After having submitted the greetings of the Vice-Premier and Minister Arben Ahmetaj, Esq. who cannot participate in person for a last minute institutional commitment, the discussion within the panel has been articulated through the analysis of the following issues: the geostrategic framework and the corresponding new European challenges for the climate and sustainable development; the updating of the European financial architecture and the related instruments to achieve the goals of such challenges; the global analysis and the virtuous projects implemented in the Mediterranean and Adriatic seas, with particular reference to the effects of the climate changes, to the energy production and transition, to the innovation and technological research in the health sector, to the industrial and agricultural productions; concluding with the definition of the role that Italy, the Friuli-Venezia Giulia Region and Trieste could and intends to play for the financing and implementation of concrete proposals.
Hereinafter a brief summary of the speeches is reported:
1. World geostrategic framework:
Prof. Arduino Paniccia (President of the International Economic Competition School, Professor in the Centre for High Defence School CASD, Commentator and Analyst of RAI, LA7, TGCOM televisions) has analysed the world geostrategic framework and its evolution to better define the dynamics for the implementation of the new European development strategies in accordance with their relations with United States, China and Russia, that will inevitably influence the new financial architecture that Europe should adopt to support them. His speech entitled Introductory analysis on the European geostrategic framework, in the light also of the recent Ukrainian conflict and within the new EU strategies and financial policies” highlighted the global crises and the change of the international scenario due to climate change, the pandemic outbreak and the beginning of the RussianUkrainian war, with particular reference to the geographic continuity of the European Union with the Baltic and Black Sea areas that became fundamental for the future of Europe. The new European dynamics and political challenges determined the necessity to involve new actors, like Turkey, that is directly connected with Russia, and China, with the likely redefinition of the relations and alliances between the great powers. For what concern the development of the conflict, the next months that are separating us from the autumn will be crucial to understand if more space will be available for the cease fire before the winter entrenchment. The negotiation of an agreement will probably require a compromise from Ukraine, which limits are not clear yet. Further complexity factors stem from the military field – mainly due to different opinions of United States and Ukraine about the approach to be followed in the management of the operations – and from the food-wheat crisis. Differently from other analyses, we think that the enormous cost of this new war could not be sustained for an indefinite time, neither by Russia. The barycenter of the Chinese Silk Way and of the networks interconnecting Europe with the Asian markets has been already drastically shifted towards the south, actively involving the whole Mediterranean Sea. The necessity to strengthen the trans-European transport network of the Corridor V Lisbon-Kiev that still needs big railway and structural investments in its central and eastern part is again considered instead of putting new resources to the Adriatic-Baltic Corridor already substantially completed. Nevertheless, it is important to underline that the events of the last years and the increased geopolitical competition are also the determining a new phase of the globalisation that assumed every day more complex characteristics, having been slowed down. The necessity to guarantee self-sufficiency became a priority, especially to address global challenges while taking more care to local communities. We are again in a period of great competition between USA and China, with an ever more important role to be assumed by the EU, that should reform itself to guarantee more agile and appropriate instruments and decision-making processes to face new challenges.
