LIVE: WEF panel on Europe's future with Belgian PM De Wever, Croatia's Plenkovic

Okay, well, very sobering. Thank you very much for that introductory thought, Prime Minister Devea. Of course, Europe's under pressure from two sides: Russia, but also we have Donald Trump arriving tomorrow, demanding Greenland, part of a European Union country.

I noticed. Yeah, so the question people keep asking me in the corridors: do you think Europe can, will stay united? A lot of people saying, you know, Europe's going to fold in the end. That's what they do. Europe won't be able to push back. How confident are you that Europe can, as von der Leyen said, stay united, proportional, and respond?

It's a very good question. Actually, I wonder about this myself. We're under a lot of pressure. We're 27 countries, and if you're under pressure, two things can happen. If you have outside pressure, you can come together or you can explode in any possible direction. And I think Europe is at a crossroads where it has to decide. Until now, we tried to appease the new president in the White House. We were very lenient also with the tariffs. We were lenient hoping to get his support for the Ukraine war. We were in a very bad position at the moment. We're dependent on the United States. So we chose to be lenient. But now so many red lines are being crossed that you have the choice between your self-respect. Being a happy vessel is one thing. Being a miserable slave is something else. If you back down now, you're going to lose your dignity. And that's probably the most precious thing you can have in a democracy. It's your dignity. So we should unite and we should say to Donald Trump, I'm going to meet him tomorrow. The meeting was fixed before the Greenland issue. So looking forward to it.

Oh yeah. Yeah, I'm looking forward. The king will accompany me. I'm looking at the queen who's sitting in the front row. Our king will accompany me at the meeting, but it will have a different character than we had planned. It will probably be the message that we have to send. You're crossing red lines here. We either stand together or we will stand divided. And if we are divided, there is the end of an era of 80 years of Atlantism is really drawing to a close. And you know, as Gramsci said, if the old is dying and the new is not yet born, you live in a time of monsters. And it's up to him to decide if he wants to be a monster, yes or no.

Very good. Before I move on to Prime Minister Plenković, I just wanted to ask you about the aftermath of the whole euro argument, which you were absolutely in the center of. And I think you must have been reasonably happy if not with the argument, with the outcome. But some people will say, well, that whole episode just told you about Europe's problems. Here's Europe. We say we're going to do this big thing and then we all sit around arguing and then we do a little thing and everybody says, oh, look, they can't get it together.

I'm going to try to be a little bit optimistic, otherwise it's going to be a very depressing session here. At the end of the day, we decided to aid Ukraine with 90 billion euros. And that was the thing we had to do, keep Ukraine in the fight because the United States is no longer supporting them. They're on their own. It's not looking good. Was Europe able to say, we're going to do whatever it takes to keep you in the fight? And at the end, we did. The way in which we did it, the discussions we had maybe are not an example of the best governance you can imagine. But at the end of the day, there was a result. But of course, we are in a bad position. We didn't do our homework. We stayed believing in the United West, but the writing was already on the wall. When Obama said, I'm the first Pacific president, the burden shift from the United States towards China. We chose to ignore it and then to keep enjoying the peace dividend. We didn't rearm, we didn't strengthen ourselves. Now we're in a weak position. But I think having said that, that we made the choice to support Ukraine. Only we learned a lesson the hard way with the euro clear in the reparation loan debate that there is no such thing as free money. There's nothing like the Alibaba cave that opens and you can simply take the gold and get away with it. That was an illusion that existed for a few months at the European table, but I think we managed to put an end to it for the moment.

Okay. Prime Minister Plenković, I'm interested in your take. Again, to quote the president of the commission, she said, Europe's response will be unflinching, united, and proportional. There's a European Council meeting on Thursday night. What kinds of things will Croatia be arguing for that Europe should respond to from these twin challenges, Russia and the United States now?

Thank you very much. Marit, you run a big European bank. You're, I mean, and both things I guess are important to you. You're European, you're also a banker. How do you navigate these geopolitical waters? I was quite struck that the European Business Roundtable issued a statement saying, you know, okay, it's enough with America. We need to get tough, which is not the normal thing that you expect business people to say. So how do you see it?

You're right. As my accent probably betrays me, I'm French and at the same time, you know, I live in Amsterdam running, you know, a large bank. I would define myself as passionately European. And when I try to think about what are all European values, I would say that this is about the rule of law, this is about human dignity. This is about democracy. This is about also reason and truth. And all these values of cooperation have served us well in the past decades and helped us build a Europe free of war. Right now we feel challenges from all fronts outside of Europe, with wars, with authoritarian regimes and also in fairness within Europe with, I would say, added polarization, sometimes the erosion of truth in our internal debate and sometimes also political instability and fragmentation. And right now looking at Europe we sometimes feel, hey, are we the herbivore in a world of carnivores? Because on all fronts we feel right now under pressure.

