BIRD FLU IN EGYPT

1-WORLD QUAKES LAST 2 DAYS. 2-At least six dead in Australia storms.3-Millions suffer as storms in China kill at least 23. 4-Twelve killed, 40,000 trapped in Iran flash floods. 5-Anti-terrorism Convention enters into force. 6-Russia wants freeze on U.S. missile plan. 7-Bush feels awe at Pope who urges Middle East fix. 8-Egyptian girl dies of bird flu virus. 9-The EU in the global economy: perspectives and challenges.

EARTHQUAKES

MATTHEW 24:7-8
7 For nation shall rise against nation, and kingdom against kingdom: and there shall be famines, and pestilences, and earthquakes, in divers places.
8 All these are the beginning of sorrows.

MARK 13:8
8 For nation shall rise against nation, and kingdom against kingdom:(ETHNIC GROUP AGAINST ETHNIC GROUP) and there shall be earthquakes in divers places, and there shall be famines and troubles: these are the beginnings of sorrows.

LUKE 21:11
11 And great earthquakes shall be in divers places, and famines, and pestilences; and fearful sights and great signs shall there be from heaven.

WORLD QUAKES LAST 2 DAYS (USGS)

Update time = SUN Jun 10 12:01 AM EDT

JUNE 9,07
MAP 5.0 SIMEULUE, INDONESIA
MAP 2.5 FOX ISLANDS, ALEUTIAN ISLANDS, ALASKA
MAP 2.9 COLORADO
MAP 3.0 ALASKA PENINSULA
MAP 2.8 ALASKA PENINSULA
MAP 3.1 UNIMAK ISLAND REGION, ALASKA
MAP 2.6 SOUTHERN ALASKA
MAP 2.8 FOX ISLANDS, ALEUTIAN ISLANDS, ALASKA

JUNE 08,07
MAP 3.4 FOX ISLANDS, ALEUTIAN ISLANDS, ALASKA
MAP 2.5 CENTRAL CALIFORNIA
MAP 4.4 NORTHERN COLOMBIA
MAP 5.1 NEW BRITAIN REGION, PAPUA NEW GUINEA
MAP 3.7 SOUTHERN ALASKA
MAP 4.6 PAKISTAN
MAP 5.1 OFFSHORE GUATEMALA
MAP 2.8 MOUNT ST. HELENS AREA, WASHINGTON
MAP 5.9 OFFSHORE GUATEMALA
MAP 5.0 DOMINICAN REPUBLIC
MAP 4.7 HOKKAIDO, JAPAN REGION
MAP 5.0 KEPULAUAN BABAR, INDONESIA
MAP 3.0 CENTRAL ALASKA
MAP 4.9 SOUTHERN EAST PACIFIC RISE
MAP 4.9 MID-INDIAN RIDGE
MAP 2.5 ISLAND OF HAWAII, HAWAII
MAP 2.6 FOX ISLANDS, ALEUTIAN ISLANDS, ALASKA
MAP 2.5 CENTRAL CALIFORNIA
MAP 5.2 MARIANA ISLANDS REGION

STORMS HURRICANES-TORNADOES

LUKE 21:25-26
25 And there shall be signs in the sun, and in the moon, and in the stars; and upon the earth distress of nations, with perplexity;(MASS CONFUSION) the sea and the waves roaring;(FIERCE WINDS)
26 Men’s hearts failing them for fear, and for looking after those things which are coming on the earth: for the powers of heaven shall be shaken.

At least six dead in Australia storms by Neil Sands
Sat Jun 9, 7:59 AM ET

SYDNEY (AFP) - Six people were confirmed dead and another two were missing on Saturday as wild storms continued to lash Australia's east coast, smashing boats, flooding roads and cutting power to 200,000 homes. The Hunter Valley and Central Coast regions north of Sydney were declared disaster zones after being pounded by gale-force winds and torrential rains for a second day.

Massive seas ran aground at least 12 pleasure craft moored in Sydney Harbour, although fears eased that a massive coal freighter stranded at Newcastle would break up and create an environmental disaster.Police put the official death toll at six, including a couple in their fifties whose car was washed off a bridge.Searchers also found the bodies of four members of a family of five carried away when a highway collapsed.

The four bodies found were an adult female and three children -- a nine-year-old boy, a three-year-old girl and a two-year-old girl. The children's bodies were recovered.Search teams were still looking for one more family member, believed to be an adult male.The Australian Associated Press news agency reported that the adult body found, a 30-year-old woman, was the mother of the children and the missing male, a 30-year-old, was the father.A Newcastle man was also missing after falling down a stormwater drain late Friday, police said.With Australia beginning a long holiday weekend, officials advised motorists to scrap plans to travel to popular tourist spots in the state's north, saying a number of major roads were closed.

