Romano Prodi, former president of the European Commission, shares his views with EurActiv.de on the future of the single currency and moves towards a two-speed European Union. Regarding the UK's disengagement from Europe, his assessment is simple: Britain will lose influence and eventually face "grave difficulties".
Romano Prodi was president of the European Commission from 1999 to 2004 and served as prime minister of Italy from May 1996 to October 1998, and May 2006 to May 2008. He spoke in Berlin with EurActiv Germany's Daniel Tost.
What is your perception of the results of last week's EU summit?
I don't want to be too optimistic but let me at least be less pessimistic.
In the last meetings, the long-term goals of Europe have come back on the agenda. When you accept the basis of harmonising the banking system you are making a political decision. It is not a technical decision. It's only the first step towards a common financial policy. Now we have taken this direction. Clearly the process started with the decision taken by a non-fully democratic body, which is the ECB. But this is now being 'inherited' by European policy.
The danger of break-up is not on the table anymore. I really think the change will be slow. Until the German election there will not be any major decision. But when we are standing on the brink nobody wants to jump.
You have stated that a new chapter is opening for Europe, which now works at different speeds. Do you see this evolution positively?
I have been saying this for years: There is no alternative to the different speeds. Two of the bigger decisions have already been taken at different speeds: Schengen and the euro. I think this will be a general rule for Europe because in this way we are respecting democracy and making progress. There is no alternative.
What is your take on the idea of establishing a 'euro-area Parliament' within the European Parliament to vote on decisions related to the single currency?
At the moment there are more urgent problems. Even if the Parliament is gaining strength, in the new Europe the strong player is the Council. It is not the Commission anymore. Decisions are taken by the Council and I am not happy about that. But this is an issue we can tackle in 10 years' time.
You have said the German-French 'twin engine' is no longer working. Is there a growing polarisation between France and Germany?
European policies have changed. These are not summits in which only France and Germany meet. France and Germany are indispensable for Europe but they can't work alone. This was the message after Merkel and Sarkozy were meeting alone in pre-summits.
Now we have a much more complex situation in which France is sometimes linked to Italy and Spain, sometimes to Germany. There is much more mobility in the decision-making process. From this point of view Europe is coming back.
If you put France vis-à-vis Germany now there is a difference in weight. It's not 'I'll give you political legitimacy, you'll give me economic strength'. Germany does not need any political legitimacy now.
David Cameron has vowed to stick to his guns in demanding a European budget freeze. Is Britain undermining the EU's efforts to overcome the debt crisis?
No. I do understand Cameron because his country is different from others. But he will not stop Europe. He will simply get out of the room in which decisions are being made. Britain will be more peripheral towards Brussels. It will still be a strong member of the Union but if you do not want to participate you will lose power.
The UK wants to preserve its strength and independence in the financial field. It is coherent with the Cameron doctrine that they do not want to take more part in the budget. They say 'we are a member of the European Union, we have already stretched our belongings and we don't want to do more'.
But they will become less powerful and someday they will be in grave difficulties. But it is clear that they will never accept to have a more united Europe.
Merkel has said no to eurobonds "in her lifetime". What is your view on Germany's position?
You must give Merkel time. Now it is clear that the German interests are for the euro. Germany is the leading country in Europe and Germany would lose a lot without the euro. German businessmen know that the Italians and the French did not forget how to devaluate. We know the science of doing it. But we must give the German people time to meditate on this. At least until after the elections.