Bruegel's Franco-German roots

“I have not been an enthusiastic supporter of each and every French, German, or Franco-German initiative, but I must say that this one was worth supporting”. This is how, in his characteristic style, Bruegel first chairman Mario Monti presented it to the press on 18 January 2005.

Two years earlier, on 22 January 2003, the idea of setting up what would become Bruegel had been given a strong impetus by the Chirac-Schröder declaration issued on the occasion of the 40th anniversary of the Elysée Treaty. In this declaration the two leaders stated that “in order that Europe can make its full contribution to international debates on economic, financial and trade policy, and have a greater capacity for analysis and initiating proposals, thereby strengthening its position in these spheres, France and Germany have decided to launch a European initiative for the creation of a European centre for the international economy devoted to those objectives. This centre, which could be located in Brussels, should progressively be able to open up to all the European partners – member States, EU institutions and private-sector businesses”.

Before the leaders’ statement the original outline for the project had been discussed between Jean-Pierre Jouyet, then Directeur du Trésor at the French MOF and his counterpart Caio Koch Weser, the German State Secretary. Both men were unconventional civil servants. Jean-Pierre, a former chief of staff of Jacques Delors at the European Commission, had participated in think tanks in France and believed in the virtue of open debates. Caio had served as a World Bank vice-president and was nostalgic of the brown-bag meetings where policy ideas took shape. So when the idea emerged, they promoted it rather than finding a dozen of reasons why it could not be pursued – as could have been expected from men in their position. The two finance ministers, Hans Eichel and Francis Mer, were also open to new ideas and favourable to new inputs into policymaking. This unique conjunction made it possible for what looked like a weird idea to be given an official blessing.

The next step was to move from the broad outline to a concrete business plan. A joint working group was formed within the two ministries. Christian Kastrop was put in charge on the German side and I was his French counterpart. We worked until September on the various dimensions of the project, including the plans for the structure and statute of the future European Centre for International Economics, which were jointly drafted by Reiner König, then director-general with the Bundesbank, and future Bruegel scholar Nicolas Véron, then an independent financial expert. Other experts involved in the early design were Lionel Fontagné of CEPII and Willi Leibfritz from the OECD.

Both sides were in full agreement that the future centre could not be a bilateral institution. This is one of the reasons why the Brussels location had been chosen. Early contacts were therefore made with Peter Praet, then a director with the national Bank of Belgium (and now an ECB Executive Board member). Peter – another man of ideas – was immediately enthusiastic and he asked his advisor Stéphane Rottier to help overcome obstacles.

In September 2003 Caio and Jean-Pierre invited their colleagues of the Economic and Financial Committee (EFC) to join the discussion. Most participated in a series of meetings in Brussels, together with the Commission and the ECB. The Commission was ambiguous on the project: Pascal Lamy, then Commissioner for Trade, was very supportive, but his colleague Pedro Solbes, who was in charge of financial matters, was somewhat fearful of Bruegel being used by states as an alternative source of expertise and proposals. The Commission participated in all discussions but in the end it

was decided by common agreement that things would be simpler if it stayed out. This proved to be an excellent decision which paved the way for a fruitful working relationship with the European institutions.

By March 2004 discussions with states had been completed. Time had come to decide who would join. Germany was very keen on having the UK on board, but when asked, British EFC member (and now UK permanent representative in Brussels) Jon Cunliffe, humoristically replied “we are not very good at joining”. Nevertheless he eventually agreed on UK participation, conditional on Bruegel starting small and demonstrating usefulness during its first three years of existence. The incentives had been set right: perform or die.

Another important member that joined early was Poland. It was not even a member of the EU but all new member states had been invited to participate in the discussions and the Warsaw Office for European Integration (UKIE) was keen on taking part from the very start. Eventually therefore, what was not yet named Bruegel was endorsed by 12 state members.

The last two steps were to attract private support and make concrete plans for research and organisation. A steering group chaired by Sigurd Naess-Schmidt of the Danish ministry of finance was formed to these ends. I was recruited as project manager and together with Nicolas, we campaigned to convince private companies to join. The subscription fee was high and we had nothing to show so it was a hard sell, but eventually we were able to start with 17 corporate members. On the academic side, an advisory scientific committee was formed with Peter Neary of Oxford, Paul Seabright of Toulouse – who would become the first chair of the Scientific Council – and Jaume Ventura of Barcelona, with whom we started discussing research strategy.

We still had to find a chairman and a name. Mario Monti, whose term at the Commission was approaching its end, gracefully accepted to take the risk and serve as the first chairman. He then asked me how the centre would be named. I presented to him several names we had imagined. “Can I think a bit about it?”, he asked politely. “Obviously” was my reply. The next day he came back with a proposal: Bruegel.