Does the EU Have a Future? The World Debate

The third day of that trial has just finished. Now it is time for

Welcome to these The World Debate coming to you from Rome. We are

home to the British ambassador, who is hosting a conference organised

by the British Council. Let me introduce the panel. Emma Bonino is

the vice-president of the Italian Senate. She was also a commission

at the European Union and in her long career has seen many crisis

both in Italy and in the EU and yet you still describe yourself as a

Euro-fanatic. Yes. From grace, the country which is at the heart of

the current Euro and debt crisis, the education system -- education

minister, Anna Diamantopoulou. Very tough at the moment being a Greek

minister. It is something more than half. It is dramatic. And one of

France's most prominent politicians, the Elisabeth Guigou. She acted as

an adviser to a former President and was the minister for Europe.

And you have also established a lobby group, Women of Europe. I

hope you approve of the panel today. I am very happy. We have a man on

the panel. Professor Markus Kerber, at the technology of take not --

the University of Technology and Berlin. You lead the campaign

against the Greek bail-out. The court said that the bail-out was

legal but you are not giving up the fight. You are going to the

European Court of Justice. Yes. We are bound to put certain limits.

There has been outrageous behaviour for the ECB president. We will hear

more about what you think in a moment. That is the panel. Welcome

to you all. APPLAUSE. Professor Markus Kerber. Gentlemen first in

this case. Should the euro be saved? The project is worth making

a very strong effort to reshape the eurozone. Saving the euro it in the

current shape is impossible. After more than ten years of experience,

we have seen that the experiment turns out to be a catastrophe.

Bonino, D remember Margaret Thatcher said, the emu is a bird

that cannot fly. Is it right, it is not worth saving the euro?

crisis we are in is much more political than financial and the

real problem is the fact that what stands in between the crisis and

the solution is the revival of nationalism. The question is that

you do not save the euro if you do not save Europe. The two questions

are linked. You do not just save Europe because you reduce the

eurozone. Anna Diamantopoulou, should the euro be saved? The euro

is a big achievement. It is a success story because the euro is a

very strong currency. The euro is not just a currency. It is a symbol

for European people. Let's think of our countries. We have our flags,

our language. What all Europeans have in our hand is Europe. Yes, we

must save it. Elisabeth Guigou? think the euro must be saved, both

for political and economic reasons. If the euro is not saved, we will

have a terrible consequence. Inside Europe, it is not only peripheral

countries, I am sorry Anna Diamantopoulou, the gross national

product would be a concern, but maybe Italy, Spain, France, and

across Europe, even for those countries who do not belong to the

eurozone, there will be tremendous consequences. Let's go to the

audience. The panel has picked up that the eurozone needs to reshape.

And also the comments that Europe is a political project. I disagree

with that. It is an economic projects. For myself, many British

MPs decided to stay out of joining the euro and my colleagues and I

will fight tooth and nail to stop further integration. Another

British MP. I am quite shocked by the denial of the realities of the

panel by saying that this is a political problem. It is a fiscal

problem. A country like Greece will not be able to regain

competitiveness unless it can devalue its currency. If we keep

pouring money into those who fail, ultimately we will run the German

economy. Anna Diamantopoulou? me speak about Greece which is in

the centre of the storm. Is it the euro the problem that Greece has

the debt crisis? Know it is not. It is the political mismanagement, the

fiscal mismanagement, and we are responsible for that. At the same

time we are in the middle of an international and a European crisis.

We have to work and go on with very painful reforms, very painful

structural reforms. In this effort, it is very important to seek that

we must avoid this kind of fiscal mismanagement at a European level,

by changing institutions and procedures. Now in the last year,

we can see things that we could not im imyear ago, mechanisms,

ideas about fiscal ministers, different ways of co-operation

between the ministers and different ways of decision-making. There are

ideas in the pipeline that can change things. You said that the

euro is not the reason why Greece is in this current problem.

Political mismanagement. The fact is, the structures were not strong

enough to check whether Greek was racking up this huge debt. He kept

the budget deficit secret. OK, the government before yours did that,

but nobody knew how bad it was. That means that the institutions,

the structures of the EU are lacking, people are breaking rules.

This is exactly what I was saying. Nowhere in the world do you have a

single currency without a Treasury. We have a single currency but not a

fiscal union and the mechanism to oblige countries to comply.

