Olaf Scholz
07.02.2020

Oxford University German Society


Asia’s re-emergence, the West, and European sovereignty
 
I would like to start out by saying how pleased I am to be here today with so many highly accomplished students, researchers and educators. I would also like to thank the Oxford German Society for inviting me here and giving me the opportunity to speak at this outstanding centre of European thought that attracts students and scholars from around the world.
 
This includes quite a few Germans – as a quick poll in this room would probably confirm. Notable alumni include former German president Richard von Weizsäcker and diplomat Adam von Trott zu Solz, who resisted the Nazis by taking part in the July 20 plot to assassinate Hitler and paid for his courage with his life. 
 
The people I have just mentioned went to Oxford long before the European Union brought us Erasmus and the freedom of movement. And I am sure that Brexit won’t change this openness. 
 
So let’s get the Brexit-elephant out of the room, because I don’t want to dwell on Brexit. I imagine that many of you would have wished for a different outcome in the 2016 referendum. I certainly did. But that is in the past. 
 
Now we have to look to the future and focus on the negotiations that will determine the shape and the depth of our relationship. 
 
Regardless of the outcome, to my mind, there is no question that the EU and Britain will remain close partners. We will certainly be close friends. 
 
Another thing is certain: Negotiations in the coming months will have ramifications that go beyond Britain and the EU. Others will try to insert their own national interests into the process. Just think about the number of times President Trump has already weighed in on Brexit and future UK-EU relations. In our globalized world, one must beware of bilateral actions that risk undermining multilateral approaches.
 
So, let’s take a look at the wider, multilateral picture; at the geo-political landscape, as we enter the 20s of this century.
 
This year, the output of Asian economies is forecast to overtake the output of the rest of the world combined, for the first time since the 19th century. Last year, India overtook the United Kingdom.
 
Asian countries have achieved this remarkable feat through decades of rapid growth after opening up their economies. They have become part of the global supply chain. 
 
Some nominally socialist countries have caught up by embracing their own form of capitalism. China alone has managed to lift hundreds of millions out of poverty. 
 
Historically, China’s growing economic strength represents a return to the norm. 200 years ago – as in centuries before – China accounted for something between a quarter to a third of the global economy. When you add India and the rest of Asia, it was more than 60 percent.
 
The re-emergence of Asia shifts the composition of the global economy closer to what it looked like before the scientific revolution, the Enlightenment and the industrial revolution. These periods of tremendous innovation transformed Europe and eventually led to two centuries of Western economic and scientific pre-eminence. 
 
Today, Asia’s relative growth necessarily means a relative decrease in other regions, first and foremost the West. And that is not a bad thing. Prosperity in Western countries is still growing. Other countries that started out very poor by comparison are just catching up. Their growth is opening up new possibilities for trade. 
 
But: as the world’s economic centre of gravity shifts, so does its balance of power.
 
While the global distribution of power and influence is in flux, the world is facing plenty of challenges on a global scale that will define this decade. Let me name a few.
 
First, the multilateral international order is under pressure. The nature of globalization is changing. We have seen China becoming bolder in asserting its interests. The US is willing to engage in trade conflicts to keep China and other perceived rivals in check. And the US government’s failure to nominate WTO judges puts our trading system in jeopardy. 
 
Second, migration is a matter with world-wide ramifications. Even though many poorer regions of the world are catching up, there is still a considerable wealth gap between countries. Migratory pressure poses challenges for both countries of destination and countries of origin. 
 
Third, we will have to make considerable progress in the fight against climate change in order to limit global warming to 1.5 degrees above pre-industrialization levels. Moreover, the impact of climate chance will accelerate migration in future.
 
Fourth, rapid technological change is transforming our economies and the nature of how we work. But not everybody is affected by these developments in the same way. Where some see new opportunities, others see a potential threat to their economic existence. We can observe how these differences in personal outlook are splitting the ‘old’ middle class. Our social structures – in particular, European-style welfare states – will have to adapt if we want to ensure economic security. Because without economic and social security, we risk widespread resistance to progress, as we saw in the initial stages of industrialization in the 18th and 19th centuries. 
 
