Sharon Bowles - Chair, EU Economic and Monetary Affairs Committee HARDtalk

And you can get in touch with me and most of the team on Twitter.

Now on BBC News it's time for The eurozone crisis has been a test

not only for Europe's politicians but also its institutions. The

European Union's response to the economic turbulence in its midst

has been criticised as too slow and ineffective. Sharon Bowles is a

British Liberal Democrat and the Chair of the EU Parliament's

Economic and Monetary Affairs Committee. She has a big say in how

economic legislation is drafted, Sharon Bowles, a welcome. And the

EU parliament was set out more than 30 years ago. The idea was to

bridge a gap between Europe and the people of Europe. But with each

election, fewer and fewer voters have turned up. How relevant are

you to the daily lives of European citizens crash probably more than

ever before. Almost everything I do and now matters of economic

governance. It direct -- directly affects citizens and their pockets.

If they knew, they would take more interest. It is very big picture

staff. That makes it difficult for individuals. They want to know how

it is special for them and their town, against any other town. The

answer is setting it is not special to your town but it affects every

citizen. It is definitely it of concern to all European citizens -

the current crisis in the eurozone. When Andy doing to alleviate that

an emperor that in any way? We have several roles and this. We have a

lead us to believe rolled in the stability and Growth Pact. -- bled

ledger stone. It is very important to make sure that once we climb out

of the whole, we do not fall back in. There are proper monitoring

wars to make sure that countries do live up to their promises in how

they're going to repay their debt. We have a very big role in that. We

made over 50 additional changes to the chaff legislation that came.

That includes the voting in the council. If there is going to be

measures imposed on a country, it is still left to the council of

ministers to take a vote. We changed the burden they are so that

it happens unless they boats against it which is a very

significant change. We have done quite a lot in strengthening.

Looking forward to solving the problems we have exerted a lot of

pressure, for example, to do things around the issues of reduction --

redemption funds, euro Barnes and bail-out. I had been so many

meetings and had been very forceful in saying you have to do more and

faster. Of course, we know it is difficult. We have been there.

and faster is what the people of Europe want. It is what the markets

want. They complain that the institutions are not getting on

with it. You say you exert influence but at the end of the day,

it is the members, the nation states of Europe, who have to agree

before something can become policy. You had been accused of heel

dragging and therefore making the crisis worse. If you're saying to

members of a country, are you going to pull your sovereignty further,

are you going to put the country in a situation where you're going to

be responsible for debts that have run up in another country, I do

think they actually want us to do things willy-nilly. It is not

possible to do that. The markets want more bail-out funds because

every time there is money put in, they get rid of their dodgy assets.

Where are they going? They are going in the pension funds of

people. Too little is being sung each time. Quoting one at PIP,

fighting the crisis is keeping an liferaft above water. We have been

pumping out the liferaft, feeling it with just enough air to keep it

afloat even though it has a leak. Sir Mervyn King has described

your's decision-makers as kicking the can down the road and making

problems worse. That is pretty damning. Those are the kinds of

things that I have said. It is always too little, too uncertain

and too late. I can join in with those voices. But at the same time,

I am very conscious because I sit in the room, having to do the

legislation of these things. It has to carry a majority across the

European Parliament. It will be even more difficult if it have to

go to referendums in individual countries. For the long-term fix,

we are looking at things like a banking union, more fiscal

integration, these are things you cannot do quickly. It is an

unfortunate fact that the situation hass to almost get worse before you

can make the politicians turn around it to their national

electrodes and say we have to do this. Were sent it is now? We have

had leaders queuing up again - Italy, Germany, France - they are

saying they are going to do what about it takes. That is very true.

We were not get any gold medals for the way in which it has been

presented for the execution. But the things that are being done a

very genetic. Every country in the EU, especially in the eurozone, is

now monitored with a severity that is the equivalent of being in an

IMF programme. You do not have monitors coming to inspect two. But

the way the statistics are done and the way you find... But are they

are effective? We do not know if the revised rules are going to be

effective until the time comes when somebody has to be fined. That is

the point. It takes a certain amount of time. That is acquired

their knees to the conditions attached. Marioni says conditions.

We have not proven the rules we have made. Looking at some concrete

measures that are on the table, we are looking at the permanent bail-

out fund for the year. If it is approved by Germany in September,

there is not enough cash in in any way to make a difference. The

dominoes are wobbly now. Even if the figure Greece, you are looking

as Spain and Italy - the third and fourth largest European economies.

If you are saying the fund has to be big enough to rescue every

country and potentially or the banks in that country, it is not

big enough. We are talking about real problems like Spain. Are you

saying it is expected to take all the dead? That is not the case.

