Attali: A federal Europe is the only way out of the crisis

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?The only way to save the euro and get Europe out its financial crisis while maintaining people’s living standards is to have a more integrated union, the economist Jacques Attali said in an exclusive interview with EURACTIV.

“Europe would be the first economic power in the world if it were unified; it could be the winner of globalisation, at the crossroads of trade routes and knowledge networks,” the former chief advisor to late French President François Mitterrand said.

He also called for structural reforms to boost the economy in a fair and sustainable way.

Living standards will diminish without more European integration, said first president of the European Bank for Reconstruction and Development and the man entrusted by Nicolas Sarkozy to lead a commission for economic growth.

Short-termism is over

“The crisis makes us understand that we in fact urgently need more Europe,” he said, adding that Europe cannot rely on the European Central Bank injecting billions of euros into the economy as it did from December to February. Such short-term measures may temporarily solve a liquidity problem, he said, but they don’t lead to structural changes.

Leaders have not learned the lessons from the crisis yet, but they will be forced very soon to think differently.

Attali points the finger to the fact that today’s decisions are taken through an intergovernmental process, which makes any further European construction hostage of divisive negotiations. At a time when Europe needs a long-term vision, this is not viable anymore, he said.

“We cannot expect any long-term vision and any consistent plan of reform to emerge from such a dramatised way of governing. The EU executive body [the European Commission] should have the democratic legitimacy to implement reforms with effectiveness and flexibility. And the Parliament needs the appropriate control power of course,” he said.

Attali has joined forces with other “federalists” and launched Eurofederation, a campaign and manifesto demanding more solidarity and unity.

“I am convinced that any major evolution of the European Treaties will come from the people,” he explained, referring to notably to the European Citizens’ Initiative, the newly launched participatory democracy tool.

Attali reckons that people could gain confidence and start a bottom-up process to write the next step in the European construction, if after the presidential elections in France a new strategy is launched based on a growth-focused agenda.

“We are at a moment when a federal jump is feasible,” he said.

Not only France and Germany

Regardless of who is elected in the upcoming French elections or in Germany in 2013, the European institutional setup has to evolve and smaller EU member states have an important role to play in this process, the economist said.

“We will have the choice between abandoning our sovereignty to unregulated markets, or strengthening it by building democratic, budgetary and social institutions,” he said.

Attali’s vision for better European governance is grounded on transforming the Council of ministers in a Senate – the upper Chamber – which together with the MEPs – the lower chamber – would form the Parliament of the European Union, one representing the nations and the other citizens in their diversity.

“It will then be the role of the executive power, elected on a programme presented to the citizens, to implement a particular policy,” he stressed.

Countries should rationalise their expenditure, and Europe should implement project bonds to finance new productive projects, said Attali, arguing the case for deficits. New investments in strategic sectors such as energy, telecommunications and innovative industries are vital to boost growth.

“We have so far the largest population taken as a whole; that population has in general a high-level education, is mostly in good health, can take advantage of efficient infrastructures, and inherited a rich history and strong values. Europe can still be the centre of creativity, knowledge and innovation,” he said.

Jacques Attali spoke to EURACTIV Managing Editor Daniela Vincenti and Publisher Christophe Leclercq.

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