Keynote Speech by Vice-President Maroš Šefčovič at the Munich European Conference during the European Dinner - Main contents
Introduction
The European Union is going through an era of unprecedented change, both within and beyond its borders. In common with previous periods of upheaval, it is perhaps not the changes themselves, which cause the most distress. Rather, it is the question of what we can do about them.
We Europeans are rightly proud of our societies, our economies, our democratic institutions - at local, national and European level. This is especially true for those of us from Eastern Europe who can tell you first-hand of the vast amount of progress made in what, in historical terms, is a mere blink of the eye.
Our economy is healthy - GDP has grown at an average of 2% in recent years, with 27 consecutive quarters of growth, while 14.5 million jobs have been created in the EU27 since the lows following the economic crisis of the previous decade.
Yet we still find ourselves scrambling to adapt in the face of emerging challenges, which have developed their own critical mass, like climate change and the digital transformation.
And these challenges, global in nature, feed into a wider debate around Europe's place in the world. Certainly, they are challenges, which cannot successfully be navigated by Europe alone. Yet given the changing geopolitical landscape, one which is increasingly dominated by great power competition, Europe must forge a stronger role for itself at the global table.
Not least because these challenges offer as much opportunity as they do risk. While climate change undoubtedly represents an existential threat to humanity, it can also spur us on to shape a fairer and more sustainable future for Europe. And digital technologies offer an addictive mixture of potential benefits for all of us, despite the risks that come hand-in-hand.
These twin challenges will, I am sure, take up a lot of our effort and resources over the coming years. Certainly, successfully achieving both, the green and digital transformations is a key priority for the von der Leyen Commission - essential not only for pursuing our domestic policies, but also in terms of keeping our citizens safe and strengthening the EU i's place in the world.
And with the gaps between internal and external policies becoming increasingly blurred, the President's commitment to lead a geopolitical Commission is all the more significant; the need to strengthen Europe's role in the world and build partnerships all the more pressing.
I would like to use this opportunity to expand upon these issues, to tell you what action the European Commission is planning to take over the coming years.
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-Climate change
The challenge
I will start with climate change, an issue that has leapt into public focus with unprecedented force in recent months and years. It now poses a highly visible and very real threat and is perhaps the challenge of our century. The World Economic Forum named “failure of climate-change, mitigation and adaption” as this year's number one long-term risk by impact, and number two by likelihood.
Certainly, science leaves no doubt about the urgency of taking effective climate action. The evidence is stark, with the devastating effects of climate change being wrought around the world during 2019 and 2020.
Last year, for example, saw a record number of cyclones in the Indian Ocean, the wettest 12 months on record in the United States, the planet's hottest August on record, devastating fires in the Amazon, and massively destructive bushfires in Australia, with an area twice the size of Belgium being consumed by the flames and the associated, dramatic consequences for biodiversity.
And we should not suffer from the delusion that Europe, with its generally milder climate, has been immune from this. Last summer, temperature records were broken from the Netherlands to Slovakia, with France recording its hottest-ever mark of 45.9°C.
Record floods in Venice, the worst wildfires in Spain in 20 years, accelerating glacial melting in the Alps. This is just the beginning, with predictions showing that the EU will face major consequences if no action is taken.
Deadly heatwaves would affect nearly 300 million EU citizens a year, killing up to 90,000. The availability of water in the southern parts of the Union would fall by 40%. The agriculture, energy and water supply sectors would face drought-related losses of nearly €50 billion a year by 2100, a figure matched by river flooding losses. Coastal flooding losses would be five times that.
And the effects would go further. Some recent studies have suggested a relationship between climate change and fluctuations in asylum applications in the EU. Even under a moderate emissions scenario, such applications are projected to increase by 28% due to climate impacts by the end of the century. It would mean an average of 98,000 additional asylum applications per year - a figure, which would increase substantially under more extreme scenarios.
This is not fearmongering or over-exaggeration. This is simple fact. After centuries of largely unchecked industrial human development, we are feeling Mother Nature's violent backlash, like a cornered animal forced to turn and face its pursuers in a final, desperate attempt to survive.