These countries have less debt than many other countries. Italy runs a

larger primary surplus than any other country in Europe. Are you

denying it? The markets are more concerned about them then the

basics should indicate. What they are concerned about is an effect in

the eurozone of what happens if something worse happens. And we

start going countries out of the euro, will the whole thing

collapsed? They are worried about the size of the debt burdens in

those countries. At the moment, they are paying more than is

necessary giving the overarching stability. Yes, I would have liked

a bail-out fund of two trillion. But you get to the plate where no

bail-out fund is big enough. What you have to look out is the future

trajectory of the eurozone countries. They are going to move

towards a much greater integration, both in banking and in fiscal

matters and in their hot economic policy. This may take until 2018,

2019 to complete. If you look at what we're doing in banking

regulation, we're saying we would give banks and to 2018 or 2019 to

get up to the bars or standards for capital. If you're going to give

that much time to a bank, don't you think we should give that much time

for countries? Those are issues that we will come back to. Looking

at fiscal integration, we need to be more federal, coming together,

on a European level in terms of banking or fiscal policies. Do we

have the time in the EU? Do you have the time to wait? Certain

moves to take time. Certain others can come quickly. The banking union,

putting the EC be in control of the eurozone banks, even if they have

to involve the national supervisors to deliver on the ground, that is

something that can be done quite quickly. It will improve

consistency across the banking sector. If you're saying how long

it will take to get to a fiscal union, how long it will take until

you can have everything cross guaranteed, that will take longer.

We may have to move towards a political union which would take

longer still. There is a question whether these theoretical

discussions are a waste of time and whether the eurozone should be

broken up now. And expect believes short-term measures like buying

government bonds is burying its head in the sand. He says, sooner

or later, they should contemplate an orderly end to the eurozone.

What do you think? There are several levels you can take that.

You have to try. Every country in the Euro house to try. The things

that we're doing in that trying also gives space for there to be

more separation between the dead of various countries. If you look at

what has happened, far from being more integrated at the moment, the

debt is becoming more and more ago and within individual member states.

Exactly. Within the eurozone... Just cut of the brain for parts.

Say goodbye to Greece, Spain and Portugal. Short-term it may cost

countries but in the long-term, surely not. I do not think that is

the European idea. That is not what we want to see done. I think if you

undermine that idea, you can undermine the stronger countries.

There is a tendency to stick together, especially where

countries have shown they are willing to make substantial such

changes. In the long-term, you can see the way through. Portugal is in

that situation in the same way that Ireland is. They have done

everything that has been asked. So has a spade. Greece? They are the

exception. They still have to be dragged kicking and screaming to

make some of the changes that the reduction in the civil service and

so on. Greece is a special case. If you look up the rest, where

everybody has shown they are willing, it would be a bad thing to

say we're going to change the euro in the ideal and change that.

you accept that Greece is going to go? Adding something else is going

to happen to Greece. Whether it be another default and how we are just

in response to that. People are asking the questions. I do not have

the answer. Within the parliament, the general view is that we would

rather we all stuck together. We believe in the European ideal and

we believe we want to move forward together. Behind closed doors, the

markets are saying something different. If the eurozone stays

together, you say then is to be closer unity and so on, this would

involve treaty changes at a European level. This will frighten

the UK. Does that put you in a difficult position? My position is

to look at things across the peace and to represent all member states.

They take pride in doing that. At times, it may put me in loggerheads

with my own government because I have an overarching objective view.

What about other members of the committee? After David Cameron

vetoed the treaty, there was a louder than usual thumping of the

table. The chair had to be from a My track record in approaching

things as at technocrat fits well with the current situation we have.

That is what is needed I think to try to steer a careful path through

the conflicting views that do come from different member states.

Sometimes to be on the objective and on the outside is the right

place to be. The place for the UK is uncomfortable. These changes,

the banking union and so on, are extremely uncomfortable. But the

eurozone has not forgotten the reason we have this problem with

the German constitutional court at the moment is because of the UK's

veto. It was not going to affect us, but the UK tried to get an opt out

on financial services. Having done something that was the trigger that

caused this eurozone crisis, we know there were flaws in the way

the euro was constructed, but the trigger that exposed those flaws

blatantly was the disaster in financial services. And then, as

one of the culprits, we seem to think we can say sorry as the UK,

and then set all of the rules for rehabilitation. It does not work

that way. Let's look at the Curragh uncomfortable position. You are

discussing at the moment putting a cap on bankers' bonuses, the

European Parliament is in favour of a one 2-1 ratio on pay and bonuses

across the senior bankers. You are in favour. Your government is not,

including George Osborne, whose advisers says, we are not convinced

about the beach house you are proposing. They are not convinced.

