Andreas Dombret — A stairway to heaven? The promises and limits of global integration

The speech is not short but it is important considering this is the Bundesbank.

The conclusion at least is a must read.

7. Conclusion

Ladies and gentlemen

I was born in the United States, grew up in Germany, and spent much of my life working around the world, including London. Personally, the backlash against the integration of our global community has shattered my core beliefs and worries me deeply.

But I accept that global economic integration has gone too far. Theoretically, it may be appealing to have one global market, but the reality is that it does not work. It has substantial negative repercussions - repercussions that our current approach to globalisation cannot handle well.

We need to find a new, third way; a middle way that harnesses globalisation's benefits and limits its negative repercussions. To stop a race to the bottom, national governments and parliaments will have to be more willing to go their own way rather than believing in entirely free, frictionless global markets and fully harmonised rules.

They will have to decide what level of compensation they want to provide to those who lose out from globalisation; and each society will have to reconsider where it makes sense to impose limits on global markets and internationally active firms.

However, there would still be substantial room for the harmonisation of rules, but it should be less, and focused, harmonisation with minimum standards only in carefully selected, meaningful areas. I personally will do everything I can to contribute to finding the right approach.

Ten years from now, I hope we will have adapted the multilateral system to form one that does not condemn distinct national rules as something illegitimate or inefficient, but one that combines sensible global integration with institutional diversity. Only if we become that open-minded and accept the rich diversity of human culture will we be able to sustain a close multilateral system that is geopolitically stable and enjoys the support of the clear majority of people.

We need to debate this earnestly and intensely so that we may arrive at new thoughts and ideas. On that note, I now look forward to debating with you. Thank you very much for your attention.

BIS

Andreas Dombret: A stairway to heaven? The promises and limits of global integration

Speech by Dr Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, at the London School of Economics and Political Science, London, 8 February 2018