Transcript: To be or not to be Europe

This is the full transcript for the Empire episode Europe: To be or not to be (Thursday, June 14, 2012)

Dimitrios Droutsas:
It is like you would have a knife on your throat.

Raul Romeva:
You cannot simply tell somebody commit suicide.  

Philip Aegeon:
Greece can be the Lehman Brothers of Europe.  

Eamonn Butler:
The euro as a economic statement it was sheer nonsense.  

Marwan Bishara:
Hello and welcome to Empire: I am Marwan Bishara. You’ve probably heard many facts and figures over the past two years, but the figure you need to know is 19; that’s the number of emergency summits convened by European leaders to resolve their crisis, but none has worked out. At the centre of the current crisis is this: nothing symbolises Europe’s dreams and unfolding nightmare than the euro. That’s why we’re starting our European journey here, in Brussels, the seat of the European project to try to answer some fundamental questions: who led Europe into this crisis? Who can lead it out? Is this the centre of European power or is it Paris, Berlin and London? To discuss this and more I’ll be joined inside the parliament by former Greek foreign minister and European parliament member, Dimitris Droutsas and his fellow MEP from Spain, Raul Romeva. But first a quick reminder of how we got here in the first place.

Jacques Delors:
[Foreign dialogue]

Ruud Lubbers:
A monetary union with one currency is now a fact of life.

Eamonn Butler:
The euro was a very brave and bold political statement but as an economic statement it was sheer nonsense.  

Eamonn Butler:
You’ve set a currency system which has fatal flaws that everybody is simply ignoring. Certainly Mrs Merkel is fully aware of them, but everybody else just wishes that they would go away, now that is no way to run a country; it’s no way to run a union; it’s no way to run a currency.

Marwan Bishara:
Dimitrous and Raul welcome to Empire.

Dimitrios Droutsas:
Thank you.  

Marwan Bishara:
Listening to the news travelling around Europe, it sounds like, or the assumption is, that you, meaning Greece and Spain, are the problem. Are you the problem in Europe?

Dimitrios Droutsas:
Do you really think so? I know that a lot of people think so and maybe this, this is the real problem that we are facing that somehow there is a tendency of hiding oneself behind his own finger, and please don’t misunderstand me, I want to be very clear, I’m not hiding myself behind my own finger for the situation in Greece, this very difficult situation we are facing, we are responsible ourselves, in Greece, because of the way politics used to behave and to deal with things in the past three, three and half decades. I don’t need to dwell into that; [acclientalistic] systems, things not working well, a huge bureaucracy, huge administration, all those things came together and now we are facing the bill that was presented to us, so, there are no misunderstandings, I fully acknowledge the fact that we are responsible ourselves for the situation we are finding ourselves in. What Greece needs, and what the Greek people need, is, first of all, respect, acknowledgement that the Greek people are trying. They have been suffering – there have been huge sacrifices in the past two, two and half years, this must be acknowledged, and we all must sit together on the same table and see how we can overcome the crisis. It’s not about threatening or saying you haven’t done this, you haven’t done that, we know our mistakes, now it’s time to see what we can do together. And when I say together, I certainly mean first of all the European Union, but of course also the whole of the International community.

Marwan Bishara:
I want to get to the European Union. Raul, what do you think – are the Spanish leadership acknowledging, as the Greek leadership, their responsibility in this?

Raul Romeva:
I think that every country has its own part of responsibility on the internal level. Obviously in Greek they mentioned that it’s specifically Greek, in Spain it’s exactly the same situation, in Ireland probably you would find other aspects that would be internal problem that need to be solved, but there is also another dimension of these is the European dimension of the whole problem, I mean you cannot say that the problem like the Greek, or the Spanish, or the Ireland, or Portugal, whatever, is simply something that it isolated from the European Union project – it’s part of it. And historically, the other member states have been taking profit of the situation in Spain, in Greece and many other countries, so there is a co-responsibility in a way, in a part of the dimension, part of a problem. On the other side I also understand there is also a question of timing and Dimitrios is absolutely right when he says this, you cannot simply tell somebody this is the gun, commit suicide. That’s completely unacceptable.  Not only because it’s simply something that is gonna give any solution, it’s simply something that is gonna not happen.