All these issues represent challenges on a global scale. As we face them, we have to ask ourselves: 
 
How can we defend and perhaps even promote Western values, including democracy, freedom of expression, the rule of law, and social security? 
 
How can we preserve our international influence; shape decisions; be rule makers instead of rule takers; and protect our European way of life?
 
Where do we see our place in the world?
 
As always, the answers to these questions depend on whom you ask.
 
Let me set out the German perspective: To protect our national interests, we need a strong European Union. Europe, and European sovereignty, is Germany’s primary national concern. 
 
President Macron eloquently argued for European sovereignty in a recent interview with the Economist that unfortunately received more public attention for other, controversial remarks. 
 
One need not agree with his characterization of NATO as brain dead; or his rejection of accession talks with countries in the Western Balkans. I don’t. 
 
But few people focused on his central, overarching point: Europe needs the ability to stand up for itself. On this point, President Macron is absolutely right.
 
In a world of almost 8 billion people – 9 to 10 billion by mid-century – no single European country can hope to deal with major global powers on equal terms, with China or the United States. But the European Union – with its 450 million citizens – can. A strong European Union can ensure that its members will not be pushed around; that we will not have to be dependent on others; and that we have the capacity to act in our own interest. In other words: a strong European Union can ensure that we have true European sovereignty.
 
In the area of trade, we can see why we need European sovereignty. Germany is an exporting nation. We have highly specialized industries that export most of their output. Nearly 60 percent of these exports go to the European Single Market. On top of that, we benefit immensely from the EU’s success in negotiating free trade agreements that promote European technological standards and that safeguard European environmental and consumer protection standards. Speaking for the world’s largest economic area gives the EU a lot of bargaining power.
 
Technology is another area where Europe is essential for our sovereignty. Airbus is a good example. In the late 1960s, airlines were dependent on two large US manufacturers, Boeing and McDonnell Douglas. No national aerospace industry in Europe was able to develop a commercially viable jetliner on its own. European airplane manufacturers realized that if they wanted to compete, they could only do it together. Fast-forward 50 years and Airbus is the world’s largest producer of passenger airliners, having once again overtaken Boeing in 2019. 
 
Another example is Galileo. This year, Europe’s satellite navigation system is scheduled to become fully operational.
 
All of which goes to show: Europe has the capacity to compete with any other part of the world in trade, in industry, and in technology. When we come together as Europeans, we are a force to be reckoned with.
 
The European Union is certainly large enough to be counted among the world’s major powers. At the same time, European politics with 27 member states is not without its challenges. The EU is made up of countries with different traditions, different historical perspectives, and different schools of political thought. Certainly, Europe’s diversity is one of its biggest assets. But we must make sure that our differences don’t impede our ability to act. 
 
Europe needs less insistence on unanimity, including in matters of foreign policy.
 
We need to focus more energy on those areas where a European approach delivers better results than a national one. 
 
We need more combined defence spending. Having as many as five times the number of defence systems as the United States is just bad economics. Developing those systems together will give us better value for money and strengthen NATO’s European pillar.
 
We also need to better integrate our financial markets. By making progress on the European Banking and Capital Markets Union, we can reduce financial risks and ensure that our finance industry serves the economy more effectively.
 
Above all, we need to strengthen the European idea and emphasize the common values that form our European identity. Democracy, freedom of expression, the rule of law, and social security as an expression of solidarity. 
 
Solidarity is a defining feature of our European way of life. With solidarity, we can better embrace global openness and technological progress. With solidarity, the transformation of our economy need not lead to a tribalization of society.
 
We need to strengthen Europe and we need to strengthen solidarity. Because, from my perspective, a strong and united Europe based on solidarity is the best guarantee of our sovereignty. 
 
I understand that by leaving the European Union one week ago, the United Kingdom has chosen a different path. But we should realize that Brexit does not negate all that we have in common: our mutual interests, our common challenges, and our shared values. 
 
Universities such as Oxford remind us how education and research have brought us closer together. How scientific progress is built on cooperation. How millions of young people have chosen to go and study abroad and thereby have made us better able to understand each other. 
 
That means that you - students and researchers alike - have an important responsibility. As we redefine our relationship, you can be a voice for cooperation and partnership. You can be bridge builders. 
 
Thank you!
 

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