BERLIN — European Union member states must decide who they are and whom they rely on, ECB President Christine Lagarde said at a September 9 speech hosted by the Deutsche Bundesbank at Berlin's Bode Museum.
Europe has entered "a harsher, less forgiving world" shaped by major powers willing to leverage economic and geopolitical weight for their own advantage, Lagarde told the audience. She outlined three pathways before the continent.
The first would be to accept that Europe's global influence has passed and that decline is inevitable — importing technologies from elsewhere to power growth and fund the social model. "Europe will become a museum," she acknowledged, but warned this was a mirage. In reality, she said, Europe would face weakened growth and a social model it could no longer afford, squeezed by countries whose technologies it depended on. "We would be left with weakened growth and a social model we could no longer pay for."
The second pathway — each country pursuing its own national interest on trade, industrial policy and energy — was also a mirage, Lagarde said. Middle powers around the world were grappling with how to band together against larger players, she noted. Europe already had an advantage: through the EU, it had built structures allowing it to act collectively and relatively quickly. "Why should Europe give up its greatest asset by letting itself splinter into 27 national agendas?" she asked.
The third path, she said, was to choose each other and continue building Europe. This meant painstaking negotiations and difficult compromises, but "we are now alone together. We can only rely on ourselves." She warned that if strengths in one domain, such as the Single Market, were undermined by weaknesses in others like defense or fragmented, costly energy markets, Europe would be easy to divide. But acting together where it made sense would let Europe master its own scale and become less vulnerable.
Lagarde pointed to two initiatives already underway. The savings and investments union could unlock Europe's abundant savings and channel them toward areas where the bloc needed to grow stronger. The digital euro would help preserve monetary sovereignty in a world where heavy dependence on others was no longer viable.
She closed with a reference to Alexander von Humboldt, whose medal was among the holdings of the museum's Münzkabinett collection. Humboldt had written: "Schwieriges erscheint mir nie unmöglich" — nothing difficult is ever impossible. "The choice to build Europe is a difficult one," Lagarde said. "But it is far from impossible."
