During the plenary session in the European Parliament in Strasbourg (02-05 May 2022), MEPs debate the state of the EU with Italian Prime Minister, Mario DRAGHI, and his vision for its future. Introductory statement by Roberta METSOLA, President of the European Parliament and opening address by Mario DRAGHI, Italian Prime Minister. This transcription is a result of an automatic process. Please check against delivery.

Strasbourg

debate

plenary session

DRAGHI, Mario (IT)

METSOLA, Roberta (EPP, MT, EP President)

This is Europe Debate (T)

"This is Europe" - Debate with Mario DRAGHI, Italian Prime Minister: Introductory statement by Roberta METSOLA, President of the European Parliament Opening address by Mario DRAGHI, Italian Prime Minister

SOUNDBITE (English), Robera METSOLA, President of the European Parliament The prime minister of Italy Mario Draghi with us today. Prime minister. Let me start by thanking you for accepting our invitation to address the European Parliament as part of our This is Europe debate, where together with European leaders, we discuss our common agenda for Europe's future. We know, dear colleagues, Prime Minister Draghi is a committed a European who, as president of the European Central Bank, already steered the eurozone out of a crisis that could have seriously undermined our monetary union.

SOUNDBITE (English), Robera METSOLA, President of the European Parliament Prime Minister. It is largely thanks to your vision, your commitment and your steady hand that we got through. You gave confidence to our people and to our banks. And I have no doubt that we can rely on your expertise as Europe again faces challenges of a different kind. But there are just that are just as existential in nature. After the Russian army's illegal and unjustifiable invasion of Ukraine. Europe faces another whatever it takes moment. We have seen unprecedented European coordination, solidarity and unity against this war. And this must remain the blueprint for us going forward, be it on further sanctions, on sending aid to Ukraine, on disentangling ourselves from energy dependence on the Kremlin, helping the millions forced to flee or building a new security and defence union.

SOUNDBITE (English), Robera METSOLA, President of the European Parliament So, Prime Minister, you guided your country through the worst of times, coming out from the pandemic stronger. We know that we must take stock of lessons learnt and ensure that we have the flexibility that we need to care for our populations. We must build our future in a sustainable manner that protects the next generation. And we can do this. And I know that we will look to you for a way forward. Prime Minister, let me also thank Italy and the Italian people for your leadership on migration in the Mediterranean. You have borne the responsibility thrust upon you in a humane and value-based approach, and it is now on us to ensure a way forward where Italy and other states do not feel alone.

SOUNDBITE (English), Robera METSOLA, President of the European Parliament Next week on Europe Day, we will receive the conclusions from the conference on the Future of Europe. The onus will be onto us to listen and to act. And in terms of responding to people's demands on policy changes in health, climate, security and more, no suggestion for change should be off limits. Because if not now, then when? President, you have the floor.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Metsola President Metsola, members of the European Parliament, citizens. I'm very pleased to be here at the heart and in the cradle of European democracy. Let me begin by paying tribute to the memory of David Sassone, who was president of the European Parliament during difficult years.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy During the Pandemic, the Parliament continued to meet to discuss and take decisions. And that shows its institutional vitality and is a testament to Mr. Sassoli's leadership. He never stopped working towards a new project of hope, as he called it in his last speech to the European Council. He worked for a Europe that innovates, protects and enlightens. And this vision of Europe is today more necessary than ever before. I'd like to thank President Metsola and all of you for your contribution in moving forward this idea every day.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy The war in Ukraine means that Europe is facing one of the greatest crises in its history. It's a security, humanitarian, energy and economic crisis all rolled into one. Our countries are still dealing, in addition, with the consequences of the greatest health crisis we've had in the last 100 years. The European response to the pandemic was an effective and brave one. Scientific research enabled us in an unprecedentedly fast manner to develop vaccines that prevented contagion and reduce the severity of the disease. We organised the most impressive vaccination campaign of recent history, which has enabled us to sell save lives, put children back into school and relaunch our economies.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy We adopted Next Generation EU, the first major European reconstruction project funded through a contribution made by everyone to deal with the specific requirements of every member state individually. This determination and readiness to act, this spirit of solidarity, they need to be the things that guide us in the challenges we now face, the institutions that our predecessors have built over decades have served European citizens well, but they are inadequate for the situation that arises today.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy The pandemic and the war have meant that European institutions have had to take on unprecedented levels of responsibility. The geopolitical situation is changing rapidly and we have to move and move fast. We need to ensure that managing the crises that we're living through don't lead us back to our starting point. We need to move to a fairer and more sustainable economic and social model.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy We need pragmatic federalism, which embraces all areas struck by the current changes the economy, energy policy, security policy. I mentioned pragmatic federalism, but I should also add that our European values of peace, solidarity and humanity need to be defended now more than ever. Now, more than ever, it is difficult for individual states to defend these values and it will continue to be more and more difficult. We need pragmatic federalism, yes, but we also need a perfect federalism. This is the start of a path that will lead to treaty revision. And if that's going to be the case, we should embrace it. .

