• Date 03 September 2020

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I am very happy to have the opportunity to take part in this year’s Bruegel Annual Meetings and I am grateful to the organizers for making it happen. All of us connecting digitally is perhaps a perfect example of our new normal and of how the pandemic is changing the world. Politics, too, is a very different animal these days. We have to take enormously consequential decisions, often within a relatively short period of time and with a limited amount of information.

ts can be vitally important, if it contributes to well-informed policy making in our response to this crisis. And so I am looking forward to our discussion. But before we get into it, and in order to get us started, I briefly want to make three points.

My first point:
Europe has shown a strong response to this crisis.

Perhaps it didn’t look like it at first. Covid-19 hit Europe relatively early on in the global pandemic – and in many European countries it hit hard. Parts of Europe are among the worst-affected regions in the world. We have seen nationalistic reflexes, despite the cross-border nature of the pandemic. Some commentators have asked whether open, liberal and democratic societies are actually capable of dealing with this kind of crisis.

Europe has shown that – yes – we are capable. In fact, the characteristics that define our European model of democracy are also our best assets in the fight against the pandemic and its economic fallout. With a strong role for responsible government, with the guarantee of social security, and with an emphasis on solidarity, we can weather this storm. Solidarity is the cornerstone of the EU. One of its founding fathers, Robert Schuman, called it a “de facto solidarity” that is created through concrete acts – acts, like flying-in and treating patients from neighbouring countries or like helping out with much-needed medical equipment.

In this crisis, Europe is living up to its core principle of solidarity. And we are putting our money where our mouth is. It was only in April that the Eurogroup agreed on a 540 billion euro safety net to protect workers, businesses and states. Now we are working out the details of our 750 billion euro recovery program, to get Europe’s economy going again.

And that brings me to my second point:
For recovery to be truly successful, we must recover together and use this opportunity to transform our economy.

“Together for Europe’s recovery”: not for nothing have we chosen this as our motto for Germany’s Council Presidency. Recovery will only work if we do it together. We must make sure that all parts of the EU can overcome this crisis, especially those that are hardest-hit. Ultimately, this is a question of the cohesion of the single market, and therefore, of a major source of our prosperity.

Together describes the “how” of our recovery. The “what” of our recovery is investment. To get Europe’s economy back on track, investment is key. Coupled with smart, credible reform packages it can create growth opportunities and make our economies more resilient. But to have a lasting positive effect, it must also be the right kind of investment. I am talking about ecological and digital transformation, about making sure that Europe and its economy are fit for the 20s of this century.

That is why I have pushed for an ambitious, cohesive and transformative recovery programme. We have spelt out such a programme in a joint Franco-German proposal. And now, with Next Generation EU and its Recovery and Resilience Facility, we have a programme on the table that has been agreed by all Member States.

Next, we must continue apace and finish the legislative process, so that funds can become available at the start of 2021. Driving our recovery programme forward will be a priority during Germany’s Council Presidency. And it is connected to another priority: finalizing the next MFF, the Multiannual Financial Framework. The outcome of this process in the second half of 2020 will determine how the EU will emerge from this crisis.

Which brings me to my third and final point:
With its strong crisis response, Europe has taken a big step forward. Now we have an opportunity to take the next steps that are necessary, for a better – a “more perfect” – Union.

Put together, the safety net and the recovery programme elevate Europe’s common financial policy to a completely new level. A level that moves us closer to a fiscal union. The EU will issue a substantial amount of debt together. The simple fact that the EU will also repay this debt together calls for – among other things –more EU own resources. We will discuss this topic at the Informal ECOFIN in Berlin next week.

Achieving a fiscal union will complete the Economic and Monetary Union. This way, we can increase the stability of financial markets. We can strengthen the role of the Euro, putting it on a similar level the US Dollar in a way that reflects our economic weight as the world’s largest trading bloc. We can ensure our financial independence and thereby our sovereignty.

In the puzzle of building a better European Union, we need other pieces, too:

  • Moving ahead on minimum corporate taxation, to ensure that everyone contributes their fair share.
  • More decisions taken with qualified majority, especially in tax matters or in foreign policy, so that Europe cannot be divided easily.
  • And further integration of financial markets by deepening the Banking Union and the Capital Markets Union.

We will work towards progress in all these areas during German’s Council Presidency. The pandemic has shown how much we – as individuals – all depend on each other. The same goes for Europe. No European country can go it alone.

Strengthening the EU is a question of sovereignty – of holding our own with the United States or with China, who are forcefully asserting their national interests. Only together can we defend our European way of life. For me, a strong and united Europe is Germany’s primary national interest.

Progress to this end will require perseverance and leadership. We will have lots to do in the coming months and years. It is entirely up to us Europeans, if we want to emerge from this crisis with a better, more social, and more sovereign European Union.

Let us face the coming technological transformations and societal changes of the 2020s together. Bruegel can play an important role in understanding these challenges. And with this call to action I will conclude, because I am eager to hear your questions and your input.

Thank you very much!