Humboldt Speech on Europe by Minister of Finance Wopke Hoekstra

 Ladies and gentlemen,

It’s a great honour for a me, a Dutchman, to be speaking to you today here at Humboldt University on the eve of such an important European election.

It was 160 years ago yesterday that one of your university’s namesakes died: Alexander von Humboldt. Throughout his adult life, he was a scientific superstar.

There is an ocean current, a mountain range and a species of penguin named after him. He counted Thomas Jefferson, Henry David Thoreau and Goethe among his friends. Alexander and his older brother Wilhelm witnessed the French Revolution, the rise and fall of Napoleon and the Coalition Wars. They were educated in the ideas of the Enlightenment and Romanticism. Wilhelm championed individual sovereignty and developed the model of higher education (Bildungsideal) that bears his name.

The lives of these two extraordinary brothers are interwoven with European history and our common cultural heritage. Their insights helped lay the scientific, political and philosophical foundations that we are still building on today.

And in 1869 – ten years after Alexander’s death – 25,000 people marched through the streets of New York City to celebrate his hundredth birthday. Imagine that: 25,000! On a distant continent!

It is remarkable that today this man has been all but forgotten in some countries. In 2016 the German historian Andrea Wulf published a biography of Alexander von Humboldt to keep the memory of his work alive. In her book she describes his idea of the earth as a living organism and nature as the web of life. Humboldt said, ‘In dieser großen Kette von Ursachen und Wirkungen kann keine Tatsache isoliert untersucht werden.’ (In this great chain of causes and effects no single fact can be considered in isolation.)

Let’s take a look at the web of life that is the European Union: 28 member states and a population of more than 500 million. Culturally diverse. A true melting pot. Forged by revolutions, wars and natural disasters. Moulded by diplomacy, art, and cultural and economic industry. And this is what Europe has brought forth:

Bach and The Beatles, Baroque and Bauhaus. The Sistine Chapel and Shakespeare. Absolutism and the Enlightenment. The Industrial Revolution and the Sexual Revolution.

European values and legal principles are an inspiration and a benchmark far beyond Europe’s borders. Our languages are spoken all over the world.

What a magnificent continent! And what a privilege it is to live here. This web of life is my home.

My love for Europe began when I was child. During long holidays, my parents took me to churches, museums and monuments in Italy, France, Germany and the UK. We would have conversations around the kitchen table about the history of the continent and the politics of the moment. My father and grandfather guided me and taught me about our shared European history.

When I was a student and for years after, I had the good fortune to live in cities like Berlin, Fontainebleau and Rome. That is when I became fully aware of the richness of the European continent. Because that web of life is also a way of life. A way of life where individual freedoms are of paramount importance, where you are free to choose who you love and be who you are. And where the differences between rich and poor are never as extreme as in other parts of the world.

This is because we consider both the individual and society as a whole important. And we have reaped the benefits of this. According to the OECD, 19 of the 20 countries ranked highest for income equality are in Europe. And according to the UN Human Development Index, seven of the ten most successful countries in the world are in northwestern Europe.

And lastly, Berlin. This city that feels a bit like home to me. In 2002 I arrived at Ostbahnhof with a big suitcase in tow, and I moved into an apartment in Fehrbelliner Straße. For two years I enjoyed the energy of Baustelle Berlin. I’m grateful for the warmth and friendliness with which I was received. As our neighbour, Germany is a crucial ally. And since 2002, for me personally it has been first and foremost a good friend.

Nowhere have I felt the importance of Europe as strongly as here in Berlin. I have a profound belief in the diversity, quality, cultural richness and underlying fundamental values of Europe. We must cherish all that Europe has achieved since the war: an unprecedented period of peace, prosperity and freedom.

But revelling in the past with our backs to the horizon is simply not good enough. We need to focus on the future. But the question is: how? What does the future hold for our reasonable, well-mannered, well-manicured, not to say well-behaved continent of a mere half-billion people in a world of much more populous power blocs? Blocs that are increasingly playing the game by an entirely different set of rules?

Ladies and gentlemen, I love Europe. I am a fierce advocate of the European Union and of greater European cooperation. None of the EU member states can tackle our current and looming problems alone. That even goes for Germany and certainly for a country the size of the Netherlands.

But it is precisely because I am so certain of the need for European cooperation that I have grave concerns about the European Union. Let me explain.