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy If we manage from the tragic events of recent years, we can take steps forward and if we can make institutions more effective and make them better able to find solutions for our citizens, well, then I think that we will be able to build a Europe in which people feel proud.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy The Russian attack on Ukraine has called into question the European Union's greatest achievement, peace on our continent. This peace was based on respect for territorial borders, the rule of law, democratic sovereignty.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy It was based on the use of diplomacy as the means to resolve crises between states. It was based on respect for human rights, which have been violated in Bucha, Mariupol and everywhere else that the Russian army has used violence against innocent citizens.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy We need to support Ukraine, its government and its people as President Zolensky has and continues to request.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy This is a war of aggression and it's clear who's invading and who's resisting. We want Ukraine to remain a free, democratic and sovereign country. Protecting Ukraine means protecting ourselves. It means protecting our security and our project of security and democracy that we've built over 70 years.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Helping Ukraine means, first and foremost, working in favour of peace. Our priority is to achieve a ceasefire as soon as possible so that we can save lives and enable interventions in favour of civilians, which are currently very difficult.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy So a cease fire would also further boost or would foster negotiations which haven't yet achieved the desired results. Europe can and should have a central role in fostering dialogue, and we need to do that because of our geography, which means that we're close to this war. It puts us in the front line when it comes to dealing with all the possible consequences of the war. We also have a duty as a result of our history, which has shown that we're able to build stable and lasting peace even in the wake of bloody conflicts. Italy is a founding member state of the European Union. We're a country that believes deeply in peace and we therefore committed to being in the front line when it comes to achieving a diplomatic solution.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy The war is already having a deep impact on our countries. Since the start of the conflict, around five point three million people have left Ukraine and come to the European Union. And mainly these are women and children. That's more than double the numbers of refugees that were present in the European Union at the end of 2020. The number then stood at around 2.5 million. Italy believes in the European values of welcoming and solidarity. We have welcomed, thanks to the generosity of families, volunteers and NGOs, over 150000 Ukrainian refugees. And I'd like to thank all those who have welcomed them. Other countries Poland, Romania, Germany, Slovakia have made even greater efforts. Many refugees want to go home as soon as possible, and some of them have already started doing that. Nevertheless, we don't know how the conflict is going to develop and we don't know how long it's going to last. We need to be ready to continue along the path we've taken to ensure that Ukrainian refugees are integrated into our societies as well as possible. In economic terms, the crisis has disturbed international supply chains and ha...

