Nadia Calviño: "The University of Porto 70th anniversary, an extraordinary milestone"

My very dear Commissioner, querida Elisa, dear friends

Ladies and Gentlemen,

It is a great honour to me to be here joining you today at the University of Porto to celebrate an extraordinary milestone – its 70th anniversary. Congratulations!

As President of the European Investment Bank, I am deeply aware of the significance of this university and the role that this prestigious institution plays in Portugal and Europe. In the EIB, we have several colleagues from FEP in our teams, from lending officers to economists assessing and monitoring projects many are coming from this University.

It is a great pleasure to be here today and share with you some personal thoughts on one of the main issues, probably the main one that occupies my mind: The state of the world and the power of economic ideas to improve it!

Only some weeks ago, the Spring Meetings of the International Monetary Fund and the World Bank in Washington were held and my two takeaways from that very intense week were:

• the economy is better than expected, geopolitics is worse.
• And thank goodness that many decades ago the Bretton Woods Institutions were created. Because the multilateral economic and financial network is functioning well, and right now provides probably the only forum for leaders to talk to each other and try to find constructive solutions to today´s problems.

The international world order established after the Second World War, that has served us very well, was the result of economic ideas.

Keynes and Roosevelt lived the Great Depression and knew well of the dangers of poverty and social disarray leading to conflict and war. They also knew of the power of public investments and the New Deal in the US, providing citizens with work and dignity as a driver for prosperity and political stability.

The lessons learnt from the 1920s and 1930s led to the Marshall Plan for Europe, the free trade agreements, and the Bretton Woods institutions to ensure financial stability and avoid balance of payments crisis throughout the world.

This setting has evolved in the last decades, of course. For instance, as a result of the Great Financial Crisis that started in 2008, the G20 became an important forum to steer coordinated responses to global challenges.

And now this world order is being challenged.

The tectonic plates which underpinned economic progress, trade globalisation, and cooperative solutions, are shifting and this is leading to clashes and gaps.

A new world order is in the making, and the basis of Europe´s success throughout its history is being put to the test, and our decisions today will mark the role of the EU – going forward, in the future in this brave new world which is in the making.

The EU is precisely the second example that I wanted to share with you today on the power of economic ideas to shape the world. Our Union, the most successful experiment of supranational integration in recent history, was born from the ashes of the Second World War.

And it started as a customs union and some common basic policies, that were put together to join forces in those areas that would avoid Europe going into another war: and that was steel and coal – used to make weapons, nuclear energy, and the common agricultural policy, to feed the population and to feed an army.

Unfortunately, we have become again painfully aware of the importance of these core policies, as war reappears on our Eastern border.

Fortunately, those bright leaders also thought of the need to finance investments supporting economic prosperity. And so the Treaty of Rome created in 1958 the European Investment Bank as the financial arm of the nascent economic union.

Seventy years later, it is quite clear that those were the right decisions.

With €22 billion of paid-in capital, the European Investment Bank Group has mobilized €5 trillion in investments. We Europeans have one of the largest multilateral financial institutions in the world, with a balance sheet of €600 billion, a strong AAA rating, and a solid portfolio with huge impact inside and outside our borders.

Portugal is a bright example of the value of being a member of the European Union. The EIB has been a partner to the country since shortly after the Carnation Revolution, which brought back democracy – difficult to believe that we have just celebrated the 50^th anniversary – and this cooperation marked the beginning of a profound transformation in the country.

Over this period, the EIB has financed flagship projects: like the Vasco da Gama bridge, the first offshore wind farm, roads, ports, airports, hospitals, museums, schools and universities.

In these two days in the country, actually I have visited the impressive Port of Leixões and also discussed with city mayors and ministers financing for the high speed train between Lisbon and Porto, the flood management tunnels in Lisbon, and how to scale up the unicorn factory that represents the success of Portugal as a start-up nation.

By the way, you probably do not know it but the European Investment Bank Group has funded 5 of the 7 unicorns of Portugal.

In 2023, Portugal was once again among the top ten recipients of EIB Group financing, with more than €2 billion invested in the country. That’s almost 1% of the nation's GDP.