Our continent is not capable of defending itself. Even with American assistance, we will have to pull out all the stops to maintain our military capability. We are currently unable to fulfil our most basic responsibility to our citizens: guaranteeing their security. That is the cruel paradox of the luxury of 75 years of peace; we have forgotten how horrific war is, and as a result we are totally unprepared for it.

Geopolitically speaking, too, our continent is unable to present a united front. This was evident in our failure to reach a common European position on Syria. It was evident in our inability to truly act in concert on the Russian gas pipeline. And it is evident now in our inability to counteract or even respond to the divide-and-conquer strategy being used against Europe by others, be it Beijing or Moscow.

Our continent’s economic engine is stuck in second gear, and we are investing very little in the economy of the future. Artificial intelligence, Big Data, nanotechnology and biotech: we are hardly doing anything in these fields. There isn’t a single European firm among the world’s top 15 tech companies. There is no European Google, no European Facebook, no European AliBaba. And there won’t ever be if we don’t change course.

What is more, our continent is ill-prepared for the next economic crisis. Debt is too high, risk reduction is too limited, reforms are taking too long and economic growth potential is simply too low.

Although our continent has embraced the Paris climate agreement, it has shown itself to be incapable of coming together to address one of the defining challenges of our future: global warming. Independently, Germany and the Netherlands are doing plenty in the area of energy, climate and sustainability, but there is remarkably little cross-border activity. But a melting ice floe doesn’t care about the border marker at Nieuweschans and Bunde.

Ladies and gentlemen, bear with me a little longer. Our continent was able to abolish its internal borders effectively and enthusiastically. As a tourist I’ve benefited from this for years. But the EU failed to couple this achievement with effective protection of its external borders. This has resulted in serious migration problems and an unfair distribution of migrants across the EU.

Consequently, we are unable to effectively meet the external challenges of our time. And internally, the EU has another problem: the smouldering threat of implosion. The bitter reality is that we have a Union in which part of the population, mainly in northwestern Europe, wants to leave. A Union that democratic, prosperous, likeminded countries such as Norway and Switzerland aren’t interested in joining. Where democratic, prosperous, likeminded countries such as Denmark and Sweden have rejected the euro. And now, in one of the most tragic chapters of the EU, the second most important economic power and single most important geopolitical power in Europe wants to leave the Union.

To my surprise I’ve heard some naive remarks here and there from continental Europeans who are pleased with the prospect of a future without the difficult British. But that shows a complete misunderstanding of who the winner is. This is not a victory for London, or for Berlin or Paris, let alone The Hague. This is a victory for Moscow and for Beijing.

If our Union is unable to inspire the best and brightest to join its ranks or introduce the euro, and if our Union is at risk of losing a force for good like the United Kingdom, then our Union has a fundamental problem.

Ladies and gentlemen, I get very worked up about this because Europe is so important to me. If we want to maintain our way of life, we will have to change course and modernise in a number of areas. We will have to move towards a new and improved Europe that is ready for the future. We will have to build a Europe that is resilient, prosperous and reciprocal. Allow me to explain my vision.

A resilient 21st-century Europe must first fundamentally rethink its priorities.
In the European Union we spend hundreds of billions on agriculture and cohesion projects, and in the previous century there was a lot to be said for that. But we are now in the year 2019, and it’s time we entered the 21st century. If we want to address the problems I just summarised, we will not only have to choose fundamentally different priorities, but we will also need to make funds available to pursue them. And that will mean reducing spending in other areas.

Ladies and gentlemen, a 21st-century Europe should make its own security a priority. And that is why it is time for European cooperation on defence to become the rule rather than the exception. European Defence Cooperation will not replace NATO. Instead it will be a strong and coherent component of NATO that functions significantly better. Defence cooperation starts with countries that have a close bond organising joint low-level military exercises. It is with good reason that the German and Dutch armies already work together very closely, as do the British and Dutch naval forces. But we need to do more and take more fundamental steps in this field. We could also cut our spending by a third if we purchased military kit and materiel together. And there’s a world to be won by standardising our materiel. So let’s get started.