Looks a bit like that.

It may feel like that and then the answer is if we want to defend our values we need to be strong and it's not only about, I would say, military or political strength. This is also about economic strength and this is where, you know, very humbly as a banker, we feel we can contribute because what are banks? The plumbing of the economy, the blood circulating in the economy making projects possible, financing innovation, financing infrastructure and taking risk we manage and understand. And this is what we want to do because we want to be strong European banks for a strong Europe. That sometimes also leads us to, I would say, question collectively our risk appetite in Europe. Don't get me wrong, I was at the time of the financial crisis actually in the public service working at the Elysee so I got firsthand experience of what goes wrong when the financial sector goes wrong. But I think we have built a very sound financial sector and now we need to make sure that sometimes our collective risk appetite is not preventing us from also financing the needed European transitions, be it energy, defense, mobility, tech and digital to name a few. Because unfortunately being conservative in today's world and status quo is not a risk-off position. It is a very dangerous one.

Well, that leads me naturally to Aral Mench because I think one of the reasons for American super confidence and their slight contempt for Europe, maybe slight is an understatement, is the sense that we have fallen way behind in the industries of the future, particularly technology. And indeed I remember being at a meeting and you passed by and somebody said, you know, there's our only hope. He's the only guy we've got. You know, I don't want to lay too much on you, but how far behind is Europe and what can we do about it?

Well, I think there are a few reasons to be optimistic on that front. If you look at technology, it's about inflection points and whenever you have a replatforming of software because you've invented a new technology you can expect competition to rise again and you can expect opportunities to rise and then the question is is Europe ready to use those opportunities to catch up because effectively we lost the battle on cloud and we created a huge dependency to US digital services in Europe. So that's 80% of digital services being imported from the US to Europe and that's effectively all that amount of value that is coming back to the US used and reinvested in R&D to build further leverage and further dominance. And so this is true but yet AI is a way to build different software. It's a different kind of infrastructure that you need to build. You need a lot of energy. You need high density energy sites. Europe has plenty of those. You can rebuild the entire public cloud services based on AI technology and it's actually much less costly to rebuild thanks to artificial intelligence. So suddenly the unique economics of software have changed and the good thing about Europe is that we have opportunities. We have again high supply of energy. We have talented people that can build software quickly. We actually have manufacturing, financial services, those companies that are worldwide competitors, world class and those companies are willing to spend on R&D, willing to transform themselves around artificial intelligence. And what we've seen in the last year and honestly I think Donald Trump's presidency played a role there is that a lot of these companies and a lot of European states realize that now may be the time to partner with European technology providers to build value together to make sure that the value created is reinvested in research and development to further build leverage and get rid of the dependency that we have created for ourselves. And that dependency, the technological dependency, is probably the biggest vector of power of the United States. And if you talk to JD Vance, that's exactly how he staged that. So we do need to build that leverage and to make sure that we use our strength to not fall into what I think is the biggest risk in the coming years for Europe which is to become a colony in artificial intelligence. In that we may be in a state if European technology does not achieve its goals. We may be in a state where 95% of digital services and artificial intelligence is imported from the US and that means that our entire industry is going to run its processes on top of an infrastructure that can be turned off if the US decides to. That also means that our defense technology and deterrence is going to rely on US technology that can be turned off and that means deterrence ceases to be anything. And eventually that also means something for democracies. And at Mistral we don't really focus on that. We really focus on the two first points. But on the consumer side, if you end up with two US companies that own access to information and can influence how people think, that means they can actually influence elections, they can influence the regimes wherever they actually are deployed. And so I think we can build leverage onto three things. So defense, economy and information sovereignty. We work with businesses, enterprises and states to make sure that we create leverage on two first. We can do it more. We think Europe could invest more in European technology, procure more European technology, cease to procure US technology. And that would propel us forward. But really, we have reasons to be optimistic and in a way we are ceasing to be the frog in the slowly boiling kettle. Because we realize that effectively they've built leverage and they're going to use it. So a lot of red lines have been crossed and it means that actions are being taken and I think we should continue to take them.

Just can I quick follow? I mean you as you say you run a major business. You must in the space you're in work a lot with Americans. You have to.

I mean we do. Yeah we do. And we export to America and we haven't built our differentiation based on sovereign concerns only. We've built an approach to enterprise software, an approach to creation of value in financial services manufacturing that actually exports to the US.

