President Pahor, dear Borut,
Prime Minister Golob, dear Robert,
Presidents, Prime Ministers, Ministers, Excellencies,
Ladies and Gentlemen,
Many thanks for inviting me here to the Bled Strategic Forum. It is wonderful to see this packed room here. And indeed, this is a forum, which has become unmissable by now as a gathering for the foreign policy community and as an event of European and global relevance. It is wonderful to be here with you today. This year’s headline – we have seen it on the screen while this fantastic orchestra was playing – perfectly sums up the most relevant question of our times: Will the rule of power replace the power of rules? I believe that the answer to this question boils down to one line: It all depends on the power of democracy. It all depends on our capacity to uphold fundamental principles, to resist aggression, to protect our values and our friends.
It is no understatement to say that the world has been watching our response to Russia’s aggression very closely. The stakes are clear to everyone. At the beginning of this year, Russia and China have openly declared a so-called unlimited friendship. And only weeks later, Russia launched its war against Ukraine – weeks later. The message could not be more explicit. If we are to preserve basic principles such as self-determination and the inviolability of borders, Putin cannot win this war. And Ukraine must win this war. This is absolutely clear. This is why we have mobilised our economic might like never before. In a matter of days and weeks, we have approved the most far-reaching sanctions ever implemented. And the sanctions are causing colossal damage to the Kremlin’s ability to wage war. Putin himself has admitted it. And the damage will only grow over time. Besides this, we have supported financially Ukraine with more than EUR 10 billion since the beginning of the war, and I am not including the bilateral support of our Member States. And we are working on the next tranche. More has to come for Ukraine. My message to our Member States is very clear. And we used – for the first time ever – resources from the European budget on military equipment to sustain Ukraine’s brave defence effort. We will support Ukraine as long as it takes. We are doing it for Ukraine. We are doing this to uphold our European values. But we are also doing this to show – to Russia and the world – that breaking internationally shared rules comes with a massive cost. That has to be very clear. This effort must come together with a new European strategic thinking. Today, I would like to pin down three of its main tenets. First, to defend the rule of law and the rules-based order over time, we must neutralise Russia’s blackmail ability and strengthen our own capabilities to act. Second, we must support democracies that are most exposed to foreign threats – and I am not only thinking about Ukraine but also about the Western Balkans. And third, we must also look further, to global geopolitical shifts, and use our economic might to preserve and expand the rules-based global order.
My first point means, primarily, ending our dependence on dirty Russian fossil fuels. And our work here is well underway. We are diversifying our suppliers at lightning speed. The gas supplies from sources other than Russia have increased by 31 billion cubic metres since January this year. This compensates by now the Russian cuts of gas supply to Europe. We are also cutting substantially our need of imported gas. Because we have to prepare for a potential full disruption of Russian gas. And for this, we have asked Member States to reduce the gas consumption by 15% and save it to the storage. That can save up to 45 billion cubic metres of natural gas. And, ultimately, the best way to get rid of Russian fossil fuels is of course to speed up our transition to green energy sources. Every kilowatt-hour of electricity that Europe generates from solar, from wind, from hydropower, from biomass, from geothermal or green hydrogen makes us less dependent on Russian fossil fuels. So invest in that. If you look at the facts, the evidence, today, the price of wind and solar energy is cheaper than polluting fossil fuels. That is why, with our REPowerEU initiative, we will invest together EUR 300 billion to accelerate the green transition. For instance, we are now financing one of the largest offshore wind farms of the world in the North Sea. And tomorrow, I will be in Denmark to discuss exactly similar initiatives, a huge offshore wind farm in the Baltic Sea. So Ladies and Gentlemen, my dear friends, the era of Russian fossil fuels in Europe is coming to an end. And with freedom from blackmail will come greater power to defend global rules. That has to be our next strategic approach. Ending our dependency on Russian fossil fuels is only the first step. The skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity market design. It was developed under completely different circumstances and for completely different purposes. It is no longer fit for purpose. That is why we, the Commission, are now working on an emergency intervention and a structural reform of the electricity market. We need a new market model for electricity that really functions and brings us back into balance.
And then, we have to look, of course, beyond energy. The green and digital transitions will massively increase our need for raw materials – take lithium for batteries, or silicon metal for chips, take rare earths – to produce magnets for electric vehicles and wind turbines. Demand for them may double by 2030. And if you look at the European demand for lithium batteries, it is set to increase at an annual rate of 40% between 2020 and 2025 – a 40% rise in demand per year. Now, the good news in that is: It means that the European Green Deal is progressing. The not-so-good news is: One country dominates the processing. Out of the 30 critical raw materials, today 10 are mostly sourced from China. So we have to avoid falling into the same dependency as with oil and gas. We should not replace old dependencies with new ones. So we must make sure that access to these commodities will not be used to blackmail us. We have to diversify the supply and build new ties with reliable like-minded partners around the globe. For this purpose, for example, I am travelling in two weeks to Canada – like-minded partners with very interesting offers. The power of democracies also depends on building strong foundations with like-minded partners for the economy of tomorrow.