Marwan Bishara:
And the gun is a metaphor for austerity, pressure?

Raul Romeva:
When you are telling somebody you have to apply these measures that you know that they are killing that people, that population, that society, you are simply asking them to commit suicide.   

Marwan Bishara:
Then so why did the Spanish government and the Greek government accept those dictates?

Raul Romeva:
Well let’s see what happens, let’s see what happens, but what I understand is important is that we overcome the Spanish dimension or the Greek dimension and we start thinking about the European solution. There is no solution if there is no European solution. And it’s not me who’s saying this, it was Jacques Delors in that moment when he said, “you wanna euro, fine, but you will not have an euro if you don’t have at the same time a fiscal union, a banking union”, that’s what we lack now and that’s we need to overcome the situation.
 
Marwan Bishara:
It sounds familiar, Dimitrous, political union first, why put the cart in front of the horse?

Dimitrios Droutsas:
Certainly, and personally I’m very much in favour of going further into European integration, into doing things much faster.

Marwan Bishara:
Are the Greeks too, by the way?

Dimitrios Droutsas:
Uh, Marwan, that’s a very interesting point you are tackling here, because Greece and the Greek people used to be one of the most pro-favourite, pro-European counties in the European Union; you can imagine that in the past two, two and half years with all these developments with what happened, the feelings of the Greek towards the European Union are not so positive anymore but I think that if we explain things to the Greek people again in the right manner, if the Greek people see that things are changing, that the European Union is changing, rhetoric is changing, policy is really trying to help, then the pro-European character of the Greek people will come out very, very soon.

Marwan Bishara:
So, you don’t think we missed an opportunity there?

Dimitrios Droutsas:
Uh, unfortunately we have been missing a lot of opportunities in the past. The whole of the European Union has missed a lot of opportunities and let me tell you one thing, because we feel in Europe and we as European parliamentarians we certainly feel it much, much more, we feel that the European citizen is going more and more away from the European Union; the so-called Euro scepticism to bring in a modern word in the European Union.

Marwan Bishara:
So you feel more Greek and you feel more Spanish.  

Dimitrios Droutsas:
Yes. The national element is again much, much stronger. But this is also because a lot of big decisions – huge decisions for the development of the European Union were taken behind closed doors, by the leaders of Government, by the leaders of the Member States without really asking and involving the European citizen on those decisions.

Marwan Bishara:
Yes go ahead.  

Raul Romeva:
No, no, actually that what I think is an important point. We’re usually talking about economic crisis, the financial crisis, that’s wrong. The most important crisis you have to face is the democratic crisis.

Marwan Bishara:
Do you think Europe is democratic enough?

Raul Romeva:
Not enough, I mean, hewn we talk about this democratic…

Marwan Bishara:
Why, because European Parliament for example is irrelevant?

Raul Romeva:
No. That’s putting the way the other extreme, I think there is…my position is that it is not yet as let’s say decisive as it should be, let’s put it in an example, in one member state you have the capacity of ruling the economy because you have a central bank controlling basically the currency; in the European Union you cannot do that. The central bank has not this power, uh, on the other side politically speaking, there is a lack of confidence on the way some decisions are taken. I mean, we are seeing that the parliament is actually crucial in many of the decisions that are taken, but, there is this kind of feeling that the ones who really decide in Europe are Berlin, basically Madam Merkel, and up until now it was Sarkozy. It’s this perception that who are these people deciding for everybody without having being voted for.

Dimitrios Droutsas:
Let me give you another example with the banking sector coming back to, to my country Greece. As it is well known we have received very generous support, financial support, by our EU partners and also the IMF, but let me tell you that not a single euro from this support went to Greek society.

Marwan Bishara:
Where did it go?

Dimitrios Droutsas:
It went in order to save and support the banking system that had big troubles.

Marwan Bishara:
Notably French and Germany?

Dimitrios Droutsas:
As well, as well. When we are talking about the banking system it’s an international network, we all know that.
 
Marwan Bishara:
Speaking of solutions. I read that one of your proposals has long been that the European Central Bank can step in and borrow money at a low interest in order to support some of those struggling economies – do you think the Germans will go for that?

Dimitrios Droutsas:
That’s a good question and you should ask this Madam Merkel when you have the chance. As I said, more decisive action is needed. It’s not only up to the European Central Bank to decide, it is also up to member states to take this action.

