Remarks

Thank you so much for having me, and so good to have so many friends, also Klaus will be speaking about the innovation part of NATO. We're very happy, Benedikt, all of you.

Listen, history – and Europe's history is no exception – is built between ideas, like the Schuman and Monnet idea, and shocks and moments of inflection of history. That's what human species and human history and human geopolitics have always been produced by.

So in a way, in February last year, when Russia decided to invade Ukraine - and NATO knew that they were about to do that - it was basically a huge shock. And probably not that much of a shock for Eastern Europeans because knowing Russia historically, they knew that this imperial instinct in Russia never dies, but especially for the Western European friends and allies and members of the European Union and NATO and our German friends – Benedikt will speak more about this - it was a sort of a brutal awakening to a new reality. They call Zeitenwende in German, and I think Benedikt will say more, and we were in Elmau together speaking about this.

What is really nothing short of remarkable [is] that basically huge shock, this awakening in European nations - and across NATO and across the world - led to unprecedented unity among the Western alliance. Something Mr Putin never believed: He really believed his own propaganda that the West is weak and decadent. We proved to be strong and resilient. He believed that Ukraine doesn't exist as a nation. And we have seen today a brave nation forged under war and becoming the 3D beacon of freedom, and also fighting for our own freedom.

There is also something that is happening in Europe and Chancellor Scholz, the German Chancellor, said it in Prague, I think, two or three months back: That the centre of gravity in Europe is moving eastward. And that's a complex statement. Because geopolitically, indeed, with Russia decoupling herself from civilised Europe - because they opted out, they opted out, not us, Russia opted out from civilised Europe, - and by Ukraine coming closer to us, Moldova coming closer to us, Georgia coming closer to us, the Western Balkans coming closer to us, in fact, the centre of gravity in Europe is moving eastward. It's a new geopolitical geography in Europe as we speak.

But there's also a much more profound transformation, it’s of the economic model of Europe, not only the strategic model, and the fact that in Vilnius at the Summit, we hope that all Allies will accept to spend at least 2% of GDP for defence. And what Germany has been doing with this huge fund to re-constitute the Bundeswehr and your great nation’s capabilities is nothing short of formidable.

What happens with the economic model? The fact that we are now out of the dependency on Russian gas, that there is a strong, strong operation for economic resilience in Europe, on supply chain reconsideration, on clean and green energy, on this realisation in Europe that we are not that doing that well on microchips and AI and quantum, the next generation of innovations.

So what I'm saying is that it’s not only the geopolitical shock reshaping the architecture of Europe in security terms, with a stronger Europe with a stronger EU, which is good for NATO. This is not a zero-sum game: If the EU gets stronger, it's good for NATO, and the other way around.

But I would say the most important consequence is the consequence on the huge competition for a new balance in world affairs that is coming from this war in Ukraine. So we are now, for the first time in decades for America - and in centuries for Europeans - we are seeing a superpower, which is China, hooking up to a declining power – Russia - and with a revisionist power like Iran and proposing to the world an alternative model of organising human societies from the one that we have built together in Europe and in America for the world, which is liberal democracy, and free markets, and capitalism.

So what we have today - and this is just the tip of the iceberg, the war in Ukraine, - is an epical fight for which proposition will be successful and dominant in the 21st century: Between freedom and dictatorship, between free markets and the fusion between state and business. And I would say the way in which we'll be addressing Ukraine and incorporating Ukraine in the political West will very much dependent on the success of this broader operation.

The last comment: When we talk to our friends from the rest of the world - from India, from South Africa, from Nigeria, from Brazil, - sometimes what we tell them [is] the self-evident truth that Russia is a huge aggressor, that they have broken every single principle of the UN Charter, that you don't invade an innocent nation and pretend that nothing has happened, that they have the right to spheres of influence. So what we'll have to do a much better job of is to talk with more humility, listening more to the concerns and the complaints of the rest of the world that has now is also trying to find a balance in this changing world.

