Prime Minister Ulf Kristersson’s speech at Hertie School

Thank you so much, and thanks for hosting me here today. It´s a true privilege to have this opportunity. A few weeks ago, I met with students, like you, at the Kyiv School of Economics.

And now – meeting with you – it strikes me how similar life is between them and you. And at the same time, how extremely different life can be.

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The European Union we know today is by and large the product of post-war Europe – but also the product of post-communist Europe. And there is obviously no greater symbol of this Europe than Berlin. This city encapsulates the fate of an entire continent – destroyed and divided, then rebuilt and reunited.

Brick-by-brick you recreated a war-torn country into a democratic, peaceful and prosperous state. The West German Wirtschaftswunder demonstrated to the whole world that progress was possible, after a time of terrible destruction. And that a country’s past does not dictate a country’s future.

That hard-earned peace is now under attack. Russia’s brutal, illegal invasion of Ukraine marks the return of large-scale war to Europe. Just like the Second World War and the fall of the Berlin Wall, it will change Europe permanently. After the 24th of February last year, neither our security arrangements nor our trade ties or our energy systems will return to normal. Instead, we have come to a turning point in history – Zeitenwende, as I think you would put it.

And if we want European values – respect for international law, democracy, sovereignty and human dignity – to prevail, we must help Ukraine win this existential war. In this struggle, Germany and Sweden can play a critical role.

And we do – every day in the EU, and through our own specific initiatives. Only a few weeks ago our two countries agreed to collaborate on providing additional, advanced air defence capabilities to Ukraine. And we are working closely together to support Ukraine with Leopard 2 tanks. I thank Olaf Scholz for this leadership.

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Germany and Sweden are both engineering nations. In the 20th century, Sweden underwent a voyage from rural poverty to advanced industry and welfare.

At the end of the previous century, Sweden was one of the poorest countries in Europe. So poor, in fact that in 1867 we received humanitarian aid from Great Britain to fend off starvation.

A century later, Sweden – like West Germany – had become one of the most modern industrial nations in Europe. The Volvo Amazon – like the Volkswagen Beetle – became a symbol of European creativity and technological excellence.

In short, modern Europe was built by engineers. By people who had a long-term vision and the means to fulfil it. Not just in the professional sense, but also the political sense. Because modern Europe was built on the principles of free competition, common rules and a level playing field.

However, this stands in stark contrast to the developments over the last fifteen years.

The global realities have been heavily marked by crisis. The EU, its Member States and the rest of the world have had to focus on emergency measures. Overall, we have been successful here in Europe.

First came the eurozone crisis, which threatened to topple the common currency and force southern Member States into bankruptcy. Then came the migration crisis, which put a heavy burden on both Germany and Sweden. The COVID-19 pandemic was another difficult crisis we managed to get through together, as Europeans. But just when it was almost over, Russia decided to create a security crisis of historic proportions.

We in the EU haven’t had to endure the same direct and tragic effects of the invasion as our Ukrainian friends. Nevertheless, this is also our crisis. The war has forced us to deal with a broad range of consequences, not least sky-rocketing energy prices and general inflation.

For the last fifteen years, the EU has not acted as an engineer, but rather a fire fighter – trying to put out one fire after the next. Of course, I don’t mean that we don’t need fire fighters. On the contrary. In Sweden we know the importance of fire fighters all too well, as EU support was essential in fighting the massive forest fires that afflicted our country five years ago. And the German and Polish fire fighters who came to our side were welcomed like heroes.

But the Union is and must be more than a world-class trouble-shooter.

With crisis management skills alone, Europe will never be able to take control over its own destiny. Let me therefore explain how I think the EU can become more like an engineer, looking specifically at three areas: security, competitiveness – and global democratic alliances.

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Let me start with security:

Putin has brought geopolitics back on the agenda. And that has made one thing extremely clear: Europe must take greater responsibility for its own security. For Sweden, this has meant substantially strengthening our own security, by enhancing civil and military defence. We have also applied for NATO membership – after 200 years of non-alignment.

It also means strengthening EU security. Here, the work has already begun with the Strategic Compass, and we must continue to advance that work. The EU has an important role as a complement – not a competitor – to NATO.