Marwan Bishara:
Member States or France and Germany?

Dimitrios Droutsas:
Well, we can discuss about this.

Marwan Bishara:
We want to put our finger on the pain here.  

Dimitrios Droutsas:
We can discuss about this very, very frankly, you see and you are absolutely right, the past two, two and half years in all these efforts to tackle the crisis, two member states were decisive. Or let me put it maybe in a less diplomatic way, one and a half member states were decisive. Germany and some sort of, off France, and yes this is also an open point of criticism that I make – Germany and the leadership of Germany was not up to the task, unfortunately. We see this from the results. You cannot take a programme that for instance fits to a country like Germany and try to put it on, on another country, like Greece, like Spain, Ireland, Portugal or whoever else.

Marwan Bishara:
And here we go back to the original, perhaps, problem that is facing Europe – that as soon as the first financial crisis hit the continent, there was no European Union. Everyone acted according to their own interests, especially the Germans.

Raul Romeva:
Absolutely. I have to say as well in that sense because, I mean, we need to be fair, I understand – I don’t share, but I understand why the German, I don’t want to talk about Germany as such, I mean I’m talking about Merkel because she is the one who is leading, Germany is very big and there is a lot of political opinions among several groups, but there is obviously this perception from the German tradition in political culture of perceiving the deficit as a problem in itself. It’s a sin, something that had to be combated, and from that perspective their problem is that they cannot simply understand why the deficit is something that can be used in some circumstances. To me, the problem is not deficit, the problem is – how do you arrive to the deficit, what do you spend in order to get the deficit, because some of the expenditures need to be done.

Marwan Bishara:
You mean whether it’s infrastructure or it’s consumerism.

Raul Romeva:
Of course, I mean there are some expenditures that can be saved but some others cannot. But let me finish it because that’s important, and what I want to compare to this is that there is an economical deficit that is important but what about the social deficit?

Marwan Bishara:
It sounds to me that you’re, with all the crisis and now with all the accumulation, the debt and so on and so forth, you are basically losing a generation, you have basically lost.

Raul Romeva:
That’s a problem. I mean if you don’t…I repeat one figure I know the figures are complicated, but 50 per cent of youth unemployment in Spain, that’s very important data.

Marwan Bishara:
But, you know, I mean, in order to be fair to the Germans, while you were increasing wages, while you were having a real estate bubble, while you were spending money on various things in Greece and Spain, the Germans froze their salaries, kept their inflation down, kept their debt down, and hence they’re benefiting now when all the rest of the continent is in crisis, but they have a lot to profit from.

Raul Romeva:
Let’s be frank too.  First, the German’s as well, I don’t want to put this as a kind of German against the rest of the world, I mean that’s not the situation.

Marwan Bishara:
But one can argue it’s the German banks against the German worker, I don’t know, but certainly they’ve done that.

Raul Romeva:
That might be because on the other side, for instance, we have to admit as well that with Germany was doing profit was basically because the rest of Europe were buying things, to him.

Marwan Bishara:
So, effectively Germany benefitted from the trade to the rest of Europe?

Raul Romeva:
Of course. I mean, somebody.

Dimitrios Droutsas:
Hugely.

Marwan Bishara:
Hugely?

Dimitrios Droutsas:
Hugely.

Raul Romeva:
Somebody needed to buy things from Germany, that’s why they made the profits, and we bought it, we are happy to keep buying things from Germany.

Marwan Bishara:
Would you say naively bought things from Germany or shall we say soberly?

Raul Romeva:
Oh no, I mean, it’s part of the game, it’s part of the game, but on the other side I also would like to remind – Germany is very worried about the question of the deficit, and the debt, let’s remember that the two countries that first broke the rules that they imposed in terms of deficit and that was Germany and France.

Marwan Bishara:
In 2003 or so?

Dimitrios Droutsas:
Exactly.  

Raul Romeva:
So, it’s not such a long time ago.  This story is important to remind as well when they blame somebody.

Marwan Bishara:
They were the first to break the rules.  

Raul Romeva:
And they did, precisely because they were in a crisis.  