Power utility EnergyAustralia said 200,000 homes had no electricity and could remain blacked out until late next week.This is the worst storm and the worst damage our electricity network has seen for more than 30 years, EnergyAustralia network general manager Geoff Lilliss said.Hundreds of people were evacuated as floodwaters rose, including 65 elderly residents of a Central Coast nursing home.

The Bureau of Meteorology said the storm dumped 300 millimetres (12 inches) of rain on some areas, with winds peaking at 120 kilometres per hour (75 miles per hour).It said conditions had eased slightly Saturday morning, granting a reprieve to emergency services struggling to cope with more than 5,000 calls for assistance.But meteorology bureau forecaster Julie Evans said that after causing extensive flooding in Newcastle, the storm was likely to intensify as it moved south towards Sydney before heading out to sea.It will be the sting in the tail in the system before it moves off to the east, she told Sky News.Sydney ferry services were suspended for a second day amid huge swells.

Officials said at least a dozen recreational boats in Sydney Harbour had broken their moorings and run aground and that 30 more needed to be towed to safety, while a beachside wharf collapsed into to sea. But the 30,000-tonne vessel Pasha Bulker, which ran aground Friday when the storm first hit, appeared to be structurally sound and there was no sign that its 800 tonnes of oil and fuel was leaking.

A number of other ships that were also in danger of becoming stranded had managed to steam into deeper waters overnight, officials said. The Pasha Bulker sparked a dramatic rescue Friday as a helicopter braved gale-force winds to pluck its Filipino and Korean crew to safety from the ship's deck.

Millions suffer as storms in China kill at least 23 JUNE 9,07

BEIJING (Reuters) - Rain storms and floods have killed at least 23 people across southern China in recent days and made thousands homeless, Xinhua news agency said on Saturday. Millions of people are suffering, it said.

Storms killed seven people and left four missing in the southern province of Guizhou on Friday and Saturday. Nearly 20,000 hectares (77 sq miles) of cropland were flooded and 3,000 houses destroyed, Xinhua said.In Guangdong province, bordering Hong Kong, heavy rain triggered landslides killing three people and destroying 788 houses and about 1,120 hectares of cropland, Xinhua said.Storms cut off a railway link between Meizhou and Shantou in Guangdong leaving about 1,100 passengers stranded on Friday.In neighboring Guangxi, two people were killed in torrential rain that destroyed 610 homes, Xinhua said, citing flood control authorities.In Guangxi, high school students sitting all-important university entrance exams on Thursday and Friday had to be evacuated as heavy rain submerged their classrooms, Xinhua said.

Storms also broke 29 reservoirs, 362 embankments, 165 roads and forced 59 factories to suspend production, Xinhua quoted Chen Rundong, deputy head of the regional flood control office, as saying.On Friday, Xinhua reported seven deaths and nine injuries on in the Liangshan region of Sichuan province from hailstorms, lightning strikes and landslides. Xinhua did not give details of all the deaths.China's central Hunan province was on high alert after four successive days of rain swelled the Xiangjiang river to 4.6 meters above the warning level and to its highest mark in 20 years, Xinhua said.

We have stepped up our guard against flooding as two more heavy rainstorms are forecast over the next four days, Xinhua quoted Xie Kangsheng, a Hunan government official, as saying.Storms in Hunan had killed three people, left 158,000 homeless and cut off water supplies to 75,000, Xinhua said on Friday.Late last month, lightning, mudslides and floods in Sichuan province killed 43 people, state media reported.China's typhoon season is just getting under way in the south. Experts last month warned that China's Yangtze river could flood badly this year, for the first time since 1998, when floodwaters from the country's longest river killed more than 3,000 people.

Twelve killed, 40,000 trapped in Iran flash floods Sat Jun 9, 6:43 AM ET

TEHRAN (AFP) - Flash floods caused by cyclone Gonu have killed 12 people, injured nine and trapped 40,000 others in southeastern Iran, news reports said Saturday. Based on the latest information gathered, 12 people were killed as the result of floods in Hormozgan and Sistan-Baluchestan provinces, the head of Iran's emergency services, Farzad Panahi, was quoted as saying by the semi official Mehr news agency.He added that more than 3,000 livestock had perished in the southern port town of Jask in Hormozgan province.The Fars news agency, meanwhile, quoted another official as saying that a total of 40,000 villagers are trapped by water in Hormozgan province.