Everything was left to the goodwill of co-operation and so on and so

forth. In some part, I think of course the national states and

governments cannot avoid their own responsibility, but from now on, I

think that if you do not come to a fiscal union with much stricter

control of the national budget, you cannot save Europe. Europe is much

more than a single currency. Europe is also a political -- Europe's

fiscal policy should be at the world stage. The alternative to

save the euro and Europe is that we will go back nationally divided,

totally irrelevant in the world stage and even somebody as big as

Germany will be irrelevant. Anna Diamantopoulou, countries like

Greece have spent money borrowing all these cheap money with the low

interest rates. Your point is, why should you Germans be more fiscally

responsible? Not only Germans. Why the effort of endless bail-out?

should you? ould you? lf-awareness and we know very well while we have

this debt crisis and why we are in this situation. It is two years now

that there is structural reforms with unprecedented not only for

Europe but for the world. I need to give you some examples. In two

years, and because of the mistakes of the past and because we have now

to change things, and the euro and what is behind the euro, the rules

and stabilisd stabiliseferred to some of the changes we did. We

changed the pensions system. We changed the health system. We

changed the administration and justice of the country. We cut off

salaries and pensions up to 30%. We cut the budget on health and

education about 25% in 18 months. In my portfolio. In one year we

closed down about 2000 schools, about 25 departments of

universities. We did it in a very - - we are dealing in a depressive

situation. What kind of response have you had? Of course there has

been strikes. People are depressed. But I repeat that there is a self-

awareness. People react in this way even if we are under this

unprecedented situation. What is the goal of this in? Through these

austerity packages, through what we have agreed with the European Union,

to stabilise the country and at the same time to find the Gross wrote.

Can you imagine a country which is under a huge struggle and we have

every day and night a statement of a leader, an academic, a lawyer,

that Greece is going to default, that Greece is going to...?

when you critics say things like, why should they work until their

mid-sixties in Germany? -- in Germany so that somebody in jet

that -- somebody in Greece can retire in their 50s? People feel

resentment. Just one word. If we want to stabilise the country, on

the one side we have to put all of these austerity packages. At the

same time we have to push the engine of growth. Can we do it when

we have every day, from Germans and others, all these ideas that the

country is going to be a fault? Let's remember other cases in the

Europe of countries who had a huge deficit, who went on default

because of those crises. They recovered. They did not recover by

squeezing, only by squeezing, but by support of... You have been

given 110 billion euros. You're getting another... In her... In we

have agreed on that,... Its you are asking for another 109 million

euros from the IMF and the EU. The Germans have paid... This is not a

debate between Greece and Germany. I appreciate the enormous efforts

which have been made in Greece under fiscal point of view. These

the work of a generation. I speak as an economist. You Ali it -- you

are losing your sovereignty. It is a de facto government. Your Members

of Parliament do not have any powers. You lose all the self-

determination. Secondly, with all these fiscal measures, which are

too severe, which have brought recession, you do not regain your

Regaining competitiveness in the short-term needs devaluation. You

cannot evaluate. We double the exports in 18 months

because something is changing in the country. The tourism industry.

