Viviane Reding is European Commission vice president and commissioner responsible for justice, fundamental rights and citizenship. She spoke to Giampiero Gramaglia, editor-in-chief of EurActiv Italy.
The economic crisis has highlighted all the difficulties and cumbersomeness of EU institutions to find the right answers and put decisions into practice; nevertheless it has also shown a certain degree of selfishness and some tensions between member states. What do think about this?
It is certainly true that the current financial and sovereign debt crisis in several member states of the European Union is an unprecedented challenge for which neither our national democracies nor our European governance structure had been prepared – the Maastricht Treaty simply had not anticipated such a situation.
While this crisis had its origin in the US, notably in a policy of loose money, lax credit conditions and an excessively deregulated and therefore risk-prone financial and banking sector, it hit Europe much harder than the US. The crisis exposed from one day to the other very important structural deficiencies in the economic and fiscal positions of several European countries. Some countries have simply accumulated too much debt in the past decades, others did not make use of the first 10 years of the euro to gain badly needed competitiveness, and others did not see that their undercapitalised banking system gave credit too generously and thereby created asset bubbles.
In view of these different features of the crisis, I find it rather remarkable what has been achieved over the past five years. We Europeans have learnt one important lesson in this crisis: Sharing a single currency means to be bound together in a community of destiny, as the economic and fiscal problems of one country can very swiftly become the problems of all other countries in the euro area. This is why we need to fight the crisis by joint measures that bring about more stability in each country of the eurozone. And we need to complement this by joint measures that ensure solidarity to countries in difficulties during the time that they go through necessary, but painful adjustment programmes.
We have therefore created in Europe new fiscal rules which ensure that the national budgets of all EU member states that have the euro as their single currency are now strictly supervised by the common EU institutions. This is complemented by the new “Fiscal Compact”, signed in January this year which stipulates that the national structural deficit must not exceed 0.5% of GDP.
We have now also in place a new European procedure to supervise and counter macroeconomic imbalances (as they may be created by a housing bubble) in a eurozone country. And, in an endeavour of unprecedented solidarity, the member states of the euro area have jointly agreed on two consecutive rescue packages for Greece, worth € 240 billion. They have also established temporary European rescue mechanisms – the EFSF and the EFSM – which can mobilise up to € 750 billion for euro area member states in difficulty and which are currently used to support the tremendous reform efforts made in Ireland and Portugal, which both are on a good track to regain the confidence of investors.
And euro area member states have agreed to transform these temporary rescue mechanisms into a permanent mechanism called the European Stabilisation Mechanism [ESM], a kind of European Monetary Fund which will be able to provide stability support to member states in difficulty of an additional €500 billion.
Last but not least, we should not forget that the European Central Bank – chaired since November by the very talented Mario Draghi – has provided liquidity support to European banks by two long-term refinancing operations of three years duration and with a volume of more than €1 trillion. This comes on top of around €211 billion which the ECB invested in the purchase of sovereign bonds of euro-area member states in difficulty.
If I add all this, the member states and the EU institutions have taken unprecedented, courageous steps in support of the stability of the euro. We did this even though our institutions had not been equipped to do this. However, the crisis has led us to take new steps in order to demonstrate to the world that the euro is irreversible.
Of course, this requires a strong commitment from all member states - those in difficulty, who need to reform their economies in a profound manner, and those that are not in difficulty, but now need to explain to their citizens why they need to finance European solidarity. As all EU member states are fortunately democracies, it is normal that agreeing on all these measures takes time, and that there is political debate and also controversy.
The crisis also has stimulated the debate to find federal solutions which seemed totally unrealistic before. The European Commission is doing everything it can to drive the Union in the right direction or it could act with greater courage? Governments (the German one in particular) sometimes lack of European vision. Is it possible to take advantage of the crisis to make steps towards a stronger political union or we will “simply” build a more effective economic and monetary union? What do you think about the direct election of the president of the European Commission?
It is indeed interesting to see, as you say, that in this crisis, the political debate is more and more becoming a debate about the future of Europe. I find it very positive to see that we are witnessing now in all member states a debate about where we stand in Europe and where we are headed. If anything good has come of the current crisis, it is that more and more national politicians are starting to understand that we can only be strong by being united. The right answer to the crisis is for me more Europe, not less.
Europe has a long history of rebuilding and reinventing itself. This is what we do – we adapt, we grow, we progress, and this is what thus far has made the European project successful. Our destination in the years to come is clear for me. I believe that if we want to preserve and strengthen Europe's position in the world, we now need to turn our Economic and Monetary Union into a strong European Political Federation with a Monetary, Fiscal and Banking Union, covering at least the eurozone, while being open to all EU member states that wish to join.
In today's globalised world, sharing and federalising sovereignty is the only way of maintaining democratic power in view of ever growing global challenges, starting from the current financial and debt crisis to climate change.