Helicopters have been dispatched to the affected areas, the official said.Iran's elite Revolutionary Guards Air Force said on Friday it had delivered 40 tons of food to the rain-hit port city of Chabahar in Sistan-Baluchestan province.Cyclone Gonu bore down on Oman early Wednesday, creating havoc and leaving at least 49 people dead and another 27 missing before veering towards Iran.

Anti-terrorism Convention enters into force
Friday 8 June 2007

The Council of Europe has announced the official recognition of offences which may lead to acts of terrorism, under the auspices of the Convention on the Prevention of Terrorism, in a move aimed at preventing future attacks.

Brief News:

Following the announcement, on 1 June 2007, that its Convention on the Prevention of Terrorism has entered into force, Council of Europe Secretary-General Terry Davis said: This new weapon provides a robust and effective response to the threat of terrorism. It allows our governments to act early and effectively to stop terrorists before they can carry out their attacks.The Convention is the first international treaty to establish as criminal offences several activities which may lead to acts of terrorism, such as incitement, recruitment and training. It also reinforces international co-operation in the prevention of terrorism by modifying existing arrangements for extradition and mutual assistance.

The Convention was opened for signature at the Third Summit of Heads of State and Government of the Council of Europe in Warsaw in May 2005. It has served as a precursor to counter-terrorism efforts at the global level and was followed by the adoption of UN Security Council Resolution 1624(2005), which echoes the Council of Europe's approach to the fight against terrorism. To date, it has been signed by 39 countries, and ratified by seven: Albania, Bulgaria, Denmark, Romania, Russia,

Slovakia, Ukraine.

YOU CAN'T TAKE GOD OUT OF EVERYTHING AND NOT EXPECT A REPLY FROM THE CREATOR (JESUS GOD).

NOTICE GOD USES WIND AS WELL AS NORTHERN NATIONS TO DESTROY POLITICAL BABYLON FOR ITS GODLESSNESS.

JEREMIAH 50:1-3,9 (POLITICAL BABYLON (USA) DESTROYED FROM NORTH COUNTRY RUSSIA,

1 The word that the LORD spake against Babylon and against the land of the Chaldeans by Jeremiah the prophet.
2 Declare ye among the nations, and publish, and set up a standard; publish, and conceal not: say, Babylon is taken, Bel is confounded, Merodach is broken in pieces; her idols are confounded, her images are broken in pieces.
3 For out of the north there cometh up a nation against her, which shall make her land desolate, and none shall dwell therein: they shall remove, they shall depart, both man and beast.
9 For, lo, I will raise and cause to come up against Babylon an assembly of great nations from the north country: and they shall set themselves in array against her; from thence she shall be taken: their arrows shall be as of a mighty expert man; none shall return in vain.(I BELIEVE ITS THE RUSSIA MUSLIM HORDE THAT DESTROY POLITICAL BABYLON).
46 At the noise of the taking of Babylon the earth is moved, and the cry is heard among the nations.

JEREMIAH 51:1-8,20-21,24-26,41-43 (POLITICAL BABYLON THE U.S.A)
1 Thus saith the LORD; Behold, I will raise up against Babylon, and against them that dwell in the midst of them that rise up against me, a destroying wind;
2 And will send unto Babylon fanners, that shall fan her, and shall empty her land: for in the day of trouble they shall be against her round about.
3 Against him that bendeth let the archer bend his bow, and against him that lifteth himself up in his brigandine: and spare ye not her young men; destroy ye utterly all her host.
4 Thus the slain shall fall in the land of the Chaldeans, and they that are thrust through in her streets.
5 For Israel hath not been forsaken, nor Judah of his God, of the LORD of hosts; though their land was filled with sin against the Holy One of Israel.
6 Flee out of the midst of Babylon, and deliver every man his soul: be not cut off in her iniquity; for this is the time of the LORD’S vengeance; he will render unto her a recompence.
7 Babylon hath been a golden cup in the LORD’S hand, that made all the earth drunken: the nations have drunken of her wine; therefore the nations are mad.
8 Babylon is suddenly fallen and destroyed: howl for her; take balm for her pain, if so be she may be healed.
20 Thou art my battle axe and weapons of war: for with thee will I break in pieces the nations, and with thee will I destroy kingdoms;
21 And with thee will I break in pieces the horse and his rider; and with thee will I break in pieces the chariot and his rider;
24 And I will render unto Babylon and to all the inhabitants of Chaldea all their evil that they have done in Zion in your sight, saith the LORD.
25 Behold, I am against thee, O destroying mountain, saith the LORD, which destroyest all the earth: and I will stretch out mine hand upon thee, and roll thee down from the rocks, and will make thee a burnt mountain.
26 And they shall not take of thee a stone for a corner, nor a stone for foundations; but thou shalt be desolate for ever, saith the LORD.
41 How is Sheshach taken! and how is the praise of the whole earth surprised! how is Babylon become an astonishment among the nations!
42 The sea is come up upon Babylon: she is covered with the multitude of the waves thereof.
43 Her cities are a desolation, a dry land, and a wilderness, a land wherein no man dwelleth, neither doth any son of man pass thereby.

