It is a great honour for me to speak to such an audience. And really, welcome to Rome. Such a global audience, and such a selected audience. And a global audience in a time of global change.
Clearly, history did not end, as Fukuyama was thinking a few decades ago. History is running now, even as we listened, from the previous speech, liberal democracies are under threat. Everyone in the world, everywhere in the world, there is a desire…diffuse desire of authority. It was incredible a few years ago, but now from Philippines to China, from Europe to the United States, people seem to be more and more uneasy with the traditional political parties and with the traditional decision making process. All democracy is under accusation. It is not a problem of economic growth.
The world economy, if we analyse it broadly, is performing generally in a positive trend. Not booming, but in a positive trend. Even in developed and developing countries. Even in Africa, if you look at the last years, it is going much better than we could forecast. Even if there are many [?] of the poorest countries in the world. Even if now, after ten years of good growth, Africa and share of GDP in the world is the same as it was in 1980. But there is some new hope. There are countries performing better than others. And even many countries in trouble. But the GDP growth is not the main reason of malaise. Not income growth but income distribution is the number one [problem].
Inequality, has globally increased everywhere in the last generation. Why? First of all the pressure against wages and salaries due to the global competition. Second, a fiscal policy as an answer to the popular request to decrease taxation. There are 40 [?] nobody could make an election campaign saying ‘I will increase taxation’. In the old times the proposal was more wealth for more taxation, less wealth for less taxation. Now only less taxation. The mobility of capital, third.Compared to labour mobility there is much less mobile, of course.
And then a technological change, with a split between high-level jobs with high salaries and lower and lower salary for the middle range workers. And this is quite new. In the old [?] revolution, you had really a big change… the horses… the farmers who had horses were not happy for the car revolution. But in a few years, new roads, new [unintelligible], new investment made things better. Now this change is very slow. And the traditional political parties are accused of dedicating themselves to the next election without taking care of the long-term programmes for people. These are the issues raised by so-called populist movements that are progressing around Europe. They blame the consequence of globablisation.
The unity of this new movement is the visible symbol of globalisation: migration. It is not a new event in the world but because of wars and instability, the strict links among different countries, migration is the target for the world malaise. And clearly unites the malaise in United States, Europe, Asia, everywhere. The symbol of all fears is migration. Even if in many cases like Europe, like Italy especially, migrants are indispendable for the daily economic life. Even if the malaise is sometimes inversely correlated to the number of migrants.
The problem of migration is absolutely important because it’s a problem of identity. Clearly the split in the world demography will bring this phenomenon of migration more and more in the future. If you think one figure solely, here in Italy, the median age is 47 years. In Mali, Chad, it’s between 17 and 18. I don’t need to give other numbers. Migration means loss of identity, and the loss of identity, the defence for the loss of identity is the nation. Traditionally the nation. This is the reason why all the international bodies from UN to EU, WTO, are under accusation because there is this real split.
A total change has happened in Europe, because the EU was the symbol of shared progress of the defence of the rights, all [unintelligible] in the previous conference, and was the visible instrument of a new social justice in a continent devastated by wars and tragedy. I remember when the [unintelligible] there was a meeting in the Romanian parliament in the beginning of the process. All the parties were speaking in favour of joining the EU. And then a man, who defined himself as the member of the non-Hungarian minority of the Romanian parliament – how complicated is Europe, you know! – and he made a strong defence in favour of Europe. I asked him why, he told me, ‘Look – my grandfather died because he was a member of a minority, my father was in exile because he was a member of a minority, I want to enter into Europe because it is a union of minorities. The best definition I ever heard of Europe.
But then things changed, the political atmosphere that was so influenced by the world, by the split between East and West, by the Soviet Union menace, this was not felt so deeply…this materialised in the transfer of power from the Commission to the Council. From the supranational body to the national bodies. The Council has nations represented in it…so the great achievement of Europe stopped. Not any more [unintelligible] of Euro or enlargement, and with a French veto to the European Constitution. Europe was in some way frozen. There was not any more effort to achieve a union of minorities. But a challenge for the European leadership that is totally different. In the long period of economic crisis, when you have a meeting of countries, strongest countries are leading, and Germany was leading for a long period of time, with a political economy that was harmonised with a German spirit, the authorities, and less and less European policies and more and more national. Clearly the Commission was obligated not to tackle the strong political program but technical aspects of the Union.