Marwan Bishara:
Raul, let me just, be that as it May, the danger today, as we look for solutions, for the Central bank to step in and so on and so forth and instead Greece is left at the mercy of the IMF, even Egypt refuse to take the sort of loans you took from the IMF, and second the European Union is able to do nothing about it because at the end of the day the Bundesbank counts more than the European parliament.
 
Raul Romeva:
That’s a problem.

Dimitrios Droutsas:
There is certainly a problem but let’s look a little bit back how things developed Marwan.  When we in Greece were faced with this situation and we had to turn to our partners for support, the European Union at that time two, two and a half years ago, don’t forget this, the European Union didn’t have any kind of tool, any kind of supporting mechanism ready as we have it now.  The European Union, I will be very frank, and I will say it openly, was not prepared to tackle such a crisis.  Also, Germany, Madam Merkel, was not really prepared.  We had, yes, we had to learn, Europe had to learn how to tackle it and it was also a request by EU partners and especially Angela Merkel to say, when we were building up this mechanism of support in the European Union, to also bring in the International Monetary Fund, the IMF, the so called troika, to be part of the so called troika – why?  The argumentation was because we, as a European Union, do not have the experience, the IMF has the experience, so we should have them in and onboard.  This is why we also turned to the IMF.  

Marwan Bishara:
And you believe that?

Dimitrios Droutsas:
Marwan, let me also clarify one thing, when you are facing bankruptcy as a country, when you are facing those huge problems that you have created yourself, but you are facing bankruptcy and nobody is really willing to help you, it is like you have a knife on your throat.  You know what people in the corridors always say about Angela Merkel?  She’s always coming a quarter of an hour too late.  Because, we are waiting too long to take decisions.  Proposals, proposals were put, the first reaction, no, then the crisis is developing further, we reconsider and then we do things that we could have done too long time ago.  

Marwan Bishara:
How do you even feel about the election of François Hollande?  Is this a game changer for Greece and Spain and the rest of Europe?  
 
Raul Romeva:
It changed the rules.  We need to overcome the austerity measures as the solution of everything, and that’s what I understand Hollande is putting on the table.  The austerity measures by itself are not the solution at all.

Marwan Bishara:
Neither is growth, by itself.

Raul Romeva:
Neither is growth by itself but austerity might provoke more problems than solving them, and that’s the message that’s need to be explained everywhere.  

Marwan Bishara:
And that gives you hope that maybe Europe is turning a corner?

Dimitrios Droutsas:
Certainly.  François Hollande I belong to the same political family, the Social Democrats, so, certainly I have very much hope after the election of François Hollande as President of France, but I also want to be a realist.  I have been a member of the Greek government, foreign minister, I know some sort of how things.  

Marwan Bishara:
You’ve been to the [unclear] as it were.

Dimitrios Droutsas:
Also there.  So, there is hope and I’m certain, I am certain that, and we already see it might change, a change in the discussion, that a new discussion will begin that the German dominance will not be so strong anymore.  We are talking in the last months about a possible exit of Member States.  Why aren’t we coming back to our rhetoric of the past where we’ve spoke about enlarging the European Union?  The Balkans, and other regions, we must come back to this positive scenario.

Marwan Bishara:
On this ambition note. Sobering as well, Raul, Dimitrios, thank you for joining Empire.

Dimitrios Droutsas and Raul Romeva… Thank you.

Marwan Bishara:
While all this might be true, just as there are two sides to every coin, there is more than one side to this story, and for that we go to Paris.  

Jacques Attali:
The European history since 50 years has always been a move of deepening integration through crisis.

Marwan Bishara:
That, and much more, after we come back from a news break.

Part 2

Marwan Bishara:
Welcome back. The socialist victory in France’s presidential elections could be the game changer that Europe so desperately needs. Across this continent, citizens are demanding their leaders rethink the way forward.  But just as everyone would like to take a deep breath to try and figure out a way to reconcile their differences, time is running out.

Marwan Bishara:
Some predict the collapse of the euro within three months if it’s member states can’t agree on how to deal with the economic crisis, and that’s why Francois Hollande could prove to be the man of the moment he won the presidency for two key reasons.  He promised to scale back many of the austerity measures introduced by Nicholas Sarkozy and he made clear the relationship with Germany would have to change.
 