In this sense the EU summit in June brought important and unexpected results on the way forward. EU leaders looked beyond short-term interests and found a common agreement paving the way for further European integration. We agreed on the need to take Economic and Monetary Union to a "new stage". We also agreed that by the end of the year, the European Central Bank will become the eurozone's single supervisor over banks. President Barroso and his closest collaborators are currently working on the appropriate legal proposals. This is in my assessment a real breakthrough. Discussions for a single European banking supervisor have been dragging on for almost 30 years and now this is happening.
In addition, the report by the 'four presidents' (the president of the European Council, the president of the Commission, the president of the Eurogroup and the president of the European Central Bank) of 26 June specifically states that: 'Integration and legitimacy have to advance in parallel.' This means that we must not only strengthen the powers to be exercised jointly by our EU institutions, but also the democratic legitimacy of the EU decision-making process.
Decisions that affect budgets in all 17 euro-area countries cannot be taken behind closed doors in a secret meeting of the Eurogroup or of the European Council. We need to make sure that this is done in a fully democratic way. In my view this can be best done by turning our Union into a European Federation with a strong European government (the European Commission) that is made accountable to the directly elected European Parliament. The head of the European government should in my view be directly elected by the European Parliament which represents all EU citizens. He should then select the members of his team.
This is my vision for the future of Europe. The European Commission wants to take citizens on board when debating about the future of Europe and this is why we launched a very broad public consultation asking citizens what type of EU they would like to see by 2020 – I invite you to have a say! You can participate until 9 September: http://ec.europa.eu/your-rights-your-future.
As regards the idea of a direct election of the president of the European Commission, I have – probably because of my experience of 10 years in the Parliament of Luxembourg and of 10 years as member of the European Parliament – always considered that the European Union should develop into a parliamentary democracy and not a presidential system. This is why my vision of the future of Europe is based on a strong, directly elected European Parliament that elects the president of the Commission in the light of the outcome of the European Parliament elections.
However, there are certainly other options for the future institutional development, and the idea of a directly elected president of the Commission is certainly a very interesting one. It would take Europe closer to the US system and would require a future candidate to campaign across a continent that is much more diverse, both linguistically and culturally, than are the 50 states of the US. We should not exclude any option for strengthening democracy at this stage but discuss them all with an open mind. The ultimate aim for me is to make Europe more democratic and bring European politics closer to the citizens.
Just one year ago Italy was at the margins of European decisions. Now it appears again between leader states. Is it just a perception or is it a fact? Which strategy could Italy follow to gain more credibility and authority in Europe?
As a Luxembourger, I personally do not believe in the concept of ‘leader states’. To me, the European Union was created exactly to get over this, and to ensure that all member states, big and small, northern and southern, western and eastern, are treated equally and have equally a say in common decisions. However, I believe in political leadership of talented politicians, and I understand that you want probably to hear my assessment of Mario Monti.
I have known Mario Monti since a long time – he was first EU commissioner responsible for the internal market and then for competition. His vision for a single market without any borders has always inspired me – take as an example his idea to have an optional instrument for companies in the EU that would not touch national laws but would exist alongside these rules to promote cross-border trade and electronic commerce.
This Monti idea served as inspiration for the Commission proposal for an optional European sales law presented in October last year which is currently discussed in the European Parliament and in the Council of Ministers. Such an optional instrument would leave national sales laws intact but still provide companies with an alternative solution that they could choose: a single set of rules so that they can offer their goods for sale more easily in other EU countries and reach a much larger market of consumers – up to 500 million customers across the EU as a whole.
With this visionary idea, the seeds of which Mario Monti planted in his Report on the Future of the Single market, he is currently making sure that Italy is driving the European debate around this proposal which plays a key role in Europe’s quest for a stronger, more growth-oriented single market. To me, this is a very good example of leadership from Italy, namely through good and innovative ideas, which always have been an Italian specialty.
In many European countries the economic crisis caused an alternation of political forces in the governments. In Italy and Greece we have had the so called “technocratic governments”. The crisis gave also strength to anti-European, extremist, xenophobic and populist movements and political parties. Are these symptoms that European democracies are becoming weaker? In the case of Hungary and Romania has the European Union been firm enough?
I disagree strongly with your statement that in Europe we would see symptoms that democracies are becoming weaker. I also cannot understand the assessment that Mario Monti would be a technocrat. Mario Monti was twice elected as EU commissioner by the European Parliament. And, as I understand the Italian Constitution, he is now prime minister of Italy, elected by the Italian Parliament, as it is the rule in Italy. He is thus as legitimate as all his predecessors.
More generally, I am convinced that in many aspects the crisis has actually strengthened democracy in Europe. Three examples to illustrate this: First, the new European rules to strengthen coordinated fiscal and economic policies, which entered into force in December last year, could only be adopted thanks to the pressure of the European Parliament on the Council of Ministers. This is why the rules have become strong and credible, and this is why we will see in the future from time to time committee and plenary debates in the European Parliament about imbalances in this or that member state of the eurozone, as such matters are matter of common concern.
