SPEECH
A Mediterranean Odyssey: from ancient origins
to future strength
Speech by Christine Lagarde, President of the ECB, at the
Mediterranean Meetings
Marseille, 21 September 2023
I am honoured to be with you at the Palais du Pharo, overlooking the historic port of Marseille, the cradle
of today's eponymous city.
For thousands of years, this port has served as the city's spiritual and economic heart, acting as its
gateway to the world. Even today, this city still embodies the essence of the Mediterranean: a site with a
shared history, a bridge connecting the diverse peoples of its shores and a place compelled by its very
nature to open itself up to the world.
It is in this spirit that you have gathered here for the Mediterranean Meetings - to consider the region's
calling and destiny and to offer unity and peace in a landscape marked by global division, inequality and
instability.
In that same spirit, I would like to divide my speech today into three distinct parts.
First, I will recall the rich history of the Mediterranean region and the deep roots shared by all those who
inhabit its shores. Second, I will look at some of the challenges the region is facing today. Lastly, I will
reflect on how we can foster the region's economic reintegration and reclaim its unity and strength in a
new era.
The Mediterranean region: past and present
For a long time, the Mediterranean remained a "mare clausum", an impregnable sea that served as a
natural barrier for its people.
From Homer to Horace, the Mediterranean was a source of both fear and fascination.
But over thousands of years, through intrepid seafaring and humans' innate desire to go beyond the
horizon, the Mediterranean was turned from a barrier into a bridge, binding the different parts of the region
together into a cohesive whole.
The Phoenicians were the first to develop the sea's potential. They revolutionised maritime technology
1 ]
through innovation, inventing the keel,[ endowing their vessels with greater speed and allowing new sea
2 ]
routes to open up.[
What the Phoenicians began the Greeks continued, setting up city states along the Mediterranean's
shores, including the one we are meeting in today.
But the region's integration took another crucial step when Rome became the pre-eminent power.
Supported by the Pax Romana, a common currency and an integrated legal framework, the scale, reach
3 ]
and intensity of commerce within the region reached its peak.[ This laid the foundations for something
akin to a Mediterranean single market, where goods, people, but also cultures and religions, flowed freely.
This history underscores how much we are collectively shaped by the history of the Mediterranean region.
For thousands of years, the people of its shores saw each other as their closest neighbours - our
economies and societies rose and fell together.
But this is not the Mediterranean we see today.
It is now a mosaic of distinct regions and countries spanning southern Europe, North Africa and the
eastern Mediterranean, with low levels of trade and cultural exchange.
Rather than being an economic centre, it has been pulled in different directions fundamentally reshaping
centuries-old trade patterns.
As a result, intra-Mediterranean trade today accounts for less than one-third of the region's foreign trade.
Furthermore, trade between southern Mediterranean countries accounts for a mere 5%, marking one of
4 ]
the lowest levels of regional economic integration in the world.[
The shared challenges of today
Yet even if the countries of the contemporary Mediterranean have drifted apart, they face an array of
common challenges.
I see two main shared challenges for the region today - what I refer to as restoring the economic balance
and the natural balance.
The economic balance
First comes restoring the economic balance.
The Mediterranean today is off balance in the sense that we are seeing large, persistent economic
disparities.
Those disparities exist between countries. Those along the northern shore that are part of the EU boasted
a per capita GDP of over USD 40,000 in 2019, more than twice that of the countries on the southern
5 ]
shore, at less than USD 19,000.[ In addition, they attract more than two-thirds of net inflows of foreign
6 ]
direct investment into the region.[
Disparities also exist within countries - in the form of inequality - although to do justice to this topic would
require another speech.
These disparities also exist between generations: the Mediterranean boasts one of the world's youngest
populations, with nearly one in every three people under the age of 25. In the southern and eastern
7 ]
Mediterranean, nearly half of the population falls into this category.[
Youth unemployment rates in the southern and eastern Mediterranean were among the highest globally in
2019, ranging from a minimum of 19% in Tunisia to a maximum of 42% in Algeria. Equally concerning is
the participation rate of women in the region's job market, one of the lowest rates in the world at only 22%
8 ]
in 2019.[
This demographic divide is projected to widen. While the population on the northern shores is expected to
drop by over 4%, the southern and eastern shores are expected to see an increase of more than 20% by
9 ]
2050.[
At the same time, countries in the western Mediterranean in particular, including Algeria, France, Italy,
10 ]
Morocco, Spain and Tunisia, have some of the highest levels of university enrolment.[ But a substantial
number of university graduates still grapple with unemployment, which exceeds 30% in many southern
Mediterranean countries. There is in fact a paradoxical trend where higher levels of education seem to
11 ]
correlate with higher rates of unemployment.[
The consequences of these problems are not confined to the less affluent parts of the region. Lack of
opportunity leads to the loss of countless lives, as migrants strive to reach the more prosperous northern
shores. And the countries where those migrants arrive are faced with anger, division and pressure on their
social systems.