What will be the destiny of many of the German banks? Unhealthy

products that they bought, not only in Greece but everywhere. I also

speak of UK banks, not only Germany. The advantages for the German

people of the European project as far raised exports. At the end of

the day you other one you have been, like many others, you got the

result of Europe. 70% of your export is still in Europe, China,

India etc. All the picture has to be taken into account where leaders

have do make the decision about saving Europe. We have the German

ambassador in the audience. You have heard that 66% of Germans are

opposed to bail out, and yet the Chancellor Angela Merkel said that

the answer to the crisis is more. Do you think the German people will

accept that? Germany is a country which has supported the European

Community from the very beginning and we still have majority support

in Germany for that. Angela Merkel made it very clear in a speech in

the Bundesbank in which she said that we need more Europe, not raise

Europe. We want a unified Europe which is strong politically,

economic 'Glee' and culturally. There is scepticism in Germany,

isn't there? Why should we be the paymasters? A brief response. Euro-

scepticism. Be is a very strong discussion in Germany these days on

who is paying one. Again it is not a crisis of the euro, it is a

crisis of politicians who have not played the game by the rules. This

was said several times already in the debate. The effort of my

government is now to find stronger co-ordination within the European

Union. To have an obligation and commitments which are binding. What

we are lacking is sanctions if somebody does not play the game by

the rules. Marcus, briefly. statement which I take for granted

is disconnected from the sentiment of the German population. There is

85% disagreement with the bail out policy. In Rome? A difficulty in

telling the truth to the people. And so, Professor Markus Kerber, I

think your idea is not so... it is in Germany's best interest to say

the euro. Is not a question of political preferences. Recent

studies show that the cost for Germans of the break-up of the euro

would be much higher than the cost of the financial stability. What I

wanted. Doubt is that it is not only Greece all Portugal of Ireland

which are the cause of the eurozone crisis was the economic outlook is

weak and it is Maliki in Europa and the US. -- week. We need is --

discipline. Without growth, we were not even succeed in reducing our

deficit. What we need is political leadership. Because what happened

was that each of these national leaders, Mrs McConnell or Nicolas

Sarkozy, they are Europeans of course, but both of them acted on

their national grounds and failed in explaining their public opinion

why it was in the German interest to continue to save the euro. Why

it was in the French interest etcetera. And nationalism, of

course, I agree with Guyana. -- agree with Emma Bonino. There is a

healthy debate in Europe and they would wish to have the same debate

in my country, France. Finally, I think that one of the crisis of

Europe is that the question of Europe has never been debated at

national level. That has been one of the most... between the project

and international public opinion. People say about Greece and Italy,

look at the tax evasion, the nepotism, the corruption and so on.

And that makes a difference. It makes people, perhaps, in these

other countries say, at least we are tried to sort things out. But

we are not sure that the Greeks are. First of all, because there is a

lot of discussion on this issue, I admire European people and I am

very proud because each people has its own confederation. There were

problems. It is our and full. Should we be punished, yes. Should

we do it ourselves close mac yes. We do it in a way that we cannot

imagine because beyond what I am saying now about reforms and

decisions of reduction of everything they are people, their

lives, retired people. We have to do everything in 18 months. Yes,

there was political mismanagement. To do it, you have to sack 30,000

Greek civil servants by the end of this year? Yes, and not only that.

Last year there were 55,000 people fired from the public sector with

Congress. Are you doing that? have already done it. That's why I

tell do it was a dramatic situation. They decided, we are going to

stabilise the country. You have got to get 50 billion euros from market

privatisations. By you doing that? You say you're going to do this,

that actually, we cannot see the evidence was they at is an

interesting economic question because everything is not just

political. We have to privatise a complete number of companies. We

have put everything in the pipeline. Just think that in a country when

everybody talks about the death toll tomorrow and the atmosphere.

You can imagine how difficult it is to privatise the public companies.

Who will come? Can you imagine any foreign investor who will put his

money in a market where everybody, every day there is somebody who

speaks like that. What about people increases say the tough austerity

measures are too tough. We have seen the soup kitchens with

pensioners queuing up because they do not have enough money to buy

food. Doctors, lawyers, everybody. All social started going out and

the seats. -- out on the streets. Have you ask them if they want a

holiday? May be default, maybe that's what they want. Professor

Markus Kerber, does the world need the European Union? The world is

not conceivable without the European Union. It is not less

Europe that we need, it is more Europe. What I expressly clear and

I would like to make these public here. The euro project for, which

from and economists pointed you is an experiment is now turning into

an adventure. It will have disintegrating effect and will be

responsible for the revival of nationalisms which we are, rightly

or wrongly, afraid of. On that thought we in this debate. Clearly,

there is consensus that this is the worst crisis. What will happen to

the euro? Willette survive? What kind of Europe will survive once

the dust has settled. That is also not certain. Thank you to my panel.

Still a pretty good chance that we could threaten the record for

October on Saturday. The current record is 29. 4 degrees Celsius.

Yesterday they hit 28.8 at Kew Gardens and they will be higher on

Friday. Starting off from temperatures of 15, 16. Mist and

fog will clear quickly and it is basically sunshine across England,

Wales and eastern Scotland. In Northern Ireland, outbreaks of rain

and wait in western Scotland by the afternoon. More cloud for the

western fringes of Wales, Devon and Cornwall. Foremost it is all about

the sunshine and the heat. How high will the temperatures reach?

Somebody, somewhere may reach 29 on Friday afternoon. It will people

around the coasts, but even here temperatures in the low 20s are

significantly above the average for the end of September. And the West,

more cloud through Devon, Cornwall and Pen wrap sheet. More rain in

Anglesey later in the day and the Isle of Man. -- Pembrokeshire. Much

of eastern Scotland remains fine. Into the weekend, the weather front

moves through, bringing cooler weather across Scotland and

Northern Ireland. Some rain, particularly on Saturday. In the