2. Evolution of European Financial Architecture:
Prof. Franco Passacantando (Scientific Advisor Istituto Affari Internazionali, Member of the “HighLevel Group of Wise Persons on the European financial architecture for development” Professor at the Luiss University, former Managing Director at the Bank of Italy and Exceutive Director of the World Bank) has given an update on the evolution of the European financial architecture, also in light of the continues changes of the global geostrategic framework. In his intervention, entitled “The European financial architecture and new policy instruments: recent developments” he recalled that the reform proposed by the Council of Europe was motivated by several factors: the first was the consideration that even though the EU is one of the most important actors in development policies, as it contributes more than half of the overall financial aids to the global climate and sustainable development agenda, its political visibility remains much lower than that of other well-known contributors, like USA and, more recently, China; the second is the fragmentation of the European financial architecture for the sustainable development, where a number of actors and Member States act with limited coordination; finally, the existence of duplications and inconsistencies which limit the capacity to exploit synergies and to maximise efficiency. These motivations led the European Council to establish in April 2019 a High-level Group of Wise Persons on the European financial architecture for development. The Group finalised its report in October of 2019. The report made a number of proposals on how to meet the main challenges regarding the European development agenda, such as climate change, development support to Africa, the management of migration flows. In order to overcome the fragmentation and heterogeneity of the development policies, it was proposed to establish a European Climate and Sustainable Development Bank. There was no consensus on the modalities to create this new entity. One option was to establish a branch or subsidiary of the European Investment Bank (EIB) with a specific focus on development outside the EU. An alternative was to extend the mandate of the European Bank for Reconstruction and Development (EBRD) taking into consideration its consolidated experience in the implementation of development policies also outside the EU borders. None of these solutions have eventually been implemented, mainly due to the necessity to operate rapidly, which is inconsistent with the need to review the shareholders’ structure of the new organisation and to raise additional financial resources. Nowadays, the EBRD, which seemed to have completed its mandate, because of the rapid growth of Eastern European Countries, will again play a key role following the Ukrainian crises. The EIB has abandoned the idea of establishing a separate legal entity, and opted instead for the creation of an internal entity called EIB Global, which will regroup all the activities of EIB outside the EU. The EIB also opened 30 offices outside the EU and inaugurated a regional hub in Nairobi to coordinate the activities in Africa. At the same time, the Commission has activated a new guarantee’ instrument which will be made available to the EIB, EBRD, and National Development Banks and other entities that will present valid investment projects. which however will encounter major obstacles if there will not be clarity about long-term institutional reforms of the European architecture for Development.
3. Italian role and action in the European development banks:
Dr. Elena Clemente (Head of Office I, General Direction for the Cooperation to Development of the Italian Ministry of Foreign Affairs and International Cooperation) described the action and the role that Italy is covering and that we would like to cover in the European banks, that are under modification to implement the new development challenges. Il suo intervento, intitolato “Architettura Finanziaria Europea: dalla teoria alla pratica” ha innanzitutto evidenziato come la cooperazione allo sviluppo sia parte essenziale dell’azione esterna dell’UE e che si è lavorato ad un Regolamento che potesse fornire risposta alle nuove sfide e ai limiti dell’architettura finanziaria europea. Despite the positive impulse given by the Wise Persons Group established by the Council of Europe, the arrival of the pandemic catalysed the policies and corresponding financial resources towards the emergency management, reducing the ambitions of the proposal to establish a subsidiary of the EIB, opting as alternative to the EIB Global. This is a sub-optimal result in comparison with the initial reform proposals, despite it represents in any case an important improvement of the actual Organisation and a step towards the right direction. The pandemic not only slower the reform process but highlighted how the available resources are still insufficient. In particular, it must be underlined that when the new resources were issued, the finances of the EU budget were already committed, and this was a limit for the development to cooperation initiatives in the partner countries. Therefore, it was decided to strengthen the coordination between the different involved entities and to improve and structure the communication finalised to increase the visibility of the important European contribution to the sustainable development. As first positive consequence, all European banks strengthened their mutual coordination to improve the positive impact of the investments and to exploit better the available resources under the EIB global umbrella. The future investments should comply with the so called “policy first” principle, meaning that the emanation of the resources should be conditioned to an European political coordination that will decide their destination. Summarising, the European planning is becoming more important day by day and it will be based on the foreign policy principles. The sub-Saharan Africa is identified as first priority for the destination of the investments taking into consideration the fragility that characterises the Countries of this continent, but also its great growth potential. We must also take into consideration that there is a general alignment of the different Ministries of the EU Member States towards a future necessity to complete the establishment of an EIB branch dedicated to the sustainable development. Only with the re-start of the negotiation during the coming years it would be possible to restart the project, where Italy intends to assume and will continue to play an important role.
