Mario Draghi: Reviving the spirit of De Gasperi - working together for an
effective and inclusive Union
Speech by Mr Mario Draghi, President of the European Central Bank, at the presentation
ceremony of the De Gasperi award, Trento, 13 September 2016.
* * *
I have many reasons to be grateful and honoured by your decision to award me the Premio
De Gasperi today. His character and his experience provide us with an inspiring message,
loud and confident: "In Europe we go forward together in freedom".
This message is rooted in the 20th century history of our continent.
The raison d'être of any government is to provide security for its citizens, both physically and
economically. And in democratic societies, that means providing safety and security by
preserving individual liberties and individual rights, by promoting social fairness and equal
opportunities.
The statesmen who, after World War Two, looked back over the preceding half-century could
reach only one conclusion: that the governments which emerged from nationalist and
populist movements, and which were carried into power by a mixture of charisma and lies,
completely failed to offer their citizens security, fairness and freedom. They had betrayed the
very reason for their existence.
In outlining the future shape of international relations, De Gasperi and his contemporaries
concluded that only cooperation between European governments within a common
organisation could ensure the joint security of their citizens.
They saw that implanting democracy in the nations of Europe would not be enough. Europe
also needed democracy among nations. They understood that building barriers between
countries would make them more vulnerable and less secure, not least due to their
geographical proximity; and that withdrawing behind one's borders would make governments
less effective.
De Gasperi's vision of how this joint process should be shaped was articulated in various
speeches he gave in those years.
Common challenges should be addressed via supranational instead of intergovernmental
strategies. Speaking to the assembly of the European Coal and Steel Community in 1954,
De Gasperi noted that "...from 1919 to 1939, some seventy international treaties were
concluded - and all became mere pieces of paper when it came to their implementation"
because of the lack of "joint control of common resources".1 And the experience of politicians
was validated by distinguished economists, such as Ragnar Nurkse, who showed how those
treaties ended up fostering protectionism.2
Integration above all had to meet the immediate needs of the people. As De Gasperi
observed, "We must begin by pooling only what is strictly essential to the achievement of our
immediate aims, and do this by means of flexible formulae which can be gradually and
progressively applied".3
And joint action had to be focused on areas where, evidently, individual action by
governments was not sufficient: joint control over the raw materials of war, in particular coal
and steel, was one of the first examples.
In this way, the founders of the European project were able to pair effectiveness with
legitimacy, since the process was legitimised by both popular consensus and the support of
governments. It was focused on areas where the action of European institutions and the
benefits for the people were directly and visibly related. And joint action did not limit the
authority of governments, but rather buttressed it, and thus found their backing.
But it was not only the disastrous experience of the past that motivated De Gasperi and his
contemporaries. It was also the immediate successes which were made possible by the
initial decisions of the post-war period.
The achievements of working together
The establishment of peace - the crowning achievement of the European project -
immediately produced growth and laid the foundation for prosperity. Set against this was the
devastation wrought by the two world wars. Real GDP per capita fell by 14% during World
War One and by 22% during World War Two, wiping out many of the gains that had been
made during the preceding years.
Economic integration built on peace in turn produced significant improvements in living
standards. Since 1960 cumulative growth in real GDP per capita has been 33% higher in the
EU15 than in the US. Incomes in poorer European countries have also converged towards
those enjoyed by richer ones.
And EU citizens have gained the right to live, work and trade throughout the Union - and to
benefit from equal protection, wherever they are, provided by European courts of law.
Indeed, the process of coming together in a single market, one of the greatest achievements
of the European project, was never solely about increasing market integration and efficiency.
It was above all a choice of values of a free, open society - a choice made by the people of
the European Union.
The European project has firmly established political freedoms, too. From the outset the
promotion of free democracy has been at its heart. As a guarantor of democratic principles,
the EU has acted as a point of reference for countries eager to escape dictatorships or
totalitarianism, such as Greece, Portugal and Spain or those of central and eastern Europe.
The Copenhagen criteria and the Charter of Fundamental Rights ensure that all EU countries
respect a set of well-defined political principles enshrined in national and European law.