Marwan Bishara:
In a moment, I will sit down with the man who helped guide Francois Hollande to the Elysee Palace.  But first, a quick look at this key European relationship.

Francois Hollande:
[Foreign dialogue]

Francois Hollande:
[Foreign dialogue]

Marwan Bishara:
Although the game maybe about to change with the Socialists back in the Elysee Palace; President Hollande has been widely criticised for being strong on optimism, weak on specifics, that’s why I sat down with one of this key economic advisors, [Philip Aegeon], and began by asking him whether tighter economic integration is indispensable.  

Philip Aegeon:
I think there is no future, I think, for the euro area without increased integration, so, which means in particular that I believe that in the longer term countries have to renounce part of their budgetary power, I mean, individual Member States.  For example, at the minimum allow that the budget of the countries be monitored by a European institution.  

Marwan Bishara:
You speak of harmonisation or normalisation of standards, but many accuse France and Germany of being the first, for example, to increase the ceiling on their deficit back in 2003.

Philip Aegeon:
Yeah, absolutely.  

Marwan Bishara:
So, France and Germany are not exactly playing by the rules that they are imposing on others.

Philip Aegeon:
Exactly.  And I think that’s the limits of the sanctions mechanism, I think, you know, if the sanctions become too tough the strong countries within the zone can say, look let’s renegotiate, you see what I mean?  That’s why I prefer to have instead, or at least as a compliment, [unclear] mechanism where you would tell a country, your budget cannot fly, you cannot implement it, because it does fly, you have to come back with another budget.

Marwan Bishara:
Then how can we have a European harmonisation, standardisation, euro mechanism when the first crisis Germany says hands up, you pay for it.  

Philip Aegeon:
With Germany, things are changing in Germany. They had their period of angriness and punishment and now they understand, you know, they know there is something called Lehman Brothers. You don’t want to repeat the Lehman Brothers mistake, you know, you want to protect the [unclear], you know, the famous word [unclear], if we are nice to one country, other countries will cheat etc, but, you know, Lehman Brothers, we know what happened after Lehman Brothers, and Greece can be the Lehman Brothers of Europe, so now more and more people in Germany, you know, tell Mrs Merkel, look you cannot have German prosperity if the rest of Europe is in ruin.

Marwan Bishara:
So, how much is that a French wish, how much is that wishful thinking? Because, with all respects to France, many think that it really has very little influence of Germany. It is a junior partner.

Philip Aegeon:
Yeah, you’re absolutely right that Germany has a much stronger economy and therefore their bargaining power is greater than that of France, but I think France can play on the following things: Germany, more and more people in Germany, in particular the Socialist Party in Germany, and you see Hollande is very close to the Socialist Party in Germany the SDP, Social Democrat Party. They are now very aware, they realise that Germany cannot grow in the long run if they are surrounded by other European countries in recession.  

Marwan Bishara:
But that’s all the reason why Merkel is not gonna cooperate with Hollande.  

Philip Aegeon:
No, because you see, she went through elections that she lost.

Marwan Bishara:
I mean, the start, that’s a regional.

Philip Aegeon:
Yes, but it’s a warning and more and more people, even in Germany, have become aware that if you keep the course as it is now, without doing anything on growth, the euro is threatened. And if the euro is threatened, Germany has a lot to lose with the euro, so [unclear] has been to say, I do the minimum I need to do, subject to maintaining the euro, Germany knows that it has to lose a lot with the euro – why? Because, it exports a lot to the rest of the euro area, and also to other European countries. If the euro ceases to exist, France and other countries devalue their currency and, of course, the export capabilities of Germany will go down a lot. And the second thing is that Germany has a lot of assets in euros. The value of these assets will go down a lot if the euro disappear, so I think more and more people now in Germany become aware of that, do you see what I mean?  

Marwan Bishara:
Could we say that Germany needs the euro more than the euro needs Germany?  

Philip Aegeon:
I think, yes, we could say at least that Germany needs as much of the euro as the euro needs Germany, certainly. And they know it. They badly need the euro.

Marwan Bishara:
It multiplies their force, their power, their trading capacity?

Philip Aegeon:
Absolutely.

Marwan Bishara:
And within Europe itself?

Philip Aegeon:
And within Europe itself.

