We have it in our power to make Europe strong and sovereign enough to cope with the new global situation, Bundesbank President Joachim Nagel said in his speech at the Bank’s Capital City Reception. For ten years now, the Bundesbank has been inviting representatives from the worlds of politics, academia and civil society to this annual event in Berlin. The topic this year was the courage to strive for more Europe and Europe’s future in a changing world.

The evening’s guest speaker was Daniel Hager, President of the German Electro and Digital Industry Association and a member of the Executive Committee of the Franco-German Chamber of Commerce and Industry in Paris. Hager used his speech to stress that, in his view, European sovereignty did not mean isolationism. For me, he explained, it meant being able to shape our future for ourselves. And retaining our ability to act in technological, economic and political matters.

Nagel emphasised that Europe had a raft of major challenges to contend with, given the harsher geopolitical climate, mounting competitive pressure internationally, and the impact of AI.

The energy crisis and the rising cost of living were a worry for many people, he remarked. Monetary policy had the task of preventing those developments from causing inflation. That, Nagel explained, was why the ECB Governing Council had already raised the key interest rates twice this year. A further hike in policy rates could not be ruled out, he said.

A strong Europe needed a strong European single market, Nagel added. It was important, he remarked, to dismantle the remaining hurdles, like those in capital, energy and services markets.

Acting together as Europeans

In the areas of defence and foreign policy, the Bundesbank President said that national interests were best served whenever policymakers acted together as one.

Nagel called on Germany and France to play a key role: As the Franco-German axis, we need to provide bold impetus, seize the initiatives our partners put forward and, in so doing, work together to forge sustainable solutions. Closing his speech, he stressed: I am in no doubt that it’s worth having the courage to strive for more Europe.