I first met Jacques Delors in 1981, shortly after the May election victory of President Francois Mitterrand, in the headquarters of the Socialist Party in central Paris. Virtually unknown, having served a stint in the European Parliament, low-key and modest, I had been told he would be playing a key role in the new government. "I am but an economic advisor to the president," he remarked casually, but immediately, realizing he was also talking to my paper, the International Herald Tribune, he gave me my lead – the new Socialist government, containing Communists, would actively continue encouraging American and other, foreign investments to settle in France, which they did. Having covered him as finance minister and then, starting in 1984 as president of the European Commission – in my view the most effective since the EU’s founding in 1957 – he provided me over the years with many insights into Europe and the world economy. Throughout the years, he has remained incisive, focused, tolerant, a teacher and, above all, modest, like on the day we met. Our interview in French took place on September 13 in his left-bank office, near the former headquarters of Jean Monnet, one of the EU’s legendary founders, and he looked chipper. Quite an accomplishment for a man who at 82 is proud of having worked hard since the age of 19, and now is ready to take it easy.
In light of warnings in the United States about a financial crisis and even recession, with widespread repercussions, what is the outlook for the world economy?
One can always have a financial crisis and we are currently living through one. But if I take account of the extraordinary development of countries like China, India and many others, and of the high level of worker productivity in the United States, the only factor that could provoke a serious recession would be a diminished demand for the dollar. But as long as countries and central banks continue to consider it a necessity to maintain their assets in dollars, subscribing to American treasury offerings, you cannot have a crunch in the United States.
How about elsewhere?
There is a great anticipation and need for growth in the world…and as I say, the world’s dominant economic power (the US) is not suffering for the moment, even with its high, budgetary and trade deficits.
What is your assessment for the 13 countries in the euro-zone, plus Great Britain? How are they positioned?
First, one needs to make a distinction between short, medium and longterm. Regarding the two latter considerations, it is clear that the European countries you mention still have considerable possibilities for growth…this is also true for the United States, despite a certain saturation of markets. And yet, new technologies, particularly with regard to distribution, are emerging constantly. The main problem facing the European countries are related to demography. In many, there is a shortage of labor, notably in Germany. And this raises the question of immigration policy, which is being addressed by the European Commission.
Looking at the future of the European Union, you have often said that Europe faces a choice: either becoming an integrated union, with common policies, particularly with regard to foreign affairs, or remaining an economic entity, essentially a vast, free-trade zone that would include countries like Turkey. Is that still the choice?
It is a debate I opened some years ago, because fidelity to the ideas of the founding fathers (who launched the Treaty of Rome in 1957) presupposes an integrated Europe, augmenting its powers of governance and capacity for influence…defending its interests. And that presupposes several steps forward in the political area. And on that point, the 27 member-states are very divided among themselves and so most member governments refrain from talking about it. So my first demand is that the debate takes place.
To debate what question mainly?
Are all the countries involved prepared to move at the same speed? In the past, that has never been the case, because of differing approaches, producing, for example, the Schengen agreements, plus economic and monetary union. This a policy of differentiation, with some countries moving forward faster than others, while not forcing any country to move forward faster than it wants, and, by the same token, not blocking any who want to advance. This debate should take place, and would be a sign of health for the EU.
Given that the EU is already at 27 and with other countries, like Turkey, seeking membership, isn’t it a bit late for this debate?
No. This, like other things going on in Europe, is misunderstood by our friends in America. When I would visit the US each year as President of the European Commission and well after the postwar Marshall Plan, and in particular, when dealing with journalists, it was necessary first of all to symbolize Europe.
And how did you do that?
First, by emphasizing the creation of a large, single market, based on the free circulation of people, goods, services, capital and subsequently, the creation of a single European currency. And despite longtime doubting and scepticism, it happened. But the second, very-difficult message is explaining why the European Union expanded its membership. Leaving aside Great Britain, still a much-debated, special case, and faced with the demands of the others and history, we had no choice. What would have been said if, at the time, the EU had refused the applications of Greece, Spain and Portugal, each emerging from dictatorships? And if, after the fall of the Berlin Wall, we had remained evasive regarding the newcomers from the east? History determined the opening of the EU. It also created problems related to governance.
Was there an alternative?
We couldn’t have proceeded any other way. It is to the honor and credit of the six founding countries (France, Germany, Italy, Belgium, Luxembourg and the Netherlands) to have committed the EU to a tradition of open-ness and generosity. You can see the results in the subsequent, EU-financed development of member states, notably Portugal, Spain, as well as in the support among public opinion in Poland today, where people realize that EU membership is a powerful factor in the development of the nation’s agriculture and other areas.
