President Werner Hoyer's laudatory speech for KfW CEO Günther Bräunig, who received the European Banker of the year award in Frankfurt.


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>@EIB

Ms Wüst,
Ms Scholtes,
Günther Bräunig,
ladies and gentlemen,

Google searches for “Wuhan” reached unprecedented levels at the beginning of last year. The online community anxiously watched the place where a new virus had entered the world. A world that, by March 2020, we suspected would never be the same again.

While many were still in a state of shock, wondering whether in our interconnected era it was really possible to lock down entire countries from one day to the next, phones in political and economic centres were ringing off their hooks. Germany was no exception.

What it meant for Europe's business capital when ports and airports suddenly closed, when assembly lines ground to a halt, when laboratories stopped researching, builders stopped hammering, and most shops stopped selling, only a few could imagine.

And those that could do so painted a bleak picture: An unprecedented stock market crash, global economic indicators at rock bottom and consumer spending and production in simultaneous freefall gave many a political and economic leader sleepless nights.

You won't have slept much during this time, Günther. In any case, the German government quickly assured us it would handle the pandemic's economic upheavals with a “bazooka”.

The coronavirus aid measures announced by Olaf Scholz in mid-March aimed to support firms in dire financial straits due to the crisis. As it turned out, quite a few were in this situation.

Just as important as rolling out the heavy weaponry was putting it in responsible and capable hands.

In Germany, this could only mean one institution. Developing the former East Germany, the financial crisis, the energy transition — since its founding 70 years ago, KfW has proven time and time again that it does not shy away from challenges. And so the sustainability bank of the 2010s became the “bazooka bank” literally overnight.

The jury that chose you, Günther, as Banker of the Year 2020, praised the unprecedented feat of the German government, the commercial banks and KfW in setting up the special coronavirus aid programme. That the programme was ready in just a few days is undoubtedly one of the most impressive achievements of last year.

The EIB Group also launched emergency aid in March 2020, subsequently developing the European Guarantee Fund (EGF) as another instrument to mitigate the consequences of the pandemic across Europe.

I can speak from personal experience here and say that the weeks and months after the first lockdown were the most labour-intensive of my career.

But we shouldn't kid ourselves. The number of hours ministers, bank bosses and CEOs spend working — or rather remote working — has only a limited influence on success or failure.

For a Herculean task like the coronavirus aid programme, two things were needed, namely a team of highly motivated co-workers and management that made it clear: “This is the priority. Everything else can wait.”

KfW obviously had both, and did well. Because the coronavirus aid programme not only saved the German economy from collapse, but also hit upon the way out of a dilemma that just recently re-emerged in the coalition negotiations: Germany will only remain a progressive and welfare-oriented country open to the future if it mobilises huge quantities of funding.

Funding it does not want to derive from excessive debt or higher taxes. Funding that is out there on the market, but that still goes to projects with social benefits far too rarely. Funding that, when applied skilfully, can make a big difference, because it brings investors on board who would otherwise steer clear of riskier financing.

If the coronavirus aid programme has shown us one thing, it is that state guarantees for national AND European promotional banks (we always need both to avoid damaging the integrity of the internal market) are a good way to finance eligible projects even under difficult conditions.

They make it possible to partially guarantee the lending of commercial banks and to better distribute risks. Major investments can be triggered with a relatively small amount of resources, no financial trickery needed!

Just take a look at the coronavirus aid programme. It has exceeded expectations, except those related to losses. It is already clear that defaults are negligible compared to the liquidity provided on the market.

In the case of the coronavirus aid measures, this principle mainly benefited small and medium-sized enterprises, but it also works for complex infrastructure investments and for fostering innovation. An offshore wind farm in the Atlantic, the world's largest concentrated solar power plant in Morocco, or financing for new vaccines — traditional investors stay far away from such projects.

Carefully conceived financial instruments can change this and we would do well to use them in a more determined manner outside times of crisis.

Speaking of determination: the way Günther Bräunig ensured that his team were focused on implementing the coronavirus aid programme was key to its effectiveness. This was complemented by forward-looking, years-long restructuring at KfW, which enabled it to successfully complete the aid programme.

The jury considers that KfW was able to act so effectively because it: “continuously expanded and further developed its funding infrastructure.” This refers not least to one aspect that is still often seen as uncharted territory in Germany.

As the jury put it, “the fact that all KfW financing partners were digitally integrated at the outset of the COVID crisis was crucial to success.” Indeed, under Günther Bräunig, digitalisation become a top priority in-house and externally.

During his years on the executive board and later as CEO, he defined the bank's new priorities. Digitalisation came first. Sustainability was just as important, as were Africa and development.

By setting these priorities, Günther proved his understanding of the real challenges facing Germany and the world. We need massive investment in climate action and our environment, and we must ensure that this investment brings the world's countries closer together and does not pull them further apart.

If we want to achieve these goals as quickly as possible, we must apply state-of-the-art technology and comprehensive networking from the smallest to the biggest companies.

I am pleased that our two institutions are putting this principle into practice, quite well in my opinion.

KfW and the EIB Group have been working together for a long time. Most recently though, we have been steadfast partners since Jean-Claude Juncker launched an Investment Plan for Europe in 2015, tasking the EIB Group with its implementation with the help of the European Fund for Strategic Investments (EFSI).

Be it through the StartGeld startup loan programme, the loan for growth aimed primarily at larger SMEs, or the coparion venture capital fund, together we have been able to get many major projects off the ground in recent years, setting the tone for the future.

I have especially fond memories of the Clean Oceans Initiative, which we began discussing at a dinner in Luxembourg, and then unveiled in October 2018 in Bali alongside the Agence française de développement.

