of europe ’ s member states has drastically declined over the past decades. looking at the aggregate economic performance of eu countries, the eu ’ s share in global economic output has fallen from around a third in the 1980s to a sixth today. germany ’ s share has more than halved over the same period and now stands at around 3 %. and individual european countries will continue to lose their significance in the world, for one because our birth rate is far lower than that of other countries. more than 500 million people now live in the eu, representing 8 % of the world ’ s population. in 2050, this share will have declined to just 5 %. the german population will then make up no more than 0. 8 % of people in the world. in such an interconnected world, individual countries will therefore find it increasingly difficult to uphold their prosperity and social security provisions. globalisation reduces the capacity of individual countries to levy corporate taxes and finance their social security systems. free movement of capital allows enterprises to use differences between tax systems to their advantage and to distribute both profits and intangible assets across different countries. this leads to corporate tax bases being eroded. the oecd estimates that the global revenue shortfall owing to tax avoidance amounts to between 4 % and 10 % of corporate income tax receipts. moreover, globally - active companies can threaten to cut jobs and move production to other countries. countries are thus tempted to use lower labour and social security standards to their competitive advantage and enter into a race to the bottom, making it harder for them to defend their social standards. by pulling together, countries in europe are in a better position to withstand global developments. as a whole, europe is still large and economically significant enough to tax corporate profits and put an end to social dumping. the eu is a market that firms can hardly do without. power lies in numbers. that is especially true for trade. the eu is the most tightly integrated economic region in the world. twothirds of eu trade takes place with other member states. and around 50 % of cross - border financial holdings in the euro area are from other euro area countries. that is true for germany too. in practical terms, this means, for example, that germany exports more goods to france than to china. so it ’ s not surprising that turning away from europe could have disasterous consequences for our prosperity. one study shows that, for example, new trade restrictions in europe could reduce germany ’ s economic output by 8 %.

stability, sustainable growth, and opportunity for employment. as joseph schumpeter said, money is a reflection of the condition of our economy and our polity. looking from that angle, reinforcing the monetary union is an integral part of a broader endeavour to strengthen europe. ladies and gentlemen, this is of paramount importance especially today, when the international role of europe as a key standard - bearer of democracy and the rules - based international order has become even more essential than it may have been some years ago. for politicians, my message is : instead of using political energy for drawing red lines to agitate the home audience, we ’ d do better by pursuing positive goals of reform and focusing on building bridges across europe. a stronger europe and a more stable monetary union are essential for both internal and external reasons. and these goals can, as in the football field, only be achieved in unity and by teamwork. this is a vision we can only achieve in dialogue and with support of the citizens of europe. meine damen und herren, europa wird nur auf einer starken vision, durch bruckenbauen und im engen dialog mit den burgern erfolgreich aufgebaut. 1 the ” parlemeter ” of october 2018. 5 / 5 bis central bankers'speeches