Alexander De Croo served as Prime Minister of Belgium from October 2020 until February 2025. He previously served as the Belgian Minister of Finance and Development Cooperation. De Croo studied at Solvay Business School in Brussels and the Kellogg School of Management in Chicago.
You've spoken to the need for Europe to become more economically competitive and innovative. What approaches can Europe take to achieve this? How can these changes be implemented, and what are the barriers to them?
First of all, as Europeans, we should show more pride in what we have achieved. This [is] a continent that has gone through so many wars, and what we have built [within 70 years] is quite amazing. We are one of the most attractive markets in the world across so many dimensions. We are the number one trading partner of the rest of the world. We are the number one investor in fighting climate change, [and] the number one investor in development throughout the world. We are number two [in] military expenditure[s], and we need to step up our game there. The problem is that we are number one in so many domains, [but] we act like we are number two or number three. It is about time that Europeans are not only reactionary but set our own path.
We have established something quite amazing here in Europe: something that the rest of the world is jealous of. That does not mean that we should say: okay, all is fine. Europe has one gigantic disadvantage, and that is speed. In Europe, we are actually quite slow, and that lack of speed in decision-making is hounding us. We are a continent with extremely well-educated people, we are extremely good at innovation, [and] we have a common market, which is extremely attractive. There are some missing links. Those missing links are taking us time, and we are still not there. Take the discussion about the Capital Markets Union, for example. I was the finance minister five years ago and we had that discussion then, and we said: Wow, we've been discussing this since 2008 when we had the financial crisis. We are five years down the road, and it is still a [discussion] priority. This has been a long time debating a single topic, and the same goes for our single market, which is a great achievement, but still needs a lot of work.
In foreign policy, [there is a saying], “If I want to call Europe, who am I calling?” That question is still valid. What do we need to do? The Capital Markets Union is a crucial one. Deepening our internal markets is very important. Stepping up our military expenditure, taking our security into our own hands and building a defense industry around it, [and] cutting red tape, are all things that we need to do. The question is, how do you achieve it?
The president of the European Commission, Ursula Von Der Leyen, is really at the top of the game but will need support from national governments [to bring Europe together]. The state of national governments throughout Europe is complicated these days and the home political situations of the historically leading European countries are complicated, but that can improve rapidly, so I am not too negative about it.
History has shown that as Europeans, we move forward when we have our back[s] against the wall. It is quite clear that we have our back against the wall right now when it comes to competitiveness, geopolitics, and what is happening in our own backyard. We [also] have our back against the wall on many trade topics. It is time for Europeans to take a giant leap forward.
What lessons have you learned from your time as Prime Minister of Belgium, and what is your vision for both Belgium and the rest of Europe?
I was Prime Minister for approximately four and a half years in a coalition of seven different parties, which is a lot. Seven different parties is ten times more difficult than having just five parties because there is almost always someone who has an issue. It was a coalition with parties from across the political spectrum, including the Green Party, Socialist Party, Liberal Party, and Christian Democrat Party. How did we come to that coalition? It was because of COVID[-19]. The first year of COVID[-19] was extremely difficult with a minority government, which did not have the power to make the decisions that had to be made. Everyone was hesitant about forming a government because everyone saw that COVID[-19] was going to be complicated, until the moment [when] myself and the parties of my coalition said, enough. If you are an elected member of Parliament, you are not elected to do the easy things. Even if many people said it [was] going to be incredibly hard, I thought that [was] part of the duty.
My first lesson was that compromises work, even though compromises and political deals are often seen as ineffective, slow, and a barrier to good decision-making. I contest that. In very difficult moments, like during COVID[-19], where our government had previously been seen as very vulnerable, receiving a lot of criticism, [and] we managed to turn that around in a few weeks. We came out of COVID[-19] as one of the stronger countries with policies that were very stable. All the decisions we took were much better than if I [had] made those decisions on my own. Especially in these moments, if you want [stable] decisions, if you want decisions that are accepted by your population, I think it is actually a good thing to negotiate with different parties, and in our case, different governments, because we are a federal country.
Despite the fact that the coalition was made up of a broad range of parties on the political spectrum, as a government, we [made] some decisions [that] did not look easy at first. For example, we decided to reverse our nuclear exit, an agreement that would stop nuclear power production, which the Green Parties, [Groen and Ecolo], in my government really wanted. Six months down the road, we decided to do the opposite: we decided to extend our nuclear power plants. This [decision] was almost impossible for [the Green Parties] to do, but it led to some good decisions.
