“How we in Europe deal with the upheavals of our time, whether we are targets or agents of change, is a question that will be decided not least by our attitude, but also by the tools with which we go into the future”, writes Dr. Ingrid Hengster, member of the Managing Board of KfW Bankengruppe, in her essay to our series of articles “Europe can do better. How our continent finds new strength. A wake-up call from economy” which was initiated by Handelsblatt and United Europe. “A continent that knows its strengths will have the ability to shape its own destiny and find innovative, creative solutions to the coming challenges in the future as well.”
When the European Union was awarded the Nobel Peace Prize in October 2012, the Norwegian Nobel Committee described the EU as a ‘fraternity between nations which for over six decades contributed to the advancement of peace and reconciliation’. Words that now read like the description of a utopia come true already belied reality back then, as deep discord was already simmering over the right pathway out of the government debt and currency crisis which, until this day, has kept the union on tenterhooks. The discrepancy between an ideal status worth aspiring to and the permanent, often conflict-laden balance of interests between 27 nation states is a constitutive element of the EU. In a way, crisis is something it was born with.
But there is something unique about the current situation. Never before has the European project been under such pressure. Authoritarian systems such as China and Russia are challenging the political and economic model of liberal democracy from outside. On the inside, the EU is suffering a legitimacy crisis. Many now see it as an intransparent juggernaut with a voracious appetite for power. The United Kingdom has already opted to leave the union. The relations between the nations of the north and the south have in part been deeply rattled over the management of the economic and sovereign debt crisis. New rifts are opening up between the members over issues related to rule of law and basic freedoms.
So the challenges are enormous, but contrary to the opinion of many, most Europeans are optimistic about the future. Austrian Chancellor Sebastian Kurz therefore had good reason to demand in an interview in late January 2019 that Europe should once again become a ‘continent of optimism’. He pointed out that the European Union, with its more than 500 million citizens, generates one fourth of the world’s economic output and is one of the largest donors of development cooperation funds and humanitarian aid. We EU citizens take for granted the achievements of a united Europe without which our lives would be more complicated, more costly, less secure and less interesting: freedom of movement and freedom from tariffs, freedom to choose where to study or work, and the safety provided by social, consumer and environmental standards.
The undeniable success of the European Union rests on two pillars which are important for solving its current problems and which we should become more conscious of again: appreciation of its diversity and commitment to constant renewal. Both are strengths which Europe must now focus on. The key to this – more than anything – is education, which conveys not just knowledge and abilities but social skills as well. The conditions for this are good.
Europe continues to be one of the world’s most innovative regions. Its universities and research facilities enjoy an outstanding reputation. Broad tertiary education, in particular, is extremely well-positioned. The European Union has a well-equipped set of instruments for advancing education and innovation with programmes such as Erasmus, Erasmus plus, the European Research Area and Horizon 2020. The in-company training system in central European countries in particular is of high quality and viewed as exemplary worldwide.
But the picture is not unblemished. In spite of all efforts undertaken by policymakers, the educational system in Europe, not least in Germany, is chronically underresourced and beset by structural problems. It has still not been able to decouple young people’s educational attainment from their social origins and overcome powerful gender stereotypes that prevent many girls and women from pursuing a tech career or completing a degree in natural sciences.
Passion for research, a willingness to change, creativity and the drive for education have shaped our continent. If education is one of the keys to overcoming the challenges ahead, then it is a dictate of reason that we harness this heritage together. Let’s outline some possible courses of action.
1. Invest more in our educational systems
The time has come to resource our educational system in a way that befits its importance. There is much to be done, especially in Germany. The OECD has been criticising for many years that Germany spends less on education in relation to economic output than other countries. At 4.2% of gross domestic product, investment in education is not even near the OECD average of 5.3%. That means Germany would have to spend around an additional EUR 30 billion a year on education to bring it at least to the average level. The Digital Pact which the federal and state governments have agreed on is an important step towards providing schools with state-of-the-art resources.
The backlog of municipal investment in schools and child daycare exceeded EUR 55 billion in 2018, according to a survey conducted by KfW Research. KfW itself is making an important contribution here with its promotional programmes for municipalities. In addition, the shortage of qualified teachers and educators needs to be addressed with determination. To achieve this, the status of teaching and educational professions needs to be raised significantly, made more attractive and, where necessary, professionalised further.
More can be done at European level as well, for example by more consistently promoting multilingualism. The EU member states have agreed on the goal that every European should be proficient in at least two foreign languages. We still have a long way to go. Why not make regular stays abroad an integral part of secondary school education? That would require incorporating them into and aligning them with the design of school curricula.