Technical aspects are important, a necessity for the common market, you know, sanitary rules, even chicken cages are important, but far away from the desire of change of people. We had a moment of new hope when Macron was elected European leader with the song of the European anthem. I did expect the European army after the European currency, because the completion of the vast mother state is based on two pillars, army and currency. But nothing happened. More and more the French policy was a strong foreign policy, but a French foreign policy. In Syria, in Libya, everywhere. So there are these cases in international relations, and the reaction is very clear. The German government has increased the grip on the economic aspect - French foreign policy, German economic policy. Europe that was one engine with two pistons, now is two engines with one piston each, so the car is not going so well. And in the meantime, the EU lost a wheel, with Brexit. A particularly important wheel because… it was always tempted between East and West, but with a strong army, strong finance, strong R&D, but with alternatives in mind. And so now there is this split with an unexpected event that sees European unity and negotiation versus unexpected division.
The only gain-gain compromise is to save trade and to sacrifice mobility of workers and cooperative projects. So we are in a very difficult situation. More and more in British academic society or selected groups, there is the idea to repeat the referendum. Maybe, but I don’t think so. I cannot imagine how you can do it. So we are going into this split that is important, not only because of the dimensions and characteristics of the UK that I briefly summed up before, but also because a great part of the world was looking at Europe – India for example - through British glasses, so we have to reshape the union after Brexit. We have no alternative to this outcome in Europe. Negotiation will be tough, but I think that in the end, there will be a compromise.
The compromise on this chapter in which everybody is a win-win winner [sic], let’s say to have free trade, and nothing else…I don’t say nothing else, but free trade and compromise on the other issues. It will not be easy because the chapters…the link that we had in the past years in the union are so strong. Thousands and thousands of different laws and bills, and to split them will be painful and difficult, so the process to split will be…even if we are trying to find a win-win, it will be a lose-lose game, in any case. So it’s history, and there is nothing to do [sic]. In this meanwhile there was great change, and this clearly was the rise of China. It is absolutely changing the world. The new perspective is completely out of Europe. I can remember the attitudes of the American presidents vis-a-vis Europe, they changed visibly during my political life. The Bush family, even with the differences between father and son, they were European by definition.
Clinton was European by education. Obama was not European. For Obama, Europe was like any other part of the world. Typically [unintelligible] absolute leader of the world. It was quite interesting. The only change Obama made during his presidency vis-à-vis Europe was that in the beginning he was talking with a British prime minister, in the end he was talking with a German Chancellor. Step by step this was a change that was a consequence of the political change inside Europe. Clearly, if we don’t have a stronger wake up [call], Europe will be like a nut in a nutcracker, because of the different forces that are waking up in the world. We are Euro [?] now, and I am of course Italian. But I think I tell the truth when I tell you that in the Renaissance period, the Italian state was dominating the world, Rome, Florence, Genoa, Venice, Milan, they were leading in technology, weapons, philosophy, art, Michaelangelo, Raphael and so on.
But then we had the first globalisation, the discovery of America, and we didn’t stick together. We remained divided. And no Italian state was of course able to build the new caravels that were necessary for new trade between America and Europe. And Italy disappeared for five centuries from the world map. The world was under the rule of England, France, Spain, that had the dimension for the new globalisation. Look, now we are in Europe in the same situation. Germany, France, Italy, Poland, all the European states are in the new globalisation, impossiblitated [?] to have a role, but in that time the caravels were too small. But which are the new caravels of the world? Apple, Google, Alibaba, Ebay, Amazon…there is no-one European. They are all Chinese and American. This is the new world in which we are living now.
Even if Europe is still number one in industrial production, number one in GDP for a short time, but still number one, but with the split that we have in the decision making process, we cannot exercise the moderating role that will be necessary to avoid the [?] effect for which we are all afraid in the world. The repetition of what happened in Ancient Greece when Sparta was dominating power in Athens, was trying to rise up, and the war was unavoidable. Historians say we had after that 16 cases in which there was some sort of tension between a rising power and an established power.
In 12 cases we had a terrible war and in only 4 cases we had an agreement. What is my wish? My wish is with some sort of new European spring, we can avoid being the 13th case of war and I hope that we shall be for the 5th time, the builder of peace. For building this peace, Europe is absolutely necessary. So I end my short [speech] by telling you that in a moment of increasing tension, in a moment in which we have all the supranational powers in crisis, think of the last United Nations meeting. To me it was incredible, the annual meeting of the United Nations, Putin does not show up, Xi does not show up, the only great speaker is Trump and he speaks against the United Nations. So in this moment in which we need supranational bodies to calm and slow down the tensions in the world, and I think in Europe we can only do it together, because now, even France and Germany are very small caravels vis-à-vis the dimensions of the new global world.