Karl von Habsburg: Speech on the future of Europe

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1918, the year when the First World War ended, was a historic turning point for Europe and for world politics. Until then, there had been a European order. Not in the sense that Europe had been a political entity, but world politics had been synonymous with the politics of the European powers. For as long as they could meet at congresses to maintain the established order, or to create a new one, conflicts had at least been curbed. Thus, in the decades leading up to the First World War, Europe had enjoyed an incredible economic boom which had also benefitted from international trade and an international division of labor, i.e. what we now call “globalization”.

In 1918, what none of the leading politicians at the time, regardless which of the countries they were involved, events happened that they could never have envisaged. In Central Europe, a cultural area that had evolved over centuries was dismembered. Nationalism took over.

That year also saw the end of the idea of supranational states. However, what was dismembered was not just a cultural, but also an economic area. Each individual state tried to solve its problems through isolationist policies, protectionism and nationalism, but in reality, this only made them worse.

So what then were the lessons of 1918 for Richard Coudenhove-Kalergi? Europe, fragmented into small countries, would become the plaything of non-European powers – he mentioned Russia and the US – and he clearly analyzed that the policy of protectionism would only increase the damage. Consequently, he said, Europe must find a way to unite, as otherwise, it would plunge into another devastating war. Today we know how clear this vision was back in the 1920s, and what followed.

His approach, at the time, was geopolitical. He was concerned with redefining a European order. Not in the sense of what, even at the time, would have been an unrealistic return to the old order, but as a structure that would re-establish Europe as a global political entity and not turn it into a plaything of non-European powers.

Therefore, his thoughts were focused first and foremost on a European foreign policy – so as to not be dominated by others on the stage of world politics. Secondly, he thought of a European security policy so as not to become dependent on others and thus dominated in this regard, or to be drawn into new intra-European wars. And thirdly, the dismantling of all intra-European customs barriers.

Today, this would be called a free internal market, i.e. Europe as a free trade zone. In addition, there also was the idea of a common currency. Coudenhove’s concept was based on the gold standard still used at the time and a European federal court, i.e. today’s European Court of Justice.

The freedom of citizens, individual responsibility, and a state that limits itself to setting the framework conditions in the fashion of constitutional states were a further basis for his considerations for European unification at that time.

European security policy was also at the heart of early, real European unification discussions after the Second World War. Far too little thought is probably given to the fact that the founding fathers of the European Union considered it as a basic principle to create a large security area that would make another war among European countries impossible.

The division of Europe by the Soviet Union’s Iron Curtain made it necessary to limit this security area to the free West. The founding fathers back then also realized that it was not possible to create this security space directly by military or political means. After the Second World War, the time had not come for such a development. They, therefore, knew that it would be necessary to create this space on an economic level which aimed to have the political and also the security institutions follow at a later point.

The core idea of European unification is the creation of a common zone of freedom, security and justice. This core idea naturally applies to the whole of Europe, so it is based on the principle that each European country must be entitled to join European unification. The respective criteria are defined.

The fact that European unification was limited to Western Europe in its initial phase was due to the geopolitical situation in Europe at the time. It would be completely absurd, however, to infer any kind of privilege of the six founding countries of the then Coal and Steel Community. One cannot blame the Slovaks, Ukrainians or Kosovars that they were cut out from European culture by an Iron Curtain.

A broad consensus prevailed across party and national borders, apart from a few small parties, in the sense of a pan-European approach to integrate those countries into the EU which had not previously had the opportunity to do so. In addition to the three neutral countries of Finland, Austria and Sweden, these were, above all, the Central European states of the former Eastern Bloc and some of the successor states of the former Yugoslavia.

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This was modelled on an approach already taken with the accession of Spain and Portugal. Integration was supposed to consolidate democratic institutions, whereas any return to authoritarian regimes or totalitarian dictatorships was to be prevented.

Today, the focus is on the integration of the six countries in Southeastern Europe that are not yet EU members. In its latest reports on enlargement, the EU Commission rightly states that the admission of Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro and Serbia to the EU is a “geostrategic investment in peace, security and economic growth throughout Europe“.

The geostrategic importance of the region is clear to anyone familiar with its history. And in politics, there is no vacuum. If Europe withdraws from the region, there will be all the more room for other powers to advance their interests in Southeast Europe. In addition to actors like Russia and Turkey, who have been connected to the region and its politics throughout history, above all China, but also Saudi Arabia with its exporting of Wahabism, exert massive influence today. The interests of these actors do not coincide with European security policy interests.

Europe itself must formulate and defend its own security interests.

And when I mention Russia and China, it is clear that this is primarily a matter of geopolitical interests. This should also be borne in mind by those EU member states that keep blocking this enlargement out of mostly petty national or even nationalistic interests.

But we must also look to the East, where a country like Ukraine with the Euromaidan, or the so-called Revolution of Dignity, has made it clear that its citizens see their future in Europe rather than under Russian dominance. Undoubtedly there still are major problems in all these countries regarding, for instance, the rule of law and corruption, but they are European countries, nevertheless.