So Ukraine is very important. It's important for Europe. It's also important for the world, because China and others are watching. And they are looking into how resilient the support for Ukraine is from the political West. And if the lesson they will learn - that the cost of doing something similar, let's say in Taiwan, is too expensive on the cost-benefit analysis, - they will probably refrain from doing this. If we stop or don't do a good enough job for Ukraine, the lesson they will learn is that force and aggression and military conflict pays. And this is something I believe would be bad for the rest of the world, not only for Europe.

I still believe that Monnet and Schuman were right; I think Europe has potential to thrive. But we have to do it in a way that will make us relevant, united, and also protect the values that we are based on, which is democracy, rule of law, freedom and respect for the sovereign rights of nations to choose their destiny. The place of Ukraine, the place of Georgia, the place of the Republic of Moldova, the place of the Balkans is in civilised, democratic Europe. And I know that one day, they will be fulfilling their dreams, so courageously and so bravely fought on the battlefield. And we are preparing to have a long and positive connection to these great nations fighting for their survival, and fighting for a better place under the sun.

Thomas Eymond-Laritaz, founder and CEO of Highgate, moderator: I would hate to monopolise the discussion between us here on the panel. And I would very much like to have questions from the audience. And for those who are following us online, or if you want me to send questions on the iPad, you just scan the QR code over there. But are there some questions from the audience?
Yes, please. If you want to stand up…

First question from the audience: My question is: There’s been a lot of conversation today about Taiwan and China, and that one of the reasons why the US should be investing now in Ukraine is to send this message of deterrence to Xi, right. But there is a lot of concern - I work for a congressman in DC - and there's a lot of concern, especially among lawmakers, about where our European allies really will be, and how with us they will be, when it comes to the unthinkable of China, in some way, you know, invading Taiwan. So I'm just curious, kind of, what you all know about conversations happening within Europe, plans being made, and the realities that we might be facing if something like that happens.

Thomas Eymond-Laritaz (Highgate), moderator: Well, President Macron could not join the panel, but you might have heard his remarks - was it last week or the week before? Now, are Macron’s remarks reflective of the thinking in the rest of Europe or is it just the French way of doing things differently? Dr Franke, do you want to comment on that?

Benedikt Franke, Vice-Chairman and CEO of the Munich Security Conference: You know, as a German commenting on French policy… Let’s put it that way: Had I wished for a European delegation to travel together, and not the President of France going one day, giving one interview, and saying the exact opposite as some of the Germans or Italians that were there the week before?
He was kind enough to take Ursula von der Leyen with him. No one really realized that she was she was around because –

Thomas Eymond-Laritaz (Highgate): No, everybody… But everybody she didn't accompany the German Chancellor, by the way.

Benedikt Franke (Munich Security Conference): Yeah. So is Macron’s comment reflective of a common European position on China? No. Is Europe waking up to the Chinese threat and challenge? Definitely. Look at the language in the security documents that have been coming through the last couple of months.
States are realizing that we must not make the same mistake with China as we’ve done – with Xi’s China – as we’ve done with Putin's Russia. And again, I come back to this realisation of dependencies.
This is an enormous change - and it will be an enormous change - for investors and money people like you. Because, you know, BMW, for example, great German company, is making 47% of its profits in China. There is nothing wrong with making money in China, but not 47%. Because if Taiwan is invaded, I'm pretty sure that BMW will make less profit there, and it will endanger the entire company, with hundreds of thousands of employees in Germany and in Europe.
So this is now ongoing, that all these companies are changing the risk calculus, and the government is trying to help to find new markets, make market entry in places like Africa and Latin America easier. And this is happening, but it won't go overnight. And I think the US assistance is crucial to cover the time between Europe getting its act together and Xi moving. And hence, I implore you and your congressman to keep doing what you're doing. Surely Europe, Germany, needs to up the game and provide even more, but if you fail to continue to contribute, I think we're in a really bad place.

NATO Deputy Secretary General Mircea Geoană: Can I jump here? I don't want to be the rabbi here, to say that everybody is right. I’m saying -

Benedikt Franke (Munich Security Conference): I was right.

Thomas Eymond-Laritaz (Highgate): You are always right.