So where does this leave political integration?
Today the European Union represents, above all, successful economic and financial integration, with a strong coefficient of solidarity with regard to development of its regions, thus providing a strong political dimension. The EU also exists on the international scene, particularly with regard to world trade and development aid, and on the latter, more important than the United States. And beyond that, the EU tries hard to adopt common positions in foreign policy, in such areas as crisis-prevention, and this works…yet I was not surprised by our divisions over the second war in Iraq, which I had already experienced regarding the earlier tragedy of Yugoslavia. Many EU members are important countries with long, diplomatic, geopolitical traditions, and they cannot be expected to agree overnight.
So in what direction are these EU members heading?
Even if we leave aside the question you asked about selective moving forward, and in light of the emerging, world powers I mentiond earlier, one can envision – optimistically – that they will increasingly seek common positions with regard to the outside world. While continuing the policy of differentiation, such as on monetary union mentioned earlier, and I could also mention the EU’s fragmented approach to social and labor issues. I believe this differentiation will continue. And yet, if I were still in a position of responsibility today, I would urge creation of an EU energy community in order to discuss and negotiate with other world powers on new sources of energy and th environment.But how many EU members would join?
How do you assess the emergence of a common EU defense policy?
The first consideration is that if you add up the combined total of defense spending in the EU, it does not represent much more than the budgets of Britain, France and Germany. If these three powers could agree on the basis for a common defense policy, even partially, they could make it happen. And it would be a key element in the reflections about the future of the Atlantic Alliance. But the EU cannot weigh in the discussions unless it has something to put on the table, in all areas.
Yes, but after France in its 2005 referendum rejected the proposed EU Constitution, you said the EU had slipped into a "light coma." Is that still the case?
EU members have come out of the light coma. The price is a reform-oriented treaty, containing many elements in the proposed Constitution, which I consider a step forward. And yet, for the time being puts off any discussion of the vital, important options for Europe’s future. It is not a locomotive…you cannot launch Europe with words. But the proposed treaty will for several years provide a framework for discussion and decision-making for managing the present.
Would you agree there is a great convergence in foreign policy between the EU and the Bush administration, particularly with regard to the Middle East and in condemning Hamas, Hezbollah and Iran?
I do not agree. If you consider the key, central issue in the region – the Israeli-Palestinian conflict – or other, related issues, such as radical religious movements, Iraq, Iran, or Darfur, and attitudes toward Africa, there is divergence, clearly. We see this clearly in Iraq, where the situation is hardly bright. Yet the United States stands in the middle of the world’s problems. And those that criticize America, also demand a lot of the US. And Europe has to decide what it wants. The Cold War is over.
Does the "special relationship" with Washington, traditionally identified with Britain, but now also between the Bush administration, Germany’s Chancellor Merkel and France’s President Sarkozy, have meaning for you?
It needs to be clarified, and is not really understood nor accepted by, for example, Chinese, Indian or Mexican leaders who believe that the Europeans may not have understood their situation in the world today. Needless to say, in the world of tomorrow, the good relations between the US and the EU are necessary, based on our common values and capacity for discussion. We need this, and yet it cannot be based solely on a relationship with the three nations mentioned.
What is your reaction to those in France who, because of the weak dollar and lackluster French exports, are calling for a devaluation of the euro?
Groundless accusations have been directed at the monetary policy of the European Central Bank. By the same token, I am not in agreement with the communications policy of the bank, based on the idea that if wage-earners are reasonable, flexible and display mobility, all will be fine with the EU economy. This makes it difficult to explain EU monetary policy to Europeans. But it is also true that giving the European Central Bank the right to promote economic growth will not change much. What functions at the bank is monetary policy. And the fact is that the European Central Bank and the Federal Reserve in Washington, faced with the same problem, generally react the same way.
We also have heard calls for more EU governmental control via finance ministers, regarding the ECBs monetary policy. Is that ever going to happen?
This may surprise some, but there is an article in the bank’s founding treaty that allows discussion of exchange-rate policy by the Council of Ministers of finance, that is, the thirteen members in the euro zone. But they never get around to discussing frankly; the ministers usually disagree, with Mr. (Jean-Claude) Trichet, the ECB president, irritated.
Is Britain’s entry into the euro indispensable for the monetary union to continue succeeding?
Not really. What is indispensable is the EU’s re-establishment of the balance between economic and monetary policy.
What is your attitude regarding future EU membership for Turkey?
I have always said yes to the negotiation for membership. I never would have taken the responsibility with the Islamic world of saying no to Turkey. Can we live with a predominantly Muslim nation in the EU, I say – yes. Responding no would be saying the world is un-governable.
