‘The EU awakening: priorities for strengthening Europe in the world’ – Speech by President António Costa at the Cercle d’Economia event
Thank you very much for inviting me. It is a great honour to be here at the Cercle d’Economia, which is a pioneer of democracy and a promoter of dialogue. And it is an honour to be here in Catalonia and to be able to begin this speech with a few words in Catalan.*
Because it is very important to bring the European Union closer to societies and regions that are making our project thrive every day. From Hamburg to Stara Zagora in Bulgaria, from Florence to Catalonia, I am visiting a variety of places with this purpose in mind.Places that are at the heart of our efforts towards competitiveness, innovation, jobs and security.Making sure that European policy takes account of citizens’ views – and that Europe is built from the bottom up.
Catalonia has always been at the forefront of the European project, since a group of Catalans travelled to The Hague to attend the Congress of Europe in 1948 in order to further the visionary cause that led to the establishment of the ‘Consell Català del Moviment Europeu’ and join the call for a strong and united Europe, which today is an unshakeable reality. An unshakeable reality that needs the active participation of Catalonia to keep making progress. Not just because of its strong pro-European tradition but, above all, because of its economic leadership. An economic leadership that today is rallying with new momentum, based on stability and confidence. This can be seen in all of the big companies that are coming back home to Catalonia. And personally, as a Portuguese person who shares this Iberian Peninsula with you, but also as a European who has always admired you, I am glad to see that Catalonia is back, and is once again actively contributing to Spain’s stability and growth.
Spain is a leader in terms of economic growth – a real driver of the continent’s economy. We need that contribution from Catalonia and Spain, that impetus and that stability, now that we find ourselves at a turning point in history with Russia’s invasion of Ukraine, in a fragmented and uncertain world. A world where respect for the rules-based international order is being eroded, where multilateral commitments to address global challenges such as climate change and poverty reduction are being questioned. Where hybrid attacks threaten our infrastructure and democratic processes, where new technologies alter the balance within our political systems.
A world where economic strength is once again inseparable from security. That is why our Strategic Agenda – as agreed by the European Council – focuses on the priorities of security and competitiveness. Both are urgent. Both must be pursued at the same time. The Cercle d’Economia shares this assessment.
Let me start with security. The citizens of the Iberian Peninsula – including you and me – are well aware of how valuable and how fragile democracy can be. Having endured lengthy dictatorships not all that long ago, we know how important it is to defend our democratic systems and values. So, supporting Ukraine in its legitimate and legally justified struggle remains crucial for all of us, in order to reach a sustainable and lasting peace that can only be based on robust European defence.
Because in an increasingly dangerous world, Europe must be able to defend itself. Not just against strictly military threats, but also against various hybrid threats and challenges, taking a 360-degree approach. Because peace without defence is an illusion. That is why I welcome Prime Minister Pedro Sánchez’s announcement that defence spending will be increased to 2% of GDP this year. That is the right thing to do. It is a necessary step. Europe must be able to defend itself, enhancing our capabilities and strengthening our international alliances.
Our second major priority – competitiveness – is directly linked to our security efforts. We need to boost investment in innovation, infrastructure, supply chains and quality jobs. This is the approach we must take to achieve more sustainable shared prosperity.
It is also logical, because what we are seeing in the world around us is not just geopolitical disorder. It’s also geoeconomic disorder. The post-war system of global economic integration, which brought billions out of poverty and promoted peace, is being eroded. Tariffs have returned – not just as tools of industrial policy, but as geopolitical weapons. This much is clear: we must not respond to protectionism with more protectionism. We must stand together to find solutions through dialogue.
For example, we have proposed eliminating tariffs on both sides of the Atlantic. This is a constructive proposal and we are ready to see it through. But we are not naive. If necessary, the European Union will act to protect its interests, its industries and its workers.
We all know that tariffs are taxes on citizens and businesses. They increase prices, they create uncertainty and they weaken everyone economically. Yet the current situation also represents a great opportunity. An opportunity to boost our domestic demand and promote increased growth. An opportunity, too, to capitalise on our position as a trusted partner throughout the world.
At a time of volatility when trust is at an all-time low, the European Union is a reliable and predictable partner, a partner committed to all of its allies. We are also committed to our international agreements, such as the Paris Agreement, the Pact for the Future and the Development Goals. Faced with this paradigm shift, we are expanding our network of partnerships with those who believe in multilateralism, respect for established rules and mutually beneficial trade.