Now is the time to act. The world must do more to ensure a safe and sustainable future. The consequences of denying climate change and doing nothing, or even delaying action, will be far higher than the costs of tackling the challenge head-on, high as they might be.
The EU's response
The EU is, and will remain, at the forefront of efforts to tackle climate change. Indeed, the Union has always been one of the strongest proponents and champions of global climate ambition.
For decades, we have been working to modernise and transform our economy with the ultimate aim of climate neutrality.
Between 1990 and 2018, for example, the EU reduced greenhouse gas emissions by 23%, while its economy grew by 61%. These efforts will continue, but current policies only target a 60% reduction in greenhouse gas emissions by 2050 - which will not be enough.
It is time, then, for bolder action to reconcile the needs of our economy with the needs of our planet. Enter the European Green Deal - to put the transformation to a climate compatible, low carbon economy at the heart of the European project.
The first step will be the new Climate Law, which we will bring forward in March. It will enshrine in law for the first time the EU's objective to become climate-neutral by 2050. And by the summer, the Commission will present a plan to boost the EU's greenhouse gas emission reductions target for 2030 to at least 50% compared with 1990 levels.
But the European Green Deal is not just about cutting emissions. It is about making our entire society more sustainable. It is about clean energy, a circular economy, a zero-pollution and toxic-free environment.
It is about preserving and restoring our ecosystems, green agriculture and clean transport.
It is about creating green jobs, increasing competitiveness and boosting innovation.
It is about bringing all these elements into one package for the first time, and recognising that the whole is more than just the sum of its parts.
And it is about taking our European Green Deal to the rest of the world. We will look to boost the climate ambitions of our international partners as well as their capacities to carry out the transformation, including through scaled-up EU financial support.
At the same time, we recognise that half the battle will be persuading the reluctant to take action. So we will double down on our climate diplomacy efforts, with a focus on the biggest emitters.
This year's climate conference in Glasgow, COP26, will be an important political moment to reflect on that. Because the real danger is if too many of our partners around the world fail to share our lofty goals, leading to the risk of ‘carbon leakage' - where industrial production is transferred to third countries with cheaper and less stringent emissions constraints. This would undermine both, the Paris Agreement and necessary global emission reductions.
The EU will therefore work towards the introduction of a carbon border adjustment mechanism for selected sectors, should differences in levels of ambition worldwide persist. The measure will be compatible with WTO rules and other international obligations of the EU.
This is all the more important given the effects climate change will have on those parts of the world, including many less-developed regions, where people are more dependent on natural resources for their livelihoods.
The chances of famine, drought, hardship and waves of climate-induced migration are all driven up when grazing lands shrink and water sources disappear.
For example, in the decade up to 2017, the Middle East suffered one of its most severe drought cycles in the last thousand years, triggering large internal displacement in Syria and social disruption and instability across the entire region. Africa is also heavily affected by migration due to the impacts of climate change.
And by 2030, more than 60% of the world's poor will live in fragile and crisis conditions. This growing instability will continue to pose a serious threat to peace and security worldwide, something we are already seeing on the borders of the EU.
What can we do in response? Increasing the climate and environmental resilience of our partners, especially the most vulnerable ones, will prevent these challenges from becoming sources of conflict, food insecurity, population displacement and forced migration.
For instance, the EU's upcoming new comprehensive strategy for Africa will seek to help unlock the continent's potential to move towards a green and circular economy, looking at sustainable agri-food systems, green cities and the sustainable management of natural resources.
Within the Southern Neighbourhood and the Eastern Partnership, the EU will look to support energy efficiency, decarbonisation and depollution through sustainable investments; create jobs; reduce migratory pressures; contribute to peacebuilding; and help reduce poverty through sustainable management of natural capital.
At the same time, as we seek to work with the rest of the world, we must make sure we do not leave ourselves vulnerable. This transition will require the mobilisation of key resources and a future-proof industrial policy, including the security of supply of raw materials - we cannot turn fossil fuels dependency into raw materials dependency.