REVELATION 18:1-24 (FINAL DESTRUCTION OF POLITICAL BABYLON)
1 And after these things I saw another angel come down from heaven, having great power; and the earth was lightened with his glory.
2 And he cried mightily with a strong voice, saying, Babylon the great is fallen, is fallen, and is become the habitation of devils, and the hold of every foul spirit, and a cage of every unclean and hateful bird.
3 For all nations have drunk of the wine of the wrath of her fornication, and the kings of the earth have committed fornication with her, and the merchants of the earth are waxed rich through the abundance of her delicacies.
4 And I heard another voice from heaven, saying, Come out of her, my people, that ye be not partakers of her sins, and that ye receive not of her plagues.
5 For her sins have reached unto heaven, and God hath remembered her iniquities.
6 Reward her even as she rewarded you, and double unto her double according to her works: in the cup which she hath filled fill to her double.
7 How much she hath glorified herself, and lived deliciously, so much torment and sorrow give her: for she saith in her heart, I sit a queen, and am no widow, and shall see no sorrow.
8 Therefore shall her plagues come in one day, death, and mourning, and famine; and she shall be utterly burned with fire: for strong is the Lord God who judgeth her.
9 And the kings of the earth, who have committed fornication and lived deliciously with her, shall bewail her, and lament for her, when they shall see the smoke of her burning,
10 Standing afar off for the fear of her torment, saying, Alas, alas, that great city Babylon, that mighty city! for in one hour is thy judgment come.
11 And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more:
12 The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood, and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble,
13 And cinnamon, and odours, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots, and slaves, and souls of men.
14 And the fruits that thy soul lusted after are departed from thee, and all things which were dainty and goodly are departed from thee, and thou shalt find them no more at all.
15 The merchants of these things, which were made rich by her, shall stand afar off for the fear of her torment, weeping and wailing,
16 And saying, Alas, alas, that great city, that was clothed in fine linen, and purple, and scarlet, and decked with gold, and precious stones, and pearls!
17 For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off,
18 And cried when they saw the smoke of her burning, saying, What city is like unto this great city!
19 And they cast dust on their heads, and cried, weeping and wailing, saying, Alas, alas, that great city, wherein were made rich all that had ships in the sea by reason of her costliness! for in one hour is she made desolate.
20 Rejoice over her, thou heaven, and ye holy apostles and prophets; for God hath avenged you on her.
21 And a mighty angel took up a stone like a great millstone, and cast it into the sea, saying, Thus with violence shall that great city Babylon be thrown down, and shall be found no more at all.
22 And the voice of harpers, and musicians, and of pipers, and trumpeters, shall be heard no more at all in thee; and no craftsman, of whatsoever craft he be, shall be found any more in thee; and the sound of a millstone shall be heard no more at all in thee;
23 And the light of a candle shall shine no more at all in thee; and the voice of the bridegroom and of the bride shall be heard no more at all in thee: for thy merchants were the great men of the earth; for by thy sorceries were all nations deceived.
24 And in her was found the blood of prophets, and of saints, and of all that were slain upon the earth.

Russia wants freeze on U.S. missile plan By STEVE GUTTERMAN, Associated Press Writer JUNE 9,07

MOSCOW - Russia's foreign minister urged the United States on Saturday to freeze plans for missile defense installations in eastern Europe during negotiations and warned that the proposal — intended to serve as a buffer against Iran could backfire.