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Ukrainian food supplies have crumbled as a result of the devastation of war and the impact the export blocs that have been put by the Russians on the ports in the Black Sea and the Azov. See, the Ukraine is the fourth largest supplier of food to the European Union. It produces around half of wheat supplies and a quarter of our vegetable oils. Russia and Ukraine also make up around a quarter of global grain exports. Almost 50 countries in the world depend on them for over 30 percent of their imports.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy In March, the prices of cereals and the main food supplies reached historic highs. There's a major risk that the increase in prices, as well as a lack of availability in fertilisers, will produce food crises. According to the FAO, 13 million more people could suffer hunger between 2023 and 2026. As a result of the war in Ukraine.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Many countries, particularly in Africa and the Middle East, are more vulnerable to these risks and could go through periods of social and political instability. We can't allow that to happen.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Our commitment via development banks, multilateral financial institutions and our bilateral commitments need to be ramped up when it comes to energy. The price of oil, which in December and January was between 70 and ninety dollars a barrel, is now around 105 dollars a barrel. It was it peaked at 130 in March. The price of gas has also gone up massively around. It's around five times higher than it was a year ago. These increases were already being observed prior to the crisis, but they have pushed inflation to levels that hasn't been seen for decades in the euro zone. Inflation is at seven point five percent in April compared to a year ago, and it is having a major impact on families purchasing houses and businesses levels of production.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy The European economy is slowing down in the first three months of 2022, the eurozone's GDP increased by nought point two percent when compared to the last three months of twenty twenty one. The IMF predicts that the European Union will grow by two point nine percent this year compared to the four percent forecasts that were in place just a little while ago. Each of these crises would require a strong reaction from the European Union.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy But given that they're all coming together means that we decisively need to accelerate the decision making and integration process during the coming months. We need to show European citizens that we're up to the task of ensuring that Europe can be up to its history, its values and its role in the world. Europe needs to be stronger, more cohesive and more sovereign. Europe needs to be able to take the future into its own hands.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy As Chancellor Merkel said, during the last 75 years, European integration has often been the best response to common challenges. The founding fathers of the European Union were aware that economic development and social progress were difficult to achieve using the resources of individual member states. They saw the supranational model as the only one that could unite the interests of European peoples and would enable the European Union to influence events that they otherwise wouldn't have been able to have an influence on. Integration has been a gradual process.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy There have been crises and resets. There have been internal disputes, and that has sometimes been extreme resistance. The result has been built bit by bit and sector by sector. The European Union couldn't be built as an ideal city, as Robert Schuman said after the Second World War, Europe responded with the first institution for Economic Cooperation. They restored trade using these institutions. And then you had the European Coal and Steel Community, which did away with customs duties and other barriers, which stopped these goods flowing freely. Then in 1956, we had the Suez crisis and this further sped up the process towards the Treaty of Rome. The Bretton Woods system collapsed in 1971, and when that happened, European countries reacted by creating the the monetary snake and then the European monetary system.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Then there was growing scepticism in the 1980s, and the response was a series of targeted interventions proposed by the Law Commission. And then there is the single European Act in 1986, at the end of the Soviet Union and the reunification of Germany, Europe followed up with the signing of the Maastricht Treaty and the creation of monetary union and then enlarged eastwards. The eurozone crisis around a decade ago led to a boosting and a modernisation of our economic institutions, first and foremost amongst them, the European Central Bank.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy The pandemic, as I mentioned earlier, brought us together again and led to the creation of next generation EU. As you can see, this has been a long path of integration and has changed our lives for the better because it has given us peace, prosperity and a social model which we can be proud of. The single market has not only led to the relaunching of the European economy and at a difficult time, but has led to protection for consumers and workers and forms of social welfare that are unique in the world.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy We've built democratic institutions that are common to all of us, such as this parliament, and here we can achieve shared decision and ensure that fundamental rights are respected. We have made the European Union an area that is not only economic, but an area that defends rights and human dignity. And this is a heritage that we cannot throw away.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Now it is time to move forward further on this path.  On the 9th of May excuse me, the conference on the future of Europe will conclude and the final results suggest that we need to be ambitious. We want to be in the front line of designing this new Europe.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy The geopolitical situation has suddenly become much more uncertain and more dangerous. And we need to deal with economic and social emergencies and guarantee the safety of our citizens. Investments in defence need to be carried out with a view to improving our collective capacities as the European Union and NATO. The last European Council took an important decision when it adopted the strategic compass that needs to be rapidly implemented. We need to go further than these initial steps, however, and build effective coordination between defence systems. Are expenditure on security is around three times Russian expenditure, but there are many, many different systems which this expenditure is spread across. This is inefficient and is an obstacle to the construction of genuine European defence, strategic autonomy in defence requires first and foremost greater efficiency when it comes to defence spending in Europe.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy We need to hold a conference to rationalise and optimise our defence spending and investment. In addition, the construction of a common defence system needs to be accompanied by a single foreign policy and effective decision making mechanisms. We need to get over the principle of unanimity. We need to move forward from the principle of unanimity, which leads to a logic of intergovernmental decisions. We need to move towards decisions taken on the basis of a qualified majority.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy We'll know it by capacity that either a Europe which is capable of taking rapid decisions is a Europe that is more critical, a credible excuse me vis a vis its citizens and the rest of the world. A first move needs to relate to the enlargement process. We need to fully integrate countries that have European aspirations. This is not a threat to the European project. This is part of its implementation. Italy supports the immediate opening up of accession negotiations with Albania and the Republic of North Macedonia in line with the council conclusions of March 2020. We want to boost negotiations with Serbia and Montenegro and we want to support the expectations of Kosovo and Bosnia and Herzegovina were in favour of all of these countries joining the European Union. And we also want Ukraine as a member of the European Union.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy We need to follow the path that we've designed, but we need also to move along as rapidly as possible. Solidarity shown vis a vis Ukrainian refugees needs to push us to European level of management of migrants who come from other theatres of war in general. We need to establish an effective European mechanism to manage migration flows, which goes further than the Treaty of Dublin.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy We need to boost repatriation agreements and ensure that are affected. But we also need to boost legal channels for migration to the European Union

