Blog Post

Speech by President Donald Tusk at the Bruegel Annual Dinner

Speech held at Bruegel Annual Dinner, Brussels 7 September 2015

By: Date: September 7, 2015 Topic: European Macroeconomics & Governance


Thank you for that introduction and those thoughts. I am very glad to be here this evening. First, I want to congratulate Bruegel on a successful decade spent shaping and influencing Europe’s economic debate. Not only in Brussels, but in many European capitals. I am personally very happy that my own country, Poland, was one of the founding members of your think-tank. Congratulations once again and keep up the great work.

To begin with, I must confess that I have a kind of an eccentricity, or at least a political extravagance: I am very proud of Europe and really happy that I was born on this very continent. Contrary to all of today’s radicals, notoriously outraged intellectuals and the European Union’s external adversaries, I still perceive Europe as the best place on Earth. I am also ready to risk being criticized by modern and progressive politicians and thinkers, when I declare my allegiance to liberal democracy, the free market and a political philosophy founded on common sense and moderation. This also means the readiness to protect Europe the way she is now, together with all her problems, the “decadent Europe”, as she is called by her enemies, without a strong ideology, diverse and very difficult to govern, with her never ending negotiations, just like the Greek poleis, arguing with each other even in the face of the Persian threat.

Surely the European Union is not the best of all possible worlds. But for sure it is the best of the existing ones, and in my view, the best among those that humankind has seen across the centuries. Europe is relatively safe and prosperous, and shows respect for the rule of law and rights of individuals. The poor are offered help, universal education and medical care are provided for. We are not perfect, but are still doing better than at any other time or anywhere else. Europe has also found a way how to durably substitute conflict and violence for dialogue and consensus.

What also fills me with great pride is that Europe is the only place where the idea of solidarity is treated as a supreme political principle, or even more, as the main purpose of her existence. Today’s disputes about how to apply solidarity in practice, especially in the context of refugees, show us that although we are far from perfect, we address this idea with all seriousness.

Is this not enough to defend Europe? We should defend Europe hic et nunc, here and now, the Europe that exists in reality, and not as an ideal appearing in the dreams and visions of ultra-European ideologists. We all know that beautiful ideas, in particular the idea of progress, the better they sound the more destructive potential they may have. As a historian and a man with a painful personal experience of ideological experiments, (I lived under a Communist regime for the first half of my life) I am driven by very firm convictions in this regard.

Life has also taught me that values are more important than ideologies, while realistic pragmatism is more important than utopian visions. That is why today, in the face of different crises and threats, I propose that we abandon revolutionary thinking and reflect on how to strengthen the Union in its current framework.

In that regard, let us recall where the European Union was this time ten years ago, when Bruegel started its work. In September 2005, the Union was in a deep political crisis after the rejection of the constitutional treaty by voters in France and the Netherlands. That period of constitutional confusion ended four years later when the Lisbon treaty was finally ratified in 2009. What was the reason for wasting those years? I believe that the European project had drifted too much towards political day-dreaming and too far away from real life.

In today’s Europe there are even more risks than what we experienced 10 years ago. It is therefore necessary to properly assess them but above all we need to see everything in the right proportions. Problems do not imply catastrophe, neither today nor tomorrow, and even the loudest choir of today’s Cassandras will not change this fact. We must not give in to hysteria nor put faith in empty promises of the third way or the new order because this might actually lead us to the brink of disaster.

Instead of revolutionary thinking and sudden systemic changes (for instance big treaty changes) we should use every possibility to improve and correct the current system. Most importantly we should try and apply the rules and principles existing today with greater determination and engagement. Following the current rules would help us to avoid the many problems of the Eurozone, as well as those resulting from the new migratory pressure. Step-by-step action is a fine European tradition. This is why I prefer evolution to revolution and that is how our community was built. I can understand people’s impatience. We all would like things to happen quickly. But let us get a proper perspective. Compared to the dollar, the currency of a federal nation for over 200 years, the euro is the currency of sovereign nations and is only 16 years old. Therefore, it is a much more difficult project and so it demands much more patience from us all.