Such dependence on a small number of external suppliers represents an unacceptable risk to many industrial sectors, including strategic ones like defence and low carbon technologies. And it is a risk, which will only grow as the rollout of such technologies ramps up.
According to recent estimates by the Commission's Joint Research Centre, demand by the EU's wind, photovoltaic and electric vehicle sectors for certain key materials, including rare earths, is expected to grow by a factor of between 10 and 45 by 2030.
For dual-use technologies, namely advanced batteries, fuel cells, robotics, unmanned vehicles and 3D printing, Europe is highly dependent on imports of critical raw materials: just 1% of the necessary materials come from European countries.
And the geopolitical nature of the issue is highlighted by the role of China as a key supplier of critical raw materials.
In response, we need to consider action, such as diversification of supply, increases in recycling and the substitution of critical materials, while stockpiling could help ensure access to strategic raw materials in the event of a crisis.
We also need to encourage synergies between the civil and defence sectors to increase interest in common research, investment and manufacturing opportunities in Europe.
An important step forward in this regard will be the adoption of a new Industrial Strategy by the Commission next month.
Ultimately, no longer can we consider sitting back and doing nothing to be an option - our prosperity, our security and even our survival depend upon us taking action now, together with our partners across the globe.
Even with close cooperation, however, we will need to make the most of new technologies if we are to have the desired impact.
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-Digital transformation
The challenge
Which leads me to the second challenge I want to address, the digital transformation.
Our societies are becoming ever-more digital and increasingly intertwined with emerging technologies. The future Internet of Everything will see billions of devices, everything from toys to bank cards, exchanging information over our communications networks.
For all the opportunities this offers up, it also comes with downsides. Malicious actors - terrorists and organised criminal networks; state and non-state actors - are becoming more skilled at utilising sophisticated encryption and anonymization tools to prevent tracing and identification, potentially rendering more traditional forms of communication interception used by law enforcement, such as wiretapping, obsolete.
So as the digital train speeds ever onwards, we must be prepared for the future. We need to pursue a vision for digitalisation that harnesses the EU's strengths in areas, such as data, artificial intelligence, 5G and 6G as well as green technologies. But we also need to ensure that the accompanying risks are properly mitigated.
The EU's response
The Commission will set out a new digital strategy next week. It is designed to ensure that the digital transformation benefits all citizens, while boosting European technological sovereignty and leadership in global digital value chains.
We will also present an EU data strategy. We want to support efforts on ‘data sovereignty', in particular by reinforcing measures on cloud computing and on data.
We want to create common European data spaces to aid innovation, especially in sectors such as energy, mobility and manufacturing.
There will also be a white paper on Artificial Intelligence in the EU, which will underscore the need to invest in both, its quality and its trustworthiness. AI has huge potential, including for improving security, given the appropriate respect for individual rights and ethical implications.
These measures complement our work on the security of 5G networks. The rollout of 5G is of huge strategic importance for Europe. It will become the backbone of our digital connectivity, going far beyond consumer services, to critical sectors like energy, transport, banking and health, to industrial control systems carrying sensitive information, and into all parts of our daily lives.
If there are any vulnerabilities in the 5G network infrastructure that can be exploited by malicious actors, they could have potentially devastating effects across Europe.
We therefore sought to put in place a framework to map and mitigate the risks, from both, technology and suppliers. Last autumn, after Member States completed a national risk assessment of 5G network infrastructures, we published a coordinated EU-level risk assessment.
And last month, the Commission endorsed a joint toolbox of mitigating measures agreed by Member States, with the help of the EU Cybersecurity agency, to address security risks related to 5G. The toolbox will help to mitigate risks effectively and in a coordinated way, including by assessing high-risk suppliers and excluding them from critical and sensitive parts of the network where appropriate, and by ensuring the diversification of vendors.