For the good of the entire region, we must therefore strive to restore economic balance. This means
ensuring that the region's youth can integrate with confidence, instead of becoming unwitting and unwilling
contributors to the proliferation of instability and conflict or the perpetuation of migrant flows.
The natural balance
Yet restoring the economic balance is not enough. The structure of the economy affects both people and
the planet, therefore economic questions cannot be considered in isolation from the natural environment.
Indeed, the economic balance will be made immeasurably worse if we fail to restore the natural balance in
parallel. Most importantly, this means addressing the Mediterranean region's vulnerability to climate
change.
12 ]
This pressing issue was highlighted by Pope Francis in his encyclical, Laudato Si,[ in which he called on
humanity to protect and respect an integral ecology.
The effects of our failure to heed this call are already becoming visible.
The Mediterranean basin is witnessing some alarming trends, with temperatures rising 20% above the
global average. And it places approximately 250 million people on a trajectory to being classified as "water
13 ]
poor" within the next two decades.[
If current policies remain unchanged, temperatures in the region are expected to surge to a level 2.2oC
14 ]
higher than pre-industrial levels by 2040.[
Stressed ecosystems and increased pollution pose major risks to our economies and our lives. And they
disproportionately affect vulnerable populations, including elderly people, children, and those on low
incomes.
The recent drought in the western Mediterranean, for example, has illustrated just how devastating the
consequences of climate change could be. In Morocco, cumulative rainfall in the period prior to the sowing
of winter crops was 50-80% below the long-term average, leaving farmers facing the worst drought in 30
15 ]
years.[
And the combination of ever scarcer resources, ever higher migration flows and ever worse conflicts is
likely to exacerbate the situation. As we saw in 2011, when rising food prices triggered the Arab Spring in
Tunisia, we can expect profound political upheaval as well.
This only serves to underscore how, when we disregard the natural balance, we disturb the balance of our
societies too.
So, we urgently need to restore and respect this natural balance. And we need to recognise that this is
intimately linked to our ability to deliver justice for young people and for those most in need, and in turn to
ensure the harmony of our societies.
Reintegrating the region for the common good
How can we restore this balance?
We cannot seek answers by searching on our own, which would only exacerbate divisions and
inequalities. As these challenges transcend borders, the only way to restore balance is by addressing
them together.
This is a matter of reconnecting with the deep roots of this region and of rediscovering a sense of the
common good.
Achieving the common good implies that each part of society must be able to reach fulfilment more fully
and easily. In other words, the good of society as a whole ultimately depends on the well-being of each
individual part.
For the Mediterranean region, there are two practical dimensions to achieving the common good in the
current era.
Recognising that there is more that unites us than divides us
The first is recognising that there is more that unites our societies than divides them.
The world has entered a geopolitical era marked by profound changes in international relations. We are
seeing greater competition among great powers, a waning respect for international rules and the declining
influence of multilateral institutions.
In this new landscape ethical foundations and trustworthiness are once again becoming more important in
evaluating political and economic partnerships. Across the world, we are seeing countries forging closer
ties based on trust and shared interests - a process known as nearshoring or friend-shoring.
For instance, since Russia's unjustifiable invasion of Ukraine in February 2022, trade among geopolitical
allies has grown by 4-6% more than trade between geopolitical adversaries, which is unusual in such a
16 ]
short period of time.[
These transformations offer an opportunity to recognise what we have in common and to considerably
strengthen connections in the region. The Mediterranean, with its geographical proximity, industrial
potential and young workforce, is poised to become an attractive hub for nearshoring, especially for firms
wanting to be closer to Europe.