4. Italian support to the sustainable development in the Adriatic and Mediterranean basins:
Prof. Antonello Pezzini (Counsellor of the Italian Minister of Environment and of the Land and Sea Protection, Member of the European Economic and Social Committee) summarised the Italian action to support the new sustainable development policies and challenges in the Adriatic and Mediterranean Basins. His speech entitled “ Energetic dependencies and Italian strategies for the sustainable development in the Adriatic and Mediterranean basins” highlighted that, if from one side the EU decision making process sometimes slow down to consider many aspects, Europe is ahead of our time in the fields of climate policies, sustainable development, and biodiversity. This is an asset which is a clear part of the acquis communautaire, meaning the legal framework that the Countries that are candidate to enter in the EU must consider during their accession process. Transpose the acquis to the Western Balkan Countries is a crucial element to allow the sharing of a value system that we developed during a long time in Europe. For example, considering the climate and energy aspects, this transposition is translated in laws that originated the development of the ETS, the exchange system of the European carbon shares and to the diffusion of the energy efficiency culture. These are norms that commits the Italian Ministry of Environment and of Land and Sea Protection in the transposition process towards countries that in a future will enter into the EU and that is particularly relevant because it fosters the awareness towards the need to consume energy more responsibly. In fact, changing the way how we produce primary energy is possible if a cultural change takes place. However, despite new clean energy production technologies are already available in the market, as it is the case of hydrogen and sustainable mobility, the energy consumption culture is still slow to spread in many cases. To conclude, the sustainable development cannot disregard the support of the banking system. The banks mediate these values and priorities with the necessity to concretely implement the projects and, therefore, the redefinition of the financial architecture and of the instruments that are useful to achieve such challenges in this new geostrategic framework is also fundamental.
5. Climate changes and energy interconnections:
Prof. Corrado Clini (Professor of the Environmental Science Department of the Chinese University of Tschingua, former technical Minister and General Director of the Italian Ministry of Environment) described the ongoing epochal change in relation to the climate changes and to the implementation of new global interconnection networks, therefore focusing the attention to the new European challenges within such priorities. His intervention entitled “New world strategies to fight the climate changes and the global energy interconnection networks”, where he underlined that also in Italy the climate, energy, food and conflict issues are highly interconnected between each other. For instance, the conflict between agriculture and energy that this summer has affected our Country due to the scarcity of the hydric resource in an extraordinary drought period, had a severe impact. Namely, the competition for water resources has resulted in a difficult trade-off for the water utilisation in the production of energy through hydroelectric plants vis-à-vis the water use in the agricultural irrigation. These climate events should not surprise us if we look at the last available data, as efficiently remembered by the Prime Minister Johnson in his speech to open the COP26 “The watch of the apocalypse is running”, referring to the climate change. In particular, the average temperature variation of the Earth, according to the estimates of NOAA – the USA agency for the atmosphere and oceanography – shows a concentration in atmosphere of the carbon dioxide that is expected to rise to around 420 parts per million in 2022, in comparison with a containment objective largely under this value. In accordance with the international scientific community, a value of 400 ppm is considered very dangerous. The COVID-19 allowed a temporary reduction of this value but now the concentration seems to increase again, despite during 2021 the weight of the coal in the world mix has been overcome by zero emission energies, including renewables and nuclear energies. The IPPC 2022 report also throws Europe in a critical situation in many aspects: hydric criticality level in the Mediterranean basin (southern and northern shore); increase of sea level and floods in Central Europe; drought; extreme climatic events with important social and economic impacts. In this sense, an essential instrument is represented by the European strategy on a climate adaptation that provides guidelines to change the use of the territory in Europe, with important consequences on the infrastructure policies and on the land use. Within the debate on the future of energy system in the EU, we acknowledge the necessity to diversify the supplying sources, as underlined in the RePowerUE document. If EU is willing to reduce its dependency from Russia on one side, at the same time other Countries are increasing their gas consumption. India is focusing its policy of replacing the coal with gas to fight the pollution and achieve its climate objectives. China, already a big consumer of energy, recently became the biggest importer of LNG in the world, overcoming Japan, signing also important agreements with USA for the supply of gas. Energy interdependency is therefore global, and the EU must compete with India, China, and Japan. Within the supposed solution an important role is played by hydrogen for which the EU has been committed with important investment within the same RePowerEU instrument, in particular for the upgrading of the transport infrastructures that are necessary to distribute the natural gas mixed with hydrogen. We highlight also the local production of green hydrogen through the renewables which is a more practical and economic alternative. In addition, the EU is also thinking about the production of green hydrogen in Africa to be imported in Europe. A last initiative within the European strategy, which is crucial and at the same time difficult to be implemented, regards the critical minerals, i.e., the raw materials that are necessary to supply the growing capacity for the production of energy from renewable sources. Just as an example, 98% of the rare earth metals is imported from China. Therefore, we risk exiting from the Russian gas dependency while remaining dependent from the import of rare earth metals and permanent magnets from China. At the same time, despite EU has a mineral resources potential, there is a low level of public acceptance of mineral extraction activities, as also demonstrated by the recent events that stopped the concession of the lithium extraction from the Serbian mines assigned to the multinational company Rio Tinto, because the strong protests of the local populations.
