By MacKenzie C. Babb
IIP Staff Writer
The United States will continue to work with its European partners to promote financial stability and sustainable, balanced growth as the region’s economy moves toward recovery.
“We have a huge stake in the health and vitality of the European Union,” Under Secretary of State Robert Hormats testified before the House of Representatives’ Foreign Affairs Subcommittee on Europe and Eurasia in Washington March 27. “European growth and financial stability are important not only for Europe, but also for the global economy.”
Calling the U.S.–European Union economic relationship “one of the central drivers of the world economy,” the under secretary said the partnership accounts for almost 50 percent of global gross domestic product. He said trade flows between the United States and the EU exceed $2.7 billion per day, and foreign direct investment has created millions of jobs on both sides.
“Our ties to Europe are deep and longstanding, and we have continued to collaborate closely through the global financial crisis and, more recently, the eurozone crisis,” Hormats said, adding that the United States is encouraged by European leaders’ efforts to spur the region’s economic recovery.
“We have seen a commitment by the EU to address current economic challenges not only through fiscal consolidation aimed at improving debt sustainability, but also by facilitating job creation and structural improvements and putting in place measures to assist member states in finding a path back to economic growth,” he said.
Hormats said European nations are developing strategies to safeguard the region’s economic future, improve competitiveness and achieve stability.
“We have every reason to believe that with continued decisive action by European leaders, fiscal financial sector … challenges can be resolved,” he testified.
The under secretary said that while the global economic crisis has slowed growth and tightened budgets both in the United States and Europe, the partners remain committed to advancing shared goals.
He highlighted the U.S.–European Union joint economic, political and defense work, and said the cooperation has resulted in promoting an open, transparent and nondiscriminatory trade and investment climate worldwide through multilateral organizations such as the Group of 20, the World Trade Organization and the Organisation for Economic Co-operation and Development.
Hormats said that as the world’s two largest donors, the United States and the European Union have also continued to promote effective and complementary development assistance.
“Europe is an indispensable partner in promoting peace and prosperity through development assistance,” he said. “Together we can stretch the impact of our assistance through targeted cooperation efforts in developing countries and countries in transition across the globe.”
Hormats said the United States and Europe have also collaborated to improve supply chain security and to promote the adoption of rules-based economic policies to “level the playing field” for businesses around the world.
Looking forward, the under secretary said the United States and the European Union will need to continue working to remove barriers to commerce — work he said will benefit both sides of the Atlantic by creating more trade, more jobs and more business opportunities.
“There is much work yet to be done,” Hormats said, “but our partnership with Europe … has never been stronger or more important.”
The under secretary testified along with U.S. Chamber of Commerce Vice President for Europe and Eurasia Peter Rashish and Dan Hamilton, director of Johns Hopkins University’s Center for Transatlantic Relations.