:00:03. > :00:13.his mother. When he's strong enough, he'll join his father outdoors. Now
:00:13. > :00:14.
:00:14. > :00:18.on BBC News, it's time for HARDtalk. Europe's economic crisis is pushing
:00:18. > :00:21.its leaders further and further down the road to economic
:00:21. > :00:27.integration than some may have imagined. This is raising questions
:00:27. > :00:32.about what is left of individual country's powers and identity. At a
:00:32. > :00:37.time when EU citizens say they have never trusted the EU left - what is
:00:37. > :00:43.their goal - to become a Federal superstate or stay a monetary union
:00:43. > :00:46.based on common economic interests. I have come to the heart of
:00:46. > :00:51.European Brisbane to the European Parliament to speak to Richard
:00:51. > :01:01.Ashworth, and Guy Verhofstadt, who is a former Belgium Prime Minister.
:01:01. > :01:15.
:01:15. > :01:21.Where is the EU project going, and Richard Ashworth, and Guy
:01:21. > :01:25.Verhofstadt, welcome to HARDtalk. The man regarded by proEuropeans as
:01:25. > :01:31.the forefather would -- pro- Europeans as the forefather would
:01:31. > :01:37.like to see the crisis as an initiative, and to see us go
:01:37. > :01:45.forward. Is this crisis an EU opportunity? You can say never
:01:45. > :01:51.waste a crisis. I think at this moment it's necessary to use this
:01:51. > :01:54.crisis to reform the European Union. That means that instead of having a
:01:54. > :01:59.loose consideration of nation states, what we have today, we need
:01:59. > :02:04.to build up what I call a Federal European Union because otherwise
:02:04. > :02:10.you can continue with the single currency. This crisis around the
:02:10. > :02:16.single currency has shown us that we need to also build up an
:02:16. > :02:21.economic union, a fiscal union and a political union, just as you have
:02:21. > :02:26.a real Federal state behind the dollar, and you have a state behind
:02:26. > :02:32.the yen. A closer union, is that the way forward? I'm picking up on
:02:32. > :02:35.your word of opportunity. I wholeheartedly agree with that word.
:02:35. > :02:39.It's an opportunity for Eurozone member states to address structural
:02:39. > :02:44.issues, which they have. The architecture of it is not fit for
:02:44. > :02:49.purpose. It needs to be changed. It's an opportunity for those
:02:49. > :02:55.nations that do not wish to integrate further, but value the
:02:55. > :02:58.opportunity of working with 27 like-minded states to redefine that
:02:58. > :03:03.relationship. It's a time for change, and an opportunity for all.
:03:03. > :03:10.You say there's choice, and we'll get on to the idea of a two-tier or
:03:10. > :03:17.two-speed Europe. Yes. powerhouse of the European Union,
:03:17. > :03:22.Germany, Chancellor Angela Merkel says we need monetary, fiscal, bj
:03:22. > :03:31.etry and a political -- budgetry, and political union. She says
:03:31. > :03:38.there's not just one way forward. One thing we share is that it is
:03:38. > :03:42.vital thatle European union and -- that the European Union survive. To
:03:42. > :03:46.make changes it involves closer integration, a chaise which the
:03:46. > :03:51.Eurozone nations have to mag -- a choice which the Eurozone nations
:03:51. > :03:54.have to make. At the same time, this is a moment where we have to
:03:54. > :03:58.sit together intelligently, and understand the needs of the others.
:03:58. > :04:05.There are 10 nations not in the Eurozone at the present time. We
:04:05. > :04:10.need to understand what they want from this relationship, and how to
:04:10. > :04:14.inform an intelligent solution. That is the point. In terms of
:04:15. > :04:21.people lacking the will to support the European Union, it is seen as
:04:21. > :04:28.the cause of the problems, not the solution. That is not true. If you
:04:28. > :04:35.look to the problems today, it's clear that more euro - certainly I
:04:35. > :04:39.agree with that that it can be a difference between countries with
:04:39. > :04:48.another currency, but it is a solution more the crisis. What does
:04:48. > :04:58.that mean - more Europe? Let me make a comparison. US have a public
:04:58. > :05:00.