A 21st-century Europe must present a united front in the geopolitical arena and on economic security, and abandon its current touching naivety. Whether it’s imposing sanctions, protecting our markets or dealing with conflicts, in today’s world, Europe must be able to engage in power politics. Don’t forget, we are the largest trade bloc on the planet. So let’s not be afraid of using the power that comes with that position. We can no longer allow China to disregard our market rules while permitting only token levels of European investment. We can no longer allow ourselves to be caught off guard by the Belt and Road strategy and neglect to come up with an effective response. We can no longer allow Europe to respond with inconsistency as Russia and China to try to gain influence in the Balkans. European coordination, in short, is a must.

A 21st-century EU must protect its external border effectively. The countries on the border where the most migrants are arriving deserve our support. They deserve the help of extra border guards to enhance security.

Removing our internal borders was a great idea. But it can only work if the EU does what Germany and the Netherlands used to do: determine who and what comes in. For how long and for what reason. As finance minister, I dislike opening my wallet as much as anyone, but it clearly makes sense for the EU to gear its budget more to effective protection of the external border.

And lastly, a 21st-century EU must take a united approach to climate change, sustainability and energy. Because this, too, is an issue that none of us can solve alone. The goal is clear: we have all committed to the climate objectives agreed in Paris. So let’s get on with introducing a common CO2 levy, specific and collective reduction targets, new forms of energy, and sustainability initiatives. In June the Netherlands is hosting a major conference on the introduction of a flight tax. I’m well aware that more is needed, but still: an EU flight tax would be a significant and concrete first step in a common European climate policy.

Second, a rejuvenated, 21st-century Europe requires a return to reciprocity. We need to get back to behaviour that is reasonable and justifiable. To a Union where rights and obligations – give and take – are two sides of the same coin. Right now in Europe, we talk a lot about solidarity. But solidarity and reciprocity should go hand in hand. That is crucial for public support.

In the Netherlands I often have to justify why the age of retirement will soon be rising to 67 years old, and will continue to rise after that. I can make that argument with total conviction, because I believe it’s entirely defensible with a view to the generations that come after us. We’re in the happy position that we’re living longer and longer: half of all girls born in the Netherlands today will reach the age of 100. But it won’t make my life easy if another government decides to lower the age of retirement, potentially sparking a debate on whether that country will be eligible for emergency funds when it eventually runs out of money. Emergency funding, of course, is nothing more than the hard-earned cash of other European citizens. And there’s no way I can justify that.

Let me be clear: there are no European rules on the age of retirement. Every member state has to decide that for itself. But their decisions must of course be financially viable, and reasonable vis-à-vis the other EU member states. Otherwise we undermine public trust and lose our credibility. So, for that reason, I believe that any state that does not make reforms, or uses European funding unwisely, or fails to respect the Stability and Growth Pact should not be entitled to any more European funds.

It’s a similar situation with Schengen. I believe that having open borders is a great good. I’m a firm supporter of the single market. And I also believe that our continent should contribute its fair share to the reception of people fleeing conflict and violence. I’m happy to explain that to the Dutch people. I think it’s perfectly reasonable.

But there is no justification for countries wishing to profit from the single market and enjoy European freedoms and travel without restrictions but then opting not to cooperate when it comes to migration. As far as I’m concerned, the time for this kind of cherry-picking is over. With the possible consequence of having to reinstate the Schengen borders.

Let me share one last example. If Europe is a community of values, we should attach consequences to failures in this area too. We should defend our values. We should not accept countries playing fast and loose with everything Europe holds dear. Muzzling the free press. Undermining the rule of law. We simply cannot accept this, ladies and gentlemen. We can’t accept it, and we can’t justify it. In my view, this is another area where the consequence should be no more access to EU funding or the Schengen area.

In the future Europe that I envision, reciprocity is a balance between rights and obligations. A balance that every citizen understands instinctively. That means it’s not an option. It’s a core value.

Imagine that we succeed in uniting behind these goals. Imagine a resilient 21st-century Europe capable of protecting its borders, holding its own geopolitically and solving the issues of migration and climate change. Imagine a 21st-century Europe that has rediscovered reciprocity and has the support of a public that believes in the system. A modern Europe of this kind, defined by rights and obligations, can succeed only if it has sufficient earning capacity and a robust financial and economic system in place. This is the foundation on which we can build.