Russian Foreign Minister Sergei Lavrov's comments, reported by Russian newsagencies, suggested the Kremlin is unhappy that the United States has continued discussions on its plans to deploy facilities in Poland and the Czech Republic following Russia's counteroffer of joint use of a radar station in Azerbaijan.It's necessary for Washington, at a minimum, to freeze the deployment of missile defense elements in Europe for a period of study and negotiations on the Russian proposal, ITAR-Tass quoted Lavrov as saying.Lavrov also warned that the U.S. missile defense plans could hamper efforts to ease international concerns about Iran's nuclear program, RIA-Novosti reported. The United States has said the missile defense shield is intended to protect against a potential Iranian threat.Lavrov said there was no proof that Iran was seeking to develop nuclear weapons, but that the missile shield could further provoke the Iranian government, which is already facing international sanctions for its disputed atomic program.

The U.S. system calls for a radar screen in the Czech Republic to watch for missile threats, and 10 interceptor rockets in Poland to shoot down any missiles.

Both Bush and Polish President Lech Kaczynski said Friday the system would not threaten Russia. The Kremlin argues that the system would undermine its nuclear deterrent. President Vladimir Putin, who has led Russia's bitter objection to U.S. plans to deploy a missile-defense radar in the Czech Republic and interceptors in Poland, surprised President Bush with the offer of joint use of the radar station in Azerbaijan, which borders Iran.Meeting with Putin on Thursday during a Group of Eight summit in Germany, Bush agreed to consider the proposal. But the Bush administration made clear it was not abandoning plans for a program in Poland and the Czech Republic Cold War-era Soviet satellites that are now in NATO.

Putin added clarity to his offer Friday by suggestion locations for missile interceptors if Azerbaijan were to be used for the radar element, saying they could be placed in Turkey or Iraq, or on sea platforms.Secretary of State Condoleezza Rice told The Associated Press on Friday that one does not choose sites for missile defense out of the blue and that it was not yet clear whether Azerbaijan makes any sense in the context of missile defense.

Bush feels awe at Pope who urges Middle East fix By Caren Bohan and Philip Pullella JUNE 9,07

VATICAN CITY (Reuters) - President George W. Bush said on Saturday he felt awe in the presence of Pope Benedict, who urged the U.S. leader to seek regional and negotiated solution to Middle East conflicts like Iraq. I was talking to a very smart, loving man, Bush said of his first talks with Benedict since he became Pope in 2005.After 6-1/2 years of being a president ... I've been to some unusual places and met some interesting people and I was in awe, Bush told a news conference in Rome. It was a moving experience for me.Addressing the 80-year-old head of the Roman Catholic Church as sir, Bush heard the Pope's concerns about the Middle East and the plight of Christians in Iraq and told him of his efforts to combat AIDS and malaria in Africa and hunger and poverty.He told the Pope before reporters about what he called the very strong AIDS initiative at the Group of Eight summit this week which pledged $60 billion to fight diseases ravaging Africa -- although much of that was made up of existing pledges.

A Vatican statement said Benedict and Bush had discussed the Middle East and the Holy See's hope for a regional and negotiated solution to the conflicts that afflict that region.

It's good to be with you sir, Bush said as he sat before the Pontiff's private desk in the Vatican.The two men see eye-to-eye on ethical issues like abortion and euthanasia but differ on the war in Iraq, which Benedict's predecessor, John Paul, tried hard to avert.When the Pope mentioned Bush had come from the G8 summit, Bush said: I did your old country and it was successful ... A lot of different opinions, but it was good.

Asked if his dialogue with Russian leader Vladimir Putin -- closely watched because of a number of sharp disagreements between Russia and the West -- had been good, Bush responded with a smile as reporters were being ushered out of the room.I'll tell you in a minute, he said.

SECURITY FEARS

Bush and his wife Laura, who wore a black veil, took a more circuitous route to the Vatican than usual, which disappointed thousands waiting to see him.It was not clear if this was for security reasons, although 10,000 police were deployed as a precaution in central Rome.Leftists and pacifists opposed to the war in Iraq and the expansion of a U.S. military base in northern Italy took trains to Rome for mass protests likely to echo those at the G8.Many who elected Prime Minister Romano
Prodi's centre-left coalition -- which is critical of U.S. foreign policy -- joined the rally and four communist deputies from Prodi's alliance hung a banner outside parliament that read: No Bush, No War.Bush is the biggest international terrorist. It's a disgrace that the Italian government elected by the votes of pacifists should invite him to this country, said Elio Luppoli, arriving in Rome with about 70
protesters from Milan.