:05:01. > :05:05.deficit. They have 103% of that It's a world record. They paid
:05:05. > :05:09.lower interest rates. Even when there was a bankruptcy, that
:05:09. > :05:16.doesn't mean there was a dollar. Why the difference with us. A
:05:16. > :05:21.little economy like Greece, where it creates chaos in Europe, while
:05:21. > :05:27.there is a state behind the yen. A real Federal state behind the
:05:27. > :05:31.dollar. At the moment there's no state behind the dollar. You
:05:31. > :05:40.mingsed what the press refer to as the -- mentioned what the press
:05:40. > :05:44.refer to as the "F" word or the F bomb. What do you ep vizage.
:05:44. > :05:48.Winston Church -- envisage. Winston Churchill said we need a United
:05:48. > :05:53.States of Europe not to be joined by the British. That was his idea.
:05:53. > :05:58.He said that is the way forward for the country to create the United
:05:58. > :06:02.States of Europe. That means in reality you have a common Treasury,
:06:02. > :06:11.one Minister of Finance dealing with economic and fiscal policies
:06:11. > :06:16.of the country. Also, a single bond market. A Europe bond market. Lets
:06:16. > :06:19.be honest, the biggest bond markets in Europe is Germany, and it's 10
:06:19. > :06:27.times smaller than the bond markets in the United States of America,
:06:27. > :06:31.and has a lack of lick wittedity. I think the crisis -- liquidity. I
:06:31. > :06:37.think the crisis can be sourced if we create a bond market. It's
:06:37. > :06:44.impossible to deal with a currency if you have 70 governments, 70
:06:44. > :06:51.Ministers of finance, and different economic strategies. More appear to
:06:51. > :06:57.follow suit that economic union is necessary. Does one need to jump
:06:57. > :07:03.towards that? One warned "I would take precaution in introducing
:07:03. > :07:08.Federalism into the equation, raising the bar of the European
:07:08. > :07:13.Union to the theoretical". I don't think it will work, a single
:07:13. > :07:17.currency if you don't have a political union. That's what rating
:07:17. > :07:22.agencies say. They say the lack of economic and political integration
:07:22. > :07:29.is the reason why we are downgrading some of these countries.
:07:29. > :07:36.We accept a lot of those points. The Eurozone nations need to
:07:36. > :07:41.integrate more. Britain wouldn't want to join. A reason is we doubt
:07:41. > :07:46.whether nations that have enormous disparity between economic
:07:46. > :07:50.efficiencies and competitiveness can make comfortable bed fellows.
:07:50. > :07:55.The other point we are wanting to make is we are talking about the
:07:55. > :08:00.United States of America or Europe. The global situation changes on a
:08:00. > :08:04.daily basis. We are facing challenges to economies which are
:08:04. > :08:09.emerging, south-east Asia, Brazil, and others. They are all
:08:09. > :08:13.challenging us today. We in Britain are conscious of that, we are
:08:13. > :08:20.acutely conscious that competitiveness is an issue, that's
:08:20. > :08:24.why we want an outward looking competitive D-rated economy. We
:08:24. > :08:29.feel the integrated call of Eurozone countries will lose site
:08:29. > :08:35.of the objective, which is global competitiveness. It may be that
:08:35. > :08:40.some nations like Greece, Spain, Italy. It may be that they can
:08:40. > :08:44.change, deregulate. That's for them to prove. In the meantime I have
:08:44. > :08:49.doubts, and I'm sure the United Kingdom has doubts for the time
:08:49. > :08:55.being. We would be unlikely to want to participate in the Eurozone at
:08:55. > :08:58.all. If you stay on the outside, don't you risk isolation. This is a
:08:59. > :09:05.subject of debate in the European press and the European parliament
:09:05. > :09:11.over and over again. This is where we in this European parliament have
:09:11. > :09:17.to talk intelligently together and work out a formula where you can. I
:09:17. > :09:22.don't see a contradiction between an inner core group and an outer
:09:22. > :09:28.core of people who do not wish to join the Eurozone. They have to co-
:09:28. > :09:32.exist. The single market is too big an issue to lose. Surely the
:09:32. > :09:42.actions of one affect another. It's been said that the Swedish
:09:42. > :09:44.