If I think about how the 21st century is unfolding, and the factors that determine how we’ll earn our living in 20 years’ time, it’s clear to me that we have to invest in the economy of the future. And that calls for a fundamentally different approach. The EU will have to make a big leap forward when it comes to investing in innovation, artificial intelligence, nanotechnology and biotech. In Asia, in 2016, there was over three times more investment in artificial intelligence than in Europe. In the US it was over six times more. So let’s bridge that gap, and do more. We can do so by facilitating research and support the latest technologies. And the member states themselves can take the bull by the horns and invest in education, technology and research. That will make all the difference in the future.

If the EU can shift into a higher gear and, at the same time, devise an ethical framework for transparency, protection of privacy and cybersecurity, we can set a global standard, as we’ve done in the past in many other areas. In order to ensure we truly turn the tide, the Netherlands is pressing for a European Commissioner for Cybersecurity in the new European Commission.

It’s also important that we remove barriers to growth. Dutch entrepreneurs tend to be satisfied if they’re operating throughout the entire country. That’s the same mindset you find in America. The difference is that the Dutch market consists of 17 million people, while the US market has three hundred million. We need to see the whole of Europe as our domestic market. But that won’t be possible if businesses get tangled up in 28 different sorts of rules and regulations. It won’t be possible if we keep applying bricks-and-mortar rules to a digital economy.

What’s more, we need to share the risks much better via private channels. And the eurozone offers unique scope for doing so. We often cite the US as a prime example of a strong and resilient monetary union. That’s partly because any local crisis is absorbed by all Americans, since shares in local US companies are also largely in the hands of investors from other states. This is why France and the Netherlands have long been calling for the EU’s capital markets union to be broadened and deepened.

It’s also vital that we make real strides with the banking union. I know certain aspects of this issue are highly sensitive in Germany. Even more sensitive than in my country. But a completed banking union would make our financial system more robust and ensure that European citizens are better protected against a financial crisis – as long as we succeed in reducing the upfront risks. So that’s what we should be striving for. The same goes for increasing banks’ buffers, tackling problem loans and weighting the risks of government bonds. Because if there’s one thing we’ve learned from the crisis, it’s that there’s no such thing as risk-free debt. The alternative, moreover – in both moral and substantive terms – is many times worse: forcing ordinary people, including in other countries, to foot the bill when a crisis hits.

Ladies and gentlemen, the job of politicians is to prioritise the long-term interests of their country and their people, even when this involves difficult choices. It means putting reform, debt reduction and investment ahead of consumption. This will prepare us for economic downturns, reinforce sustainable growth and ensure that future generations can also grow up in a prosperous society.

We are witnessing the emergence of a new world order. The transition from a multilateral to a multipolar world is unfolding before our eyes. Alliances are at stake, old certainties are crumbling, and the leading roles are being recast. The EU has a crucial role to play. But it’s one we must actively seize. We can’t just sit around arguing among ourselves while others make off with the prize.

To fulfil that role, we must build a modern Europe with 21st-century priorities. A Union of rights and obligations. A new and improved Europe, which is resilient, prosperous and reciprocal. Only in this way can we protect our web of life. Our way of life.

Shaping this new Europe will require foresight and assertiveness from all the member states, including the Netherlands. It goes without saying that we are willing to take up the challenge, particularly with the impending departure of our British friends. But at the same time, the Netherlands knows its place. In Europe, we are a medium-sized country, and despite our powerful economic engine, we don’t punch at the same weight as Germany or France. Matters of power politics requiring a geopolitical response must therefore be addressed jointly by Berlin and Paris.

Because, contrary to what some think, I agree with many of France’s ideas about the EU, especially where they concern geopolitics and Europe’s place in the world. And I would like to see Germany take a more assertive stance in this regard, precisely with a view to the broader interests of Europe.

A former colleague of mine in the Dutch Senate once told me: Germany ideally would like to be like Switzerland: you stay on the sidelines, and you get to live happily ever after. And I can understand that. But your country is simply too big and too important to adopt such an approach. So I would welcome seeing a less reserved Germany. As your neighbour, ally and close friend, the Netherlands will be at your side.

Because, in the ‘web of life’, everything is intertwined. Or, as Alexander von Humboldt put it, ‘In this great chain of causes and effects, no single fact can be considered in isolation.’ Our actions today will affect the Europe of tomorrow. So let us work together towards a modern Europe that our people can believe in.

Thank you.