I think all this should give us pride and self-confidence in our ability to take the right decisions when the moment comes.

Actually, just like history 100 years ago, the Great Financial Crisis that started in 2008 put us to the test. Economic ideas prevailing at the time led to policy responses based on austerity and that led to a lost decade in many countries, such as Portugal, without public investment and a worsening of our physical and social infrastructures.

In those difficult years, the European Investment Bank was probably the main source of financing to support the Portuguese economy.

Fortunately, we learned the lessons of the Great Financial crisis, and when the pandemic hit us back in 2020, the European response was very different; this time it was based on unity, determination and solidarity.

The European Central Bank provided liquidity to protect our financial systems.

The European Commission, through the new SURE mechanism, enabled us to protect jobs throughout the EU.

The European Investment Bank, through the European Guarantee Fund, complemented national guarantee systems to protect small and medium-sized companies (SMEs) and the business ecosystem.

And of course the Next Generation EU programme provides the massive reform and investment programme with the Recovery and Resilience Facility, which is now underpinning the strong recovery, the strong growth and transformational investments to support the green and digital transitions and build back better.

Portugal is a success story.

The EU is a success story, it is our best chance to continue to have a strong voice in the New World Order that is in the making.

And economic ideas are essential to continue to go in this positive direction,

Reflecting on what we have been through with the pandemic, the war, and inflation, there is reason to be proud.

Europe responded efficiently and effectively to these challenges, following three key principles: unity, determination, and solidarity.

Together we are stronger, and it is extremely important to continue to build on these principles going forward. And to build on our shared values.

Europe has been and must continue to remain a beacon of peace, prosperity, human rights, and protection of minorities. In these days, when there is so much tension, and language of war and conflict, it is important to continue to be a force for good in the world, enhancing North-South dialogue and strategically directing our investments to reflect our core priorities and values.

Let me close with a couple of points and remarks on being an economist. And my remarks are very much directed at the academic faculty but also the students who are watching us.

Economic science has evolved in parallel with political and social reality. This is a living science.

When I started my career, it was all about deregulation, reducing the weight of the public sector, quantitative models, monetary policy, and finance.

Later, the idea of sustainable and inclusive growth has occupied much more space in the policy paradigm. The public sector has regained a core role in our societies since the pandemic. Now we are confronted with the challenge of ensuring growth, security, prosperity, stability and strategic autonomy in a rapidly changing and increasingly complex world.

Researchers are developing real life experiments, behavioural economics, gender economics. And all these new ideas have significantly opened up our minds and are helping policymakers take the right decisions in this new world.

Looking forward, I am quite sure that Artificial Intelligence will significantly change our areas of interest. Maybe the future Nobel Prize winner is here with us today or is in the nearby IT Engineering Faculty!

But there are two principles that I think we should always bear in mind:

First of all, as economists, we should be humble; because Economics needs to learn and work with the other sciences. There are very classical partnerships, such as sociology, politics, psychology, geography… but there are also new partnerships which need to be deepened, with medicine (remember the pandemic?), biology, engineering, mathematics.

Multidisciplinary work is of the essence. And my experience shows that diverse management teams, diverse ideas, cross-fertilisation are indispensable in today’s world and is the best way to get things right.

My second message would be – be humble but be ambitious too!

We can be proud of our history, we can build on Europe´s strengths, we are a trade powerhouse, a technological powerhouse, a university culture, and knowledge powerhouse. We are also the best place to live!

So my message to students would be: you will have great opportunities in your life, we will be able to make your projects and your dreams come true. And you will also have ample opportunity to make a difference and shape the world for tomorrow.

I always have in mind a very famous quote of Tomaso Padoa-Schioppa, a great European economist and father to the euro. Once a journalist asked him, “So, Mr Padoa-Schioppa, what is your aim, to understand or to change the world? He replied, “Both. And that`s why I am an economist.”

To the University and the Faculty, I say Happy Birthday and I wish you all the best in the coming 70 years building Europe´s leaders.

And to you, students and young professionals, I say: “Learn, watch, listen, reflect… go out, and change the world!”

Thank you for giving me the opportunity to share in this joyous celebration.

Happy 70th Anniversary!