The need for a change in mindset in Europe and the completion of the single market in all strategic sectors was underlined by the Minister of National Economy and Finance and President of the Eurogroup Kyriakos Pierrakakis, from the French city of Aix-en-Provence, where he participated in a discussion on the topic “One world, conflicting visions: Who sets the standards?” as part of the forum “Les Rencontres Économiques d’Aix-en-Provence” organized by Le Cercle des Économistes.
Mr. Pierrakakis said characteristically:
“For Europe, if I had to summarize it in one phrase, I would say that the era of geopolitical innocence is over. And I am not referring only to the Russian invasion of Ukraine, but to a much deeper change in the framework within which we perceive things.
A second element is that the way we perceive how we should use policy tools in Europe is changing radically. Allow me to share a small incident, which is in fact related to Greenland.
At the first Eurogroup meeting that I chaired, in January, outside the room the discussion about Greenland was dominant. Inside the room, however, we had to elect the Vice-President of the European Central Bank. There were six candidates and those with more experience than me were telling me that, with six candidates, it would take months to arrive at one, given the way Europe usually functions.
What we decided, however, together with my colleagues was this: if we cannot elect a Vice-President of the European Central Bank at a time when we are called upon to defend European sovereignty, the sovereignty of Greenland and, more broadly, territorial integrity, then the least one could say is that this image would be extremely negative.
So, we elected the ECB Vice-President within two and a half hours, while everyone expected that the process would last four, five or even six months.
Why do I mention this? Not because the way officials are elected in the European institutions is of particular interest to the general public, but because it is a characteristic example of political will for change. The positive thing about Europe is that we know very well what we have not managed to complete for many years.
There is what I would call “the dividend of the obvious.” We know that we have not completed the Capital Markets Union, the Banking Union, the Energy Union, and we also know that we need a coherent doctrine for technology.
Technology will change everything, and I am not referring only to artificial intelligence, which is today the obvious topic of discussion. A new major technological discussion will follow, then another one and then another one…That is why an overall doctrine and a strategy are needed for how we will strengthen the capabilities that support our sovereignty.
If I had to codify it in one phrase, I would say that the mistake is to treat sovereignty as synonymous with autonomy. Autonomy is only one dimension of sovereignty. Sovereignty can be exercised in many different ways. And this is something that Europe itself has demonstrated.
It can be exercised through control. We have European champions. We have champions in technology. We have champions in the banking sector. What we need is a change in mindset.
And this change in mindset means that we must stop thinking in terms of national champions - French, Greek or German - and start thinking in terms of European champions.
Do we need to do it more in every sector? Certainly. In technology, but also in banks, stock exchanges, in every field. If we fail to develop European businesses that will evolve into European - and by extension global - champions, they will not be able to compete internationally in a world that is being transformed at unprecedented speed because of technology.
Therefore, one part of the discussion concerns policies. Another concerns the change in the international environment. But the most important dimension, in my opinion, is the change in mindset.
Because of everything happening in the world today, because, as I said at the beginning, the era of geopolitical innocence is now over, the current generation of policymakers fully understands this.
All those plans that previous generations discussed for decades, whether it concerns the Capital Markets Union, the Banking Union, the Energy Union, technology, or telecommunications, must now be implemented simultaneously.
Only in this way can we give a substantive answer to your question.
That is why I am optimistic. Not only because, as Churchill’s well-known saying goes, “there is no point in being anything else.” I am optimistic because I truly believe that this generation can succeed.”
In response to a question about whether Europe should undergo some kind of “electroshock” and take control of its internal affairs, as well as to interventions regarding the opportunity emerging for Europe in the new world of geopolitical balances that is taking shape, the Minister said:
“The positive thing is that we know very well what the obvious things are that we failed to do for years.
Defense is perhaps the most characteristic example. Are there easy, immediately implementable solutions in the field of defense? Of course there are. Today, each member state procures the same systems separately, 27 different times. And yet, we all need certain common capabilities: border protection, satellites, unmanned aircraft.
The value of joint European procurement is, therefore, enormous. Have we done it before? Yes, we have. It is called the European Space Agency. In the field of space, we have already proven that we can cooperate effectively.
The more difficult thing, however, is something else: making strategic choices.
What do I mean by that? We do not have unlimited resources. If we want to strengthen European sovereignty - and that is why I emphasized earlier that it is not identical to full autonomy - we cannot create European versions of everything.
Today, the three major American cloud service providers hold about two thirds of the European market. No European company currently has a market share above 2%. Therefore, this is not the most obvious field in which a European champion can emerge.
In 5G infrastructure, however, we had, and continue to have, significant comparative advantages. Europe has two global champions, one in Finland and one in Sweden, which are the main competitors of Chinese companies. These are not American businesses.
So what did we do, as Europeans? Did we create an integrated ecosystem around these companies, especially when the first Trump administration had adopted a very specific stance on this issue? The answer is no. We still have a fragmented European telecommunications market.
We still conduct 27 different auctions for 5G and, very likely, we will do the same for 6G. We still do not have a clear, common strategy.
Therefore, the first step is to put our own house in order. To correct the structural weaknesses of the European economy and the European edifice, so that we can unlock the obvious growth potential that is already before us.
And the second is to make strategic choices that will reduce our dependencies. The goal is not full autonomy. It is to avoid unilateral dependencies, to diversify risks, and to shield Europe against the uncertainties of the future.
This is absolutely feasible. And we have every ability to achieve it.”
Regarding developments in the field of Artificial Intelligence and technology more generally, and how these will shape the new economic reality, K. Pierrakakis commented:
“To this I would add that technology will be just as decisive a factor as geopolitics.
I would say that we have a tendency to over-rationalize the past, dramatize the present, and underestimate the future.
Today, the density of developments is unprecedented. The technological acceleration that once unfolded over decades is now compressed into a very short time. Think of the transition experienced by my generation: from video rental stores to Netflix. How much time did it take? Ten, fifteen years?
In artificial intelligence, however, changes are now taking place within months, even within weeks.
We usually perceive the world in a linear way. But technological developments move exponentially. And political systems, historically, react at a much slower pace.
This is the great challenge we have before us today, alongside all the other challenges we are already facing.
That is why we must be prepared. First of all, however, we must fully understand the scale and nature of the changes unfolding before us.
As Europeans, we have the capabilities to respond. We have the “equipment” - the infrastructure, the skills, the human capital. What we lacked for many years was the “software”: the right policies and the political will.
Today, we have both.”