During this launch, you described the initiative as a “European response to a global problem,” highlighting that while we can’t save the world through this initiative alone, we can help raise awareness of the issue — as a united front.

I think that sums up the role and potential of our respective institutions quite well, because in a time of constantly changing trends that compels many companies to seek maximum profits with the lowest possible risk, promotional banks are fortunate to be able to take a more measured and long-term approach in pursuing their goals.

This enables them to successfully create momentum that, in the best-case scenario, can prompt entire industries or continents to change course. The Clean Oceans Initiative, for example, will at least go some way towards reducing the amount of waste dumped into the world’s oceans.

Promotional banks have also played a key role in ensuring that the production capacity of wind power now ranks second among all renewable energies, and that it is now more cost effective to build wind turbines — especially offshore — than even the lowest priced fossil fuel projects.

This is the only way we can honour our responsibility to society and support a more social, environmentally friendly and climate-friendly world with our investments.

As these examples show, this can all be done better together.

National and multilateral promotional banks complement and reinforce each other. It should have become clear during the pandemic, if not before, that those countries where national public banks were on hand to help had an enormous advantage. However, this is not the case across the European Union, and even where such national banks exist, they are often far less effective than KfW.

In many countries, the EIB Group’s coronavirus aid has been and remains in high demand, and is key to keeping the internal market running. And hopefully others too.

If COVID has shown us one thing, it is that the world became even smaller last year: “No one is safe until everyone is safe” was the motto when it came to the availability of vaccines for poorer countries.

And while we have come to realise how true this is with regard to the virus, we also need to do so for the many other problems that make life difficult and sometimes impossible for millions, if not billions, of people. These include droughts, floods and fires that devastate entire regions, as well as depleted oceans, soil erosion and deforestation.

These issues also concern us in Germany.

Because who can blame people from the affected areas for leaving at some point to seek some form of security, prosperity or happiness? The same goes for the many violent conflicts that drive people all over the word to flee their home countries.

KfW has always been a development bank. And you, Günther, have really emphasised this role. With offices in almost 70 countries, you and your team are perfectly positioned to support education, healthcare, green energy, clean water and liveable cities around the globe — another Herculean task.

We will need an additional $2.5 trillion per year just to achieve the United Nations Sustainable Development Goals by 2030. Trillions, not billions.

The European Union and its members are already investing more than any other country but, as is so often the case, public funds just don’t go far enough. This is why we need to create synergies here, too — between national and international development banks, but also with the private sector, making sure that we focus on what matters.

EU development finance has always been a complex issue, in particular because it happens on four levels:

  1. Globally via the World Bank, in which European countries hold a third of the capital.
  2. In Europe via the EIB — about 10% of our operations are outside the European Union.
  3. Regionally through participation in the African and Inter-American Development Banks, for example.
  4. And finally nationally via state development banks such as KfW.

Critics argue that EU aid is therefore fragmented, and not very visible or efficient.

And while it would be better if the global community could agree on common development goals that would then be supported centrally by the World Bank, the signals from China, Russia, the United States under Trump, and a number of other large states don’t paint an optimistic picture in this regard.

We need to be realistic: Europe can only represent its values and interests globally by itself. To achieve such strategic autonomy, we need bilateral financial institutions — national ones such as KfW as well as European ones.

In Europe, you, Günther, have set the bar very high. When we open our EIB development branch next year, we will be looking to KfW for guidance.

I very much hope that our institutions will maintain the open and constructive relationship we have enjoyed in recent years and continue to build upon it, as I now turn to your successor Stefan Wintel.

This is something, Günther, that I will still have to get used to. And I’m sure I’m not alone in saying it. 32 years serving an institution with 15 of them spent on the executive board — the bank must feel almost like family.

And just like in a real family, you have had to deal with countless smaller and larger crises during your time there. You have succeeded in doing so with a resolve that many colleagues with a less glittering career might envy, such as during the 2007 to 2008 financial crisis, when you stabilised the heavily hit industrial bank IKB so that it could be sold to a financial investor, or ten years later when, under difficult personal circumstances, you took over the helm from Ulrich Schröder, who had been ill with cancer, completing many of the tasks he was unable to in the time he had left.

Few would have thought it possible that you would be confronted with an even greater problem so close to your retirement. But we had no doubt that you would successfully handle the situation.

In an interview you once said that “there is always a way out.” This unwavering optimism sets you apart from the majority of those in high economic roles and political office, who often develop a cynical outlook.

I am glad you were proven right in the coronavirus crisis, too. Your positive, problem-solving and pragmatic nature will be missed in the banking community.

As will your ability not to take things too seriously. I was told that your rendition of “Last Christmas” at the last KfW Christmas party, for example, was definitely one for the history books.

And then there’s your Vespa, which will probably soon be considered a classic. The joy it brings you shows that the man who has pushed the modernisation of KfW more than most before him can also appreciate a grease-covered two-stroke engine from time to time.

That’s human and it’s what makes you, besides your many other qualities, a very well-liked counterpart.

Now, let me finish back where I started — in China. While many of us may now regard the country with scepticism since the outbreak of the pandemic, we would do well to take inspiration from Chinese culture, taking a different approach to how we deal with challenging situations.

In Chinese, the word “crisis” consists of two characters — one means danger, the other opportunity.

You, Günther, have always considered these two terms together throughout your long career. That’s something that KfW did well — as a “responsible bank”, it has been committed to helping the economy from the very beginning, and it has done just that.

And that is why you are quite rightly now European Banker of the Year — congratulations!