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Opening Remarks

U.S. Ambassador William C. Eacho, III

Webster University
Vienna, January 25, 2010

Good evening. It is a pleasure to be here. I will open with some observations, but I hope to keep these fairly brief so we can have more time for discussion.

As I have a business background, let me start with three basic points about U.S. economic policy in the first year of the Obama Administration:

First: The U.S., under President Obama’s leadership, has acted decisively, rescuing our domestic economy from the brink of depression.

But we did not stop there. Economic reform is under way in the United States. Whether finance, health care or energy, this Administration is serious about addressing systemic weaknesses that previous administrations have been unwilling to take on.

Second: We are engaging as partners with Europe and Asia – through the G-20, IMF, OECD, and directly with our European partners.

Third: The U.S. and Europe have a long way to go before this crisis is over, but keeping markets open will help us get there.

Let us look at the steps this Administration has taken. A year ago, our credit markets were locked up, putting our economy into a rapid decline. We acted decisively, passing a landmark recovery act with stimulus focused on areas like green technology. We took steps which were costly to our taxpayers, but which helped avoid a depression which would have been far more costly. Our focus then shifted to addressing systemic weaknesses which have plagued us for many years, some of which contributed to the crisis.

First, consider banking and finance. Our Congress is working ona landmark bill to transform financial regulation. Proposals include wider oversight of financial markets, tighter standards in already-regulated activities, and new government oversight of compensation practices. We now have a consensus that “laissez-faire” regulation should never again send our economy into a tailspin. Although we are not yet out of the woods, the restored financial confidence is starting to pay off in construction and business activity, creating a solid foundation for growth.

Next, consider health care. The U.S. offers highly advanced health care – but also the most expensive, costing about 16% of GDP. American tradition has limited federal government participation in this sector to insurance regulation and to aid for the needy, with business providing most insurance to workers. There is widespread recognition, however, that our economy has evolved and our model leaves too many people uncovered, inhibits labor mobility and requires too much overhead.

The American business community supports reform to stay competitive in the global marketplace. So make no mistake: despite our free-wheeling political process, illustrated by the recent Senate election in Massachusetts, we are moving toward health care reform.

And finally, look at energy and climate. By investing eighty billion dollars in clean power and energy efficiency, the Obama Administration is changing how Americans use energy. Our House has already passed a sweeping energy bill. The administration will work hard to get a bill through the Senate as well. And we are using regulatory authority to require greater efficiency and address climate change. Meanwhile, our unprecedented investment in environmental technology and research will produce millions of “green” jobs.

Finance, health and energy: these are three tough sectors, but they are the most important for future growth and the Obama administration is tackling all three at once. It’s no surprise this generates friction: we should welcome debate when profound reform is on the agenda.

My second general point: this Administration has engaged as partners with Europe and Asia to address the crisis. The world’s largest economy cannot go it alone. Consider the G-20. Working with the EU, China and others, the U.S. helped shape a $1.1 trillion package at the G-20 summit in April. Market confidence was bolstered by the fact that leaders were working to coordinate their response internationally. The G-20 package was truly a turning point in the financial crisis: by tripling IMF resources, it put an end to speculation about central and eastern Europe, which threatened to affect Austria. Elsewhere, the U.S. and Austria are working together through the OECD, a leader in ensuring openness and transparency in tax and finance, and in fighting corruption. And we remain heavily engaged with the EU and with WTO mechanisms to keep global economic activity on a stable, reliable and level playing field.

Finally, my third general point: the U.S. and Europe still have a long way to go. A year ago, our economies were on the brink of a great depression. Now, expansion has resumed and credit markets are more liquid; but we must work together to ensure that our trade policies help sustain recovery and long-term growth. Today U.S. unemployment stands at about ten percent – more than double the so-called “natural rate” of 4-5 percent. That is a gap of five to seven million U.S. jobs, about eight percent of GDP. For a sustained recovery, the U.S. can no longer be the world's demand engine. Greater contributions to global demand must come from key emerging markets as well as advanced surplus economies in Europe. China spends about 36% of its GDP on consumption; European surplus economies about 52-55%, the US about 65%, down from 70% in 2008.

The U.S. needs to save more, Asia needs to consume more, and we all need to uphold the rules-based system. The U.S. economy is the most open in the world: to deal with imbalances, similar openness is needed everywhere. We must breathe new life into the WTO, and complete the Doha Round.

Now, let’s turn to broader foreign policy over the past year. As President Obama said in his address to the U.N. General Assembly in September, he “took office at a time when many around the world had come to view America with skepticism and distrust. Part of this was due to misperceptions and misinformation about my country. Part of this was due to opposition to specific policies, and a belief that on certain critical issues, America has acted unilaterally, without regard for the interests of others. And this has fed an almost reflexive anti-Americanism, which too often has served as an excuse for collective inaction.” In response, the President has both altered certain policies and reached out to engage and respectfully consider he opinions and concerns of our friends and allies.

In public diplomacy terms, I would argue, the U.S. “brand” is back. This is due not just to the President’s persona and individual eloquence – which certainly helped – but more especially because of the actions of his Administration.

Here are a few of them:

On his first day in office, President Obama explicitly banned the use of torture by the United States, prohibiting controversial interrogation practices employed in certain instances in the wake of the devastating 9/11 terrorist attacks.

The President also ordered the closing of the Guantanamo detention facility.

With the help of other nations, including several in Europe, detainees are being released and resettled. True, the timeline for this goal was missed – for which President Obama has been criticized.

Still, the administration remains committed to this goal. In Iraq, the U.S. is responsibly ending a war, as the Iraqis take over responsibility for their own security.

In Afghanistan, and after long and serious consultations, the President took the difficult decision to increase troops there while also deciding not to make this an open-ended commitment. While criticized by some supporters for this, I would remind them that the President, as Candidate Obama, steadily focused on the importance of dealing with Afghanistan.

We welcome the support European nations have made in the wake of the President’s decision, too. I want to mention here, also, that the United States welcomes Austria’s announced intention to provided support in the civilian sector in Afghanistan.

We look forward to seeing how this takes shape. On nuclear proliferation, the President has outlined a comprehensive agendato seek the goal of a world without nuclear weapons. Meanwhile, Russia and the United States are hard at work on a new agreement to substantially reduce warheads and launchers. On climate change, President Obama is taking our country in a new direction.

The President personally engaged in Copenhagen which, while criticized as a failure by some, was in my view a useful forum in the global effort to address climate change. Lastly, as the President himself told the UN General Assembly, the United States has “re-engaged the United Nations. We have paid our bills.”

President Obama, by the way, was the first U.S. President to chair a session of the Security Council.

In speaking at the UN, the President said something else worth repeating. I quote: “Those who used to chastise America for acting alone in the world cannot now stand by and wait for America to solve the world’s problems alone. We have sought – in word and deed – a new era of engagement with the world.

And now is the time for all of us to take our share of responsibility for a global response to global challenges.”

In short, under the Obama Administration, the United States has re-engaged with the world – and partners are most definitely welcome. Now, I am sure we will talk about the U.S. polls and the recent elections. Politics, as we say in the United States, ain’t beanbag.

Yet when you consider the challenges facing President Obama when he took office just 53 weeks ago – especially two wars and a global economy on the brink – I think you can say while it has been a tough year, it also has been one marked by definite progress and by a clear willingness on the President’s part to tackle the big problems facing the United States and the world.

Thank you.

Now let’s hear from you …

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