How to improve our Economic and Monetary Union? The missing links towards realising this vision were pointed out by the 5 Presidents’ report, prepared by the presidents of the European institutions. Tonight let me mention three key elements that in my view require special attention. These are: a proper European deposit insurance scheme, a true capital markets’ union and a euro area system of competitiveness authorities. These are the natural next steps in the evolution of the EMU and are in my opinion, politically more realistic, although still far from easy, than any treaty change.

Let us start with the common deposit insurance scheme that would complement the banking union and make it more compatible with monetary union. Being here tonight in the company of distinguished economists I will not dare to pretend that I know more about the economic benefits of such a scheme than you. And so I will refrain from explaining them in detail. But as a politician let me share with you one political benefit of this EMU reform. However difficult the reform may seem, it does not require a treaty change. I am well aware that some politicians, not least in Germany, would disagree but their claims are either an overstatement or an excuse not to change. Legal advice is clear on this. We can introduce the European deposit insurance scheme within the current legal framework. Therefore before asking for more ambitious changes let us give this one a try. I assume most economists would agree that introducing a common deposit insurance scheme will strengthen the EMU. And not only because it would help avoid the unfortunate scenes that we witnessed outside banks and ATMs in Greece earlier this year.

If someone is not convinced then I invite them for a trip across Europe to check the chances of a harmonious treaty change ratification process. My bet is zero. Let us therefore try to introduce the changes that are politically realistic and at the same time very ambitious. I apologise for the simplification but a little piece of something is better than all of nothing. And I am convinced that the very real political obstacles that exist, such as concerns about moral hazard, can be overcome through a prudent design of the system.

Another evolutionary step towards financial union is the creation of a single European capital market. Again I do not need to state in this room that an integrated capital market is key to making the single currency work better.

Finally, I would like to refer to an idea that was also developed here at Bruegel, namely a Eurozone system of independent competitiveness councils. Divergences in competitiveness within the Eurozone contributed greatly to the recent crisis and still remain a serious issue. Therefore a renewed focus on this in each and every state, as well as at European level, deserves proper reflection.

Let me use this opportunity to appeal to finance ministers, who are now working to implement the 5 presidents’ report, to speed up the work on the ideas I have just mentioned. EMU can be reformed now and it is up to Member States to deliver.

Tonight, I am making a plea for pragmatism and moderation. These are the very same principles that should guide our response to the other challenge facing Europe: the huge and increasing number of refugees. EU countries will not change their migratory policies overnight. But our attitude to refugees is in fact an expression of European solidarity inside of Europe. The countries that are not directly affected by this crisis and have experienced solidarity from the EU in the past should now show it to those in need. Today, it is truly a paradox that the biggest countries in Europe, like Germany and Italy, need solidarity from others.

At the same time we should seriously address containing the uncontrolled migration by strengthening the borders and getting the keys to our continent back from the hands of smugglers and murderers. The two approaches of solidarity and containment need not be mutually exclusive. It would be unforgivable if Europe split into advocates of containment symbolized by the Hungarian fence and advocates of full openness voiced by some politicians as the policy of open doors and windows.

Today, I call on all EU leaders to redouble their efforts, when it comes to solidarity with the members facing this unprecedented migratory wave. Accepting more refugees is an important gesture of real solidarity but not the only one. An enormous effort is also demanded of the European institutions. Humanitarian efforts to contain migratory flows will require much greater engagement from Europe. It means a major increase in spending. When we talk about new reception centres, better protection of the borders or development aid for the countries outside the EU, much more money will be needed. The consultations I have had with the leaders in the recent days seem very promising and their pledges clear. Crucial in this matter will be cooperation with third countries. This is the reason why I am going to visit Turkey and organise a summit on migration in Malta with the African countries. But let us have no illusions that we have a silver bullet in our hands to reverse the situation. The present wave of migration is not a one-time incident but the beginning of a real exodus, which only means that we will have to deal with this problem for many years to come. Therefore it is so important to learn how to live with it without blaming each other. Also, we should not feel ashamed of our emotions. Compassion is one of the foundations of solidarity, but in order to be able to help others we ourselves must be pragmatic at the same time. We are now experiencing one of the most classical political dilemmas, that is a conflict between the protection of our borders and solidarity towards the refugees. Wise politics doesn’t mean having to choose one value over the other, but to reconcile the two to the degree possible. In this case pragmatism should be the First Commandment.

