What a pleasure to be here today, surrounded by friends, on a brief stopover between Saudi Arabia and Chile. Whenever I’m in Brussels I feel I’m at home.

And home it was for me, for seven years, working at the European Commission. Someone famous may have had seven years in Tibet, I had my seven years in Brussels—including serving as Vice President for Budget and Human Resources and hosting the Annual Budget Conference.

I know it is getting to be known in short form as ABC. I assure you, I am fully aware the EU budgetary process goes from A all the way to Z—and it is made simple only by the tireless work of the fantastic DG Budget team!

Before I dive in, one confession. I actually love budgets! To me, budgets are so much more than just numbers. They tell a story. They reveal what the true priorities are. You could say they reflect truth!

***

My remarks today will be about the importance of budgetary cohesion in Europe, about the efficiency of joint spending to solve joint problems. I want to reflect on how Europe can come together to provide essential, common public goods.

My remarks will have three parts. First, some reflections on the global environment, a tough place for trading nations. Second, some words on Next Generation EU, noting its successes so far and reflecting on initial lessons. And then, to conclude, a brief outline of my thoughts on the way forward.

Let me jump in.

***

The global environment. When we stare out at the horizon, what do we see?

I see a hint of sunshine. But I also see a dull grey sky and some dark clouds.

Let me start with the sunshine. After a global burst of inflation to levels many people have never seen in their lifetimes, it looks like the ECB’s tight monetary policy is doing its work.

This is something I need to say carefully because it’s not over yet. But, yes, it looks promising: inflation down from its disturbingly high peaks and no deep recessions in Europe.

Never forget though, that the last mile can be the hardest. No longer will the major central banks be marching in lockstep, as they did during the recent rate-hiking cycle. No. From now on, each currency zone will have to chart its own path. An interest rate divergence looms, and maybe some exchange rate movements too.

We save the champagne for later.

Next, the grey skies. Two problems:

Low growth, high debt. Not a great place from which to begin a big push to develop clean energy supply and fight climate change. But let us be clear: if we do not win the fight........

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