Speech by Federal Chancellor Friedrich Merz at the ceremony awarding the International Charlemagne Prize to Professor Mario Draghi in Aachen

Mayor Michael Ziemons,

Chairman of the Charlemagne Prize Board of Directors, Armin Laschet,

His Royal Highness Guillaume V, Grand Duke of Luxembourg,

Madam President of the European Commission, Ursula von der Leyen,

Fellow Prime Ministers, Kyriakos Mitsotakis, Edi Rama,

Madam President of the European Central Bank, Christine Lagarde,

Minister President of Land North Rhine-Westphalia, Hendrik Wüst,

Honoured Charlemagne Laureates from previous years,

Members of the Land Government,

Esteemed colleagues from the parliaments, the European Parliament, the German Bundestag and the North Rhine-Westphalian Landtag,

Excellencies,

Ladies and gentlemen,

And last but not least, Mario Draghi!

A doctorate from the Massachusetts Institute of Technology in Cambridge, USA, Professor of Finance, Executive Director at the World Bank in Washington, Director General at the Italian Finance Ministry, involved in the negotiations on the economic and monetary union in the Maastricht Treaty in this role, lecturer at the Kennedy School of Government in Harvard, investment banker, Chair of the European Union's Economic and Financial Committee, Governor of the Italian Central Bank, President of the European Central Bank, Italian Prime Minister - ladies and gentlemen, that's not five CVs, but just one, stations in Mario Draghi's professional career. No doubt you will appreciate why his friends call him Super Mario.

That rigid discipline and firm single-mindedness in a man like you, Mario Draghi, as a staunch admirer of Ignatius of Loyola, the founder of the Jesuit order in the 16^th century, should come as no surprise. You were a pupil at a Jesuit school in Rome.

The simple statement today reads: You, Mario Draghi, have made an outstanding contribution to Europe. Such a simple statement. And you are still doing so. -But where should we begin, and how should we conclude? Maybe we can start with what is perhaps the most important point: In unstable times, you devoted attention to the euro, and you stabilised the euro and the monetary zone in ways that sparked controversy. That was brave. You took a risk. It could have backfired. But it succeeded, and it paid off. Today, the euro is undisputed, and that is and remains a great achievement for which we, the Europeans, are grateful, deeply grateful, to you, Mario Draghi.

That achievement is, of course, also down to others alongside you who shouldered responsibility during that time of crisis. I would like to call to mind the late Charlemagne Prize Laureate Wolfgang Schäuble. He, too, played an instrumental role in saving the euro by consistently pointing out the connection between currency stabilisation and reforms in the eurozone countries. With Kyriakos Mitsotakis, the Greek Prime Minister, here today, we can say that this reform path was tough for Greece, for many people in your country, Prime Minister. But it proved to be the right path. Your country, Kyriakos, has long itself been in a position to repay the loans that were needed at that time, and has even repaid them early. The efforts were worthwhile; for that we are thankful and congratulate you and the Greek people as a whole on what you have achieved.

Mario Draghi, when you were presented with the Princess of Asturias Award in October last year, you said: "Building Europe has been a central mission of my career ... But today the outlook for Europe is as difficult as I can remember. Almost every principle on which the Union was founded is under strain." A few weeks earlier, you said: "For years, the European Union believed that the economic weight of its market of 450 million consumers would give the continent political power and influence in international trade relations. 2025 will be remembered as the year in which this illusion evaporated."

Indeed, ladies and gentlemen, we in Europe have placed too much faith in the conviction that the power of humanistic, Western European ideas would, as if by magic, transform the world as a whole into a realm of freedom and peace. We were mistaken. Yet acknowledging the misguidedness of this false optimism does not mean abandoning the hope that people can live together in freedom and peace. Europe has the opportunity to shape the new world order so that norms and rules apply rather than arbitrary decisions and the law of the strong. The opportunity is in our hands. For it is clear, and, Mr Ziemons, you stated very compellingly in your speech that the world is currently in flux. We are witnessing new crisis situations every week. In this situation, Europe must maintain a straight course and keep a cool head. We must confidently pursue our own interests, and we must be willing to work to protect those interests.

Mario Draghi, permit me to quote you once again. Just a few weeks ago, you said: "A Europe that cannot defend its interests will not preserve its values for long." Indeed, ladies and gentlemen, we as Europeans and Europe must assert ourselves today, and I maintain that Europe has understood this. Europe has woken up. Europe is building up its strength from an economic and a security perspective. Europe is rapidly expanding its defence capability within the framework of NATO. Europe is identifying the instruments of power at its disposal and is ready to deploy them. Europe is forging new trade partnerships throughout the world and thereby reducing dependencies. Europe is resolutely supporting Ukraine in its fight to defend itself against Russia.

Ladies and gentlemen, we have gathered here today for the award ceremony in 2026 for the fifth successive year in the shadow of this war. In 2023, the Prize was awarded to Volodymyr Zelensky and the Ukrainian people. Today we reiterate what we said three years ago: we support Ukraine in its fight for freedom, because it is also the fight for our freedom. We Europeans can discover our strength and our capability particularly when we resolutely stand together. And I would like to emphasise that we want to do what we can to bring this terrible war to an end as quickly as possible. Last night's attacks speak a different language. An openness to engage in dialogue requires both sides to display this willingness. Last but not least, we Europeans decide for ourselves who speaks for us, and no one else.