Trade is a powerful tool for building our competitiveness and strengthening our multilateral system. Our trade agreements lay down common rules for shared growth, guaranteeing access to critical infrastructure, secure routes, reliable supply chains and the raw materials we need for green and digital industries. Trade agreements enhance our resilience and diversify our alliances, strengthening dialogue and fostering stability in the global order.
Let me give you the example of our trade agreement with Canada – CETA – which has helped to increase exports of EU goods to Canada by 26% in its first five years. Today, 44% more SMEs export to Canada than did so pre-CETA. It’s time to speed up the negotiation and finalisation of more trade agreements. Agreements like the one with MERCOSUR, which will be even more advantageous than our agreement with Canada, with European exporters set to save €4 billion in customs duties every year.
This is how we can prevent other actors from filling the current geopolitical vacuum with strategic partners: by building bridges, not (tariff) barriers. This is why we must continue to make progress on trade with other partners, such as Mexico, India, Indonesia and Thailand. This is why our high-level contacts with our partners are so important for trust, trade and global political stability. This is demonstrated by the success of our recent summits with South Africa and Central Asia, and those we will soon hold, such as with the United Kingdom – the first since Brexit – later this month, and with partners such as Japan, the African Union, the Community of Latin American and Caribbean States and also with China in the course of the year.
At this time of global turmoil, the European Union is an extremely attractive partner for the world at large. At the same time, stable alliances can only come out of fair and balanced cooperation. This is what the world needs now, and what we can offer – including to China, a country with which we need to build a mutually beneficial and balanced relationship. We must not allow unbalanced trade with China, nor allow it to use Europe as an outlet for Chinese products hit by US tariffs. The response to the challenges posed by China must be predictable economic rules in the face of any future systemic distortion, creating the right conditions for a level playing field.
Our external economic relations play a key part in boosting our competitiveness. But it is also very important to focus on all the things we can do ourselves, internally. This is why we took important decisions at the March European Council to give new impetus to our internal market. You know just how important these decisions are for its businesses and for our social stability.
Cutting red tape is our priority and we are working to achieve this with a clearly-defined timeline and targeted measures. A 25% reduction for all businesses and 35% for SMEs.
We are also taking measures to guarantee that electricity prices no longer depend on the volatility of fossil fuel prices. The Iberian solution has shown us a way forward enabling our citizens and businesses to benefit from cheap, clean and secure energy. To achieve this, we must further improve the integration and interconnection of the EU’s energy, as this will also help to reduce the risk of incidents and blackouts such as those seen last week in the Iberian Peninsula. With this in mind, it is crucial that we increase investment in network security.
In parallel, we are smoothing the way for more investments in the EU. Public investments through greater fiscal space in national budgets and through a new generation of European funds. And private investments through a genuine Savings and Investment Union, to mobilise the savings of European citizens and invest in innovation, productivity and competitiveness. There is still a lot to be done. But despite all the crises, despite the dramatic situation in Ukraine, despite the need to increase our spending on defence, we have shown that boosting competitiveness is our priority.
In this context, the role of regions such as Catalonia is fundamental to our shared prosperity, in order to foster innovation through businesses, with better skilled workers and in order to tackle inequalities. Catalonia has a wealth of assets: a strong industrial base, a solid innovative environment and a vibrant and pro-European civil society.
I have seen this for myself during this visit to Barcelona. Yesterday I was at the Seat factory and today I will visit the Barcelona Supercomputing Center and the ALBA Synchrotron, places of industrial and scientific excellence which exemplify the unique mix that Catalonia brings to Spain and to the path of European competitiveness.
We have faced many crises together. The euro crisis. The COVID-19 pandemic. Russia’s full-scale invasion of Ukraine. Record inflation. In all of these instances, we found the right solutions and responded with a determination and unity that took some people by surprise.
We continued to build our monetary union and strengthen our currency. We provided solidarity and purchased vaccines together for our citizens. We launched the European Stability Mechanism, the Next Generation EU funds and unprecedented solutions to support Ukraine. Crisis after crisis, we have done what was necessary to emerge stronger and more resilient. And I will say one thing to you: we will do it again.
Because, dear friends, and I’m wrapping up now, the European Union is perhaps a bit like the Sagrada Familia: an enormous, far-fetched, idealistic project of historic dimensions. A project of tremendously complex architecture, somehow permanently unfinished, and in which each new generation plays its part to meet the challenges of its time. A project that sometimes also stagnates, but that always pushes ahead with determination, because it is guided by a bold and ambitious vision of the future.
Because that, my friends, is the European Union. Let’s be proud of it.
* In Catalan in the spoken version.