Toespraak minister-president Rutte op de Staatsuniversiteit van Sint Petersburg

Toespraak | 21-10-2011

Your Excellencies, ladies and gentlemen,

In 1983, at the age of 16, I visited Russia for the first time, together with my father. It was an unforgettable experience, which I have thought about often in the past few days. I was so impressed by the beauty of Leningrad, with the Hermitage and the canals inspired by Amsterdam. In Moscow, I was so impressed by the Kremlin, the Red Square and Lenin’s mausoleum, where you could almost reach out and touch 20th-century world history. But I was also moved by the sharp contrast between the splendour of the churches, palaces and museums, and the poverty in the streets. Back then, Russia was a closed and grey country. And even at that young age, I understood how essential personal freedom is to a country’s prosperity and its people’s happiness.

Almost thirty years later, Russia has only grown more beautiful, while in other ways the country has changed radically – and for the better. The young people in this room only know the Soviet Union from the stories of their parents and grandparents. But what seemed unthinkable in 1983, so soon after Brezhnev’s lethargic ‘era of stagnation’, fast became reality. Democratic elections. Free contact with the outside world. And an economic system more open than ever before.

Let me be clear from the start: is the process complete? No, certainly not. Have there been problems and economic shocks? Yes, there have. But looking back on the last twenty years, I can only express my admiration and respect for the incredible change Russia has undergone in such a short time. As a historian by training, I venture to say that few big countries have ever achieved anything similar. That is something to be proud of. And now the challenge is to keep moving forward. In spite of, or perhaps even because of, the uncertainty now facing the global economy.

Yesterday I met with President Medvedev and Prime Minister Putin. We discussed bolstering the economic partnership between the Netherlands and Russia. And during our talk, the watchword was ‘modernisation’. A word I’ve also heard Russian business leaders use in the past few days. Let me assure you firstly that I endorse that ambition, and secondly that the Netherlands wants to be an active and trusted partner in the process.

This kind of partnership is part of a long tradition based on trade, shared knowledge and cultural engagement. Back in the early fifteen hundreds, Dutch ships were already sailing to Archangel via the Sound to trade in timber and hides. At the end of the century Peter the Great, no less, visited the Netherlands. He was fascinated by Dutch expertise in shipbuilding and water management. Today, the Netherlands is the largest foreign investor in Russia. Dozens of Dutch companies are active here, including global players like Philips and Shell. And our cultural ties have been closer than ever since the Hermitage Amsterdam was opened in 2009. I don’t know when we have received a more beautiful gift. In exchange, we gave you Guus Hiddink and Dick Advocaat. I will leave it to you to decide whether it was a good trade or not! But looking back at the recent qualification for Euro 2012 and at the 2007 Zenit championship, I imagine many of you would say yes!

My point is that we have a solid foundation for building on our existing cooperation, trust and friendship. And in the Netherlands, we are very keen to do just that. So I have come to Russia with representatives of more than seventy Dutch companies, including several CEOs of multi-billion-dollar enterprises. They all see opportunities in Russia and they all plan to keep investing in a solid relationship that benefits partners in both countries.

The Russian government’s modernisation plans are an important part of this. And although the ‘hardware’ of technology and infrastructure is important, the ‘software’ of people and society is even more vital. When President Medvedev spoke at the St Petersburg International Economic Forum in June, he was very clear about this. His frankness and honesty made a deep impression. Yes, he spoke of Russia’s ambitious technological agenda but first and formemost he adressed problems of a very different kind. For example, he talked about building effective public administration and a reliable financial system. He spoke about the need to reduce bureaucracy and fight corruption. He argued that free enterprise needs more room to grow. And he spoke frankly about his plans to improve the judicial system and the rule of law in Russia. ‘My choice’, he said, ‘is a policy that gives millions of people maximum opportunities for economic activeness, and protects them with laws backed by the full weight of state power.’ This is very close to my own political convictions: that government should make things possible, not try to run people’s lives.

In essence, President Medvedev’s speech was about confidence. It was about the rule of law and reliable institutions laying the foundation for economic growth and prosperity. And there is indeed a direct link here. Entrepreneurs are more willing to invest if they are confident that their business partners will honour their financial agreements. If inflation is low and confidence in the banks is high. And if they can be sure that a contract is worth something, because it can be enforced in reliable legal proceedings.