2. Further promote cutting-edge research
Top achievements in research are the starting point for innovative solutions to the epochal challenges of our time and a key factor for an economy’s competitiveness. If Europe wants to hold its position and, where possible, improve it in the future as well, the conditions for top researchers in Europe must be further improved. Europe and Germany as well already have a great deal to show for their efforts, and successes such as the development of a reliable and less uncomfortable blood tumour marker test for breast cancer in younger women at the Heidelberg University Medical Centre in February 2019 should inspire us further.
Consistent orientation along clear performance criteria and corresponding financial resources can achieve a higher degree of excellence. The Excellence Strategy of the federal and state governments is an important step in this direction.
3. Close the gap between science and society
Science and society have increasingly drifted apart over the past years. Understanding of scientific thought is eroding and there is growing suspicion towards science in parts of society. But without it, the challenges of climate change, digitalisation and migration cannot be met. Science needs social acceptance and legitimacy. It should therefore open up more to the public. Scientists should be more present where relevant social projects are discussed, and positive approaches already exist here which should be further pursued and expanded:
For example, the ‘Science in Dialogue’ initiative of the Stifterverband für die deutsche Wissenschaft (Donors’ Association for the Promotion of Humanities and Sciences in Germany) is making a valuable contribution with its publications and events, and it deserves broad support. The ‘Science Markets’, in which universities and institutions in German cities reach out to citizens, and the ‘children’s unis’ being offered at many universities are a good approach. Even the workplace could be a space in which science and society could meet. Companies could more strongly integrate scientific thought or encounters with scientists into their continued professional development and internal dialogue formats.
4. Learn more from one another
The ‘best practice’ approach pursued in management can definitely be transferred to Europe. Every country has developed specific methods from its history to solve problems. So we should let ourselves be guided by successful models of other countries without bias. The successes of Scandinavian countries in educational policy allow lessons to be learned elsewhere. And why should we not draw inspiration from the French educational system, whose highly evolved, nationwide Écoles maternelles teach children as young as three to six the basics of socialisation and introduce them to important cultural techniques? Conversely, other countries could follow the example of dual vocational training that is being practised so successfully in Germany and Austria.
The topic of Europe should shape public discourse more strongly. In order for this to occur, we need greater impetus from intellectuals. Their task should be to lead the debate about the European integration process. On 25 January 2019, for example, 30 renowned writers joined Bernard Henry Lévy’s appeal in the French newspaper Libération to defend Europe’s unity as ‘European patriots’ against the challenges of national selfishness. It is a shame that this appeal has received only a limited response so far. The media would also be called upon to give such initiatives more space.
Europe: the continent of the future
Faith in the ability to craft an open, democratic society is part of Europe’s historical heritage. How we in Europe deal with the upheavals of our time, whether we are targets or agents of change, is a question that will be decided not least by our attitude, but also by the tools with which we go into the future. Well-grounded education is elementary for both.
A continent that knows its strengths will have the ability to shape its own destiny and find innovative, creative solutions to the coming challenges in the future as well. In this way, Europe can become not just the continent of optimism but the continent of the future.
The article series “Europe can do better” appears in Handelsblatt in German and in German and Englisch on Handelsblatt Online and the website of United Europe until the European Elections. They are also collected in a book which was published on 15 April, 2019 by Herder-Verlag. Please find more information about the book in German here.
About Ingrid Hengster:
After studying law and obtaining her doctorate in law at the University of Salzburg, Ingrid Hengster began her career at Commerzbank. In her last function, she was last responsible for the areas of privatisation and project financing as deputy head. After stations at UBS (Head of Leveraged Finance and High Yield) and Credit Suisse First Boston (Head of Frankfurt Investment Banking), she joined ABN AMRO in 2005, where she was Country Executive & Head of Global Clients Germany and Austria and Chairman of the Board of ABN AMRO Bank (Deutschland) AG.
After the takeover of ABN AMRO’s international corporate banking and investment banking businesses by Royal Bank of Scotland in early 2008, she was responsible for the integration and management of ABN AMRO’s business in Germany, Austria and Switzerland. Until March 2014, she was Country Executive Germany, Austria and Switzerland of the Royal Bank of Scotland and CEO of RBS (Deutschland) AG.
She has been a member of the Managing Board of KfW Bankengruppe since April 2014 and is responsible for domestic financing and the environment.
In addition to her Executive Board activities at KfW, she is a member of the Supervisory Boards of ThyssenKrupp AG, Deutsche Bahn AG and DB Mobility Logistics AG and an expert on the Board of Directors of the European Investment Bank.
Ingrid Hengster is a member of the Executive Board of Atlantik-Brücke e.V., a member of the Advisory Board of Wirtschaftsinitiative Rhein-Main e.V. and of the Banking Committee of the Chamber of Industry and Commerce.
Ingrid Hengster has many years of experience in investment banking. She has worked successfully on national and international transactions in the areas of mergers & acquisitions, debt and equity capital markets in the media, industry and telecommunications sectors.