Opening remarks of Commissioner Hahn in the Annual EU Budget Conference 2022
“Check against delivery”
Ladies and Gentlemen,
Dear colleagues and fellow Budget fans,
We are facing a war, which was triggered by Russia against Ukraine, and which is also a war against our European values. This has made it very clear: with the new international security architecture, we need to strengthen Europe’s role on the global stage – standing at the side of our Ukrainian friends – in particular we have heard today in the morning about further attacks against different cities across Ukraine, it is necessary to reassure them that there will be further support, that there will predictability of our financial support. This is something which is definitely triggered by Putin and what he has caused is a situation which affects the entire world. He weaponised the plight of millions, not only Ukrainians, but in particular Ukrainians who are seeking refuge. We the Europeans fear the energy bill, and not only we the Europeans, many people around the globe. Additionally on top, many families in other regions are even facing anger.
As European Union is an ever-evolving Union, we need to learn and improve with every challenge we face. We did so during the pandemic when our budget together with NextGenerationEU invested in the future – in a greener, more digital and resilient Europe. And we will also emerge stronger now: indeed as a geopolitical Europe.
Therefore, it is time to discuss with you the role of the EU budget: How can we ensure the necessary means to cater for the needs of the hour – including leading the support for our Ukrainian friends? How can we improve our ability to act and our strategic autonomy? And how can we reinforce Europe’s international role to maintain our European way of life?
Drawing lessons from previous crises, let me bring three elements to start our debate:
- Funding following foresight – is our starting point,
- A forward-looking budget needs to be also outward-looking,
- Europe’s security is indivisible and thus needs a common approach.
Concerning the first, the current energy situation is a striking example to illustrate why foresight is key. It proves that we were right to put the green transition at the heart of our action and our budget. Facing the current crisis, the Green Deal is more important than ever:
Every single solar panel, every wind farm and every other green investment becomes an effective instrument to counter Putin’s energy war.
By scaling-up key green technologies, we will make our energy cheaper, cleaner and safer. Our budget’s green investment is thus an investment in independence and in the future of our planet and the continent. Already, European companies benefit from being a front-runner in the green transition – and by developing new technologies, we can inspire others and set global standards.
The current challenges also show that a forward-looking budget needs to be also outward-looking: Again, the green transition is a good example. If we want to become the avant-garde of the twin green and digital transition, it is evident that we need raw materials: Lithium for batteries, rare-earth-based permanent magnets for wind turbines and electrolysers for hydrogen – to name just a few examples.
While our demand is rapidly growing, we are depending on one or very few countries. Drawing lessons from our energy situation, we need to strengthen our independence and thus widen our network of strategic partnerships. It is about exploiting existing lithium potential mines in Europe, there are a lot available which could make us independent, but it is also on us to have the political strength, courage to make it possible. This is an urgent matter; a matter of preserving Europe’s ability to act; a matter of European strategic autonomy. The current long-term budget dedicates almost 20% to policies that are relevant for Europe’s strategic autonomy, such as digital policy, space and research – more than ever before.
As we are the most internationalised continent in terms of trade, this does not mean protectionism. We are committed to openness and multilateralism – and we can use this approach also to defend our legitimate interests and ensure a level playing field. Charles de Gaulle’s once said that countries have no friends but only interests. While some countries seem to take these words too serious, we can do better: we can strengthen our sovereignty by embedding our interests in a partnership strategy.
Cooperation with like-minded partners is more crucial than ever – and we need to reflect this approach in our budget as we did with the Global gateway, which allows us to support development in third countries based on values and based on a strategic approach. The Global gateway is a good example, it supports the twin transition, sustainable growth and education, at the same time, it proves we keep our promises in particular to our African partners despite the additional challenges caused by Putin’s war against Ukraine.
Finally, Europe security is indivisible. Therefore, we also need a common approach for defence. Our strength as a “soft power” depends at the end of the day also on our “hard power”.
The European Defence Fund – with nearly €8 billion in our budget – reflects this need. It supports competitive and collaborative defence projects throughout the entire cycle of research and development. And this is only the beginning. This is the first time that we have a dedicated budget defence in our MFF.
Doing more together will save resources, allow interoperability and support our European innovation. European defence funding underpins our role as a global player.
Let me add some words on the specific situation in Ukraine and the role of the EU budget: the situation of the war in Ukraine today is different from what we have assumed in May of this year: the realities on the ground are that we are facing a prolonged situation of turmoil without a clear end date. The recent decision of Russia for partial mobilisation has, unfortunately, aggravated the situation in this respect. The current situation has two important implications for EU support:
- Short-term relief will need to continue for a longer period of time than we initially hoped. Ukraine needs €3-3.5 billion per month as relief support to keep the State functioning.
- Long-term reconstruction efforts, on EU level to be delivered by the Rebuild Ukraine Facility, have now a more longer time horizon. The latest need estimates from the World Bank amount to €349 billion.
At EU level the provision of short-term relief to Ukraine in the form of Macro-Financial Assistance has so far been done on an ad-hoc basis, with important provisioning and national guarantee requirements. In view of the continued need for short-term relief, a more structural solution could be contemplated to allow for higher degree of predictability. I am working hard together with our Member States to find the solution which allows us to provide in a structured, predictable and automatic way the necessary financial support, at least for next year. Very importantly, such a short-term solution should ideally provide for a bridge towards the long-term reconstruction phase once the circumstances for this are in place.
Our budget is currently under heavy pressure, no doubt, yet it has great potential to strengthen Europe’s global position – even under the challenging circumstances we are facing today.
At a moment when our continent is at the crossroads, this conference comes timely. Because only if we make the right budget choices today, we will have good political choices tomorrow. Therefore, I am grateful that a group of young Europeans helped us to prepare for today’s conference. A warm welcome to those of you who are joining us today! In the context of the European Year of the Youth – and far beyond – your contribution is very valuable. The decisions we are taking today is what you will face and experience in the future, it is important that you are already involved in the decision shaping.
Your presence reminds us, that we need to act now to safeguard our future power and potential. If we want to have a powerful geostrategic Europe, we need to empower our European budget accordingly.
The war at our doorstep should be our wake-up call – or as the writer, Max Frisch once said: a crisis is a “productive state”, one just has to take away the flavour of catastrophe. I hope that we can – with our engaged discussions today on our common European budget – contribute to building a stronger and more geopolitical Europe.
Therefore, I am looking forward to listening and exchanging with you today.
I wish you an inspiring budget talk – and therefore I hand over to President von der Leyen, whom I warm-heartedly thank for her keynote address. Thank you very much!