The flip side of that [outcome] is that we need to do a better job of explaining to people that democracy is not always easy and that sometimes it might take time and heavy discussions. A government having a heavy discussion does not mean that it is a disaster. In a coalition government, you bring different parties together and sometimes you disagree, but at some point, you find a solution. Democracy leads to some complexity, and democracy sometimes leads to uncertainty. [Some] political models have more certainty, such as autocratic regimes. The only question you have about an election outcome is: does the President get 90 percent of the votes or 95 percent of the votes? If you are a political opponent, you [have to] be certain that you [are] prudent, because you could “accidentally” fall out of a terrace or out of a window. The uncertainty you have in democracy and especially in coalition governments is a safeguard of having politics [that] respects human rights, respects opponents, respects the fact that in a society [with] different opinions, and that the goal is to bring all [these facets] together. Honestly, most Western democracies are not doing a good job [of] explaining why democracy is complicated, and that is one of the urgent things that we need to address.
With the war in Ukraine and the growing climate emergency, we are having to allocate resources to our defense capabilities and energy transitions. Meanwhile, economic growth remains at the top of the agenda for many countries. How do we balance, or even align economic, security, and environmental goals?
They are not opposed to one another. The big mistake is to say that this is a dilemma where it is one and not the other. They are linked and that one can strengthen the other. What we need to do is find common ground between geopolitical, economic, and climate objectives. Energy is at the core of that discussion. [We were] fast and effective at disconnecting from Russian gas—it was quite amazing. We still have some way to go, but what we are doing in nuclear and renewable energy is serving [economic and environmental] goals. It is reducing [greenhouse gas] emissions and making us less dependent on Russia. We are going to continue using petrochemicals and gas, and there is a discussion with the United States on trade deficits. [Europe] can buy more LNG (Liquified Natural Gas) from the United States, which makes us less dependent on Russia. Investing in renewables [also] makes us less dependent and reduces greenhouse gasses. It is not at all a binary thing.
What is crucial is that we stick to the plan and that we keep to the goals we have in Europe. For example, [there is] the Fit for 55 regulation, which aims to reduce greenhouse gas emissions by 55 percent by 2030. We should stick to that goal, but we should be more flexible in how [to] achieve it. This is one of the mistakes being made in Europe. In public policy, what we need to do is set the goal, but what we often do in Europe is we set the goal, and then we also define how to reach that goal. That is not our business. What politicians should do is set the goal and then let innovation work to achieve it. Innovation is not something politicians are good at, but the private sector is good at it. We will create a competitive edge. China has been quite good at doing that. Why is China today dominant in electric vehicles (EVs)? It is because they have had a stable industrial policy. In the short run, it might seem attractive to relax the environmental objectives but that would be a mistake. We need to stick to them, but we need to be more flexible on how to achieve them, and we need to have [a] stable industrial policy [to] do so.
Donald Trump has been in office for nearly a month. How have his policies impacted the relationship between Europe and the United States, what do you see for the future of this relationship, and what are the implications for the rest of the world?
It has been a roller coaster. In my opinion, the U.S. and E.U. relationship is a very stable one. The fundamentals of it are there to stay, but it is under stress and that is quite clear. If you take the U.S. and European economy together, that's 40 percent of [the global] GDP. That is gigantic. As I said in my speech at the Harvard European Conference, there are so many examples of American and European firms [that] employ millions of people on both sides. The fundamentals are there. The question is, do we build on those fundamentals, or do we demolish those fundamentals? Both will take time. I am not afraid of the impact in the short term, but it is important for Europeans that we are not being pushed [reactively]. When many things are being said, including many tweets and statements, we should not react to all of it. On some things, we should react, and we have to be very clear on what our goals and interests are.
People say the relationship between Europe and the [United States] is transactional. That is clear. If you want to do it from a business perspective, do it from a business perspective. Let us see what our common interests are [and] how we can make transactions. Europe and the United States have benefited a lot from the influence they have had throughout the world by working on principles and values. That is the question: do you want to give that away by saying, principles are less important, or do we still want to keep that bonus? That bonus is worth a lot, and we have been a beacon in the world. The rest of the world look[s] up to us because we are a free society where people are respected, can grow prosperity in a safe environment, [and have] good education. We, as Europeans, absolutely intend to remain that beacon for the free world, because we think it serves us well now.
I am a big fan of the transatlantic relationship, and I am convinced that it is lasting. Of course, Europeans also have to be clear and say that the world is more than that. If we make agreements with Mercosur, for example, on trade, then that is very important for Europeans. The relationship with African countries is one where we have to be much clearer and more precise on what we want and where we can work together. We hope that the United States would be a partner in that, but everyone makes their own choices. As a last point, the United States is a democracy with very strong institutions. If you look over the past week, those institutions have played a role, and that is good. I have faith in European institutions, and I have faith in American institutions.
De Croo spoke with Williamson on February 13, 2025. This interview has been lightly edited for length and clarity.
The views expressed in this piece are the interviewee's own and are not reflective of the views of the HIR.