The same is true for the people of Russia. Or any other country, for that matter. Almost anyone will work harder and invest more in their own future if they know they will be rewarded for their efforts. If they know the government and the law will protect them against unequal or arbitrary treatment. Building confidence is the best way to unleash creativity and enterprise. So investing in economic security and legal protection may be the best investment a country can make. It cuts both ways, after all. It encourages foreign investment and builds international trade relations. But it also helps to stop knowledge and capital moving abroad, because it gives people confidence in the future of their own country. Both are equally important in my view.

So a lot depends on building confidence in institutions. On good governance at all levels. The international community understood this better than ever after the financial and economic crisis broke in 2008. Take for example the decisions the G20 have taken since then on reforming financial supervision. It’s all about good governance. The crisis has also made painfully clear how infectious problems in our globalised world can be. Do you remember how the crisis started? It began in the United States in the summer of 2008 with sub-prime mortgages. A difficult, but manageable problem, most analysts said at the time. A few months later, an economic fire was raging around the world. We are still feeling the effects today. And unfortunately we will feel them for some time to come.

Which brings me to another important point. Countries and regions that are active in the world and want to play a major role on the world stage have to realise that influence entails responsibility. Economies around the world are so closely interwoven nowadays that it is only right that we ask every country to think about the impact their choices and behaviour have on other countries. That is particularly true of large and important players like Russia, China, the US and the European Union.

Let me offer two current examples. The first concerns the Netherlands and the EU, and the second involves embedding Russia in the system of world trade. The first example, of course, is about the euro crisis. The reason for the current problems in the eurozone is that some countries have not kept to the agreements made when we introduced the euro. We agreed then that no one’s annual budget deficit would exceed three per cent and that the national debt could not be higher than sixty per cent of GNP. Unfortunately, those agreements were broken. Not only by Greece, though it was one of the worst offenders. To make matters worse, the other member states failed to intervene, mostly for political reasons. How could this happen? It happened because the system of sanctions we set up was not strict enough. So what we are now dealing with, is a serious flaw in our monetary union that has emerged since we introduced the single currency.

This is bad news for everyone who pays in euros, everyone who has their savings in euros and everyone who has built up a pension in euros. But there are also risks for countries outside the eurozone. If consumer confidence falls in Europe, for example, global demand for goods will drop too. What’s more, governments and companies in other countries are owed money in euros. So the uncertainty and instability affecting our currency poses a serious risk to them too.

Against this background, it is only right that the rest of the world should put pressure on Europe to get its affairs in order. To restore stability and confidence in the euro. The Netherlands recently submitted far-reaching proposals for this purpose. We want to introduce an automatic system of sanctions supervised by a special European Commissioner. Countries that do not stick to the rules will have to hand over increasing levels of sovereignty. That will be hard for some countries to swallow, but we need to get back to basics and make sure that this situation can never happen again. A deal is a deal. We owe that to our own people and we owe it to the rest of the world. Because new debt bubbles won’t be good for anyone.

My second example, Russia’s accession to the World Trade Organization, is another matter which transcends the interests of any one country. An economy the size and the importance of Russia’s, simply belongs in the WTO. Many countries, including the Netherlands, are convinced of that. No trade statistics are complete without data from Russia. And more importantly: WTO membership would not only be in keeping with Russia’s modernisation agenda, it would also bolster the stability and reliability of the international trade system. This would benefit many countries, including the Netherlands with its open, export-based economy.

We hope that outstanding issues that currently stand in the way of accession could be resolved as soon as possible. And we trust that negotiations to this regard will be conducted in good faith. Because accession is too important to delay - for each country individually, for bilateral trade and for the wider world.

Ladies and gentlemen,

The great Leo Tolstoy once wrote that, making laws is easier than governing. And he was right. Law-making is basically an administrative process. But governance – good governance – is far more than that. Especially in these times. Good governance is about honesty and transparency. It is about governments that are willing to face difficult choices and compromises. It’s about providing a climate of stability, legal certainty and reliability, in which people and businesses can flourish.

In 1983, I saw with my own eyes how not to do it. I can see that a great deal has changed for the better in Russia since then. And I can also see that you have set the bar very high for the years ahead. So let us agree now that I will return in another thirty years to look back with you, the future leaders of this beautiful country, on the many successful initiatives started in this period.

Thank you.