6. Pandemics and biotechnologies:
Prof. Diego Bravar (President of Biovalley Group S.p.A., President of Biovalley Investment Partner S.p.A., Vice-President of High-Adriatic Industrial Federation) described his experience for the utilisation of new financial instruments to implement the new European challenges, through a publicprivate partnership. His intervention, entitled “Establishment of European hubs that are innovation leader in the BioHighTech, DigitalHighTech and EnergyHighTech sectors, with the corresponding reduction of the dependencies from foreign Russian and Chinese energy and health markets”, highlighted his experience and the financial instruments that he is establishing, through alternative investment funds that foresee the participation of institutional investors, such as EIB and the Cassa Depositi e Prestiti, to make possible the establishment of a technological hub interconnected with an European network of enterprises that implement innovation and create development in the BioHighTech, DigitalHighTech and EnergyHighTech sectors, while reducing the dependencies from the Russian (energy) and Asian (health) markets. This, for example, is possible by strengthening export and through the replication of the Trieste Innovation Hub model in 10 countries of South-East Europe, where the project and the industrial licenses could be developed. In this regard, the industrialisation and production of salivary tampons, chemomakers, and bio-Heparine (BioHighTech and DigitalHighTech) provides a good example as it contributes to defeat diseases and pandemics and to reduce the enormous dependency on imports of pharmaceutical and sanitary products from China. Another example of innovative projects is the strengthening of the scientific research in the renewable energies’ sector (EnergyHighTech) in 10 industrial hubs established in different South-East European countries as well as the realisation of an innovative plant for the hydrogen production and carbon capture in Albania, contributing to reduce the energy dependency from Russia and to foster climate and sustainable development within the whole Mediterranean basin.
7. The Balkan role:
Dr. Gjon Radovani (Architect, Urbanist and activist of Claim for Dignity, former technical ViceMinister of the Territorial Development of Albania) described the role of the Balkans could and must cover for the peace, stabilisation, cohesion, and sustainable development of the whole Europe. His speech entitled “Sustainable Cities and Communities-Objective 11 of the 2030 Agenda” highlighted the forms and contents of innovative projects to reduce the per capita pollution produced in cities, in particular for what concern the quality of air, the management of wastes and digital mobility. In this context, he described as urban development could be more inclusive and sustainable thanks, among others, to a participative, integrated and sustainable planning of the settlements, meaning through a progressive transformation of the process that is currently still advancing in a disorderly way in some Mediterranean areas. Therefore, the establishment of self-sufficient and sustainable communities is becoming the only sustainable model for the development of the humanity, to be implemented through a de-globalisation process and through the progressive reduction of external dependencies. The intervention has also described how some sustainable development projects could be supported also through the creation of certain crypto currencies, giving the example of the new “Uranium” coin”.
