Special Address at Davos 2022 by Olaf Scholz, Federal Chancellor of Germany, in full

Olaf Scholz, Federal Chancellor of Germany, at Davos 2022

Olaf Scholz, Federal Chancellor of Germany, at Davos 2022 Image: World Economic Forum

Olaf Scholz
Federal Chancellor of Germany, Federal Chancellery of Germany
A hand holding a looking glass by a lake
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This article is part of: World Economic Forum Annual Meeting
  • Olaf Scholz, Federal Chancellor of Germany, delivered a special address at Davos 2022.
  • His speech focused on upholding a global rules-based order, and valuing freedom, sovereignty and self-determination.
  • He warned that 'deglobalization' and 're-nationalization' will cause more harm than good.

Ladies and gentleman,

We have experienced a thunderbolt which struck on 24 February 2022.

Russia’s invasion of Ukraine does not mark the outbreak of some little conflict, somewhere in Europe. A major nuclear power is behaving as if it had the right to redraw borders. Putin wants a return to a world order in which strength dictates what is right; in which freedom, sovereignty and self-determination are simply not for everyone.

That is imperialism!

That is an attempt to blast us back to a time when war was a common instrument of politics, when our continent and the world were without a stable peaceful order. That is why, three days after the Russian attack, I spoke in the Bundestag of a “watershed”.

This is, by the way, in line with the analysis of the World Economic Forum and the theme that you, Professor Schwab, have chosen for this meeting. As you say, the world is indeed at a turning point.

It is not only the statehood of Ukraine that is at stake.

The system of international cooperation that was designed in the aftermath of two devastating world wars, to give effect to the vow of “never again”, is at stake. A system that subjects power to the law, that bans the use of force as an instrument of politics, and that has in the past decades guaranteed us freedom, security and prosperity.

Our goal is therefore crystal clear: we cannot allow Putin to win his war.

And I firmly believe that he will not win it.

Even now, he has failed to meet any of his strategic goals.

Russia capturing all of Ukraine seems less likely now than it did at the start of the war – thanks not least to the remarkable defensive actions fought by the Ukrainian army and the Ukrainian population. Ukraine is now emphasising its European future more than ever before – in a similar vein as Georgia and Moldova.

Incidentally, we are also pushing ahead with the integration into the EU of the countries of the Western Balkans. The brutality of the Russian war has welded the Ukrainians together as a nation more than anything in the past. Sweden and Finland, two close friends and partners, now seek to join the North Atlantic Treaty Organization. We will welcome them with open arms!

And lastly, Putin underestimated the unity and vigour with which the G7, NATO and the EU would respond to his aggression.

Working together, we have imposed sanctions that are tougher and further-reaching than any previously imposed on a country of Russia’s size. Even now, the cost to Putin’s regime is huge – and is growing every day.

For the first time ever, Germany is supplying arms to a war zone – including heavy weapons. To my mind, if one thing is clear, it is that Putin will only seriously negotiate a peace when he realises that he cannot break Ukraine’s defences.

That is why we are supporting Ukraine. This support is closely coordinated with our partners and allies. For on this, too, we are united: we will do nothing that could make NATO a party to the conflict. Because that would mean a direct confrontation between atomic powers.

The aim is rather to make it clear to Putin that there will be no victor’s peace. Ukraine will not accept that – and neither will we. And finally, ladies and gentlemen, we have also performed an about-turn on German defence policy.

We have decided to equip our armed forces so that they are at all times in a position to defend our country and our Alliance under the new conditions created by Russia. We are even in the process of changing our constitution in order to make this happen.

We want to make available 100 billion euro for the necessary modernisation of our forces in the coming years. The security of our country is at stake. We have an unequivocal message for our allies: You can rely on Germany!

There’s another point on which there is no doubt: we will end Germany and Europe’s dependence on energy imports from Russia.

A decision will be taken this autumn on coal. We plan to phase out Russian oil by the end of the year. And we are also working flat out to end our reliance on Russian gas. We are turning our attention to floating LNG terminals and alternative sources of supply. We are moving forward with the development of the requisite infrastructure – terminals, ports, pipelines – with unprecedented alacrity.

