Davos, 24 May 2022
Thank you Klaus,
Ladies and Gentlemen,
It is difficult to believe that in Davos today we talk of war. The Davos spirit is the antithesis of war. It is about forging ties and together finding solutions for the big challenges we face. In recent years, we have looked for smart and sustainable ways to fight climate change; and how to shape globalisation so that all can benefit; how to make digitalisation a force for good, and mitigate its risks for our democracies. Davos is all about crafting a better future together. That is what we should be talking about here today. Instead, we must address the costs and consequences of Putin’s war of choice. The playbook of Russia’s aggression against Ukraine comes straight out of another century. Treating millions of people not as human beings but as faceless populations to be moved or controlled, or set as a buffer between military forces. Trying to trample the aspirations of an entire nation with tanks. This is not just a matter of Ukraine’s survival. It is not only an issue of European security. This is putting our whole international order into question. And that is why countering Russia’s aggression is a task for the entire global community.
Ukraine must win this war. And Putin’s aggression must be a strategic failure. We will do everything we can to help Ukrainians prevail and retake the future into their hands. For the first time in our history, the European Union is providing military aid to a country under attack. We are mobilising our full economic power. Our sanctions and the self-sanctioning by companies themselves are draining Russia’s economy and the Kremlin’s war machine. Our Member States are caring for six million Ukrainian refugees and eight million internally displaced. And in parallel, Ukraine needs direct budget support now to keep the economy running – pensions, salaries, basic services. We have proposed over EUR 10 billion in macro-financial assistance – the largest package of macro-financial assistance ever conceived by the European Union for a third country. Other countries, starting with the United States, are doing their utmost, too. It is an economic relief operation with no precedent in recent history.
That is the short term. But more needs to be done. With the same resolve, we will – hand in hand – help Ukraine rise from the ashes. That is the idea behind the reconstruction platform that I have proposed to President Zelenskyy. Yesterday in his speech here in Davos, he recognised the unprecedented unity of the democratic world – the understanding that freedom must be fought for. The rebuilding of Ukraine also calls for our unprecedented unity. As President Zelenskyy said: the amount of work is colossal. But together, we can and we will master the challenge. That is why we have proposed a reconstruction platform to be led by Ukraine and the European Commission, because we will combine reform with investment. The platform invites global contributions – from any country that cares about the future of Ukraine, from international financial institutions and from the private sector. And I was glad to hear about the conference in Lugano. We need everyone on board. Børge Brende called it a Marshall Plan for Ukraine. And we should leave no stone unturned – including, if possible, using Russian assets. But this is not only about undoing the damage of Putin’s destructive fury, it is also about building the future that Ukrainians chose for themselves. For years now, the people of Ukraine have worked for change. That is why they elected Volodymyr Zelenskyy in the first place. The reconstruction of the country should combine massive investment with ambitious reforms to modernise Ukraine’s administration; to firmly establish the rule of law and the independence of its judiciary; to fight corruption; to build a fair, sustainable and competitive economy; and thus to firmly support Ukraine in pursuing its European path. Ukraine belongs in our European family. Ukrainians have stood tall in the face of brutal violence. They have stood for their own freedom and for humanity. We stand with them. This is a defining moment for the democracies of the world.
Ladies and Gentlemen,
This conflict is also sending shockwaves throughout the world, further disrupting supply chains already stretched by the pandemic. It is putting new burdens on businesses and households, and it has created a thick fog of uncertainty for investors across the globe. And more and more countries and companies, already battered by two years of COVID-19 and all the resulting supply chain issues, must now cope with rising prices for energy as a direct result of Putin’s unpardonable war. And Russia has tried to put pressure on us by, for example, cutting off Poland, Bulgaria and Finland from gas deliveries. But this war and this behaviour have only strengthened Europe’s resolve to get rid of Russian fossil fuels rapidly.
The climate crisis cannot wait. But now, the geopolitical reasons are evident, too. We have to diversify away from fossil fuels. We have already set our course towards climate neutrality. Now, we must accelerate our clean energy transition. Fortunately, we already have in place the means to do so. The European Green Deal is already ambitious. But now, we are taking our ambition to yet another level. Last week, the European Commission presented REPowerEU. It is a EUR 300 billion plan to phase out Russian fossil fuels and fast forward the green transition. Today, almost a quarter of the energy we consume in Europe stems from renewable sources. Through REPowerEU, we will practically double this share to 45% in 2030.
