What we are here to discuss about is exactly that: innovation. Creating something new, anticipating the next step, enhancing our business environment.
I gladly accepted to speak at this event today because I believe that innovation is what we need to move out of the dullness that the financial and economic crisis left behind. We were all seriously shaken and rightly so. A lot of lessons have been learned from this crisis and I had myself many opportunities to speak about them and to analyze them. Deregulation and flexibility were overstretched and we must today rebalance the framework and the activities in financial services. This is the duty and challenge the financial sector faces but ultimately it is the duty of every citizen to help recreate a healthy environment where greed is not the driving force for investments and financial activities.
Evolution is never linear and innovation is an ongoing process that eventually matures and consolidates into a new structural pattern, a new societal behavior or reality. This is what is happening to the digital world and more specifically to online payments and ecommerce. To come back to the earlier quote, we must be the leaders for this type of innovation in Europe.
Online commerce, and also mobile commerce, has become a solid part of our reality. It is not futuristic anymore to rely on the digital world to take care of a lot of daily chores that we traditionally did otherwise. It is evident today that online payments have a pivotal role to play in enabling online retail and thus driving competition and cross border trade in the Single European Market. This development is indeed encouraging and greatly contributes to creating growth and economic development in Europe and in the world in general.
When innovation leads to prosperity we tend to get very enthusiastic. This is an understandable and even healthy response to success. We must indeed do all we can to ensure that this success story is not hampered and weighed down.
Enthusiasm must however be properly channeled. In this context, regulation can be perceived as a burden or even obstacle. It is not easy to identify that moment where you cross the line and move towards over-regulation. The crisis has fundamentally affected the trust relationship we as citizens and customers have with our banks. Through regulation it is hoped that trust can be gradually re-established. But some may argue that by that same regulation you can also overburden a sector that is trying hard to be competitive again.
Being a Minister of Finance in Luxembourg, one of my main concerns is to find the right balance when defining competitiveness and working on a business-friendly environment. I hesitate to even pronounce these words these days because there is a recent tendency to think that these concepts lack credibility or indicate that you are lax or not responsible. I do not agree with this tendency and also do not believe that there is an incompatibility between a sound regulatory framework and a business-friendly environment. High standards, excellent expertise, a sustainable growth strategy, an international standing – these are the trademarks of my financial sector, and I would hope, of the entire Single Market.
We must understand in Europe that our strategies for competitiveness are interlinked and not mutually exclusive. Let us welcome innovation and create the best framework within which every country can develop its own “specialty�?.
Luxembourg is very supportive of the digital developments and as a new Minister of Media and Communications I have a keen interest in further deepening the ICT sector as well as the ecommerce activities in general. Next to a well-established international financial sector which continuously develops and adapts to new standards, we have also become a hub for innovative technology companies. Connecting the dots while respecting the specific attributes of each sector is what I will endeavor to do even more so. We are in the process of matching the expertise we have in the financial sector also in this new sector and are exploring the benefits that the smart use of technology and data can provide to regulation in the payments sector. In this context I welcome very much the efforts and contributions Paypal undertakes as a key player of that sector in Luxembourg.
Let me make a final observation: one of the key success of the Luxembourg “business model�? – if I can call it that – is the governance and dialogue structure we have put in place between the public and private sector. We exchange best practices, discuss issues and challenges and try to find the most appropriate solutions in a given case. Introducing regulation and making sure it channels innovation properly can also be best discussed within such a structure. I understand that the European Commission has a similar philosophy and I will most certainly actively participate in the new discussions that will take place so we can find together the framework that will ensure stability, trust and protection without discouraging innovation and competitiveness!