Deputy Secretary General Geoană: That's why we are so such good friends. Listen, I think there is a sort of a false proposition here. In Europe, we've been here for many, many years. Previous administrations, previous, you know, legislatures in the US Congress. The idea to pivot to Asia, and in a way this false proposition that in order to do more to face the challenge of China, you have to disengage from Europe - not true.
If there is something that America has and China will never have, even if they gang up with Russia and Iran and North Korea, is the fantastic number of allies and friends that America has all over the world. To have one organization like NATO, to have 31 Allies - because Sweden is coming soon – in one place…
And speaking of China: We have not had in NATO's official documents any word on China till 2019. There was a summit with the previous American President in London. And the first time NATO had something about - said something officially about China – last year in Madrid we had a summit, and for the first time ever we invited to a NATO Summit the leaders of Australia, New Zealand, South Korea and Japan coming to a NATO Summit. They will come again at the Vilnius Summit that we have.
So what I'm just saying is that I think it's sort of a, sometimes a false paradigm here, that in order to do more against China you to do less in Europe. No: Together, we have to be into this.

Thomas Eymond-Laritaz (Highgate): it's actually the other way around: To be able to do more vis-à-vis China, you need to demonstrate that in Europe, the Western liberal powers are actually not allowing Russia to invade a neighbouring country. That's the best prevention of China invading Taiwan.

Deputy Secretary General Geoană: I'll be in Washington next week, and I hope to meet your boss on the Hill.
There is also sometimes a matter of calculating the support for Ukraine, which is creating some question marks. And I understand why: Taxpayers’ money, people elected by the people - you have to look into that. But if you look, the support for Ukraine, from all of us, it’s defence-related, military aid. And this is done outside of NATO, through the Ramstein process, where we have more than 50 nations around the world - not only NATO countries - supporting Ukraine. And there, the US is giving a massive amount of support.
But if you start adding the financial, the macroeconomic support for keeping the country afloat, economic support, humanitarian support, then America's allies are compensating, it’s roughly fifty-fifty. So if you look only to defence, we have to do a much better job, that's clear. Also, there's a difference of size of budgets between America and its European allies. But if you draw all the numbers of our common support for Ukraine, I think we are roughly even. So I think we also have to – us - to make a better case when we go on the Hill. I will do this next week, and hope [you will] help me make a better case on the Hill on this one, too.

Thomas Eymond-Laritaz (Highgate): Any other questions from the audience? Yes, please, stand up and speak loud, please.

Second question from the audience: Hello, thank you very much for your comments today. How do you see the war in Ukraine ending, and how is NATO preparing for a possible expansion of the armed conflict?

Thomas Eymond-Laritaz (Highgate): Whoa, I think we need two more hours to debate that. Anyone wants to jump on that? What was the feeling at the Munich Security Conference on that question?

Benedikt Franke (Munich Security Conference): You know, it's very much a NATO question. But what came out of Munich is that there is no conceivable scenario that this war is going to end anytime soon. So we are in at least for the mid-term. That means we need to invest in the resilience of the support system. You know, this appearance now that Ukraine is preparing this major counter-offensive in the next couple of days has come with this bizarre expectation that they will once again, you know, retrieve a lot of their territory in a couple of days.

It will be a hard fight, and even though the Ukrainians are now well prepared and the weather is getting better and the Russians are in shambles, this will take ages. And so I think the question really is - and that was the question in Munich - at what time do you prepare for the afterlife? At what time do you prepare for negotiations? Do we now have a plan in Germany, in Europe, what are we going to do if Putin falls, if Zelenskyy dies, if a ceasefire is agreed on? And that, I think, it's fair to say, we don't have a good plan. And that for me is why while the Ukrainians fight bravely, we need to prepare the ground for that.