There is no doubt that these freedoms have contributed immensely to the well-being of
Europe. And it is because of these freedoms that many migrants and refugees are looking for
a better future in the European Union today.
In short, European integration has provided its citizens with physical and economic security -
perhaps for longer than ever in the history of Europe - while also spreading and instilling the
values of an open society. The founders who began this process, and we who have carried it
on, have demonstrated to the world that freedom and security are not mutually exclusive. By
consolidating democracy we have secured peace.
New challenges for Europe
The more recent years of the European project have been characterised, however, by
growing dissatisfaction. This was expressed perhaps most clearly in the referendum on
23 June, when the people of the United Kingdom voted to leave the European Union.
For some EU countries, these years have entailed the most serious economic crisis since the
war, with unemployment, especially among the young, reaching unprecedented levels and
welfare states constrained by low growth and stretched public finances. It has been a time
when, in an ageing continent, uncertainty has grown about the sustainability of our pensions
systems. And a time when large-scale migration has called into question established ways of
life and long-accepted social contracts, and stirred up feelings of insecurity and
defensiveness.
The disaffection certainly has other causes, too. The end of the Soviet Union and of the
nuclear threat it posed has diverted attention from the notion of "safety in numbers". The
shifting balance of power among the largest nations; ongoing urgent geopolitical tensions,
wars and terrorism; climate change and the effects of continual, inexorable technological
progress - all of these factors have, in a short period of time, interacted with the economic
consequences of globalisation and intensified feelings of insecurity, especially in a world that
was inattentive to how the extraordinary benefits of that globalisation were being distributed.
Indeed, while in emerging economies globalisation has liberated hundreds of millions of
people from crushing poverty, in advanced economies the real incomes of those in the lower
half of distribution have remained at the same level as a few decades ago. It is not surprising
then that many have felt left behind. Anxiety is growing.
The policy responses to this have at times been reminiscent of the interwar period:
isolationism, protectionism, nationalism. And this also happened in previous eras. At the end
of the first phase of globalisation, in the early 20th century, several countries, including those
with a tradition of immigration, such as Australia or the United States, introduced restrictions
on immigrants, in reaction to fears among workers that new entrants who were willing to
accept lower pay would take away their jobs.
But while such policy responses can be justifiably rejected, it must not prevent us from
reviewing how the mode of European integration itself has also contributed to disaffection.
Here again, De Gasperi's own prescient words help us understand what has happened:
"If we restrict ourselves to creating shared institutions, without a higher political
will invigorated by a central body in which the wills of nations come together (...)
we risk the possibility that compared with the various national strengths, this
European venture may seem cold and lifeless - it could even at times appear a
superfluous and even oppressive extravagance".4
The structure of the European Union is solid and its fundamental values remain its base. But
the integration process needs to be guided towards outcomes that are more efficient and
more directly aimed at the people, their needs and their fears - and less focused on
institution-building. European institutions are not accepted per se by the people, but only as
necessary instruments to provide those outcomes.
Yet on other occasions it has been institutional incompleteness that has prevented
authorities from being able to handle the challenges arising from external shocks. Consider
the Schengen Agreement. It largely abolished Europe's internal borders, but it did not
envisage a strengthening of the continent's external borders. So when the migration crisis
erupted, it was seen as a destabilising loss of security.
The response of both the European Union and the Member States to these needs and fears
has so far been insufficient. Surveys show that, together with a drop in support for economic
integration, trust in both the European Union and even more so the Member States has
fallen.5
This does not apply only to Europe. The data show that in the US, too, people's trust has
declined in almost all institutions, including the Presidency, Congress and the Supreme
Court.6
The fact that this is a worldwide phenomenon cannot however exonerate us Europeans,
because we are the only group of people in the world to have built a supranational polity in
the certainty that it was indispensable to provide security where individual countries could
not.
Is Europe still the answer?
So the question is simple, but fundamental: is working together still the best way to solve the
new challenges which we face?
For various reasons the answer is an unequivocal yes. If those challenges are
continentwide, acting exclusively at national level is not enough. And if they are global, collaboration
between the Member States gives Europe a strong voice.
The recent climate change negotiations serve as an example. This global issue can only be
addressed through internationally coordinated policies. And the critical mass of Europe
speaking with one voice has produced results well beyond the reach of individual countries.