8. The entrepreneur necessity to understand the evolution dynamics:
Dr. Piero Petrucco (Vice-president of Industrial Federation of Friuli-Venezia Giulia, CEO of Icop SpA) has well described, also through his own entrepreneurial experience, how the enterprises must necessarily strengthen their capacities to understand the new world development and geostrategic dynamics and their consequential territorial impacts in order to change in advance and better orient industrial production. His intervention entitled “The production system of Friuli-Venezia Giulia and its importance in the development of the interconnection with the foreign markets” briefly addressed the role of the economic-production system of Friuli-Venezia Giulia as an interconnector with Ukraine through the Corridor V, and with the Mediterranean Sea and the Silk Way. He also highlighted the great potential of the enterprises of the Italian North-East in making innovation and in supporting the sustainable development, which is integral part of the cultural DNA of the communities where they belong. On top of this, he mainly highlighted his own company experience regarding the realisation of the new logistic platform of the Trieste harbour, the main Mediterranean port, and the following selling of the majority of the shares of the managing company to the Hamburg Port. Such experience contributed to a better understanding of development dynamics not only regarding a simple industrial project, but also their strong interconnection to international policies, to the evolution of the world geostrategic framework, as well as to the relations between Europe, United States and China. Therefore, he highlighted the importance for territorial enterprises to participate in events such as the GeoAdriatico Symposium, underlining the necessity to organise periodic meetings to inform the industrial world about the global development perspectives that inevitably will influence the world economy in the immediate future. This will support a better understanding of the visions, strategies, priorities and objectives of the international community and, therefore, a better alignment of the companies’ industrial strategies to a changing world, anticipating the implementing times.
9. The new banks at “zero kilometre”:
Dr. Carlo Antonio Feruglio (President of the Bank BCC of Staranzano and Villesse, ICCREA Group, Entrepreneur in the Agriculture Sector) presented how the territorial banks have already planned their financial support to the development in relation to the changed international geostrategic framework and the corresponding new European challenges. His speech entitled “The importance of the “Zero Kilometre Bank in the support to the innovation enterprises interconnected to the European systems, operating on the base of Circular Economy, Innovation and Network Development principles”, has first of all showed how his bank has already anticipated the vision summarised by the 3 “P”s of the International GeoAdriatico Symposium (Persons, Planet, Prosperity), having fully considered the challenge of the 2030 Agenda of the United Nations for a sustainable development. He also summarised his financial growth objective even through 5 “P”s: Persons, Planet, Prosperity, Peace and Partnership. Then, he highlighted how the support to local communities is an integral part of the vision of the Iccrea group, composed by 128 credit cooperative banks, that foreseen a constant human relation with persons and enterprises that are operating locally, willing to represent not only the third banking group for the number of opened branches along the whole Italian territory, but the main financial institution “at zero kilometre”. Such support to local communities is given in a self-sufficiency perspective, differently from the merging and globalisation models that are demonstrating their inadequacies in relation to the climate and sustainability challenges. Furthermore, particularly interesting has been the speech regarding his entrepreneurial experience in the agriculture sector, highlighting as the information on the potential food, economic and social crises due to the import of wheat that followed the Russian-Ukrainian conflict is not appropriate. Indeed, the greater food dependency is due to the supply of Russian wheat and not Ukrainian wheat because the quantities annually exported by the former, both in Africa and in Europe, are very much greater than the quantities exported by the latter. Therefore, the demining operations at the Odessa harbour have primarily geostrategic and military objectives. Conversely, the sanctions regime adopted by the EU and the US could represent a more severe threat to the supply of agricultural products from Russia.
10. Globalisation, De-globalisation, and some concrete proposals:
Then Prof. Giuseppe Razza (Moderator of the panel, President of the Sustainable Financing Bank and Enterprises Association, Counsellor of the Banking Foundation CRTrieste, Integrated Expert of the German Cooperation within the Ministry of Environment, Spatial Planning and Infrastructures of Kosovo, President of the European Movement for the Sustainable Development, former General Director of the Trans-European railway Corridor V Secretariat) concluded the discussion emphasising the necessity to implement the global challenges only through the growth of local self-sufficient communities interconnected between each other, summarising some concrete proposals emerged during the discussion. Therefore, his speech entitled “Conclusions and proposals for the Adriatic” underlined that all interventions of the prestigious speakers made possible the identification of concrete possibilities for the development of innovative projects along the Adriatic Sea, like the implementation of a thematic and new guarantee instruments’ seat of the European Investment Bank and of an international financial-insurance hub with the corresponding strengthening of the commercial network and of the consulate presence in Trieste, the strengthening and extension of innovation technological hub in 10 countries of the South-East Europe operating in the BioHighTech, DigitalHighTech and EnergyHighTech sectors, the realisation of a big hub for the energy production with carbon capture and hydrogen production in Albania. For the further in-depth analysis of these arguments a new meeting has been planned for the next autumn-winter within a big international conference that will be organised with the support of the Sustainable Financing Association.