Deputy Secretary Geoană: Okay. You know, if you look at a history book, most wars end in some form of negotiations, others don't. And here I think we all see that the political conditions now - and in the near future - for the two sides to come to a negotiation are not met. They're too far apart. Russia wants Ukraine not to go towards the West, and Ukraine wants all its territory back. So that's quite a distance in the political position of both sides. And by the way, I don't think they will change easily. With or without Putin, with or without President Zelenskyy. I think these are ingrained in the public opinion of both countries. So that's something that we have to be prepared for there.
What we believe could change the calculus in the Kremlin about the cost-benefit analysis of this war, is that really Ukraine stands strong, and there will be no indication that they're getting weaker, and eventually Russia to obtain what they want from this war. So the more we do now for Ukraine, the shorter the war. Sounds counterintuitive, but in fact that's what I think will be the case.
When it comes to NATO, we do three things at once. First, defending every inch of NATO territory: That's the bread and butter of NATO, that’s how Article 5 operates. And now with the new geography of Europe - with Norway, Finland, Sweden soon - we're from the Barents Sea to the Baltic Sea to my sea, the Black Sea - I'm from Romania - and to the Mediterranean.
The second thing we need to do is to continue to help Ukraine, and the third thing that we do simultaneously is to avoid the escalation of this bloody war into something even bigger between NATO and Russia. So I can cannot tell you more from this stage. But this is something that we operate with every single day, and I think this Alliance of ours is well equipped to defend territory, to help Ukraine, and avoid escalation.

Benedikt Franke (Munich Security Conference): Can I add one more point? I think what will be really important is to make sure that we use the leverage that countries like Turkey and China still have in Russia in a better way. And you all know that the elections are coming up in Turkey on May 14. And that may be a changing point for some of the negotiations that are already ongoing. There is this thought that there is no negotiation at all ongoing, [but] the grain negotiations are ongoing, prisoner exchanges are ongoing, and one could build on that. And making sure that President Xi understands his role in this overall picture will be crucially important.

Thomas Eymond-Laritaz (Highgate): But dictators tend to be rarely on the listening mode. So do you think that President Putin will be listening to what President Xi would tell him, and do you even think that President Xi would want to send clear message to Putin, having in mind that he would hate anybody tell him what China should do?

Benedikt Franke (Munich Security Conference): President Putin - whom I know - doesn't strike me as somebody who listens with great intensity. However, I think it's the sort of - you know - putting pressure on President Xi to publicly engage on Ukraine, which he is now beginning to do, is a good thing, regardless of whether it actually leads to a negotiated solution. But we need to make sure that countries like China, like Turkey, constructively engage in global multilateral governance. And whether that leads to anything is down to Putin, and he doesn't seem the most rational of actors.

Interjection from audience member: A country like Turkey is actually doing the opposite. And back to your point about leveraging, Turkey is, like actually helping on the opposite, because it is helping to avoid the sanctions, so…

Benedikt Franke (Munich Security Conference): It's doing that, too, but it has been instrumental in the grain deal -

Interjection from audience member: In terms of trade, and payments, or –

Thomas Eymond-Laritaz (Highgate): There has been actually been really a U-turn of Turkey in terms of trading dual-use technology to Russia. It used indeed to facilitate the trade, and I think that was a U-turn three, four weeks ago, where Turkey really changed its policy. But on the other hand, you could say, you know, the grain negotiation took place thanks to Turkey. So I think they're playing both sides.

Dan Chapman, founder and CEO of Argentem Creek Partners: Can I just – I’d like to add one thing from a financial perspective: Don't forget about the other war. You know, when the violence subsided in 2014, Russia continued to wage a war to promote corruption in Ukraine and, you know, try and create a failed state. So when the shooting war ends - whatever ends means, in a military perspective, - I think it's still very important that we're all invested in helping Ukraine fight that other war.

Thomas Eymond-Laritaz (Highgate): We're arriving at the end of the session. I would just encourage all of you to watch online the two sessions that took place at Milken that were absolutely fascinating. There was the one on Ukraine, where one of the figures that was discussed during the session is extraordinary: That for 4% of NATO military investment in support of Ukraine, 50% of Russian military equipment was destroyed, which shows the extraordinary return on investment.
And there was another session on Russia, where one of the Russians was explaining that the Western reaction to the Russian invasion of Ukraine was like trying to stop a fire by using teaspoons of water. But there are many more, so I would encourage all of you to watch these two sessions. And just as we're closing, I would like to ask the audience: How do you call “inflection points” in German?

Audience: Zeitenwende.

Thomas Eymond-Laritaz (Highgate): Full points. Okay. So you pass the test. Thank you so much, everyone. Thank you to our great panel.