Secondly, take Portugal and Ireland: thanks to tough reforms - which enjoyed a majority cross-party parliamentary support – the two countries are now on the right economic track. Work is paying off: Portugal reduced its deficit by half since the beginning of the crisis, whereas Ireland has even achieved a budgetary surplus and thereby regained investor confidence. In Ireland the “Fiscal Compact” was even ratified in a referendum by a broad majority of 60.3%.
And as third example, I want to mention Germany, where a cross-party parliamentary majority is supporting the financial assistance provided to programme countries and now also to the Spanish banking sector. True, all this takes time, as democracies are made up of debate and argument. However, in my view the crisis shows that democracy in Europe is healthy and parliaments – national and the European Parliament – are increasingly playing a strong role in this process.
Coming back to your question relating to Romania and Hungary, I want to start by saying that the rule of law and independence of the judiciary are fundamental principles on which our Union is based. Under the EU Treaties, the European Commission must uphold these. This is why in the case of Hungary and Romania, the Commission has been firmly responding to situations where the respect for the rule of law and independence of the judiciary had come under threat. After several warnings, we have taken Hungary to the European Court of Justice and we are currently following very closely the developments in Romania. Threats against judges who are doing their work are inacceptable to me, whether in Romania or in any other country of the European Union.
The Commission will assess the situation in Romania in a further report under the Cooperation and Verification Mechanism at an appropriate moment before the end of the year.
In the midst of the current financial crisis we cannot and must not make any compromises – neither in Hungary, nor in Romania, nor in any other member state of the European Union. Trust is the currency of today's economy. What applies in the world of financial markets, applies in the European area of Justice as well. A well-functioning, independent judicial system is a pre-condition for gaining the confidence of citizens and investors alike.
Regarding the rise of populist or xenophobic movements, it is true that times of economic uncertainty tend to fuel extremist movements. European leaders should not give in to the temptation of populist speeches but continue to work with the European Commission and other European institutions to push for a Europe of peace, justice and prosperity. Europe is not the problem. Europe is the solution. This is the best answer to the populists.
The Commission has already made various proposals to create a true European administration in the justice field (the “European public prosecutor”, measures against frauds and so on). How good is the response of governments to these proposals? Are we really moving towards a European justice?
Twenty years after the European area of Justice was mentioned for the first time, we have come a long way in developing it. More recently, the introduction of the Lisbon Treaty equipped us with stronger means to do so, notably in the area of criminal law.
We have already put in place a number of 'building blocks' in the construction of this common area of Justice: we have abolished the costly exequatur system and we have introduced strong procedural rights for suspects and accused persons as well as stronger rights for victims of crime.
Nevertheless, the European area of Justice is still incomplete in some respects. As the first EU-Justice Commissioner I am currently working with all my energy to further advance its construction. Just a few weeks ago I have presented legislative instruments for criminalising abusive market behaviour such as interest-rate rigging. And only a month ago, for the first time in EU history the Commission proposed common minimum criminal sanctions, including imprisonment, for fraudsters who make profit at the expense of the EU budget.
As a next step, in the near future, we are also preparing proposals on a European Public Prosecutor’s Office with a view to combating fraud against the EU budget. Because the EU budget can only be protected effectively by a common European institution which would have to work in close liaison with national prosecutors to ensure swift action regardless of the jurisdiction concerned. It is good that we have already a starting point for the European Public Prosecutor’s Office, as Eurojust in The Hague has already established a rather useful cooperation among national prosecutors on which we can build.
Women are largely present in the European Commission, but there was never a woman president. Do you think time has come for this to happen? Would it be significant for those women who (even in the European Union) have yet to gain full equality with men?
One-third of the 27 Commissioners are women, the highest number ever, and may I add, many more women than on most corporate boards in Europe. But politicians should lead by example, so I would very much welcome it if even more women would be nominated as Commission members in the future – this is what President Barroso had asked national leaders to do in fact with the beginning of the last Commission: nominate more female candidates for the EU Commission.
I very much hope that for the next European Commission, which will take office at the end of 2014, European leaders will nominate the very best candidates, both women and men - personalities who can address the challenges Europe is facing, irrespective of their gender.
In the future will you consider yourself a candidate for this [Commission president] role?
For me, being the EU's Justice Commissioner is the absolute dream job in the EU: I am currently in charge of making Europe a continent of justice and fundamental rights and bringing it closer to citizens. In addition, as vice president, I am the Commission's No. 2 in protocol terms and have thus the honour of chairing from time to time the College in the absence of the president. For me, this is the coronation of more than 30 years in local, national and European politics.
I want to do this well and achieve results for Europe and for our citizens. Besides, with José Manuel Barroso, we have a very good and active president, whom I admire for his strength, his legal mind, his patience and his wisdom in managing the current crisis. He is by the way a couple of years younger than I. So my personal wish would be that José Manuel stays on for a third term. Because I am sure that we need continuity and stability at the helm of governments in the years to come to continue to make Europe stronger and more resilient to future crises.
Of course, if he then needs again a vice president, I may consider this. Because I like this job.