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy In particular, we need to pay more attention to the Mediterranean, given its strategic location as a bridge towards Africa and the Middle East. We can't see the Mediterranean simply as a border area where we need to put up barriers. Many young countries border the Mediterranean and they are ready to put their enthusiasm into relations with the European Union. We need to build genuine partnerships with these countries, not only economic but also political and social in nature. The Mediterranean needs to be an area of peace, prosperity and progress. Energy policy is an area in which Mediterranean countries can and should play a key role for the future of Europe.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Europe faces a profound geopolitical reorientation, which will shift our strategic axis towards the south. War in Ukraine has shown how vulnerable many of our countries are and how dependent on Moscow. Italy is one of the most exposed member states. Around 40 percent of the natural gas that we import comes from. Russia. We don't have coal, we don't have nuclear power. We barely have any oil either. Given this dependency, we find ourselves vulnerable. And this is dangerous in geopolitical terms. Italy intends to take every measure necessary to defend our security and European security.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy We've supported the sanctions thatthe European Union has levied on Russia, including those on the energy sector. And we will continue to do that with the same determination in the future. During recent weeks, we have moved in a rapid and determined matter to diversify our gas supplies, and we've taken important measures to speed up the production of renewable energy, which is crucial to make our economic growth more sustainable. Reducing our Russian imports of fossil fuels mean that it's inevitable for Europe to look to the Mediterranean to satisfy its energy requirements. I'm referring to gas fields because gas can be a transition fuel, but I'm also referring to the massive opportunities offered by renewables in Africa and the Middle East. The countries of southern Europe and Italy in particular have a strategic location when it comes to this energy, we can act as a bridge towards northern European countries.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy This central position will depend on the investments that we can make. At the same time, we need to find solutions to protect families and businesses from increased energy costs. We need to moderate people's bills and fuel prices. And this will ensure that sanctions are more sustainable.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Since the start of the crisis, Italy has asked for Europe to put a ceiling on gas prices imported from Russia.  Russia sells almost two thirds of its natural gas exports to Europe. Many of those go through gas pipelines that can't be reorientated to other buyers. Our proposal would entail using our bargaining power to reduce these massive costs that are weighing down our economies, as well as that. This measure would enable us to reduce the amounts that we send to President Putin on a daily basis, which inevitably end up funding his military campaign. We also want to review the mechanism that sets electricity prices, which is based on the most expensive form of energy, which is usually gas.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Even in normal times, the generation of energy from fossil fuels is more expensive than generating energy from renewables. And this is a problem that's going to get worse over time. If we increase the quota of renewable energy into our energy mix, we'll have prices that are even more non representative of the cost of generating energy if we stick to the current system is currently massive volatility on the gas market and the way that prices are calculated is inappropriate. Gas prices then end up being reflected in the price of electricity. We now get a lot of energy from our renewables, but the cost of that, it being is low but is not reflected in bills.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy In Italy, the price of electricity has gone up four times from what it was last year, and this is having a major impact on our economy. The Italian government and other governments have reacted to protect businesses and families, particularly those that are the most vulnerable. Italy alone has spent around 30 billion euros on that just this year, managing this has many limits, however, sustainability for public finances, for example. The problem is a systemic one. It needs to be resolved using structural solutions that break the link between the price of gas and out of electricity. The problem of energy costs will be one that we look at during the next European Council, and we need strong and immediate decisions that will benefit all European citizens.

