One of the key lessons of the financial crisis is that sustainable, long-term, widely distributed prosperity cannot be based on financial services alone. The financial crisis and associated recession have left Europe and ‘the West’ generally in a weaker position in the world than before. Europe will need to overcome its aversion to strategic planning as regards governance and adopt longer term thinking towards policy if we are to avoid falling behind our global competitors.

Two thirds of a strategic plan seems to be more or less in place. The EU already has clearly defined values and aims and an institutional framework to support them. This gives us a clear vision for the future. What is missing are guidelines on how to realise this vision in a world that has changed fundamentally since the crisis began.

Europe needs to regain the trust of the markets. But in order to do so it has to have the trust of the public that it will implement the necessary economic reforms, bailouts and austerity measures. The debate about the future of Europe cannot be clouded by financial jargon. The terms of tighter European integration must not be dictated by a technocratic vision, but by the will of European citizens.

A fresh round of deeper European integration must be carried through with the full backing of the European public, otherwise we risk the creating a bigger democratic deficit in Europe. Successful EU integration cannot happen without public support.

The continuing debt crisis on both sides of the Atlantic and the difficulty of dealing with it has created a widespread notion that liberal democratic capitalism is itself in crisis. This indicates that while our economic problems require short-term economic answers, equally crucially we need to come up with long-term political answers to the challenges we face.

Europe’s long term success will fundamentally depend to what extent we can live up to the declared values of Europe. The Lisbon Treaty does not confer the competence to safeguard all the aims and values that are enshrined within it. It states simply that ‘these values are common to the Member States’. That means that the upholding of these values is largely the responsibility of the member states themselves. To be more effective, the so called supportive, coordinative or supplementing competences of the EU need to be stronger.

We Hungarians made it a priority of our Presidency to launch a number of initiatives to strengthen the manifestation of these values at the European level while simultaneously dealing with the crisis on a more technical basis. The launching of the Roma strategy strengthens the core European values of cultural diversity, tolerance, and solidarity. The Hungarian presidency also put Europe’s long term demographic challenges on the agenda through a renewed European focus on and discussion about family friendly practices.

Europe needs a long term strategy to achieve sustainable growth and preserve its position in the world.

This new growth strategy must be combined with moves to strengthen and protect the single market. The EU is still the biggest market in the world. It gives our companies a competitive edge and the EU global clout. We need to enhance our competitiveness through deeper market integration and a widening of the single market in sectors where it does not yet function optimally. Good regulation must ensure that the single market works to the benefit of everyone. We must move away from a blind faith in unregulated markets that leads to a system of privatized profits with socialized risk.

The countries that are the most successful today are the ones with a strong and competitive manufacturing sector linked to innovation. This is the type of economic growth our future prosperity will have to be based on.

The debt crisis has changed political thinking in Brussels and member-state capitals alike. Concepts and ideas that would have been unthinkable a short while ago are gaining wide acceptance and leading in the direction of a more integrated European fiscal policy. The European semester introduced during the Hungarian Presidency was a major step in creating a mechanism for taking joint responsibility for fiscal and economic policy at a European level. Our contribution to this with the even more ambitious six pack legislative proposal, which is set to be passed in the near future, will help set up the political and legal mechanisms to regain the confidence of financial markets.

The short term goal of overcoming the debt crisis and getting out of recession must be carried out in full solidarity. The recovery of one cannot happen to the detriment of others. This is why Hungary did not join  the Euro Plus Pact, even though we are supportive of it politically. Hungary is facing economic challenges that would make it prohibitively painful to join. But we do not rule out joining it in the future. In the same spirit it is essential that the stronger integration taking shape on fiscal policy remains open for others to join.

The Euro is simultaneously a cornerstone of the world’s financial architecture and a highly visible symbolic culmination of almost 60 years of European integration. Therefore saving it is both an economic necessity and a verdict on the future of European integration.

We Hungarians have a vital interest, even if not in the Euro-zone, to contribute to these solutions. We know what we have to do in the short term and many painful, but necessary steps have already been taken. However, any lasting solution will have to involve regaining the trust of not just the markets, but of the citizens of Europe.

The more immediate task of rescuing the Euro requires the creation of a method to enforce stronger fiscal discipline on a European level. This is what Hungary has been working on as the President of the European Council and we will continue to support these efforts.

The EU is at a pivotal moment. The way forward to a strong and unified Europe is clearly indicated in the basic treaty of the EU, but the journey will not be easy. Our joint economic future and success depends on tighter European integration. We will need a political leadership with a long term vision capable of earning the trust of both the public and the financial marks to achieve this.