This is only possible by also bringing cross-border cooperation to a new level. Take, for example, what is happening in the North Sea. Last week, four European countries joined forces to harness the energy of offshore wind. They decided to quadruple their offshore wind capacity by 2030. That will mean: wind farms in the North Sea will cover the annual energy consumption of more than 50 million homes – this is roughly one quarter of all European households. This is the right way to go. Renewable energy is our springboard towards net-zero CO2 emissions. It is good for the climate. And it is good for our independence and security of energy supply.
The same is true for the diversification of our gas supply, another pillar of REPowerEU. As we speak, Europe is concluding new agreements with reliable, trustworthy suppliers all over the world. In March, I agreed with President Biden to significantly step up LNG deliveries from the US to Europe. More LNG and pipeline gas will also come from the Middle East and North Africa. New LNG terminals in Greece, Cyprus and Poland will soon become operational, as will new interconnectors. And the connecting pipeline infrastructure will form the core of our future hydrogen corridors. Hydrogen is the new frontier of Europe’s energy network.
But we must also think further ahead. The economies of the future will no longer rely on coal and oil, but on lithium for batteries; on silicon metal for chips; on rare earth permanent magnets for electric vehicles and wind turbines. And it is for sure: the green and digital transitions will massively increase our need for these materials. However, access to these materials is not a given. For many of them, we rely on a handful of producers in the world. So, we must avoid falling into the same trap as with oil and gas. We should not replace old dependencies with new ones. We are therefore working to ensure the resilience of our supply chains. And again, strong international partnerships are at the heart of the solution. The Commission has already secured strategic raw materials partnerships with countries like Canada. And additional reliable partnerships will follow. Together, we can create more balanced interdependencies and build supply chains that we can truly trust.
Ladies and Gentlemen,
We are witnessing how Russia is weaponising its energy supplies. And this is having global repercussions. Unfortunately, we are seeing the same pattern emerging in food security. Ukraine is one of the world’s most fertile countries. Even its flag symbolises the most common Ukrainian landscape: a yellow field of grain under a blue sky. Now, those fields of grain have been scorched. In Russian-occupied Ukraine, the Kremlin’s army is confiscating grain stocks and machinery. For some, this has brought back memories from a dark past – the times of the Soviet crop seizures and the devastating famine of the 1930s. Today, Russian artillery is bombarding grain warehouses across Ukraine – deliberately. And Russian warships in the Black Sea are blockading Ukrainian ships full of wheat and sunflower seeds. The consequences of these shameful acts are there for everyone to see. Global wheat prices are skyrocketing. And it is fragile countries and vulnerable populations that suffer most. Bread prices in Lebanon have increased by 70%, and food shipments from Odessa could not reach Somalia. And on top of this, Russia is now hoarding its own food exports as a form of blackmail – holding back supplies to increase global prices, or trading wheat in exchange for political support. This is: using hunger and grain to wield power.
Once again, our answer is and must be to mobilise greater collaboration and support at the European and global level. First, Europe is working hard to get grain to global markets. There are currently 20 million tons of wheat stuck in Ukraine. The usual export was 5 million tons of wheat per month. This is now down to 200,000 to 1 million tons. By getting it out, we can provide Ukrainians with much needed revenues, and the World Food Programme with supplies it badly needs. To do this, we are opening solidarity lanes, linking Ukraine’s borders to our ports. We are financing different modes of transportation. So that Ukraine’s grain can reach the most vulnerable countries in the world. Second, we are stepping up our own production to ease pressure on global food markets. And we are working with the World Food Programme so that available stocks and additional products can reach vulnerable countries at affordable prices. Global cooperation is the antidote to Russia’s blackmail.
Third, we are supporting Africa in becoming less dependent on food imports. Only 50 years ago, Africa produced all the food it needed. For centuries, countries like Egypt were the granaries of the world. Then climate change made water scarce, and the desert swallowed hundreds of kilometres of fertile land, year after year. Africa is now heavily dependent on food imports, and this makes it vulnerable. Therefore, an initiative to boost Africa’s own production capacity will be critical to strengthen the continent’s resilience. The challenge is to adapt farming to a warmer and drier age. Innovative technologies can help us leapfrog. Companies around the world are already testing high-tech solutions for climate-smart agriculture. Precision irrigation operating on power from renewable, for example. Or vertical farming. Or nanotechnology, which can cut the use of fossil fuels when producing fertilisers.
Ladies and Gentlemen,
The signs of a growing food crisis are obvious. We have to act urgently. But there are also solutions, today and on the horizon.
This is why I am working with President El-Sisi to address the repercussions of the war with an event on food security and solutions in Europe and in the region. It is time to end unhealthy dependencies. It is time to create new connections. It is time to replace old chains with new bonds. Let us overcome this huge challenge in cooperation, in the Davos spirit.