The protest began peacefully but fears it could turn violent were highlighted by the cancellation of Bush's planned visit to Rome's colorful Trastevere quarter, where he was to have met leaders of the Sant'Egidio Roman Catholic community. One of Rome's oldest neighborhoods, its narrow, cobbled alleys would have been awkward for the presidential motorcade. The Sant'Egidio group, nominated for the Nobel Peace Prize for its work brokering peace and fighting AIDS in Africa, met Bush at the U.S. embassy instead. Bush had warm words for Prodi, despite concern when he came to power a year ago that Italy would no longer be the firm ally it was under his conservative predecessor Silvio Berlusconi. I look forward to seeing Silvio. We took some important decisions together, Bush said at a joint news conference with Prodi. I have known Romano a long time too. He was president of the EU (European Union) in the early part of my presidency.(Additional reporting by Robin Pomeroy, Gavin Jones, Stephen Brown, Toby Zakaria, Deepa Babington, Roberto Landucci, Antonella Ciancio)

Egyptian girl dies of bird flu virus By Cynthia Johnston
Sat Jun 9, 6:18 AM ET

CAIRO (Reuters) - A 10-year-old Egyptian girl who contracted the H5N1 bird flu virus died on Saturday, bringing the number of fatalities from the disease in the most populous Arab country to 15, the health ministry said. The girl, identified as Mayyada Tuhami, is reported to have fallen ill on June 1 after coming into contact with infected household birds but did not enter hospital until roughly a week later, delaying potentially life-saving treatment.

Her case followed a nearly two-month warm weather lull in human bird flu cases in Egypt, where 35 people are known to have contracted the virus since it was first detected in Egyptian poultry in early 2006.The Egyptian health ministry said in a statement that the girl, from the southern town of Qena, had been admitted to hospital on Thursday with a high fever and a pulmonary infection, and was put on an artificial respirator.She died at dawn on Saturday and is considered the 15th death from bird flu in Egypt, the statement said.Bird flu did extensive damage to the country's poultry industry and the economy as a whole after its arrival in Egypt, which has more confirmed human bird flu cases than any other country outside of Asia.

Most of those who have fallen ill in Egypt were reported to have had contact with sick or dead household birds, primarily in northern Egypt where the weather is typically cooler than in the south.

But in a sign of a change in how the disease may be occurring in Egypt, all but two of the past 11 human cases have occurred in central or southern parts of the country.Bird flu experts in Egypt have said they would typically expect fewer human cases of the disease during Egypt's sweltering summer months, and in 2006 there was a summertime lull in human cases between May and October.Experts fear that the bird flu virus might mutate or combine with the highly contagious seasonal influenza virus and spark a deadly pandemic which could circle the globe and kill millions. Around five million households in Egypt depend on poultry as a main source of food and income and the government has said this makes it unlikely the disease can be eradicated. The government still finds it hard to enforce restrictions on the movement and sale of live poultry.

José Manuel Barroso
President of the European Commission
The EU in the global economy: perspectives and challenges - Brussels Economic Forum
Brussels, 31 May 2007 - SPEECH/07/346

Ladies and gentlemen,

Thank you, Klaus Regling, for your kind words. I'd also like to congratulate you and Commissioner Almunia for inviting me to address this 8th Brussels Economic Forum - in a year that marks the 50th anniversary of the Treaty of Rome.Earlier this year, European leaders celebrated this anniversary with a declaration in Berlin. We have reaffirmed their commitment to a project that has paved the way for peace and prosperity in Europe.

And we believe that economic integration is central to this European success story.A gradual elimination of economic barriers over the last half-century, and the adoption of a common currency, have helped to raise living standards, ensure a fairer deal for consumers, create new opportunities for investors and foster closer economic and political ties among Member States. As the Berlin Declaration says, the common market and the euro make us strong.This is particularly true in today's increasingly integrated global economy. Globalisation is bringing new economic and social challenges.

Implementing our framework for macroeconomic stability and our structural reform agenda is essential to deal with these challenges. The renewed economic vigour in the EU offers an excellent window of opportunity for Member States to accelerate their reform efforts. Over the past year, the EU's economic recovery has gone from strength to strength. Real GDP in the EU grew by some 3% last year – its fastest growth rate since 2000.

Employment growth in the EU accelerated to around 1.6% in 2006, creating close to 3.4 million new jobs. Between 2006 and 2008, 9 million new jobs are forecasted. Inflation remained around 2% in 2006 but it came down towards the end of the year as energy prices eased. This positive growth performance partly reflects the current cyclical upturn, of course. But it also suggests that structural reforms are beginning to bear fruit. The fact that in the European Union we offered Member States a common framework for those reforms – through the renewed Lisbon Strategy for Growth and Jobs - is certainly helping this progress towards an improved economic situation in Europe.The employment effect of recent growth has been particularly intense. By February 2007, the unemployment rate had dropped to 7.4%, its lowest level in 15 years.