My background makes me incurably suspicious of political actors offering illusions to the naïve. I grew up with the consequences of that kind of politics. I have been a politician for 25 years and I can assure you that this is a time when those on the political extremes will waste everyone’s time by promising the impossible. That includes those populist parties that call the Eurozone “a mousetrap” and advocate undoing reforms that Europe needs. It also includes those who promise zero immigration and tell their voters that they can shut out the world if they get elected.

Democratic capitalism is still the best model of organising the economy because – unlike rigid ideology – it does not break in tough times, it adapts to its environment. The best proof of this is the unique experience of my country and its clear success in the last twenty five years where we undertook permanent actions to reconcile democratic capitalism with solidarity. And please let us not forget that we were coming out of a much harder crisis than the Greek one. (My point of view is that of a practitioner not a theoretician.)

Pragmatic European leadership, both on the level of national states and pan-European institutions, must focus on practical solutions. Problems that we encounter presently can be overcome on condition that they do not become an excuse to turn Europe upside down. Equally important are mutual loyalty and solidarity among European players.

On every issue on today’s agenda: migration, the Greek crisis, war in Ukraine, terrorism, a potential Brexit; we take action, which – if only we are sufficiently loyal to one another and stand united – will bring about positive results. We will continue to live with the problems longer than we would like to – but this is not the reason to question our European principles.

We need to think about our Europe with greater tenderness and patience. We need to protect her not only against external threats when they appear, but also against internal temptations for revolutionary and total changes. The European Union certainly needs to adjust and improve itself, and it must do so constantly, but under no condition should we undermine the very essence of Europe or the political and legal norms of the Union. In that respect, our patience will achieve more than our force in these times, as Edmund Burke once said.

Thank you.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

View comments
Read article Download PDF More on this topic

Book/Special report

EU–China Economic Relations to 2025. Building a Common Future

The EU and China, as the world’s second and third largest economies, share a responsibility in upholding the rules-based, global free trade system and other forms of multilateral cooperation, especially on combating climate change. This report sets out the main conclusions of a research project between European and Chinese think-tanks, which addresses the prospects for the EU–China economic relationship. A Joint Report by Bruegel, Chatham House, the China Center for International Economic Exchanges and the Institute of Global Economics and Finance at The Chinese University of Hong Kong.

By: Alicia García-Herrero, K.C. Kwok, Tim Summers, Liu Xiangdong and Zhang Yansheng Topic: Global Economics & Governance Date: September 13, 2017
Read article More on this topic More by this author

Opinion

Hong Kong should add the euro to its dollar peg

Volatility offers an opportunity for the territory to rethink its strategy. With the economy now more synchronised with China than ever before, the dollar peg may no longer provide an accurate reflection of the real value of the Hong Kong dollar.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: September 12, 2017
Read article More on this topic More by this author

Blog Post

Speech by Peter Kažimír at Bruegel Annual Dinner 2017

Peter Kažimír, Slovakia Finance Minister, delivered the keynote speech at Bruegel's Annual Dinner 2017, held on 7 September 2017.

By: Peter Kažimír Topic: European Macroeconomics & Governance Date: September 7, 2017
Read about event

Past Event

Past Event

Bruegel Annual Meetings 2017

The Annual Meetings are Bruegel’s flagship event. They offer a mixture of large public debates and small private sessions about key issues in European and global economics. In a series of high-level discussions, Bruegel’s scholars, members and stakeholders will address the economic policy challenges facing Europe.