:09:44. > :09:51.Government, who is tending towards an a la carte proposition - that
:09:51. > :09:56.issues could be decided on 27 member states - you can't afford to
:09:56. > :10:00.stay outside. I can't pretend that that is not the real $64,000
:10:00. > :10:03.question - how does that impact on the interests of the City of London,
:10:03. > :10:09.on the United Kingdom's economy. I don't think anybody could pretend
:10:09. > :10:17.that you could sneak this in without major change. We have a
:10:17. > :10:21.test with the backing union. I have to tell you, I'm on the line that I
:10:21. > :10:25.think single financial supervision has to be established in the
:10:25. > :10:30.banking union. It has to be for the 27, not the 17. I'm not in favour
:10:30. > :10:36.of the proposal of the Commission. We are giving that task to the
:10:36. > :10:41.European Central Bank, because I think you have to make a split
:10:41. > :10:49.between tasks, tasks of the European Central Bank. The task has
:10:49. > :10:55.to be given or be a merger of the three existing bodies, European
:10:55. > :11:00.banking authorities and the others - merge them into SSA, and that is
:11:00. > :11:06.a better way forward than to create financial supervision inside a
:11:06. > :11:11.union that is different for the 17. I completely agree with that. That
:11:11. > :11:18.legislation has been put in place. We have had regulations which
:11:18. > :11:23.control the banking sector. We are indulging in opinion polls, showing
:11:23. > :11:30.that European citizens go on. It's the elite deciding what happens
:11:30. > :11:34.with Europe. Is there a public app fight for integration. There's
:11:34. > :11:40.research centres, global attitudes projects in May. It shows a
:11:40. > :11:44.resistance to the decision to grant European Union the authority to
:11:44. > :11:49.exercise limited oversized national budget. You are talking about
:11:49. > :11:59.service. Let's talk about the political reality on the ground.
:11:59. > :11:59.
:11:59. > :12:04.Are you dismissing all of this. I say the last election in the
:12:04. > :12:12.Netherlands refused the treaty in a referendum seven years ago. It is
:12:12. > :12:22.different. We have seen a shift from that to pro-European voting.
:12:22. > :12:29.see it in Greece, France. Sorry, I can say that, the right wing party,
:12:29. > :12:34.and the left wing party, anti- European socialist movements have
:12:34. > :12:40.lost the elections. Winners were pro-European forces. Why is that
:12:40. > :12:44.hag in the Netherlands. Because the Dutch are not stupid. They --
:12:44. > :12:51.happening in the Netherlands. Because of the Dutch are not stupid.
:12:51. > :12:57.The euro is the engine of growth, of the range of enterprises,
:12:57. > :13:03.logistic enterprises. They voted for pro-European political parties
:13:03. > :13:10.because they want to maintain the euro. One of the biggest economic
:13:10. > :13:15.engines from Europe, the newspaper, shows recently in a new poll, that
:13:15. > :13:25.64% of French would vote against ratifying the treaty. 60% of
:13:25. > :13:29.respondents said they were in There is a lack of politicians in
:13:29. > :13:34.France to say to public opinion it is in the interest of France to
:13:34. > :13:39.have a more integrated Europe. The problem in Europe or the continent
:13:39. > :13:46.- I do not talk about Great Britain - but on the continue known there
:13:46. > :13:50.is a fall-away. Most political leaders follow Nationalist and
:13:50. > :13:53.populist rhetoric. Democracy as a political leader, developing
:13:53. > :13:59.efficient say trying to convince the public oh pin Ron to follow his
:13:59. > :14:04.vision. Not what is happening now. Nationalist and populist rhetoric
:14:04. > :14:08.in Sweden, in Finland, in France that is gaining ground. What are
:14:08. > :14:14.people supposed to make of it then? You say they support the single
:14:14. > :14:20.market. 25 million people out of work cannot be that thrilled about
:14:20. > :14:24.it. Growth stagnant across. The EU, unemployment in youth in Spain up
:14:24. > :14:27.to 49%. The people will say we believe in the single market, we
:14:27. > :14:31.think there is something here that can help us but actually it is
:14:31. > :14:35.perceived by us to shall the cause of our problems, you have the turn
:14:35. > :14:41.this into the solution. Is the challenge, the people like you and
:14:42. > :14:47.I have. I agree. We have always to say to these people, you - the
:14:47. > :14:53.wealth of tomorrow, the G8 of tomorrow, what is the G8 in 20, 25
:14:53. > :15:00.years, it shall be US, Japan, India, China, Brazil, Russia, Mexico and
:15:00. > :15:05.Indonesia. No single European country shall be part of the G8 in
:15:05. > :15:10.2030 that is in 18 years so the new world order that - there needs to
:15:10. > :15:17.be an integrated Europe with full power with a good internal market,
:15:17. > :15:22.I agree, not split into two parts. Some argue with a single currency...