Labour productivity growth in the EU averaged 1.2% in 2006, compared with an annual average rate of 0.6% between 2001 and 2005. As I said, much of the recent increase is no doubt cyclical in nature.

Yet, taking a longer-term perspective, we have seen real structural gains in the labour and product markets, and the long-term decline in trend productivity seems to have come to a halt. Overall, these developments confirm that the Commission was right to send clear signals in favour of reform, and the urgent need to adjust to a more competitive environment. They also confirm that Member States are now being rewarded for their structural reform efforts.Over the past two decades, the economic environment has undergone a fundamental transformation. The integration of China, India, Russia and other developing or emerging countries into the world economy is bringing new economic and social challenges. Today, China, India and Russia are – in purchasing power parity terms – among the six largest economies in the world together with the EU, the US and Japan. This makes some people uncomfortable. But I believe globalisation presents huge opportunities for EU economies.Firms in the EU now have direct access to new and expanding markets, where purchasing power is increasing rapidly and consumption needs are expanding. Consumers in the EU benefit from cheaper and more diverse goods and services through imports.But globalisation also involves important challenges for European economies.

First, the emergence of India as a global power in services production and the consolidation of China as a manufacturing powerhouse means adapting to new and formidable global competition.

This can be done only by shifting production and trade structures in the EU into new areas of comparative advantage and by moving up the value-added chain.Second, in particular for unskilled labour, the unprecedented growth of the global labour pool might adversely affect incomes and employment, as a result of production relocation and competitive imports. This means investing in our labour force to give them the skills they need to keep up with technological change and innovation. It means shifting the EU further towards a knowledge-based, flexible economy. It means learning to benefit from, and not run away from, technological innovation.Third, there is growing pressure on global resources and the environment. Protecting the environment is essential for the quality of life of current and future generations. The challenge is to combine this with continuing economic growth in a way which is sustainable over the long term. Adapting to all these new challenges – and adapting fast – is essential.

And the European Union has a key role to play in this.The framework and policies of the EU are very powerful tools, not just for responding to the economic challenges of globalisation, but for shaping it, according to our own European interests and values.

First, the Single Market offers European companies unrestricted access to nearly half a billion citizens of the European Union. EU internal competition enables companies in Europe to achieve economies of scale and makes them fit to compete in global markets. Second, as a complement to the Single Market, the single currency acts as an anchor of economic stability and shields us against external shocks and financial turbulence.

Supported by the euro area's weight in the global economy, the euro has emerged as the second most important international currency behind the US dollar.The single currency is now widely used as an anchor or reference currency in foreign exchange arrangements, and as an official reserve currency. Strengthening the external dimension of the euro will bring benefits not only to the euro area, but to the EU as a whole.Third, Economic and Monetary Union – which is the most advanced stage of integration to date – has encouraged sound macroeconomic policies within the EU. Since the euro was launched in 1999, EMU has delivered a high degree of macroeconomic stability, and promoted closer trade and investment ties and deeper financial-market integration in the euro area.

The figures are clear: in the early 1990s, some euro area countries were still suffering from double-digit inflation. Today, inflation is around 2%. The average budget deficit was nearly 6% - in some countries, close to 10%. Today the average is 1.6%, and for 2007 as a whole, we forecast an average deficit of around 1%.These and other benefits represent strong incentives for countries to sign up to the euro. But that is not the full story. As emphasised by EU leaders at this year's Spring European Council, the Lisbon economic reform agenda is critical for boosting growth and jobs in all 27 EU Member States. The relaunched Lisbon Strategy for Growth and Jobs is a step towards major economic adjustment, and establishes a far-reaching programme of reforms. It aims to tackle the broader structural weaknesses of the EU economy by its sharp focus on boosting productivity and raising employment rates. The strategy promotes innovation and investment in human capital, both of which are essential components for a knowledge-based economy.Today, two years after the re-launch of the Lisbon Strategy, my impression is that it has indeed added momentum to Europe's reform process.This process, it's true, has not yet received the credit it deserves. In reality, EU Member States have undertaken wide-ranging reforms in recent years. Reforms have covered some of the most difficult and politically sensitive topics such as the labour market, the welfare state - including pension systems, the liberalisation and deregulation of sheltered markets, and measures to integrate financial markets.