This could significantly bolster economic ties throughout the region - a potential that is visible in areas that
are capitalising on their position. Commercial zones like Tanger Med, the Suez Canal Economic Zone and
the Mersin Free Zone in Türkiye have already managed to become a key part of sophisticated industrial
17 ]
supply chains.[
For example, 11 of the world's top 20 car companies are now based at Tanger Med's industrial platform.
Its port in Morocco handled almost half a million finished vehicles in 2022, an 11% increase on the
previous year. And Morocco will soon manufacture the first 100% African-designed electric car.
By further exploiting the new geography of trade - shaped by common values and mutual trust - the entire
region can build on these successes. And by doing so, we can reduce inequality not only between
countries, but also between generations. In a world where supply chains are shortening, the young and
educated population of the Mediterranean could become one of the region's most valuable assets.
This requires investment in skills, infrastructure and stability.
The region needs targeted education policies geared towards developing the skills needed in sectors that
are set to grow. In particular, given their growing significance in shaping the future employment landscape,
basic digital skills could play a pivotal role in creating job opportunities for the unemployed or disengaged
young people. These tailored policies must also emphasise the inclusion of girls and women within our
economies, thereby fostering a more just and equitable society.
The integration of efficient supply chains across the region will also require substantial investment in
infrastructure, namely ports, railways and industrial bases. According to the World Bank, investments
totalling at least USD 100 billion per year over the next decade will be needed to maintain and upgrade the
18 ]
infrastructure in the region.[
In a world where new trade barriers are appearing by the minute, it is in the interests of all countries in the
region to bind their destinies together. And turning Mediterranean neighbours into partners offers a route to
shared prosperity
A prerequisite for this to happen is economic stability, especially price stability. High inflation is a challenge
for the whole region today. It needs to be brought down, not least because low and stable inflation is key
to encouraging long-term investment. Investing in major infrastructure projects takes many years, and this
will be discouraged if people expect costs to spiral upwards during construction and make those projects
unprofitable.
For our part, at the ECB we are committed to maintaining price stability for the euro area. That is why
since July last year we have raised interest rates ten times, and why we acted again last week to reinforce
progress towards our inflation target.
Sharing the endowments of the region in a sustainable way
The second dimension to advancing the common good is to share the endowments of the region in a more
sustainable way.
Today, two developments offer new hope in this area.
19 ]
First, the Paris Agreement, to which all Mediterranean countries[ are signatories, set a clear path
towards carbon neutrality. This means we have to speed up the transition from polluting energy sources to
clean ones.
Second, the Russian invasion of Ukraine has been a painful reminder of Europe's energy dependency.
Bolstering energy security is now a priority, and this calls for diversifying energy imports as well as
investing more in renewable technologies.
The Mediterranean region is perfectly placed to benefit from this opening, as it can play a crucial role as
both a source of secure supply and a provider of renewable energy. And by sharing its endowments in this
way, the region can strengthen the connection between its southern and northern shores and protect the
climate from excessive heating.
In the short to medium term, establishing a Mediterranean gas hub to diversify energy suppliers and
routes will be key. The region boasts substantial gas resources, as well as emerging gas reserves in the
eastern Mediterranean. All of this makes it well placed to become a major artery in the supply of energy.
[ 20 ]
Looking further ahead, the transition to renewable energy should be closely intertwined with the
development of clean energy production across the Mediterranean. The region is endowed with
considerable solar and wind energy, as well as hydrogen.
Installing power systems such as concentrated solar power plants could potentially generate electricity
21 ]
equivalent to 100 times the combined consumption of the Mediterranean and Europe.[ North African
22 ]
suppliers are also expected to play a central role in providing the region with low-carbon hydrogen.[
Seizing this opportunity to share the region's natural resources - and thereby combine destinies - could
be transformative in so many ways.
It would bring energy security to the Mediterranean's northern shores while fostering growth and inclusion
on its southern shores. It would endow young people with the skills, especially in green and digital sectors,
that are necessary for a just and equitable society. And it would help all of us to meet the challenge of our
times: halting the warming of the planet.
Conclusion
Let me conclude.
In the late fourth century BC, a daring young man from Marseille named Pytheas embarked on an
extensive journey.
It took him north-west, across the Straits of Gibraltar to the mysterious island of Thule and beyond.
Pytheas would become known as the first scientist to describe the wonders of the Arctic, from the Northern
Lights to the perpetual snow.