Europe has instruments of power at its disposal not only in a security context, but also economically speaking. Others are dependent on us, it is not only that we are dependent on them, and if we show that we are prepared to make use of this economic power if necessary, we can achieve a great deal. Europe has set out to become a force to be reckoned with. A force that defies the storms of this new era and that at the same time - and we remain committed to this goal - embraces the values of freedom and justice, peace and prosperity to promote itself and appeal to the citizens of our Europe.

This new European policy of determination is centred around economic clout and military defence capabilities. Before the end of this year, the negotiations on the multiannual financial framework will reveal whether we are adopting the right course in this context. I want to take the opportunity to present our view of things, particularly in light of the proposals made by our Laureate today. In both content and structure, the EU budget has remained largely unchanged over the last decades. We still, along the lines of a planned economy, decide seven years in advance who should receive how much in the way of funds from this budget, and more than two-thirds of European funds still go towards redistribution and subsidies. Yet we cannot tackle the challenges of the 21^st century with a budget from the 20^th century. Fundamental modernisation is therefore vital. Mario Draghi put it equally clearly. He calls us to channel our joint funds into financing joint investments, and I agree with him. A sovereign Europe needs a Draghi-approved budget. That is why we so firmly support the reform efforts of the EU Commission for the upcoming multiannual financial framework. Streamlined structures, investment in competitiveness and defence, a focus on European funds for European policies - all that is necessary, because resources are limited. Today, more than ever before, we need to set new priorities.

Some now maintain that we could avoid this painful task by taking on new debt, European debt, by financing regular spending through debt. Apart from anything else, Germany cannot pursue this path for constitutional reasons, and, ladies and gentlemen, we also need resources for future crises. Besides, the reality is that excessive borrowing threatens our sovereignty and restricts our capability to act. Let me be frank: some countries are already spending more on interest repayments than on defence due to their vast debts. We must not allow Europe's finances to get into that kind of state. Even in future crisis situations, we must remain independent, able to act, in a nutshell, sovereign.

That is exactly why we now really want to tap the potential that is still trapped in the European single market, the potential of a European market that is larger than that of the United States of America, so that we can finally breathe new life into the single market as it was originally intended. As some of you know, I was involved in drafting the European single market legislation in Brussels and Strasbourg in the early 1990s. I witnessed the reforms that the European Union is able to implement, and how much momentum we can generate, even and particularly in times of upheaval. Within just one legislative term, the European Parliament at that time implemented the proposals of former Commission President Jacques Delors to complete the single market. Problem identification was rapidly followed by solutions, which sparked unprecedented growth in Europe.

Here, too, I am with Mario Draghi. He, too, provided us with clear proposals in his report in September 2024. With his brutally honest analysis of the future of European competitiveness, Mario Draghi warned of the need for a fundamental change of direction in the European Union. His problem analysis is very precise. He reveals weaknesses in the EU with regard to the application of new technologies. He makes clear that Europe has an established economic structure, but it is not dynamic enough, that research findings are inadequately and too slowly converted into business models, that young and innovative companies in particular need to be able to grow much more in the single market. A particular hallmark of his report is that he does not stop at problem analysis. He formulates very concrete recommendations for action. His responses are clear and ambitious.

All this reflects Mario Draghi's character. Whenever we have met, I have found Mario Draghi to be a thoughtful, level-headed person who searches calmly and analytically for constructive solutions and to whom the common European good means more than almost anything else. We as the European Heads of State and Government convened for our retreat in Alden Biesen in Belgium, very close to Aachen, with Mario Draghi in February this year. What he and Enrico Letta, another former Italian Prime Minister, so urgently recommended us to do was outstanding in form and content. I think that is remarkable, and want to take this opportunity to say so: I am grateful that here, two Italians showed us the path Europe should adopt in the best tradition of Alcide De Gasperi.

The most recent conclusions of the European Council in March embody precisely the spirit captured in the recommendations and insights of Mario Draghi and Enrico Letta, and that is how it should be: a wise, experienced man makes thoroughly well-thought-out proposals at precisely the right time, and those currently in positions of responsibility in Europe take them on board and channel them into binding decisions, using them to strengthen Europe.

Ladies and gentlemen, Kyriakos Mitsotakis is the next speaker to pay tribute to Mario Draghi today. A Greek and a German paying homage to an Italian. This kind of cooperation across borders forms an ideal basis for success in Europe.

Incidentally, here is another reference to Italy: Only a few weeks ago, we began to map out a course for Germany and Italy. During the German-Italian intergovernmental consultations early this year in Rome, we elaborated joint proposals for a reform agenda in Europe inspired by Mario Draghi's ideas. Our cooperation with the Italian Government and with Prime Minister Giorgia Meloni is close and is moving along the same path. For this, too, we in Germany are grateful.

Ladies and gentlemen, if we get this right, these years of great historic global change will go down in history as years characterised by progress and the strengthening of a united Europe. The Board of Directors of the Charlemagne Prize has described the awarding of this year's Charlemagne Prize to Mario Draghi as a deliberate message for the decisionmakers in Brussels. Allow me to quote the Board of Directors: we are "calling on the European Commission and heads of state and government to now resolutely implement the future agenda outlined in the Draghi Report." Speaking for myself, and I believe, for most of the Heads of State and Government of the European Union, I can only say, and I want to conclude with this: Mario Draghi, we have heard the challenge. We are working to respond to it.

Congratulations, Mario Draghi, on the International Charlemagne Prize of Aachen in 2026. Thank you very much for your extraordinary life's work in the service of Europe.

(End of speech)