My second thought: We must strengthen those who believe, like us, in the value of rules, and bring them even closer. I am thinking, of course, first and foremost about Ukraine. The Kremlin’s invasion aimed to pull Ukraine back towards a darker past. But instead, we are seeing the brave determination of Ukrainians to continue on their chosen path, and even speed up their process of transformation, as they rebuild their country. It is amazing to see this effort and this determination and this passion that they show. The new Ukraine, I am deeply convinced, will have stronger institutions. A modernised judiciary, but also be a greener, more digital and more resilient economy. To get there, and we are aware of that, Ukraine will need to channel enormous resources for reconstruction, map investment needs, coordinate action. All of this in support of an ambitious reform agenda. So, big tasks ahead of us. Therefore, with Ukraine in the lead, a reconstruction platform can achieve these goals. A platform open to all who care about the future of Ukraine, and to advise on the best way forward. We have to be very precise; it is a huge responsibility that we have to take. Therefore, to this purpose, Ukraine, together with the European Commission and the German G7 Presidency, will co-host an international conference in Berlin on 25 October. We will bring together, in this conference, renowned experts, international organisations, think tanks, academics, but also – and that is very important for me – the private sector and civil society. Civil society, because the young people of Ukraine dream of a better future – rightly so. A prosperous, a fair, a green, a more democratic Ukraine. They are so right. A peaceful Ukraine. A flourishing Ukraine. And because the path of modernisation, the path of democracy is also the path that leads to the European Union, we are at your side, and we want to support you in this endeavour.
The same is true for the Western Balkans. Let there be no doubt: Our friends from the Western Balkans are part of our European family. The Danube, the Adriatic and the Balkan mountains have always been a link, never a border. Our economies are tied together, after centuries of trade and travel. So prosperity in the Balkans depends entirely on their integration with the rest of Europe. Most importantly, the people of the Western Balkans overwhelmingly aspire to join the European Union. Yet, we know that, in recent years, progress has been slowed, not least by international actors, including Russia, who seek to undermine democratic institution building and the rule of law. We have, as European Union, a clear strategic interest that all Western Balkan Six keep advancing on the path towards European membership. Because Western Balkan stability is European stability. And Western Balkan prosperity is also European prosperity. So how can we reinvigorate the European perspective for the Western Balkans?
I think that we must, first and foremost, push the integration of our economies even further. That is why we have launched the Economic and Investment Plan of EUR 9 billion in EU funding, with the potential of mobilising more than EUR 20 billion of investments for the Western Balkans. All of this is groundwork towards our common future in the European Union. And we must strengthen the credibility of our accession process. We must make sure that every step a country takes towards democracy, the rule of law and equal rights, brings it closer to the European Union. That is why the opening of the accession process and negotiations with Albania and North Macedonia was a true milestone. We had set clear conditions for this. And they have delivered. The people and the democracies have delivered. It was a huge democratic success for the people of Albania and North Macedonia but also for the rest of Europe, and for our strategic interests. The best way forward to contrast foreign influence by autocratic countries is to strengthen democracies in Europe. It is about geopolitics, yes, but it is also about our common values.
And finally, we must also look beyond Europe and beyond the geopolitics of our immediate neighbourhood. The power of democracies, our ability to shape the world of tomorrow, depends greatly on whether we are able to have a growth model and an economic model that work for all. A growth model that is fit for the challenges of this century, starting with climate change and with the digitalisation of all economic sectors. There is an urgent need to lay down the material infrastructure of the future world economy, one that is truly sustainable for our planet, and that delivers prosperity to the greatest number of people. Because investment and infrastructure contribute to shaping the rules of our world, they can promote a free and fair trade, instead of financial dependency. They can protect our environment instead of exploiting and polluting it. They can build international relations based on trust instead of economic blackmail.
This is why we have put forward Global Gateway. EUR 300 billion of investment. This is our approach to big infrastructure projects – value-based, transparent, open to the private sector. Infrastructure that delivers lasting benefits to local communities. And by doing so, we want to show the power of a value-driven investment agenda. We know what investment by other countries can look like. Take, for example, Russia. The price to pay for their oil and gas is loss of sovereignty and loss of independence. They do not want partners; they want vassals. And it is not just the Kremlin. Tens of countries are on the brink of default because they cannot pay their debt with China. And a few have already defaulted. The Financial Times calls it ‘emerging Belt and Road debt crisis’. Development loans that ignore environmental and social standards, that cut short on risk management and lack transparency? These cannot deliver what countries need. There is a better way. And it is up to us to make it work in all corners of the world. It is not just the future of several countries that hangs by a thread, it is the future of the rules-based order. This is our responsibility as democracies of our day and our age. And I want Europe to live up to it. For our own sake, and for the world’s sake.
And therefore, thank you for listening, have a great conference. And long live Europe.