:15:22. > :15:27.Its I'm sorry but time is precious. Whichever vision of Europe will
:15:27. > :15:31.take hold in the European Union, who exactly will decide? There is a
:15:31. > :15:38.lot has been spoken about recently about a democracy deep sit in the
:15:38. > :15:42.EU. Do you believe it exists? depends what you mean by Democratic
:15:42. > :15:49.deficit. It is a phrase often used but nobody ever gives me the answer.
:15:49. > :15:55.It boils down to the fact what do you perceive the European Union to
:15:55. > :16:00.be. Is it a country called Europe or a cooperative owned by and
:16:00. > :16:05.worked on behalf of and for 27 independent soof yin states any see
:16:05. > :16:08.it as the latter and toy not have a problem. We have a democratically
:16:08. > :16:12.eelectricityed council and the Democraticly elected Parliament
:16:12. > :16:15.which there is to hold the commission together and clearly
:16:15. > :16:19.after the Lisbon Treaty we are not doing that well enough. We need to
:16:19. > :16:24.do more, but we do not have that problem. Exactly the European
:16:24. > :16:27.Parliament, if I could put this to you, it is the only directly oh
:16:27. > :16:32.electricityed European decision- making body. The Lisbon Treaty was
:16:32. > :16:36.supposed to give it more powers but you service the European President
:16:36. > :16:39.Martin Shulz acknowledging "In the last two years as a result trends
:16:39. > :16:42.towards endless series of meeting was heads of state and Government
:16:42. > :16:46.more and more legislative decision have been taken without the
:16:46. > :16:50.European Parliament being consulted". How can you let this
:16:50. > :16:53.happen? We are making huge protests against it. Thin Parliament, every
:16:54. > :16:59.time when I'm intervening I business that issue. I think it is
:16:59. > :17:03.a bad thing what we see the last two years, the development in the
:17:03. > :17:07.direction of an inter-Governmental Europe that means a European
:17:07. > :17:13.Council with the heads of states, Government, deSiding for the hole
:17:13. > :17:17.of. The EU. I think we need more real European Government -- the
:17:17. > :17:21.whole of. Control to buy this European Parliament. We have new
:17:21. > :17:28.powers, the Lisbon Treaty has given full powers to the European
:17:28. > :17:31.Parliament on every toppish of the treaty. Also on in - international
:17:31. > :17:34.teethies have to be adopted by the Parliament. The problem is that
:17:34. > :17:39.people t political leadership for the moment in the nation state
:17:39. > :17:42.certainly in Germany and in France think this they have to govern the
:17:42. > :17:46.European Union and they are not cape in of doing so. Look to the
:17:46. > :17:49.euro crisis. We have at least 20 summits of the euro crisis and
:17:49. > :17:52.every time they produce half measures without real vision for
:17:52. > :17:57.the future. Isn't part of the problem the way the European Union
:17:57. > :17:59.decision making bodies are structured? Too many close order
:17:59. > :18:03.debates at the Council of Ministers t European Parliament, nobody
:18:03. > :18:07.really knows where it is going to vote. The commission against
:18:07. > :18:12.closed-door meetings. Is there not a time issue as well? You mentioned
:18:12. > :18:18.the Lisbon treaty supposed the make a. The EU more depbl catastrophic.
:18:18. > :18:24.It took eight years -- Democratic. All meetings in the European
:18:24. > :18:30.Parliament are open, also committee mightings. Closed meetings are when
:18:30. > :18:33.Chancellor Angela Merkel and Mr Hollande see each other behind
:18:33. > :18:40.closed doors You vo the International Monetary Fund again
:18:40. > :18:45.in a report in July -- you have. Complaining or pointing out the sea
:18:45. > :18:49.dragging going on in the EU. Is that why the European Parliament is
:18:49. > :18:52.cut out? No we are arguing we need a fully fledged change from the
:18:52. > :18:59.Democrat contradict union which means full powers for the European
:18:59. > :19:05.Parliament. It is not long an inter-Governmental body can decide.
