on the topic of the conference: the challenge of fiscal adjustment in Lebanon is of crucial importance to the future of this country because:
Despite the various crisis and set backs in the process of construction “European House” – European integration is evermore advancing. For Lebanon, this means that the European option becomes more and more important. One doesn’t have to be a prophet to predict that Europe will develop strong magnetary forces as the Economic and Monetary Union is taking shape. The Euro will become – with the US-Dollar – the most important currency for the Central Banks, trade and financial markets. With the share of 50% of Lebanon’s foreign trade the EU is by far the main trading partner of Lebanon. Hence the importance of the association agreement which – we all know that – will not be possible without a thorough fiscal adjustment in Lebanon. At the same time no serious observer can fail to see the obstacle and painful political and economic decisions that Lebanon will have to face if it spires to conclude an association agreement.
Therefore the Europena Union is ready to help Lebanon in order to face the extremely difficult challenges of a reform of its financial structure. Allow me to mention here the project of the administrative reform, the investment planning project, and the fiscal consulting, that the EU commission is providing.
In my capacity as the future German Presidency of the EU – starting at 1st January, 1999 – I stress that Germany is highly interested in keeping up the momentum of the negotiations for a association agreement with Lebanon. This country with all its tradition of free trade is an essential element of the larger concept of a Euro-Mediterranean free trade zone. That’s why we attach so much importance to the negotiations with the Commission.
Germany will be hosting in April 1999 the next formal conference of the Foreign Ministers in the framework of the Barcelona process. This will be an extremely important meeting in a very difficult context. It will be an opportunity to take stock of the progress made so far in the three different baskets of the Barcelona process, but above all, an opportunity to give it a new push, especially in the political and economic. The Barcelona process is important to just whither away. Therefore, I am confident and this feeling is shared even by those, who are skeptical about its potential in a situation where the peace process is stalling or agonizing.
I can assure you that the future German EU Presidency will give utmost importance to the Euro-Mediterranean Partnership. Furthermore, the newly elected German government has made it very clear at the outset of its work, that the Middle East will be one of its main focus of attention during the German presidency in the first half of next year.