Marwan Bishara:
Do you think Greece is better off without the euro, or do you think the euro is better off without Greece?  

Philip Aegeon:
I think the cost would be very high for both because, you see, the problem is that for Greece, you know, all investors will go, they leave, and all would go and it would take very long for Greece to recover. For the rest – oh it’s true, of course, people say it may be best if they leave the eurozone they can devalue, but as I told you, they could do fiscal devaluation, you see there are other ways of, you know, of doing a devaluation, a real devaluation, without having to leave the eurozone.

Marwan Bishara:
Do you think if Greece leaves, Portugal and Spain will follow?

Philip Aegeon:
No, but it will be the fear that they will. You see, there will be nervous tension.  

Marwan Bishara:
Why would they do that?  

Philip Aegeon:
There would be nervous tension.

Marwan Bishara:
Is the [unclear], is the Iceland examples, what is it about leaving the euro that would look so attractive?

Philip Aegeon:
No, it’s not that, you know, France, for example, has lent €80bn to Greece, so, that it will lose, so, that’s not good, and Germany as well has lent a lot, so, that’s not good for these countries, and also people will anticipate that Portugal and Spain will not be helped either. Do you see what I mean?

Marwan Bishara:
I have a bit of a problem with that, we keep talking about the default of the Greeks or the Spaniards and not about the injustice of this inequality within Europe. Bringing everyone on board while some are aristocrats and the others are the peasants, in the system, and as we said earlier, the idea that you’re not making this, as it were, equal in terms of opportunities and so on and so forth.  The Greeks and the Portuguese will always fall behind.

Philip Aegeon:
But it depends what you do.  If you, if you keep them some margins on the macro side and you have a big political investment, you can – you know, within the US, within the US, you know, Alabama is not California, it’s a fact.  

Marwan Bishara:
Philip, the problem with this federalisation or evolution towards federalisation is that there have been elections in eleven countries now in Europe, and most of them are dissatisfied with how Europe has functioned thus far, so Europe is not exactly popular among Europeans.  What will be done soon in order to put Europe back on track?
 
Philip Aegeon:
I don’t know what will be done. I know what should be done – you should democratise Europe. Europe should belong…you see, the problem is that the model that Sarkozy and Merkel were pushing was the model of heads of state meeting, and they decide for everybody. I think Europe should be owned by the populations. To own them, that’s why I think the European Commission should be the executive power and should be responsible in front of the parliament.

Marwan Bishara:
Maybe nationalism is more important that economics in Europe?

Philip Aegeon:
But on the other hand, you know, people know where that leads; there is a memory, so, that [unclear]. It’s true that the current generation is no longer the generation that, that fought the war.

Marwan Bishara:
Takes everything for granted?

Philip Aegeon:
But still they remember.  See, it was very interesting, this election is France, you know, where you had some xenophobia extremes that surfaced during the campaign, and I saw a number of people from the right reacting against, you know, a kind of demagogical views of these themes and all the statements by right wing leaders in France trying to [banalise] the extreme right to make them appear like normal, you know, a totally normal party and that frightened a number of people on the centre right, actually.

Marwan Bishara:
So, you could say that most Europeans are still willing for euro?

Philip Aegeon:
Absolutely, yes absolutely, because there is a historical memory.

Marwan Bishara:
For more on Europe’s future and what Paris and Berlin need to do next, I sat down with one of the few people who knows intimately how this relationship works. The former right-hand man to Francois Mitterrand – Jacques Attali.  

Marwan Bishara:
Monsieur Attali, welcome to Empire.

Marwan Bishara:
Europe is in turmoil, and the euro is of course under threat.  You’ve kind of predicted, that the euro would face such difficulties, what has gone wrong?

Jacques Attali:
The European history since 50 years has always been a move of deepening integration through crisis.  We had a crisis in ’58 because countries could not [unclear] without exporting and then we create the common market after a huge crisis.  The common market didn’t work enough and then we had other crisis and we create in ’84 the single market.  The single market could not work because we have competitive devaluation, and then we create the single currency, and we knew at that moment that no single currency in the world can work without a federal state.  There is no example in the world of a currency without a state to back it.  And then we are now in this crisis where either we’ll move to federal Europe, or the euro will disappear.