Nonetheless, this restructuring will have an impact on Europe’s economies. We are all feeling it, not least through rising energy prices. And of course this presents a very special challenge to a country like Germany, which is an industrialised nation and plans to remain so.

We will therefore not leave our businesses to weather this alone. We have put in place a protective shield to secure loans and where necessary assist with equity capital.

And in the coming years we will invest billions in the transformation of our economy. We want to halve the duration of planning processes. And within the next few weeks, we will launch an alliance for transformation through which we will coordinate with employers and employees on the restructuring of our economy. That way everybody will know what to reckon with.

Ultimately our goal of achieving carbon neutrality by 2045 has been given an additional boost by Putin’s war. Now we have even more cause to move away from fossil fuels.

In Germany, we are working urgently on an emergency climate action programme. The first steps have already been taken. We want to almost triple the speed with which we cut emissions by 2030, and generate 80% of our electricity from renewable sources. At the same time, we want to make progress on transforming the transport and heating sectors, and are working to develop a hydrogen economy. We aim to remain an industrialised country whilst becoming climate neutral.

The 2020s will be years of change, renewal and rebuilding. We will not walk this path alone. With the EU’s “Fit for 55” package, the European Union seeks to ensure that the course is set for climate neutrality by 2050 in Europe, too.

Energy and climate policy are areas that exemplify how Putin’s war has made it all the more urgent for us to act, but it is by no means the sole event that has caused this watershed.

The theme of this meeting is “history at a turning point” – a theme that encompasses far more than solely this breach of the international peaceful order.

In addition to Russia’s war, I see another global development that constitutes a watershed. We are experiencing what it means to live in a multipolar world.

The bipolarity of the Cold War is just as much part of the past as the relatively brief phase when the United States was the sole remaining global power – even though the United States will, of course, remain the dominant power factor in the world.

Incidentally, I don’t give any credence to the reports of a new bipolarity between the US and China, either. Of course, China is a global player – “once again”, we should add, because historically speaking, that was consistently the case throughout long periods of world history.

But just as that does not mean that we need to isolate China, neither does it give rise to the claim of Chinese hegemony in Asia and beyond. Particularly since we are seeing new and ambitious powers emerging in Asia, Africa and Latin America. They are all grasping the opportunities that globalisation offers them.

Even before the start of the pandemic, the consultancy firm PricewaterhouseCoopers published a report on the state of the world in 2050. It maintains that the seven largest global economies will then include countries that we currently still describe as emerging economies. As well as China, these include India. And Indonesia, Brazil and Mexico. After the pandemic, this analysis is hardly likely to be any different.

Another factor is Russia, which is attempting to secure its importance by means of military force. With horrific consequences, as we are witnessing at the moment. And then there is the European Union, which is finally beginning to convert its geo-economic weight into geopolitical influence. That is what we mean by European sovereignty.

In this multipolar world, very different countries and regions are demanding greater political participation in line with their growing economic and demographic influence. And to be quite honest, that does not pose any threat. Yet where there is a shift in the balance of influence and global power, it also inevitably affects the political order.

The crucial question is this: how can we ensure that the multipolar world will also be a multilateral world? Or to put it another way, how can we create an order in which very different centres of power can interact reliably in the interests of everyone?

This task is by no means a trivial one, given that there is no historical precedent. And yet I am convinced that it can succeed – if we explore new paths and fields of cooperation.

After all, the alternative – everyone for themselves and at the same time everyone against everyone else – involves high risks and costs, even for the strongest powers.

That is another reason why a firm and unequivocal response to Russia’s blatant violation of international law was so vital. Because this response also makes clear to everyone else that a multipolar world is not a world without rules!

Upholding this principle is in everyone’s interests. That is why it was so important that in March, 141 United Nations member states condemned Russia’s attack in no uncertain terms.

Yet we know that for many countries in Asia, Africa and Latin America, the war in Ukraine is geographically far away. However, its global consequences in the form of looming hunger, commodity and inflation crises, are all too close.