:19:05. > :19:09.You have a two-chamber system where the European Parliament is
:19:09. > :19:13.representing Parliament and the second chamber in which nation
:19:13. > :19:17.states are represented. Last thing, you need a real Government, a
:19:17. > :19:24.European Government control by the European Parliament. We are elected
:19:24. > :19:29.directly by the people t British people that elect the different
:19:29. > :19:34.MEPs from there so this democracy exists today in Europe. But it is
:19:34. > :19:38.not fully used. I does exist but so long as the council - there are 27
:19:38. > :19:42.elected Prime Ministers are the superior body. We feel true power
:19:42. > :19:45.should rest in the nation states. Only then can you get the
:19:45. > :19:49.Democratic reaction to what the people want. Picking up on your
:19:49. > :19:53.earlier point - yes, there is a problem, it is far too slow the
:19:53. > :19:56.react and respond. The reason that is the architecture of the EU is
:19:56. > :20:02.not fit for purpose for the future. It is not solving the problems
:20:02. > :20:05.about to come. A good example is the euro which was always a
:20:05. > :20:08.political project not a fiscal instrument. Hit been a fiscal
:20:08. > :20:12.instrument there would have been rules, processes an disciplines
:20:12. > :20:22.that had to have been followed and no doubt a number of nation was
:20:22. > :20:23.
:20:23. > :20:29.never have been allowed to join the euro had they been in place. Again,
:20:29. > :20:34.if we can return to the people of Europe. It has long been a desired
:20:34. > :20:38.aim by decision-makers to bring Europe closer to the people and yet
:20:38. > :20:43.with each successive EU parliamentary election fewer and
:20:43. > :20:49.fewer people are turning out to vote. You have another election in
:20:49. > :20:54.2014, how will you persuade people their vote is important?
:20:54. > :21:01.European political parties shall present a unique candidate for the
:21:01. > :21:11.presidency of the commission so it is a step towards a direct elected
:21:11. > :21:15.
:21:15. > :21:20.President of the European Commission and European Government.
:21:20. > :21:24.And I'm within favour of a system where the European citizens are
:21:24. > :21:34.financing directly. The EU. I'm always say financing you pay for
:21:34. > :21:37.
:21:37. > :21:42.something then you are interested in something. Did nation states are
:21:42. > :21:48.giving the... That... No it is not the same S if you pay directly a
:21:48. > :21:52.part of your VAT on what you buy directly to the EU you shall be
:21:52. > :21:55.interested in what is happening to you. We have a problem here. The
:21:55. > :21:58.first two points about directly elected President or whatever else
:21:58. > :22:03.is not relevant and is not going to make any difference to the voters.
:22:03. > :22:07.But this is a big issue that the European budget works on a seven-
:22:07. > :22:12.year cycle. We are on a five-year parliamentary electoral cycle and
:22:12. > :22:14.unless and until you aHine the to so you forge a link between
:22:14. > :22:19.democracy and expenditure it is always going to be irrelevant.
:22:19. > :22:23.Firstly, you have to resolve that. Secondly, while I regret that not
:22:24. > :22:28.many people turn out to vote in European elections, typically 30%,
:22:28. > :22:35.but actually that is more than the number of people who turn out for
:22:36. > :22:40.local tort elections in the UK and you have never - local authority
:22:40. > :22:44.releases or indeed in the US. there is less participation than
:22:45. > :22:50.the European Parliament so you do not say that Obama is not there in
:22:50. > :22:52.a legitimate way? Isn't it the responsibility of members of the
:22:52. > :22:58.European part and national politicians to explain to the
:22:58. > :23:03.people of Europe why it count? There is a complaint that all too
:23:03. > :23:08.often politicians use. The EU as a scapegoat for national ills or to
:23:08. > :23:12.tie score cheap points. If I was one of those 25 million people out
:23:12. > :23:15.of work today or one of those young people without a job I would not be
:23:15. > :23:21.the least bit interested in watching politicians throwing
:23:21. > :23:24.bricks at each other. I would want to see people working out solution
:23:24. > :23:28.thanks will address their problems not ours, they are going to do
:23:28. > :23:32.something 3. The economy I'm on the budget committee here in. The EU.
:23:32. > :23:41.Times have changed and the budget must change to reflect it. You
:23:41. > :23:45.cannot go out as you have before. final statement? I do not think the
:23:45. > :23:48.complaints have forwarded the European democracy. It is far more
:23:48. > :23:52.important he takes his responsibility and puts the