His story exemplifies a way of life based on curiosity and a burning desire to unravel the mysteries of the
world. There is no doubt that he shared this inquisitive nature with the pioneering Phoenician seafarers
who came before him.
Their curiosity helped to open up the Mediterranean to its people, which in turn laid the foundations for the
extraordinary exchange of goods, cultures and religions on which numerous great civilisations were
founded.
Today, the Mediterranean may have lost some of its former character. But it has not forgotten its roots, nor
has its potential been dimmed.
This can serve as the basis for renewing a sense of shared purpose, helping to drive the region's
economic reintegration and repair its social fabric.
And it can help us forge closer bonds that will ultimately heal the divisions and inequalities that we cannot,
in good conscience, tolerate in a just society. Each of us where we can contribute.
1.
See Cartwright, M. (2016), " The Phoenicians - Master Mariners ", World History Encyclopedia, 28 April.
2.
Aubet, M.E. (1993), The Phoenicians and the West: Politics, Colonies and Trade, Cambridge University
Press, Cambridge, pp. 133-166.
3.
See Wilson, A. and Bowman, A. (eds., 2017), Trade, Commerce, and the State in the Roman World,
Oxford University Press, Oxford, pp. 5-6, November.
4.
See European Commission, " EU trade relations with its Southern Neighbourhood. Facts, figures and latest
developments ".
5.
In purchasing power parity (PPP) in 2019 for Albania, Bosnia and Herzegovina, Cyprus, Algeria, Egypt,
Spain, France, Greece, Croatia, Israel, Italy, Lebanon, Libya, Morocco, Malta, Montenegro, Palestinian
Territories, Slovenia, Syria, Tunisia and Türkiye .
6.
See Manoli, P. (2021), " Economic linkages across the Mediterranean: Trends on trade, investments and
energy ", Policy paper, No 52/2020, Hellenic Foundation for European and Foreign Policy, January.
7.
See Union for the Mediterranean Secretariat, UfM Youth Strategy 2030. Euro-Mediterranean youth
towards a common goal .
8.
International Labour Organization, " Trade, investment and employment in the Southern Mediterranean
Countries ", Thematic Report of the "Mainstreaming Employment into Trade and Investment in the
Southern Neighbourhood" project, Executive Summary.
9.
See Ambrosetti, E. (2020), " Demographic challenges in the Mediterranean ", IEMed Mediterranean
Yearbook.
10.
See Hadibi, Z. (2023), " The migration of young Mediterranean talent and the challenge of employability ",
Friedrich Naumann Foundation for Freedom, July.
11.
Scarrone, N. (2021), The Education Paradox in the Southern and Eastern Mediterranean - Youth, Human
Capital and Transition to Work ", IEMed Mediterranean Yearbook 2021
12.
See " Encyclical letter Laudato Si' of the Holy Father Francis on care for our common home ".
13.
See Union for the Mediterranean, " First Scientific Report on Climate and Environmental Change in the
Mediterranean ".
14.
See "Summary for policymakers" in Cramer, W., Guiot, J. and Marini, K. (eds.) (2020), Climate and
environmental change in the Mediterranean basin - Current situation and risks for the future, First
Mediterranean Assessment Report by Mediterranean Experts on Climate and environmental Change,
Union for the Mediterranean, Plan Bleu, UNEP/MAP, Marseille, France, pp. 11-40.
15.
Escribano, G., Lázaro Touza, L. and Urbasos, I. (2023), " Revamping the Euro-Mediterranean Energy and
Climate Space ", Elcano Policy Paper, June.
16.
World Trade Organization (2023), World Trade Report 2023 - Re-globalization for a secure, inclusive and
sustainable future .
17.
. See Deandreis, M., Panaro, A. and Ferrara, O. (2022), " Maritime Scenario in the Mediterranean: Analysis
of the Competitiveness and Investments of the Major Logistics Players ", IAI Papers, Istituto Affari
Internazionali, May.
18.
World Bank (2020), Convergence: Five Critical Steps toward Integrating Lagging and Leading Areas in the
Middle East and North Africa, Washington, D.C.
19.
Although Libya signed the Paris Agreement in 2016, it has not ratified the convention.
20.
See European Commission, " Diversification of gas supply sources and routes ".
21.
Organisation for Economic Co-operation and Development (2021), Regional Integration in the Union for
the Mediterranean: Progress Report , OECD Publishing, Paris.
22.
See European Commission, " Hydrogen ".