September 10th, 2013. Europae meets economist Jean-Paul Fitoussi, professor at the Institut d’Études Politiques in Paris. The interview covers European elections next spring, the Greek crisis, the situation in Italy and the relationship between Europe and United States as far as trade is concerned. By Simone Belladonna, Mauro Loi and Andrea Sorbello.
May 22nd -25th, 2014. European elections. Do you think European elections will change the political strategies of the European Union?
«I am afraid that these elections will result in the most euro-skeptic European Parliament in history. This is another problem for Europe, in addition to the long process that must be followed to change treaties, due to the fact that both national Governments and Parliaments have to ratify. This is why we are blocked here».
According to a recent Euro barometer survey, 70% of European citizens is in favour of the direct election of the President of the European Commission. What do you think about it?
«Well.. [laughs], I think they are right. The direct election of the President would make him accountable for his actions in front of the electors and not in front of the European technocracy. This is the solution, and we have known it for a long time: Europe does not have a government with complete legitimacy. If we elect the President directly, he would have that legitimacy».
Do you think it could happen soon?
«No, because, as I said, all the significant changes in Europe need time. And I believe that all the nations prefer to keep up the impression of holding on to power – which they don’t anymore – rather than recognize that “the king is naked”».
Greece: there has been considerable debate about the debt restructuring and its economic rescue. Do you think it is fair to keep following this direction, forcing the Greeks to make great sacrifices? Don’t you think an induced bankruptcy would be recommended?
«I think that the crisis in Greece was not handled successfully. The problem has not been solved by imposing big sacrifices to the Greeks, instead the situation got worse and the crisis spread to other countries. Therefore, we must keep helping Greece, but in an intelligent way: forcing the country into a great depression – because this is the current situation of Greece – not only is counter-productive but it also makes problems worse. The debt is tied to the GDP: if you decrease the GDP the problem simply increases. That is what we notice».
Would it have been better if Greece never joined the euro zone?
«It has been considered a mistake by the majority of people, that’s a big issue for Europe! Governments keep pretending that Europe is an economic organization. But it’s not true! It is a political organization, or it wouldn’t be relevant. How would you imagine Europe without Greece? It’s not possible , it would be a Europe without its cultural roots. A Europe more focused on Economics than Politics. We have to stop pretending that we are facing an economic problem. The crisis would not exist if Greece had its own national central bank: it would have issued debt with its own currency, it would have printed its own money and it would not have had any problems. It is a political problem and not an economic one! If it was an economic problem, the best solution would be that Greece left the euro zone. This would confirm that the project of a common currency is not irreversible, leading the speculation to influence other countries’ economies».
Let’s talk about Italy. Italy seems to be the only country in the south of Europe, whose economy is stagnant, while the situation in Spain and Portugal seems to be getting better.
«Italy is not the only country in this situation. I believe you are referring to the data of the last three months in Portugal, but “one swallow doesn’t make a summer” [laughs]. These data are not so significant because Italy has public accounts in better shape than other countries in the South. There is no specific problem, Italy suffers from political instability. If taking decisions becomes a difficult task for the government, people do not believe in the future nor do they trust the markets. This leads to poor consumption and investments. This is the problem in Italy now: its productive sector will recover, especially exports».
What do you think about the government of Enrico Letta?
«It is a difficult question. I trust Enrico Letta, I think he is aware of the situation and understands the problems. However, in a coalition government, the prime minister’s powers are limited. He cannot take the decisions that he would like to, because he has to come to a compromise with both parties».
What can you tell us about François Hollande?
«His main problem is that he carries out the same reforms adopted in other countries. Therefore he did not meet people’s expectations: we were expecting a social policy in favour of employment, instead the President pivoted towards an austerity policy, that follows the European roadmap […] very close to Merkel’s idea. Like the others, the French government is a “technical” one. The government cannot operate according to its own beliefs because it is bound by the Treaties. This is a tragedy».
Changing topic, the Free Trade Agreement between EU and United States is seen as a new hope for Europe. Do you think it could help growth and employment?
«No. Europe and the United States do not share the same strategies. The United States uses all the instruments it has at its disposal, especially the exchange rate. Europe does not have an exchange rate policy. If you make a free trade agreement between a country with an exchange rate policy and one without, the first one benefits more. There is also another difference: protectionism in the United States is hidden inside the legislative system. In fact, there are laws concerning health and security that are hidden policies of protectionism. On the other hand, protectionism in Europe is evident in the international agreement. One of the main aim of the European Commission is to strictly liberalize markets. For example, in the communication sector, the liberalization has been developed creating more than 100 operators, while the United States only has 3. Still, the American economy is considered the most liberalized […]. Europe carries out a mix of “open protectionism” and dogmatism. This is why Europe is comparatively weaker when it tries to conclude trade agreements with another area of the world that possess all the tools of sovereignty. The problem is always the same: the absence of sovereignty».
How would you define, with a joke, a group of young people, such as the editors of Europae – Rivista di Affari Europei that choose to talk about Europe for a song?
«Hopeful. I would describe them with this term: hope. Old people lost it, instead young people didn’t. Young people believe in Europe, the same Europe they “live” through personal experience or through contacts with their European friends».
Photo: Jean Paul Fitoussi (© Wikimedia Commons)