But as a businessman, you know, with responsibility to the people who invested in you, can you do the things that politically you think need to be done, which is, you know, reduce your risk, reduce your exposure to the United States?

We have in that we have reduced our dependency to hyperscalers for instance. That's why we moved toward infrastructure. We decided to invest in creating our own servers, in buying our own GPUs, in operating those and eventually what we are achieving is that we are now a full stack vertically integrated cloud provider. That does reduce our dependency to US services because effectively when we started we used US cloud services because there was nothing else to train models on. Now we do depend on goods, the good dependency is not going to disappear anytime soon but the good dependency is much more balanced in that the US actually needs European goods, we need US goods. We'll find a way. On digital services this is not balanced and this is a very high risk and so that's why we decided to build that vertically integrated stack because we heard from the market, from public sector, from defense that this was a requirement.

Okay. Marit, actually I'd just like to ask you how all of this applies to the financial sector. I mean because people are saying I mean maybe this trade war will be called off and Donald Trump will change his mind etc. But if it starts it'll start spilling over perhaps into banking and into the financial markets. In fact, do you think we're already seeing a reaction in the financial markets to the growing uncertainty?

I would say that there's one thing markets don't like is uncertainty and suddenly when there is less cooperation people start to really become fidgety. And I think there's something interesting that we're observing right now. And if you remember what happened last April when the discussions on tariffs were in full swing. You know what really put some reasons back in the system was the fact that markets reacted strongly and basically the interest rate on the 10-year US bond started to go through the roof. And the US have their weaknesses and one of these weaknesses is they have enormous amount of debts they need to finance. So at some point when markets and money markets become fidgety, this is also having an impact. And if I look right now it's quite interesting. Despite three cuts by the Fed in short-term interest rates you see that the 10-year yield bond is not following that pace. So right now there is uncertainty and you see it spiking. The 10-year right now is at its highest level since September. So markets are sort of bracing for impact right now.

Interesting. President, no, I mean coming back to the Russia challenge, what's your assessment of the state of the Russian economy and do you think there is more that Europe can do to pile pressure on?

The information we receive of course is not very encouraging for the state of the Russian economy and I think the Russian economy is just deteriorating and have had a lot of macroeconomic problems, imbalances, and I think this is a matter of time when they will switch into the stage of stagflation and the stagnation and high inflation at the same time. But you know the specific feature of Russia is that the politicians or dictator can ignore this macroeconomic situation just by putting all the burden to the ordinary people and just pretending to invest more into the defense and ignoring all these imbalances at least for the time being. So it doesn't mean that we shouldn't put additional pressure on Russia in form of sanctions and the European Union will do this I am pretty sure and we have to punish also the closest ally of Russia, Belarus, which is actually our neighbor, very close neighbor, 600 kilometers common border with Lithuania and we are just experiencing almost every day forms of attacks, might it be the illegal migration, it might be metal balloons, the drones coming from Ukraine and this regime is close to Putin and should be sanctioned logically too. So this is the reason why I all the time support the idea of imposing the sanctions on Belarus because this country is a source of instability in the region. What should Europe do? Of course, Europe should take more responsibilities not only in the field of economy but also in the field of military forces and I see that we made quite significant progress in the last months. There much should be done in the future because we are still lagging behind by many means. First of all, we are lagging behind if we compare our military capabilities with Russian capabilities. We are obviously lagging behind if we compare the production capacity. The Russians can produce ammunition, military guns and other military equipment and Europe has not so much time in order.

That's the question I wanted to ask you is this time question because I've heard very different assessments. Some, you know, one senior former European leader said to me, ah, you know, the Russian scare, the Russian threat is overdone. They've been fighting for four years, they haven't taken Kharkiv which is, you know, 30 miles from their frontier, there's no way they're going to attack Europe. And then there are others like Mark Rutte, the secretary general, who says, no, no, this is a very, very dangerous moment. And people in the Baltic States also say, you know, you could take the threat from Russia as.

It's not about Baltic states this time. I think this is not about the Baltic states because missiles can reach in 5, 10 minutes every capital of Europe. This is by the way the wording of Marit too. So we are all affected because this time Putin wants to challenge the democracy, our rule of law and all these good things you mentioned and I think we have to be aware and why I am talking that after the peace deal Russia will stay aggressive. You can imagine they produce enormous amounts of guns, ammunition, equipment and do you think they will leave those goods idle and the peace deal is over? I don't think so because we know the origin of Russia. We know their ideas, messianism idea first of all and I think this is a matter of concern, big concern and we are able to deal with that matter only together. So this is for me heartbreaking to see the conflict between the United States and Europe because I'm a strong believer in the transatlantic bond, my country is too.