 The various crises that derive from the conflict in Ukraine are taking place at a time when Europe already faced massive requirements in terms of expenditure. The digital and environmental transitions require investments which cannot be put off to these need to be added the costs of the war that we need to deal with immediately to prevent our continent falling into recession. In both cases, these are asymmetric costs that strike different parts of the population and protect productive sectors in different ways and need to be compensated for in different manners. There's no rational and reasonable budget that can deal with these problems on its own. No country can be left behind.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy this depends on social peace in our continent and our ability to sustain sanctions, particularly in those countries that because of history, are more dependent on Russia. The European Union has already come up with certain tools that are useful to deal with these challenges. And these are responses that we established during the pandemic, which ensured that the European Union had a widespread and rapid economic recovery. We need to base ourselves on that success and adapt these tools to the circumstances we now face.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Sure, the European instrument, which provides temporary support for and for employment in an emergency, supported the labour market. The European Union needs to extend the scope of that to help countries that request funding. They need to be provided with new funding to deal with the burden of energy costs. Here I'm talking about reducing bills, but also providing temporary support to the lowest paid. For example, as we did yesterday, to reduce contributions for the lowest salaries. The advantage there is that we defend the purchasing power of families, particularly those that are the most vulnerable.

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Using a loan mechanism such as sure means that we avoid using subsidies to pay for national measures that come under current spending. In addition, we're seeing interest rates going up and we don't want to see member states finances getting more precarious. And these kinds of ways of acting avoid member states taking out debt on the markets. This helps to prevent financial instability. And this is a measure that needs to be implemented very quickly now because we've been in this situation for eight, nine or ten months now. This would enable governments to intervene immediately to support their economies. Now, looking at more long term investments in areas such as defence, energy, food security and industrial security, the model needs to be that of next generation EU. This idea of payments by instalment that are made when the objectives are achieved provides a virtuous mechanism that checks the quality of expenditure. This means that we're spending the resources were given appropriately and that's crucial for our credibility vis a vis citizens and other European partners. As I've said, so often, our partners have agreed to tax their citizens...

SOUNDBITE (Italian), Mario DRAGHI, Prime Minister of Italy Good governance doesn't mean just responding to current crises. We also need to move fast to anticipate those in the future. The Founding Fathers showed us how to make democracy in our continent effective in its transformations. European integration is the best tool we have to deal with these challenges with which we're faced today. Like at every decisive point during the post-war period, we need determined nation vision, but above all, unity. I'm sure that we will find these qualities again together. Thank you.