These measures complement the tools we have developed to address the external aspects of our cybersecurity. These include the EU sanctions regime, which enables us to react more effectively to cyberattacks, and which itself is part of our wider cyber diplomacy toolbox.
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-Europe's role in the world
The challenge
Climate change and the digital transformation are challenges which clearly require global cooperation. But the push to strengthen Europe's global clout, to build relationships and synergies, and to set an example, even to inspire others, goes even further.
In a geopolitical landscape where Europe could all too easily find itself being sandwiched by the contrasting goals of other power blocs, standing on our own feet and being equally assertive will define our place on the global chessboard for this century.
The EU's response
In a changing strategic context, the European Union needs to do much more for its security and defence. As a priority, we should seek further progress towards a common defence policy, whilst underlining that the EU is not, and does not aim to be, a military organisation.
We are already building up our European defence capabilities, providing added value without impinging on national security sovereignty. The creation of the European Defence Fund as well as 47 projects under Permanent Structured Cooperation, or PESCO, have helped to make our defence spending more efficient, while filling crucial gaps in our capabilities.
In parallel, we are strengthening our cooperation with NATO i through 74 joint actions, including in the fields of hybrid threats and cybersecurity.
But this effort needs to be consolidated.
We should ensure that the next MFF includes sufficient funding for EU security and defence initiatives. And we should start fostering synergies.
First, synergies between civil, defence and space industries so that our work on defence industry contributes to enhancing Europe's technological competitiveness and sovereignty.
Equally important will be to ensure synergies between our security and defence initiatives and other priority policies, including the twin climate and digital transformations, as well as other financial instruments, such as InvestEU.
Having said all this, we are, and we will be, staying true to our commitment to cooperation, multilateral diplomacy and the rules-based system. At a time when some prefer to look inwards, we understand that today's challenges cannot be solved by one country - or even one continent - alone.
Hence, the EU playing a leading role in the adoption of the Paris Agreement or the Agenda 2030 for sustainable development.
We are also looking to promote our values, standing up for human rights, democracy and the role of civil society around the world, at a time when they are coming under increasing pressure.
We are seeking to carve out a greater international role for the Euro, something which will boost our economic diplomacy and help make the global financial system less vulnerable to shocks - in doing so, bringing concrete political and economic benefits to the Euro area and the EU as a whole.
So later this year we will bring forward a plan to boost Europe's economic and financial sovereignty. This will include completing the Economic and Monetary Union, the Capital Markets Union and the Banking Union, as well as working with third countries to increase the international use of the Euro, whilst making it more attractive to do so.
In addition, we are stepping up multilateral engagement on new digital technologies, including pushing for common standards and rules to govern cyberspace and the use of AI, such as in lethal autonomous weapons systems.
Standardisation in general is a key aim - European standards contribute to job creation, economic growth and innovation in the EU. They raise quality and safety, reduce costs and open up markets. Standards benefit consumers, companies and society at large.
The benefits are tangible: standardisation has a positive impact on GDP growth, to the tune of 0.8% for France and 0.9% for Germany. They also give Europe a boost on the world stage.
The challenge now is to speed up and better prioritise standard setting to maximise European advantage in emerging sectors, like electric mobility or the green economy.
For example, the key battery sector needs strong interaction between all stakeholders to allow for speedy and efficient development of standards, which are key for the safe and sustainable production, use and recycling of batteries.
Ultimately, we should look to European standards to have a significant influence on emerging global ones.
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-Conclusion
Which brings us back around to the beginning. And provides further evidence, if it were needed, of the systemic, or integrated, nature of the big challenges of our days: they are all interlinked, and they will require deep cooperation, in Europe and beyond, if the EU is not only to survive, but to forge for itself a successful and prosperous path in the future.
I want Europe to stand on the global medal podium both, in 2030 and 2050.
This is true for the climate and digital transformations, and beyond. After years of crisis management, we should work jointly to build a shared forward-looking strategic agenda.
It is for that reason that President von der Leyen has asked me to lead the European Commission work on strategic foresight.
We see the Munich Security Conference today as a milestone in that respect.
Thank you.