Marwan Bishara:
So, then, we are in that sense in the midst of a crisis because, as you are saying, no monetary union without political union and as far as I can read the European political map, Europeans do not want political union.

Jacques Attali:
Well you cannot say that.  French want political union, Netherlands want political…Spain, Italy want political union, and even in Germany, Social Democrats want federalism, which is the way to name.

Marwan Bishara:
But then they vote against it when the referendum came about a few years ago.

Jacques Attali:
In Europe we move when it is needed, on a rational basis, and today I would say that federalism is a technical must, and not a political dream.

Marwan Bishara:
So, you don’t think they’ve put the cart in the front of the horse by introducing the monetary union before the political union?

Jacques Attali:
No.  That’s always the way we work in Europe.  We create the necessity of a next stage.  Actually I was one of the negotiators of the Maastricht Treaty and I know very well how it works.  It would have been impossible to create a political federalism at that time from scratch, impossible.  The only way was to move on a rational, deepening of economic integration and now we are at the moment of truth, this rational, deepened economic integration lead definitely to the question of political integration.  

Marwan Bishara:
I just want to get back to the idea of the necessity, because you said we create a necessity and then we create the political will.  For me this sounds like we’re putting the Europeans on the spot, we put them in a situation where they have to vote for a European superstructure that, in some ways, for many of them, negates their own nationals.

Jacques Attali:
Let’s look at what is the situation now.  The Germans do not know that if the Greek quit the eurozone, the worst victim will be Germany.  They believe that they can survive, that it will be better, that Greece is just a problem, and headache and then let’s get those lazy people out, it’s not true.

Marwan Bishara:
You want a united states of Europe of sorts.

Jacques Attali:
I think it’s the rational solution.  It’s not an ideology, I think it’s a rational solution, if we don’t have that we will collapse.  We in Europe are in a much better situation than the Americans, much better situation, economically, and the only reason why the Americans are so strong is that they are a federal state, that we don’t have.

Marwan Bishara:
Realistically do you think it’s feasible?

Jacques Attali:
We will know that in the next six months.

Marwan Bishara:
France has just had an election, the French have spoken, what is it exactly that you’ve heard?

Jacques Attali:
We want more Europe and less austerity.  We want less austerity because it doesn’t work.  We want more Europe because we know, we in France, that Europe is a solution.

Marwan Bishara:
Is this a similar message to what you heard when you were there 37 years ago, next to Francois Mitterrand, when he beat another conservative president who was in [unclear]?

Jacques Attali:
Yes, it’s exactly that, and actually we moved and we did have a single market and we did the single currency.  We did two of the steps that lead to where we are now.

Marwan Bishara:
And at the time you introduced Francois Hollande to the presidency of François Mitterrand?

Jacques Attali:
I took him in my staff.  He was one of my very brilliant member of my team and then he followed in his career.

Marwan Bishara:
Let’s talk about Franco German relations.  Are you as pessimistic as some about the Hollande/Merkel relations?

Jacques Attali:
No, of course not.  I mean, I saw that many times.  French and Germans are bound to agree, and those guys are going to agree.  The only problem I see is will the Germans consider Europe as a solution or as a problem.  And Mrs Merkel is not a natural pro-European.  You know, German leaders before were still remembering the war, their guilt, now they have forgotten that, and we all say ok it’s finished, let’s talk about something else, and we think about Germany first.  And they have a lot of work to do in order to understand that there is no German future without a strong Europe.

Marwan Bishara:
But don’t you think they are also taking over Europe in a new sort of way?

Jacques Attali:
No, I mean, not at all.

Marwan Bishara:
Not dictating?  Or the Franco/German relations axis are not dictating to the rest of Europe?

Jacques Attali:
Ah, that’s something else.  French and Germans are the dominating nations in Europe.  

Marwan Bishara:
That’s not very democratic, right?

Jacques Attali:
Well, I mean, you need to have leaders.

Marwan Bishara:
But you must agree that Sarkozy and Merkel did dictate the austerity plan to the rest of Europe?

Jacques Attali:
No, no, dictate is not true.  Dictate is not true.
    
Marwan Bishara:
What would you use as a verb?

Jacques Attali:
Lead.

Marwan Bishara:
That’s not a lead.

Jacques Attali:
No, no, no – lead, lead, I mean if you…when you have 27 nations around the table and you have the Malta prime minister, if he says no, he says no.  