Russia’s war against Ukraine has also brought enlargement back on the agenda. Although integrating additional countries into the EU will be difficult, the alternative is to give free rein to Russian and Chinese influence. That is the least desirable outcome, both for the EU and for aspiring countries.

The object should be clear: to continue giving strong support to candidate countries in their reform efforts. The keyword is merit based – but when Ukraine and other candidate countries are ready to join the EU, we must be prepared to welcome them.

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Just as we need to start building the foundations for further enlargement, we need to build the foundations for a greener and more competitive European economy. And we must remember that there is no such thing as European autonomy without European competitiveness.

Alarmingly, we don’t currently recognise this. The EU lags behind partners – not least American and Asian – in competitiveness and productivity. Between 2014 and 2019, European firms grew on average 40 per cent more slowly than their US peers and invested 40 percent less in R&D. In 10 years, the share of European companies in the Fortune 500 dropped from 32 percent to 23 percent. Things are moving in the wrong direction.

What we need is not only responsive measures, but also a long-term vision. What does it take to return Europe to its position at the forefront? How can we strengthen our economic base?

We must, first and foremost, build on the single market. Deepen it, and re-emphasise sound competition! State aid is indeed sometimes necessary to overcome market failures. But it cannot be the norm. Politicians are regulators, not investors.

And when we finally make free movement of services a reality, it should be based more on mutual trust than on complicated rules. European business does not need more red tape!

I am certain there is broad support for this view in both Germany and Sweden. Already in the Middle Ages, the Hanseatic League created one of the most advanced trading networks in the Baltic Sea Region, and as a result, cities all around the sea prospered from trade, investments, and the free movement of ideas.

Realising the historic importance of knowledge and ideas, how can we continue to invest so much less in research than our competitors? Why are we unable to reach even the EU goal of investing three per cent of GDP in research and development? This simply won’t do. Again, we must think like an engineer: a house won’t stand long if the foundation is weak.

And finally, we need free and open trade. This does not mean continuing with the same strategy as before. The current geopolitical reality forces us to adapt. We cannot afford to put all our eggs in one basket, being overly reliant on individual suppliers of energy and critical raw materials.

But we can never become self-sufficient either, not even in Europe. Therefore, the EU needs a strong trade agenda that allows us to diversify our supply chains and access world markets together with like-minded partners.

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We spend a lot of time discussing China’s changing role in the world – with very good reason. And we should continue to do so, with open eyes and an open mind. EU unity and solidarity on China are key, as are close dialogue and cooperation with allies and likeminded partners – not least the United States.

In all aspects of cooperation – from defence to climate and environment, to economy and trade – the transatlantic link is a cornerstone of EU interests. And building on this bridge over the Atlantic is perhaps our most important geopolitical task to safeguard fundamental European and Western values.

The case of Ukraine once again demonstrates the value of this mutually reinforcing cooperation. Our invaluable cooperation on Russia’s war in Ukraine should serve as a reminder that the discussion about the U.S. Inflation Reduction Act is a debate between friends, where we seek the best possible solutions. We are not push-overs, but we know who our friends are. We must therefore not abandon the idea of future and better trade relations and should continue to build on the EU-US Trade and Technology Council.

A strong democratic alliance between the EU and its transatlantic partners is fundamental to the rules-based international order. And Europe and America are the two bridgeheads of Western civilisation.

To conclude:

This year, Sweden celebrates 500 years as an independent nation. In 1522, one year before becoming the father of our nation, Gustav Vasa bought 10 ships from the German city of Lübeck. He would use them to lead the struggle for national liberation. In 1523 he was elected king in my hometown Strängnäs, some 100 meters from my family’s house. Sweden is indeed a small country.

This also gives us some perspective on the European project and the prospects for the EU.  The European project is a rather new creation in consideration of the long history of Europe’s nations, and an immense amount of time lies ahead of us. What pleasures and pains await us in the coming centuries?

It is as hard to predict today as it was for Berliners in the 1980’s to anticipate the collapse of the Berlin Wall. And as it was 1963 for the people who listened to President John F. Kennedy when he famously declared that he was also a Berliner.

We can’t predict the future. Therefore, we all have a responsibility to act like engineers and build Europe stronger today. To build Europe greener, safer and freer. To help future generations meet the challenges we cannot yet foresee.

I can hardly think of a nobler task than this. 

Thank you for your attention.