These reforms are intended to strike the right balance between security and flexibility of employment or flexicurity which has already proved such a successful formula for reducing unemployment in several Member States. I really believe it is important to recognise this progress. It is true that not all Member States are making progress at the same rate. But there is now no leader of a Member State of
the European Union who can continue a discourse against the reform process.In addition, our Structural Funds – which encourage economic and social cohesion in the European Union – indirectly help address some of the globalisation challenges. By focusing on bridging the gap between more and less developed regions, and generating new opportunities for economically hit areas, the structural funds promote the successful integration of European regions into the global economy.And to complement this, the EU is also providing assistance for adjustment through its European Globalisation Fund. The Fund acts as a useful shock absorber to the powerful motor of globalisation.

Not to protect uncompetitive jobs, but to protect people - by giving them the help and training they need to get back on the job ladder.But despite the clear progress made so far, there is still huge scope for improvement. To this end – and as we are approaching the 10th anniversary of the euro – we are launching an ambitious programme of studies, under the leadership of Commissioner Almunia, to further our knowledge on how EMU has performed, and to propose concrete measures to make it work even better in the future.We are also currently subjecting the Single Market to a thorough review.We need greater integration of financial markets, as well as a genuine single market for innovation. Other important areas include enhancing competition in services, increasing incentives to work in the welfare system and making labour markets even more adaptable.

The bottom line is to avoid complacency, and to take advantage of the current good economic situation to accelerate, rather than slow down, the pace of structural reforms. But many of the challenges today are global in nature and therefore require global solutions. It is important that we in Europe also focus on the responsibilities that globalisation brings.I think these two things go together. It is impossible to have global solutions with closed minds. We cannot have a protectionist Europe. You cannot be in favour of globalisation and against European integration.EMU and the euro are already delivering macroeconomic stability worldwide, and Europe is fostering closer macroeconomic and regulatory cooperation with new partners as well as with existing ones.

As the world’s biggest trader, the EU is also a leading player in efforts to liberalise world trade. In this respect, a successful conclusion of the Doha round of trade talks is crucial. Open markets benefit Europeans and European business; not only industry and services, but also agriculture – Europe is now a net exporter of agricultural produce to the US. A multilateral trade round is the best way to support businesses with complex supply chains operating in many countries. It is the best way to support the poorest countries. It is the best way to ensure that China continues to develop as an economic giant within a rules-based, multilateral economic system. So at the G8 Summit at Heiligendamm next week, I will urge G8 leaders to send three clear signals:

- of the potential benefits of an ambitious and balanced Doha deal;
- of the need for urgency. We have weeks, not months; and
- of the need for everyone to contribute.

Let me be clear. If this is a negotiation in which Europe pays and others do not, there will be no Doha deal. Europe has put its cards on the table. We are offering substantial cuts in our agricultural and non-agricultural tariffs, and in our farm subsidies. Others have to offer real cuts as well. Real cuts for real cuts. The prize, a Doha deal, is worth going the extra mile. That is my message to the G8. That is what we need in the coming weeks from our main partners.But there are other global responsibilities.

We are also at the forefront of international efforts to promote sustainable development. Energy policy and climate protection have become key objectives, and we intend to make important contributions to both. Let me touch on these briefly.

At their recent Spring meeting, the EU has agreed on an outline for a new Energy Policy for Europe.

Its objectives are:

­to increase the security of energy supply;
­to ensure the competitiveness of European economies and the availability of affordable energy; and to promote environmental sustainability and combat climate change.

But we all know that bold political declarations are not enough. Therefore, EU leaders also adopted a comprehensive Energy Action Plan, which fixes ambitious, but achievable, targets. The main ones include improving energy efficiency by 20% by 2020, and increasing the share of renewable energies in overall EU energy consumption to 20% by 2020 as well.Sustainable energy policies are not just a
European problem. Therefore, in 2007 the European Commission will propose a new international agreement on energy efficiency.

On climate change, agreement was reached at European Union level an agreement to reduce EU greenhouse gas emissions by 20% in 2020 compared to 1990. In addition, we have made it clear that we will go further, cutting emissions by 30% by 2020, if other developed countries join us. The G8 Summit is an important stepping stone on the way to achieving this global response. The EU will be looking for a strong signal from our G8 partners which could be the key that unlocks further progress later in the year.

Ladies and gentlemen,

Let me conclude. Nowhere is the old proverb there is strength in unity more true than when building a competitive economy for the global market. The framework and policies of the European Union are critical in responding to the challenges of globalisation.I am sure that the next two days of the Brussels Economic Forum will contribute to a better understanding of these challenges and of Europe's role in resolving them. I therefore wish you every success and thank you for your attention.