Marwan Bishara:
I guess that’s what’s changed since the Mitterrand years.  In the Mitterrand years it was a small Europe, it was manageable Europe. Does France and Germany realise that today we’re talking about 27/28 members?

Jacques Attali:
Yes, it’s why it’s much more difficult, and it’s why we need to move to federalism, in order to have a real…we live in a modern world, we need quick and efficient decisions, and if we stay with a decision making process that need unanimity for any important issue, we will go nowhere.  

Marwan Bishara:
So that Europe that made sense after the second world war, that Europe that is important vis a vis the Americans and the Chinese and the Russians and so on and so forth, do you think that’s becoming secondary?

Jacques Attali:
No, no.  Europeans are happy, wealthy, and if they could stay at it is they will say it’s fine.  As always, I mean, including us in our personal life, when we are healthy, wealthy, why change?  No reason to change, you change only on a threat, when you have a threat.
 
Marwan Bishara:
By necessity also as you were saying.

Jacques Attali:
It’s a threat; a threat or necessity is the same.

Marwan Bishara:
Yes.

Jacques Attali:
And there is a threat today, and actually why did we build Europe in the 50s?  Because of a threat, the threat of the soviets, the threat of the Germans, etc, etc, we build Europe.  Now we have a new threat – collapse.  

Marwan Bishara:
I want to talk about that and I would like us to end with this – so now we have two alternatives, I guess. One is collapse, this idea of contagion, Greece and maybe followed by Spain, Portugal and so and so forth; and the idea that you are advocating which is a federal Europe, because the fait accompli or the state as is today, the status quo, I’m sorry, the status quo doesn’t work.  

Jacques Attali:
Exactly.

Marwan Bishara:
It has to go one way or another.

Jacques Attali:
I will take the metaphorical bike.  If you are on a bike, if you stop pedalling…

Marwan Bishara:
It doesn’t go forward.  So, you think it is indispensable Europe to move forward?

Jacques Attali:
It’s why I say federalism is not an ideology or something I’m advocating, it’s something I’m explaining as the only rational way of keeping what exists already.

Marwan Bishara:
Tell our viewers around the world Jacques Attali, what does it really mean to you? Does it mean a president for Europe, a parliament for Europe and chief of staff of a European military?

Jacques Attali:
We have already a parliament, we have already a president, what we don’t have is tax and capacity to raise finance to finance growth.  What we need is capacity to finance growth. That will be done either through using the existing resources of the Central Bank and the European Commission or through and more than that, euro bonds and backed by the very small European revenues.  There is no state without tax, that’s the case.  If you are in a country with oil then all that you can avoid, but when you are a country with no natural resources to do that, no country, no state without tax, that is missing.  And when we have that at a very tiny level by transfer of existing tax, not by new tax, then we’ll have a state.

Marwan Bishara:
But you must agree with me, when people deal with Barack Obama or Putin for that matter, it’s not like they’re dealing with what’s him, Rompuy, what’s his name, Barroso, these are not real presidents.

Jacques Attali:
Of course, of course, of course.  On the long run, later on, we’ll have a real president.

Marwan Bishara:
And a real parliament.

Jacques Attali:
We have a real parliament.  

Marwan Bishara:
I mean it the sense that it will have a legislative capacity for Europe.  

Jacques Attali:
Exactly.  That will happen. All Europe will come back to the [unclear].  

Marwan Bishara:
On that note, thank you for being with us.

Marwan Bishara:
Clearly the way back is not the way forward for Europe.  The start of the 21st Century might have been challenging but no one, no one wants a return to the beginnings of the 20th Century.  Dangerous as it might be, the rise of the nationalist right in Europe is more of a symptom of today’s ills than a return to a past error.  But Europeans shouldn’t kid themselves; this is a [unclear] process, a more integrated, more united Europe means less national sovereignties.  The quicker European leaders internalise this process and share it openly with their people will determine to a large degree whether this is the beginning of an economic depression or the birth pangs of a united, perhaps, federal Europe.  

Marwan Bishara:
Disintegrate or integrate?

Marwan Bishara:
It’s time to flip our euro.  

Marwan Bishara:
That’s the way it goes. Until next time.