Graham Watson is the leader of the ALDE group in the European Parliament and the author of a pamphlet entitled 'The Lisbon Strategy: Mode d'emploi', supported by MEPs from all main parties and presented in Strasbourg on 8 July.
To read a shortened version of this interview, please click here.
What is your assessment of the Lisbon Strategy on growth and jobs regarding the 2010 deadline? Have the Commission and member states delivered?
While we have made progress, we have not made sufficient progress, particularly not in terms of deadlines. We set ourselves this beautiful deadline of 2010, but we didn't set ourselves any interim deadlines, for example the idea of having 3% of gross national income going to research and development is far from being met.
The idea of the target being set for the up-skilling of our workforce has nowhere near been met. And there are a whole series of areas, including incidentally the remaining barriers to a truly functioning single market, which are still in need of urgent attention.
We recognise that we are making some progress: for example, the adoption of the social services directive means progress. We also made progress in telecoms and energy market liberalisation, but we are still a very long way from where we need to be to meet the targets we set ourselves back in 2000.
Who is to blame for the shortcomings?
I think it is very hard to lay the blame at any person's door. There are certainly a series of governments who have sought to obstruct or delay an agreement on the liberalisation of markets. Clearly some governments have been much more willing and maybe even much more able than others to make investments in R&D.
I think it is not fair to absolve the Commission entirely of blame. This Commission has in general worked well, but it took them a long time to get up and running. If you look at the first two to two-and-a-half years there were very few proposals. There have been a plethora of them lately.
I think we all have to take a share of the blame. The point of our pamphlet is not really to point the finger. Rather than engaging in a blame game, let us get on with it now.
Your colleague Mr. Daianu told us in an interview a few weeks ago that there were large discrepancies between member states when it comes to innovation and money spent on R&D. While Scandinavia is the front runner, other regions are actually black spots. Do you share his assessment?
I think that it is right. In general, one could say that Northern Europe has had a better record than Southern Europe. But I said in general because I can think of some Southern European countries - Spain is one of them – that have done more than what people expected them to do, as well as some Northern European countries where progress has not been that fast.
But it is certainly true that governments have let their eyes be taken off the ball of a reform by the lack of a coordinated push from the European Commission.
Another point Mr. Daianu made is that it all starts with innovation. "If you innovate, if you have the productivity gains, you can also cope with the current challenges, such as the rising oil and food prices." Do you agree?
I have a lot of sympathy with his view. It is certainly true that if we had made gains in other areas, if we had made gains in productivity and wealth creation, then we would have found it easier to deal with the kind of winds of world development that are bothering us.
Do you think it is still realistic to achieve the EU's goal of becoming the world's most competitive market by 2010?
I would love to believe that we could still become the most dynamic, knowledge-driven economy in the world by 2010. I do not think we will, but equally this is not a reason to give up. On the contrary, it is a reason to redouble our efforts and make sure that even if we do not achieve our target by 2010, we are at least well on track.
This notion of a 'knowledge-driven' society - is it actually more than just a nice expression?
It is indeed. If you look at certain parts of the Union, certain parts of North America and certain parts of Japan, you can see it there already. It is undoubtedly the basis of the success of Silicon Valley, it works extremely well in Finland and there are other examples where the knowledge-driven society is working very well indeed.
We only have to look at the example of Denmark and how they produce about 20% of their electricity needs from renewables. They have had an incredible record in recent years. It is largely due to investment in R&D and the people that have made this success possible.
So what are the main obstacles to making further progress?
I think there is still a political battle to be won against political forces which believe that protectionism is a way forward. You find some of the forces on the right and some of the forces on the left. But the main obstacle still to be overcome at the European level is the political sense of urgency on the part of member-state governments to do it together.
The French are not particularly known for promoting open markets. So are your prospects for the French EU Presidency rather gloomy?
That is precisely the point I raised in the debate with President Sarkozy in the Parliament this morning. He claims to be a great pro-European. Is it too much to hope that he might also prove to be a great liberaliser? It is not easy to ask the French Presidency to liberalise markets but if this is really a new start, who knows.
You mention in the foreword to the pamphlet that there is a need for greater synthesis between social, environmental and economic polices. Could you explain what you mean exactly?
The working title of my pamphlet was Cardiff-Gothenburg-Lisbon, taken from the venues of European summits which have dealt with different issues. Cardiff was social policy, Gothenburg was environmental policy and Lisbon was economic competitiveness. I think they came in the wrong order, unfortunately. We needed them to be Lisbon-Gothenburg-Cardiff in the sense that the focus should have been right in the beginning on the need for economic reform and healthy, competitive economies.
What is my view - what we ought to do - is that if you want to have a successful economy then you have to recognise that a market does not always produce the social and environmental policies you need for that economy to be successful. And you have to be prepared to intervene in a very limited but very targeted way to produce the social and environmental outcomes that are necessary to accompany economic dynamism.
Your pamphlet also mentions the decreasing reform appetite within the EU. With the future of the new Reform Treaty now up in the air, do you see the risk that the reform agenda might be further put on the backburner as all efforts will be go towards making this treaty a reality?
I think it could happen. There are two dangers essentially. The first is that we now get so tied up in the debate on the Lisbon Treaty and the Union's institutional workings that we take our eye off the ball on what is going to make the Union more successful, which is the economy.
The second danger is that we will be buffeted by the rising fuel and food prices into adopting panic measures that do not fit with the strategy that we have.
I think it is important that everything we do is in the overall framework of the Lisbon Strategy.
Are you still optimistic about the Lisbon Treaty's chances?
As a Liberal, one is professionally an optimist.