Anyone who takes European unification seriously must make it possible for every European country to join the European Union. That is why I also advocate upgrading the current neighborhood policy towards Ukraine into a concrete accession perspective policy.

Even though the European perspective is of no real relevance in the democracy movement in Belarus, it is our duty to support this democracy movement, wherever possible. If Europe, if the EU emphasises the rule of law and democracy the way it does, these principles must also apply towards Belarus.

Ladies and gentlemen, considering what has been said, it is, of course, necessary to draw conclusions and develop concrete political instructions. Before I get to that, however, I would like to touch on two points that I would also like to call fundamental principles of Europe, and which are currently also hotly debated and argued over and over again.

These are the rule of law and freedom.

Let’s go back to Greek mythology. Europa was a beautiful Phoenician princess. Zeus, the Greek father of the gods, transformed himself into a fragrant bull to take Europa to Crete. There they had several children together. The two went down in the history of Crete as the most just of rulers because they respected the law.

Seen in this light, the rule of law, indeed, was at the beginning of the European idea.

From European history, however, we know that it was not always self-evident. The so-called papal revolution of the 11th to 13th centuries was a historical process that made a significant contribution to the emergence of constitutional principles. This process suffered a setback only during times of absolutism. For absolute rulers, equality before the law, applied only to their subjects, whereas the rule of law principle equally subjected the rulers themselves to the law.

In more recent times, the Congress of Vienna for me is a kind of turning point because the rule of law became established in Europe. The rule of law provided Europe with a stable foundation which subsequently allowed for very positive development.

This is the foundation for other pillars like private property, personal liability for failure as well as success, and private entrepreneurship which must focus on innovation ́for its success. Legal certainty, of course, is a basic prerequisite for private property, and private property is a basic prerequisite for prosperity and the creation of a middle class. The prosperity that Europe has thus generated is certainly the result of this rule of law principle. It is no coincidence that these principles developed in a culture that is clearly Christian.

This emphasis on law is so important because, particularly in Europe, there are repeated calls for a primacy of politics. Everything should be politically regulated. The more this happens, however, the deeper the conflict with the law it turns out to be. This conflict is getting sharper and sharper as it is increasingly less open to the principles of the rule of law. In the long term, this conflict is detrimental to Europe.

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Another essential element of European identity is freedom. Let me quote Richard Coudenhove-Kalergi: “The European ideal is freedom. European history is one slow struggle for personal, spiritual, national and social freedom. Europe will exist for as long as it continues in this fight. As soon as it abandons this idea and it becomes unfaithful to its mission, it loses its soul, its meaning and its existence. At this point, its historical role in history will have come to an end.“

Karl von Habsburg: Speech on the future of Europe 2
Berlin’s Brandenburg Gate, once a symbol of division during the Cold War, is now a symbol of both a unified and free Germany as well as a Europe that has been at peace with itself for more than 20 years. EPA-EFE//FILIP SINGER

European unification – European politics, that is – should not, however, aim to bring an end to Europe’s historical role, but to make use of it.

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Freedom is not a given. Freedom must be won again and again. Freedom is inseparably linked to responsibility. We cannot delegate this responsibility for freedom to the state.

To define the concept of freedom, I have to resort to the English language for it has two terms for what we call freedom: Liberty and Freedom. Both terms refer to different things. A good definition comes from Murray Rothbard, a classic representative of the Austrian School of Economics, who said: “Living in liberty allows each of us to fully enjoy our freedom“. In other words, only when we live in an external system of freedom can we actually enjoy and live out our inner freedom. ‘Liberty’ in English means the external construct of freedom, that is what actually creates freedom for us, while ‘Freedom’ means inner freedom. For example, the freedom to think what I want. The inner freedom that no one can actually take away from me. Enjoying this inner freedom requires an external construct. It is also quite clear that implementing this concept of external freedom, Liberty, is one of the most important tasks of politics.

Protecting freedom is the supreme task of politics. It is not about sustaining and exercising power, as is so often claimed nowadays, but serving the eternal values of justice, freedom, and benevolence. Safeguarding them is the essence and justification of the state. “The three concepts – individualism, freedom, and legal order – are expressions of the same deeper reality which we can call the spiritual-cultural substance of Europeanism,“ to use a quote by my father, Otto von Habsburg.

Ladies and gentlemen, you know that beautiful saying, “Rome was not built in a day”. European unification is not completed in a day either. It is a process marked by progress and setbacks. What is important here is that we do not forget the foundations of Europe, but make sure they are reflected again and again in daily politics. And it is equally important to take the right steps to be able to meet the specific challenges.

Earlier I spoke at length about foreign and security policy, about the need for EU enlargement and about the geopolitical challenges – which are not getting smaller – and the weaknesses that the EU still has in this area.