If we want these countries to continue to join us in defending freedom and justice in the future, we also need to show solidarity with them and take their concerns seriously.

In a multipolar world, this kind of international order will not be achievable without international solidarity. That is why we are investing in new partnerships. That is why we are placing existing partnerships on a broader footing – the buzzword here being diversification.

And to this end we are putting our faith in a characteristic that unites us with many countries of the Global South: we are democracies.

For too long we have practically equated “democracy” with “the West” in the classical sense. Yet it was actually this western world that denied the South its rights and its freedom in a most undemocratic manner until well into the last century: I am speaking of colonialism.

Acknowledging this is not only a question of honesty. It is also a prerequisite for closer cooperation with the world’s democracies, which we need and towards which we are working.

At the beginning of the week I returned from a trip to South Africa, Senegal and the Niger. While there, I made a conscious decision to encourage these countries to cooperate closely with our G7 Presidency – on issues such as the energy transition, climate change mitigation, the fight against the pandemic, migration and, last but not least, on how we can maintain and strengthen international cooperation in these times.

I made a conscious decision to invite my colleagues from South Africa and Senegal, as well as the Heads of Government of India, Indonesia and Argentina, which holds the Presidency of the Community of Latin American and Caribbean States, to the G7 summit in Elmau at the end of June. They represent countries and regions whose contribution is needed by the world if we are to make progress on global challenges in future.

In Germany we have made a conscious decision to adopt an Indo-Pacific strategy in order to intensify cooperation with the countries of this forward-looking region. The priority is to make progress on issues that will define the future.

And at the same time it is about showing that international cooperation provides answers. Multilateralism works. That is, incidentally, the condition for halting the deglobalization trend we are currently experiencing. Of course we need to reduce some of our strategic dependencies.

The pandemic has shown us that, not only in connection with medicines and protective equipment. Our dependence on fuel imports from Russia likewise falls into this category – that is why we are putting an end to it. Or take the current lack of semiconductors, for instance. Against this backdrop, it is really good news that Intel is planning to manufacture chips in Germany in future – that is, by the way, one of the largest industry settlements in the history of our country.

What we need now is greater economic resilience in this multipolar, crisis-prone world. And here, too, the answer has to be diversification – for politics and business alike.

At the same time we need to take care that necessary diversification does not become an excuse for isolation, customs barriers and protectionism.

To put it plainly: deglobalization is not the right way to go! It will not work.

For, contrary to everything that populists grandly proclaim, it is the enterprises, employees and consumers in our countries who pay the price of customs duties and trade barriers. Those people, therefore, who are already bearing the brunt of soaring prices.

And another thing we must not forget when people speak carelessly of deglobalization or even decoupling:

- The proportion of people living in extreme poverty has fallen in the last 40 years from more than 40 percent to below 10 percent.

- Child mortality fell in the same period from ten to below four percent.

These achievements are not only the result of national policies.

They are above all the result of international task-sharing, of knowledge exchange and global economic connectivity, which have enabled billions of people to find their way out of poverty. By that, I don’t want to say that globalisation has only produced winners in the last 20 or 30 years. That is especially true with regard to industrialized nations.

Global competition, the relocation of production to other countries or regions, the crises on the financial market, the impact of the digital transformation on the labour market – all of this is unsettling many of our citizens. All of this has intensified the calls for renationalization.

Policymakers and business must take these concerns seriously. And our answer cannot be to simply carry on as before.

Particularly as the special phase of globalisation we have experienced in North America and Europe during the last 30 years – with reliable growth, a high level of added value and low inflation – is coming to an inevitable end. One reason for this is that the low-cost producers of the Global South are gradually becoming thriving economies with their own demand, which aspire to the same level of prosperity as we have and are competing with us for the same goods.

What we require, therefore, is a sustainable, resilient globalisation which uses natural resources sparingly and, above all, takes the needs of future generations into account.

A globalisation based on solidarity which benefits all citizens – in all parts of the world. I want to illustrate what I mean with three examples.

Take, for instance, climate change. We all know that if we fail to meet the Paris climate goals, the world is heading towards disaster.

