Ladies and Gentlemen,

It is always a pleasure to talk to young people. I would like to make a few general remarks before beginning our discussion.

This year we have seen huge historic developments. Euro notes and coins are now in circulation. Overall the euro has been a great success. It is now part of our daily lives. And it is practically on a par with the dollar. It is fast becoming an alternative reference currency for the world. China's central bank, for instance, has put some of its reserves into euros.

This is another sign of our new multi-polar world. At the EU-Asia Summit in Copenhagen recently, the Chinese Minister for Industry told me that China's production capacity is sufficient to meet the whole world's needs and their economy could absorb another 300 million workers. The Chinese Telecommunications Minister said they have seven million new subscribers every month.

This gives the scale of the new challenges we will have to face. And only Europe can give us the critical mass to take action on the world scene. But today's EU, which is unifying the whole continent, needs to be reformed.

This enlargement is the biggest ever. It offers great opportunities for growth and development and poses formidable challenges. With 25 plus Member States and eventually a population of half a billion, the potential is enormous.

These two issues -- the Convention and enlargement -- are crucial for all Europeans. Especially for young people like you, who will live and work in the Europe of tomorrow.

The Convention is discussing the shape of the European Union of the future. This comes down to asking where our common interest lies. And how we can ensure the EU of tomorrow has the institutions, the policies and the powers to identify and further that common interest.

The role of the European institutions is essential to the development of our supranational democracy and the preservation of unity. This calls for a stronger decision-making procedure. And that means more majority voting, because that is the democratic way. Each decision should be taken by a double majority -- of the States and of the people -- because our Union is a union of States and people.

The shape of the tomorrow's EU has implications for countries beyond our borders too: Russia, Ukraine, the Balkans and around the shores of the Mediterranean.

In particular, the Balkans is critical to our strategy. The Balkans belongs to Europe. This is why we have offered the region clear prospects of European integration.

The European Union is a force for peace and prosperity in Europe and abroad. If we are strong, we can do much outside Europe too. But to be strong, we must be more united and speak with a single voice. This calls for a more robust common foreign and security policy to help us assume our share of responsibility for peace and development in the world.

We need to speak in unison on many issues: human rights, the North-South gap, the environment, sustainable development, trade, energy, especially renewable sources of energy. All the policy areas affecting our relations with the world.

In the EU institutions we work in a multicultural and multi-linguistic environment. This complicates our work. But it broadens our vision. For us in the EU institutions, sharing ideas and comparing approaches with colleagues from other cultures is an immensely enriching experience.

Many of you will have lived and studied in another cultural environment -- under the Erasmus programme, for instance.

Erasmus has been an outstanding success in promoting student mobility. The number of students who have taken advantage of the opportunity to study abroad under the programme has reached the one million mark and we are celebrating this with Erasmus Week.

We want to follow up that success. So we have decided to throw the programme wide open. Erasmus World will open our universities to the world by encouraging mobility between Europe and the rest of the world.

Exchanging ideas across cultures is enriching. In today's world, I would call it indispensable. That is why I have always stressed the need for dialogue between cultures and peoples. This is especially important since 11 September 2001 and in a world of growing globalisation.

As to globalisation, I would like to stress that the European Union is the only democratic, efficient and practical answer to globalisation. It allows us to balance our regional and national interests against our shared transnational concerns. It takes us beyond power politics and into a supranational democracy where the common good can prevail. It gives us a framework for the democratic solutions of the problems that face us, in harmony with our traditions and our values.

Thank you.