Nobody is. -- the details. People might say, you might be right, and

if you are, we will follow. I would not name that quote. Effect of the

matter is, we cannot have banks on a different planet from the

ordinary person. If all they are motivated by his bonuses, that is

bad. If banks are only one to motivate by poaching, by hiring and

firing, and not knowing upfront what their costs of the employees

are, they're not living in the same world as everybody us. The

parliament is pretty determined. Financial services account for

almost one-tenth of the British economy. Do you by the bankers'

argument, the lobbyists of argument, that if you put this cap on, you

will be driving business out of the city of London, or driving talent

out? No. We do not. It has got to the point that we say, we will see.

I do not buy that. There are not enough jobs in Asia or the US for

all of these people to run off there. I do not believe that there

is only these small pool of talent. That is the problem. We concentrate

on a small pool of talent and we get grouped think, which is what

caused the financial crisis in many respects. We have to move on from

it. We have to move on. So much to discuss. At the beginning of this

year you pledged to be at the forefront of redefining Britain's

role with the EU. I assume you meant that in a positive way.

Indeed. William Hague has now announced an audit on the UK's

relationship with the EU. What does Britain get out of Brussels study.

You think this is a good idea, the Audit? It is a dreadful idea. It is

a good idea to look at European legislation and say collectively,

where is it working, where is it working, where does it impede

growth, in an across the EU view. We would have a lot of allies in

that. To look at it from a point of view of, what do we want to

repatriate, which is what underlies this review, is a dreadful idea. We

will not be able to repatriate anything. We're not going to be

able to say, we're going to veto something, or else. The rest of

Europe is not prepared to pay the UK to stay in the EU. You are

interpreting what is at the bottom of this audit. Isn't this a

fundamental problem in the coalition government? You are from

the in Liberal Democrat Partick. The Conservatives are producing a

more Euro-sceptic twist. You have David Cameron saying it is a very

honourable idea to more than a referendum on whether Britain

should belong in the EU. Whereas the former leader of the Lib Dems

says, this audit could be very positive for the EU and the UK. It

is two party is going in very different directions. Is it

possible does stay in the coalition when this view differs so strongly?

-- to stay. I am not a government minister but I think it is very

important the coalition stays together, to do what it said it had

to do. If you remember, made for the coalition together very quickly

at the time that there were riots in Greece and we were concerned

that there would be a loss of confidence in UK bonds. We are a

safe haven at the moment because the financial crisis has moved on

to the eurozone crisis. But we have huge debts. Holding on to

confidence is important. That was the main thing that drew the

coalition parties together. Yes, the whole attitude... It is not

just Conservatives. I say it is also in Whitehall. It is doing the

UK no good whatsoever. They think they can throw weight around,

repatriate things, say, we know best, and the rest of Europe is not

going to lead the UK get away with it. Immediately after the veto

happen, there were various things that the UK wanted in financial

legislation that is appeared. Because they just thought, if you

are going to play hardball, we're going to play too. Maybe that is

why you are the first British citizen to hold the chair position

that you do. Apart from the policymakers, the people of Europe,

returning to them. If you look a UK polls, the majority are showing

that most Britons, is aware that -- referendum were held tomorrow,

would choose to leave the EU. The leaders of Europe say, trust them

to do what is best for Europe in the eurozone crisis, and so on. How

long will it be that trust can remain? In Germany, Finland,

Holland, will voters still want to keep paying out bank transfers? And

in the other countries, the ones forced to take austerity measures,

Spain, Greece, how long will they put up to -- put up with that?

Difficult questions. I want to correct you. They has not been any

chance they get. What I mean is, it is rather to seem like bank

transfers. What they had been so far are loans, which initially you

got twice as much back as you were paying to borrow the money.

Countries like Germany, because they are a safe haven, are now

being paid, effectively, to issue debt. They have a premium. But

there has not been transferred. I don't believe we will get out of

the crisis that we are in without there being some kind of transfers.

I think that is the truth of the matter. And until that is faced up

to there will not be a long-term problem. You can do the transfers

through the ECB, and maybe it is more here than there, but transfers

still it is. And that is something that the populations of those

countries have to face up to. -- hidden. That decision will be made.

But the people of Europe in those different countries? Do you expect

them to take to the streets? don't necessarily expect them to

take to the streets in Germany. I expect them to sit down and have a

very long and hard debate about this. Germany understood absolutely

what they were doing when they joins the EU. -- the euro. And

another country that absolutely understood was the UK. The two

countries jumped in opposite directions. UK said, and you will

have to have a lot more fiscal integration and potentially

transfers, and we don't want to have any part of it. In Germany

they said, we will have the stick stability and Growth Pact rules and

we can go into it with that. -- Street. They have to face up to the