Speakers: Carlos Sallé Alonso, José Antonio Álvarez Álvarez, Agnès Bénassy-Quéré, Pervenche Béres, Matthias Buck, Grégory Claeys, Zsolt Darvas, Jean Luc Demarty, Maria Demertzis, Anna Ekström, Lowri Evans, Ferdinando Giugliano, Sandro Gozi, Peter Grünenfelder, Reiner Hoffmann, Levin Holle, Kate Kalutkiewicz, Steffen Kampeter, Peter Kažimír, Emmanuel Lagarrigue, Matti Maasikas, Steven Maijoor, Reza Moghadam, Nathalie Moll, James Murray, Johan Van Overtveldt, Julia Reinaud, André Sapir, Dirk Schoenmaker, Mateusz Szczurek, Marianne Thyssen, Jean-Claude Trichet, Reinhilde Veugelers, Nicolas Véron, Ida Wolden Bache, Liviu Voinea, Guntram B. Wolff and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance, Finance & Financial Regulation, Global Economics & Governance, Innovation & Competition Policy Location: Square - Brussels Meeting Centre Date: September 7, 2017
Read article More on this topic

Blog Post

Should the EU have the power to vet foreign takeovers?

Should the EU have the power to vet foreign takeovers? André Sapir and Alicia Garcia-Herrero debate the issue, which has become topical in view of recent Chinese investment in Europe.

By: Alicia García-Herrero and André Sapir Topic: Global Economics & Governance Date: September 1, 2017
Read article More on this topic More by this author

Blog Post

EU posted workers: separating fact and fiction

After President Macron’s recent tour of Central and Eastern European countries, EU posted workers are getting a lot of attention. However, a major reform of the system is already underway and we should not confuse posted workers with long-term labour migrants. Posted workers are a small part of the labour force, and their labour market impact is likely to be minor.

By: Uuriintuya Batsaikhan Topic: European Macroeconomics & Governance Date: August 31, 2017
Read article Download PDF More by this author

Parliamentary Testimony

European Parliament

Could revising the posted workers directive improve social conditions?

This presentation was delivered in Brussels on 31 January 2017 at a hearing of think-tanks, to advise the European Parliament on the revision of the Posting of Workers Directive.

By: Zsolt Darvas Topic: European Macroeconomics & Governance, European Parliament, Testimonies Date: August 29, 2017
Read article More on this topic

Opinion

Europe must seize this moment of opportunity

As the EU enjoys a period of growth and relative stability, there is finally room to undertake long-needed reforms. But it is vital to act soon, and priorities must be set. There are three pillars of reform for the coming months: completing a robust euro area; building a coherent EU foreign policy; and harnessing the single market’s potential to deliver strong and inclusive growth.

By: Agnès Bénassy-Quéré, Michael Hüther, Philippe Martin and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: August 12, 2017
Read article More on this topic More by this author

Opinion

The EU and the US: a relationship in motion

Europe’s post-crisis recovery has been disappointing in comparison with the USA. But lower rates of inequality are staving off populism and bolstering support for globalisation. With the USA an increasingly unpredictable partner, the EU must address internal imbalances and build alliances to defend the multilateral order.

By: Maria Demertzis Topic: Global Economics & Governance Date: July 28, 2017
Read article More on this topic More by this author

Blog Post

Italian economic growth and the Euro

While the Euro has frequently been blamed for the poor growth performance of Italy over the years, a long-term analysis shows deteriorating growth before the introduction of the Euro. Additionally, Italy has shown worse performance than other euro-periphery countries, such as Spain, implying deeper structural reasons for Italy’s economic malaise.

By: Francesco Papadia Topic: European Macroeconomics & Governance Date: July 26, 2017
Read article More on this topic More by this author

Blog Post

The international effects of ECB’s monetary policy

What’s at stake: the literature on monetary policy spillovers is abundant of studies investigating the impact of the US Federal Reserve’s monetary policy announcements and actions on emerging market economies. More recently, economists have been investigating the effect of the ECB’s credit easing as well.

By: Silvia Merler Topic: European Macroeconomics & Governance Date: July 24, 2017
Read article Download PDF More on this topic More by this author

Policy Contribution

Precautionary recapitalisation: time for a review?

While precautionary recapitalisation is a legitimate instrument for bank crisis management, the conditions set for it by BRRD (Bank Recovery and Resolution Directive) are restrictive and have so far been effective to prevent its inappropriate use on insolvent banks. Nevertheless, the European Stability Mechanism should be empowered to participate in future precautionary recapitalisations.

By: Nicolas Véron Topic: Finance & Financial Regulation Date: July 13, 2017
Load more posts