At the same time, representatives of developing and newly industrialising countries often tell me: “We need fossil fuels for the foreseeable future to take advantage of our development opportunities. Just as you have done for more than 150 years.”

Our companies in the industrialised countries, on the other hand, tell us: “If you impose even tougher climate rules, then it’s possible that entire industrial sectors will be relocated to countries where the rules are more lax.” Carbon leakage is the keyword.

We have to resolve these conflicting interests. And we have to do that through cooperation.

We have set ourselves the goal of making the G7 the core of an international Climate Club which will implement the Paris climate goals at an accelerated pace. This club is open to all countries – provided they are prepared to commit to certain minimum standards.

In this way, we can create a level playing field and prevent different rules in different countries from distorting competition.

At the same time, the Climate Club countries will further develop climate-friendly technologies with one another and work together even more closely – for example, in the sphere of hydrogen.

As the G7, we also want to advance the issue of international climate financing. Along with South Africa, we want to offer other developing and newly industrialising countries Just Energy Transition Partnerships which will help them to transition fairly to a climate-neutral future. That will enable us to get on board partners we urgently need for the climate transition.

My second example concerns the UN’s 2030 Agenda.

There is a danger that the pandemic and Russia’s war will reverse the progress in development made during the last few decades. This is especially dramatic in the fight against hunger and poverty. If we do not take quick and decisive action to counter it, we run the risk of experiencing the world’s worst famine for decades.

As the holders of the G7 Presidency, we have therefore established an Alliance for Global Food Security along with the World Bank.

Germany made available just under half a billion euro for this at the very outset. In addition, we are investing more than a billion euro each year in rural development and infrastructure as well as in food security.

And we are canvassing intensively for support – not only from other governments and international organisations but also from scientists and academics, civil society, foundations and, not least, leading industrialists like you. The Alliance for Global Food Security is open to everyone!

And something else is important in this situation: as the G7, we are committed to open agricultural markets. In saying this, I am aware that there is still much work to be done, also in Europe.

Export restrictions are no solution. They undermine global food security. Indeed, they endanger human lives!

The third field where we want to ensure better international cooperation concerns how we deal in future with health crises.

All of us hoped that 2022 would be the year when the global economy bounced back following the COVID-19 pandemic. Instead, we have seen lockdowns in China, new virus variants and continued high case numbers.

The pandemic is not over yet – much as we wish it were. And it will not end until we finally stop the recurring cycle of new mutations triggering new waves of infection.

That is why, as the G7, we will continue to do everything in our power to support the ACT-Accelerator coordinated by the WHO. It ensures that vaccines are distributed around the world. Germany is leading the way here by providing 1.3 billion euro this year alone.

I ask all of you and your companies to join us on this path!

One example of what cooperation between policymakers and business can achieve is the development of global vaccine production. A few weeks ago, I joined forces with the EU, the African Union, the Presidents of various African countries and the German company BioNTech to launch a project designed to establish modular production sites in South Africa, Rwanda, Ghana and Senegal. This is about the fight against COVID-19 but in future also about the fight against diseases such as malaria or Ebola.

The G7 Health Ministers agreed on a Pact for Pandemic Readiness last week. This is aimed at improving the exchange of data, fostering networks among international health experts and mobilising rapid response teams to tackle an outbreak if the need arises.

And we will strengthen the World Health Organization on a durable basis. We achieved a first breakthrough in late April: we agreed at international level to finally place the funding of the WHO on a broader and more reliable foundation.

Davos has often provided impetus for these issues.

Not least, GAVI – The Vaccine Alliance was founded here in 2000. It was worth its weight in gold during the pandemic.

Therefore, ladies and gentlemen, I would like to end by evoking and appealing to this good spirit of Davos.

Yes, we are experiencing a watershed. History is at a turning point.

However, we are not at the mercy of history.

If some want to lead us back to the age of nationalism, imperialism and war, then our answer is: count us out! We stand for the future!

And if we notice that our world is becoming multipolar, then that has to spur us on:

to even more multilateralism! To even more international cooperation!

Thank you very much.

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