Only the pressure exerted by European countries forming a common front was able to make
the Paris climate conference a success. And only the EU's existence allowed that common
front to be built.
In a world where technology is diminishing physical barriers, Europe is exerting influence in
other ways too. Its ability, with its market of 500 million consumers, to impose global
recognition of property rights, or respect for privacy rights on the internet, is obviously
stronger that any of its members could hope for alone.
National sovereignty remains in many respects the fundamental element of each country's
government. But for challenges that transcend national borders, the only way to preserve
sovereignty - that is, to make the voice of citizens heard in a global context - is for us
Europeans to share sovereignty within the European Union, which has served as a multiplier
of our national strength.
And where responses can only be provided at the supranational level, we should adopt the
same approach that allowed De Gasperi and his contemporaries to secure legitimacy for
their actions: we should focus on those actions that deliver tangible and immediately
recognisable results.
There are two kinds.
The first kind of action is to complete those initiatives that are already under way, because
stopping half-way is the most dangerous option. We would partially disempower national
states without creating - at Union level - the capacity to provide at least as much security to
the people.
The process of opening borders requires common institutions to safeguard freedom and
fairness among its members. A free and single market is not anarchy: it requires that all its
members are subject to the same laws and rules; and that they all have recourse to the
same courts where those laws can be applied uniformly. This is why a true single market is a
political construct. And if those institutions do not exist or do not function properly, borders
will ultimately be restored to provide the security that people demand.
Thus to protect the single market in all its forms - and the commitment to an open society
which it represents - it has to be completed.
What is different from the past, however, is that today we must devote more attention to the
redistributive aspects of integration, and especially to those people who have paid the
highest price. I do not think there will be significant progress in terms of opening up markets
and competition if Europe does not listen to the demands of those left behind by a society
built on the pursuit of wealth and power; if Europe, as well as being a catalyst for integration
and an arbiter of its rules, does not also moderate its outcomes.
That moderating role is today assigned to nation states, yet in many cases they are lacking
the strength to fulfil it fully. It is a task that has not yet been defined at the EU level. But a
greater role for the EU would satisfy the characteristics that De Gasperi identified:
buttressing the activities of governments and therefore legitimising European action. Recent
discussions about tax fairness and a European unemployment insurance fund, about
professional retraining funds and other projects with the same idealistic goals, all go in this
direction.
But because Europe should only act where the national governments are unable to act
alone, the response must still come first and foremost from the national level. We need
policies that unleash growth, reduce unemployment and empower individuals, while offering
essential protections for the most vulnerable.
For the second kind of action, if and when we initiate new common projects in Europe, they
should adhere to the same criteria that brought success 70 years ago: they must be based
on a consensus that action is truly necessary; the projects should complement the actions of
governments; they should be clearly linked to people's immediate concerns; they should
unequivocally concern matters of European or global significance.
If these criteria are applied, there are many areas in which Europe does not need to get
involved. But there are also important areas where it clearly needs to, and where European
initiatives are not just legitimate, but even essential. Today this notably includes the fields of
migration, security and defence.
Both types of action are essential because unresolved internal divisions, for instance
concerning the completion of Economic and Monetary Union (EMU), are likely to distract us
from addressing the new geopolitical, economic and environmental challenges. This is a real
danger in Europe today - and it is one we cannot afford. We need to find the strength and
wisdom to resolve our differences and go forward together.
To do that we need to rediscover the spirit that led a small number of great leaders, in much
more difficult conditions than we face today, to overcome mutual suspicion and succeed
jointly instead of failing separately.
So to conclude, let me quote again Alcide De Gasperi, whose words resonate as much today
as they did in 1952:
"Economic cooperation is, of course, a matter of compromise between the natural
desire for independence of each participant and overriding political aspirations. If
European economic cooperation were dependent upon the compromises put
forward by the various administrations concerned, we should probably be led into
weaknesses and inconsistencies. So it is the political aspiration for unity which
must prevail. We must be guided above all by the overriding realisation that it is
essential to build a united Europe in order to ensure for ourselves peace,
progress, and social justice".7