Helmut Kohl, The Pragmatic Dreamer

We are here today to celebrate a man who was able to combine dreams with fact. Helmut Kohl transformed dreams into reality. His dreams were the reunification of Germany and the definitive irreversibility of the European project.
You know better than I the great significance of the reunification of Germany, and you know better than I how difficult it was. You also know better than I the hesitations and reservations of many world leaders. Even Helmut knew it, and profoundly recognized the difficulties, but to him one idea was clear: that that was the moment, and that there would not have been another opportunity. I remember when he used to tell me how and when he realized that the time was drawing near and that they would need to be ready for the difficult steps that would have to be taken. He had been to East Germany and had felt a strange new sentiment from the people there.
We remember the fear of certain European leaders, and the concerns of many German politicians, who feared that the reunification would not have been possible without bloodshed and other tragic consequences. Helmut assumed the risks and I always asked myself how he had done it. Helmut, like all Germans, not only felt the tragic pain of the division of his country, but he felt that the risk should be faced not in a matter of days or weeks, but in just a few hours. Clearly you need a strategy, ideas, to accomplish the task. Coalitions and consensus had to be built. But you also need other virtues. The first is knowing how to simplify problems, arriving as quickly as possible and in the most clear-cut way to the point where the answer has to be either yes or no.  This is the most important virtue of any leader, both in politics and in business, and it is a rare one. When you say yes, and you are convinced of it, then there can be no more obstacles. But your yes can only becomes reality if your personal prestige is high enough that your actions are accepted and your people follow you even if they themselves are not fully convinced. And this is the second virtue, Helmut Kohl’s unparalleled talent: with his actions and his leadership, he was able to convince even the most reluctant interlocutors both inside and outside of Germany.
I was not yet involved in politics when Germany was reunited, and as an economist I did not agree with the idea of a one-to-one exchange rate between the East and West German Marks. But when I understood why he had done it, after I entered politics myself, I supported all of the decisions necessary to contribute to the growth of a recently reunited Germany. And I did everything in my power to ensure that this indispensible historic project was accompanied by the necessary sacrifices in terms of growth and interest rates by Germany’s traditional European partners.
We worked side by side for the creation of the Euro. Kohl, despite what was told in subsequent interpretations, was perfectly aware of the challenges of the Treaty of Maastricht and the Euro. Together we analyzed the risks; many times we raised the issue of the need for a strong and coherent strategy where the monetary union was accompanied by a growing political and economic union. I remember our conversations well: we were completely convinced that an irreversible process had begun, even if at the time it was politically impossible to do everything. But the strategy was clear, coherent, realistic, and perfectly aware of the need for subsequent steps. Many times we discussed in depth what would have needed to be done later.
Europe has changed since then. Following the years of hope, we entered the years of fear: fear of globalization, fear of immigration, fear of China, but, worst of all, a lack of faith in our future. Bit by bit we sank into a situation in which the European democracies are scared of the populist parties and have become addicted to short-term decision-making.
The foundations of the Euro were healthy and robust. The Euro has worked perfectly for seven years. The Euro had been slowly drawing up alongside the dollar and was finding favor in the emerging superpowers, foremost in China. The mistake was not in the foundations laid for the Euro, but in some of the subsequent decisions. And then an unexpected and unprecedented financial and economic crisis struck, starting with the United States. This crisis is now devastating Europe, thanks to our lack of unity.
The European Union is still a world superpower: the largest in terms of gross domestic product alongside the United States, the largest exporter thanks mostly to Germany, foremost in the efforts to maintain a sustainable welfare state. The Euro area is decidedly in better shape than the US in terms of public debt, and its prospects for repairing its balance sheet are no worse than Washington’s. Despite these facts, Europe is considered the loser in the face of these new global challenges, simply because we are not united, because we are afraid to face the new challenges of an inevitable globalization.
As an industrial economist – and through teaching in the United States and China – I understand the significance and consequences of the emergence of Asia. The Asian supply chain that unites China, Japan, and South Korea is growing rapidly in size, technology, and productivity despite political tensions. The “Asian district” has challenged the world. Only united can we stand up to this challenge, only in unity can we give our children and grandchildren hope and a future.
And only Germany can be the fulcrum and propulsion for the European answer to these challenges. Not only thanks to its political reunification and ability to implement reforms, but also because of the unprecedented strength it has acquired through the creation of the Euro. For example, Germany has never had such a large export surplus, $200 million over the last 12 months, second only to China, while the US has a deficit of over $450 million.
Why, despite all this, is Europe still considered the sick child of the world economy? Because we are not united. Our sovereignty is limited by the fact that our policies are dominated by fear of international speculation. Only the United States and China are completely immune from this danger. Paradoxically, we can come to the conclusion that in other countries the real Prime Minister, the real President, is Mister Spread. Putting our sovereignties together is the only way for us to regain control. A strong Europe is in all our best interests, and so we need to work together for a stronger Europe. I assure you that Italy is doing everything in its power (and the Prime Minister Mario Monti stressed this to the United Nations as well yesterday). Italy will honor all of its obligations to our European partners, even though we know there will be consequences in terms of growth and unemployment. We have a common goal, the goal of a strong and united Europe that Helmut has supported so intensely.
Europe was born from a political notion: to bring peace, democracy, and prosperity to a continent ravaged by centuries of war. But its progress has not been strictly economic: Schengen, Maastricht, expansion and the Euro have had profound political repercussions, but the real goal, taking a step back from national sovereignty and focusing decisions at a European level, is proceeding very slowly, and has actually begun sliding backwards in the minds of Europeans. The economic crisis has reignited old grudges and national stereotypes that we would have rather forgotten forever. Europe is going in the opposite direction from that which had been our objective.
The troubled countries in Europe know that it will be a bitter pill to swallow and that it is inevitable, but it will mean deterioration in growth and employment. Recreating the conditions for growth needs to be the imperative of the monetary union, of the fiscal union, of the financial union, and of the political union. The countries in crisis need to know that they can count on European solidarity without abandoning the path of austerity.
We need a long-term vision. If Helmut had thought only of tomorrow and not of future generations, we would never have had the German reunification, and we would never have had the Euro. It is comforting to hear Angel Merkel speak more and more about political unity. I am convinced that only continuity between the policies of Helmut Kohl and those of Angela Merkel can save Germany, and Europe, together.