This also translates into one very specific request – it is precisely in this foreign and security policy issue that European sovereignty is needed. In this specific case, sovereignty means the ability to act and to shape. In terms of potential, European policies would bring clear added value compared with purely nation-state policies. To put it more precisely: the European Union needs a European foreign policy. European foreign policy does not mean coordination of the foreign policies of 27 member states by the High Representative for the Common Foreign and Security Policy (who at the same time is also one of the Vice-Presidents of the European Commission), and where individual countries can block a European position on important issues such as human rights policies in China, for example, but rather an EU foreign ministry headed by a foreign minister.

To this end, we need a core European constitution specifying precisely this foreign policy competence for the European Union. One point, by the way, is that it would also meet all the requirements of subsidiarity.

It must be clear to all of us that this step will not be that easy. It will take a lot of convincing to actually establish a European position in foreign policy. And it will be necessary to master one of humanity’s biggest obstacles – the indebtedness of public budgets.

Perhaps the connection is not clear at first glance, but if we look at the recurring disputes over budget, funds, or, most recently, disputes over a rule of law mechanism and blockades on this, it is clear that the issue of budgets can be used again and again to block progress in individual areas. Let us just think of the mockery of the so-called frugal four in the budget negotiations last year.

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Even those countries in the EU that are not part of the Eurozone are impacted by decisions about the financial future of the EU through the Fiscal Compact and EU budget issues. When it comes to money, there is always a lot of explosive power. An unregulated break-up of the Eurozone would probably massively impact the functioning of the entire EU in a negative way, or maybe even cause it to collapse altogether. A danger that should definitely not be taken lightly considering the geopolitical challenges.

Ladies and gentlemen, we must therefore consider and prepare very specific steps for reducing debts in the Eurozone.

The Fiscal Compact, which should have lightened the debt burden, has failed. Despite legally-established balanced budget amendments, many European countries have incurred higher debts. With the Corona crisis, this situation has become even worse. With its policy, the ECB is counteracting debt reduction. This is true for both the zero interest rate policy and the purchase of government bonds. Such policies do not create any incentives to reduce debt. On the contrary, higher debt becomes attractive.

However, it is necessary that interest rates form freely on the market as a basis for a free economy. If interest rates cannot form freely, the market economy will be undermined in more areas and degenerate into a politically controlled state economy. A scenario that ideologists of a Socialist planned economy may dream of, but which is definitely not in the interest of a Europe of freedom.

Three steps are necessary, in my view, to implement debt relief in the Eurozone and to then again re-establish a healthy economic system. Three steps which mean that these three steps are actually implemented as an overall concept.

First, the ECB should take the sovereign debt of the euro countries onto its balance sheet. Secondly, it would have to guarantee the citizens of the Eurozone secure bank deposits through full coverage with central bank money as well as create a digital euro as full money. And thirdly, market-based migration pressure must be created by allowing competing private currencies, which would stabilise the euro through the practical possibility of emigrating from it.

The first step has already been initiated, albeit not in full, by the ECB through its bond-buying programme. The moment it is fully implemented, the biggest divisive factor in the EU, government debt, will be eliminated at a stroke. The other two steps are necessary to make the transition to a market-based monetary order possible. Banks can then go bankrupt without any problem because bank deposits will not perish thanks to central bank money. The respective bank customer only has to inform the resolution authority to whichever other bank that his deposit should be transferred.

Important in this concept is the implementation of all three points and it must be noted that not all digital euros are the same.

Ideas for a digital euro have also already been presented in publications by the European Central Bank and have been tested internally by the ECB since October. However, these concepts are not aimed at transforming our fragile monetary and banking system into a market-based monetary order; on the contrary, they are intended to preserve the existing fragile monetary system.

Here digitisation is not used to solve problems, but rather to further delay them. Such kind of digital central bank money would de facto be nothing other than the beginning of the abolition of cash. Cash, however, is freedom in action.

Karl von Habsburg: Speech on the future of Europe 4
EPA-EFE//LEX VAN LIESHOUT

Such a concept would perhaps fit in China, where a central authority would then determine, on the basis of social credit points, who may buy what or may buy or must not buy anything at all. Such a totalitarian concept is prevented by allowing for the development of competing private currencies, such as cryptocurrencies.

Ladies and gentlemen, last year the European institutions – the Commission, the Parliament and the Council – already announced a conference on the future of Europe. It is to discuss the most important future issues for European unification. Apart from such conferences, it is always important to discuss the future of Europe, if necessary and also controversially, and with ideas and approaches that are perhaps not on the agendas of the meetings of the institutions.

Even though it is currently a small but dangerous virus that dominates the headlines on a daily basis, we should address these necessary reforms.

Even though we can hold this event only in digital format, even though we cannot debate the contents over a glass of wine or water after this speech, the world around us will not standstill. If we as Europeans do not take our destiny into our own hands, others will do it for us.

My priority here is quite clear. We must take the future of Europe into our own hands.

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