00:00Good morning. I can sense your frustration listening to her. I was agitating. Yeah, why? She says we need to
00:06move faster. Isn't that a good thing? Well, she said that for 10 years and nothing has really fundamentally changed.
00:13The competitiveness word, which is all the rage for the last two years in Brussels, which comes out of this
00:19report that Mario Draghi, the former president of the ECB and the former prime minister of Italy, produced for the
00:26commission, again, lists a number of steps, a number of measures.
00:30That Europe needs to urgently take to reduce the productivity gap with the US to try and limit our decline.
00:40But this is the same kind of story that we heard former Italian prime ministers telling reports for the commission
00:47for the past 15 years. We had Letta. We had Mario Monti.
00:51So these kind of episodes continue and nothing really changes at a time when, of course, China is increasing the
01:02pressure. We have the tariffs. So the geopolitical environment, of course, is getting worse.
01:05So it's all very well for the president to say this. But the reality is that Brussels is not going
01:13to be capable of really changing the picture. Brussels is in the US federal government.
01:20They don't have the prodigious spending powers. They don't have the executive order capabilities.
01:24There are a collection of 27 member states that need to find a consensus.
01:28They will maybe find a political consensus to do something, then bureaucratize it for five years.
01:34So we hear the same stories the whole time. We need the capital markets union. We need the single market.
01:40It will not happen in a lifetime.
01:42Is Brussels the problem?
01:43Brussels is a major misdirection for us Europeans because we have become infantilized into believing that somehow Brussels can do
01:52it for us.
01:52And instead of developing and preserving our own agency, doing things, there is a tendency to look to Brussels in
02:00the hope that someone centrally will do something.
02:03This has been the major rot of the last 15 years, a world in which we have essentially deferred in
02:10Europe to Brussels much of the agency and the capabilities that we ought to be preserving.
02:16At national levels?
02:17Absolutely. Because while Brussels is what it is, the notion that Europe is in decline and is hopeless is very
02:25much attached to that bureaucracy.
02:28It does not really extend to the reality on the ground.
02:33If you go around Europe, we are rich, we are capable, we are talented, we have enormous tech innovation.
02:43But we don't talk to each other.
02:44That is true. But it isn't going to happen because someone in Brussels designs a roadmap or designs a compass.
02:51This isn't the way. They even haven't got the budget to put behind things.
02:58How do we get away from that?
03:01Do we need to get more Hayek? Government needs to get out of the way and let the market do
03:06things.
03:06But that's exactly what we don't do in Europe. We don't let the market do what it needs to do.
03:11The price signal is not there. There are so many other factors that we don't get the information we need
03:15to make the correct decisions.
03:16We have reached into this mindset in which somehow we need to defer to Brussels to orientate us.
03:22Yeah.
03:22And this is something we need to break. Just as an example, you mentioned Eurostack.
03:27Eurostack is an initiative to increase European autonomy in digital because the very major reason why in Europe we're behind
03:34is technology.
03:35We have been slower than the U.S. in adopting and diffusing technology.
03:40So Mario Draghi and everyone else says, well, Europe is behind because our adoption and capabilities in technology, IT, AI,
03:47are behind.
03:48Why are we behind in technology? Because we spent 20 years regulating what we don't own.
03:53We thought the answer was regulating Meta, Google, Microsoft, and so on.
03:57And no one asked the question, but where's our stuff?
04:00If I regulate Google search or Apple app store, where's my cloud? Where's my connectivity?
04:06And this is now waking up to, we are all waking up to this fact that we are a digital
04:10colony.
04:11So is the commission going to do it for us? Forget it. It's not.
04:15It is going to be grassroot.
04:18We are realizing that being a digital colony means we are not appropriating the value.
04:23Do we have to accept that, because one of the things that also came out of that era was that
04:27we didn't want things to get too big.
04:28We didn't want things. And what we are now learning is that scale matters.
04:33The United States produces things at scale. China produces things at scale.
04:36That is not what we have done.
04:38We haven't got a hyperscaler. We will not get a hyperscaler.
04:41People ask me, where are the European hyperscalers? We haven't got them.
04:44That said, I don't think that the answer has got to be we either create a hyperscaler or nothing.
04:49It's not binary.
04:50I think Europe, it's a feature, not a bug.
04:53We are different. Different culture, different capabilities.
04:56Germans and French are not going to buy each other's tech.
04:59Reality.
04:59But there is good tech in France.
05:01There is good tech in Germany.
05:03And it can be essentially connected and federated.
05:05But the point is, we are not going to create giants.
05:09I don't.
05:10But you don't necessarily need giants in cloud.
05:13We have three in Europe that are American.
05:15But you can exist in Europe with cloud that is more fragmented, as long as it's ours.
05:19Because if you're building an extension on somebody else's house, the house will say at some point,
05:24nice extension you got there, I'm going to extract more rent from you, which is what we're doing.
05:29The danger is that China and the United States see us as a series of midpowers.
05:34If we become nation states again, aren't we at risk of being bullied by the big guys?
05:40Collectively, we have enormous power.
05:42And this is why I resent and resist this description of Europe as a middle power.
05:47No, Europe isn't, but its individual components are.
05:49Individual components are.
05:50I'm not suggesting we should go to sort of extreme fragmentation.
05:54There needs to be some coordination.
05:55But the driver cannot be entirely deferred to Brussels.
06:00Because for a variety of reasons, Brussels is impeded in actually acting fast and effectively.
06:06So it won't happen over there.
06:07What are we doing? Sitting on hands and waiting.
06:10So, no, the middle power description of Europe is inapt.
06:15And we should resist it because Europe is extremely rich.
06:19We save twice as much as the American.
06:20We sit on $14 trillion in assets from institutional funders that can be effectively fluidified and invested in Europe.
06:28We don't.
06:29But we are not behind.
06:31We are not behind in technological capabilities.
06:34The issue is really deployment.
06:36And this is not going to come at the speed we need from Brussels.
06:41Either the private sector does it or forget it.
06:44Not Brussels.
06:46Not Brussels.
06:46Definitely getting that message.
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