:00:00. > :00:15.Welcome to HARDtalk. I'm Sarah Montague.
:00:16. > :00:18.The EU seems in greater trouble than ever before and not just
:00:19. > :00:22.Even founding members of the club - countries like Italy -
:00:23. > :00:25.are unhappy about the direction that it is headed in its 60th year.
:00:26. > :00:29.The Italian economy has always struggled within the confines
:00:30. > :00:33.Additionally, it wants its fellow members to help share the burden
:00:34. > :00:37.of the half a million migrants who have arrived on its shores over
:00:38. > :00:42.How does the EU need to change if it is to win over the next
:00:43. > :00:50.My guest here at the Italian embassy in London is Italy's Europe
:00:51. > :00:55.Minister, Sandro Gozi. He is a passionate European. Allevi think
:00:56. > :01:00.the EU should change if it to survive and win over the next
:01:01. > :01:25.generation of Europeans. -- how does he think the EU should change.
:01:26. > :01:34.Sandro Gozi, welcome to HARDtalk. You have said that the beginning of
:01:35. > :01:40.European disintegration has started with Brexit. If the EU
:01:41. > :01:46.disintegrating? If it remains the status quo, certainly. It must get
:01:47. > :01:52.out of the status quo. Must show there is a political reaction. There
:01:53. > :01:59.are a series of crisis that has hit the EU. The major one is the Brexit
:02:00. > :02:03.decision but there was a financial crisis and migrate three crisis so
:02:04. > :02:08.we need to show that the EU is ready to react and after all, the
:02:09. > :02:14.declaration we adopted in Rome in March this year is already the first
:02:15. > :02:19.political reaction of the 27 leaders after Brexit. But by now, we must
:02:20. > :02:25.implement the political commitment. Part of that reaction, is it showing
:02:26. > :02:33.that leaving the EU does not pay? I.e., some punitive punishment to
:02:34. > :02:36.the UK. I don't think we need to further punish the Brits. I think
:02:37. > :02:44.already the decision which is going to be very risky for UK. We don't
:02:45. > :02:50.have to approach the negotiation with any punitive intention.
:02:51. > :02:56.Certainly, the negotiation is going to be very complicated and
:02:57. > :03:03.certainly, there is less talk about leaving the EU after Brexit. The
:03:04. > :03:09.paradox, on the contrary, we were afraid that it would have a domino
:03:10. > :03:18.effect after Brexit decision. Next Francis and Italy, so on. In public
:03:19. > :03:27.opinion, there is a stronger uncertainty. What is next? What
:03:28. > :03:33.shall the Britons do now? It was clear after the 23rd of June last
:03:34. > :03:42.year, it is helping to make people better think twice about leaving the
:03:43. > :03:48.union. Now, the tide is not leaving the union. What about all the people
:03:49. > :03:52.planning to vote for Marine Le Pen who is likely to get through to the
:03:53. > :03:56.run-off of the second round of the French elections coming up? Another
:03:57. > :04:03.very difficult question. I hope, I strongly hope that Marine Le Pen
:04:04. > :04:08.will lose. You said if she wins, it's the end of the European Union.
:04:09. > :04:12.I did say that. It is the attitude and programme of Marine Le Pen, to
:04:13. > :04:16.get out of the eurozone and to get out of the European Union. To get
:04:17. > :04:23.out of Nato. If I understand well what she said. This certainly would
:04:24. > :04:27.be a major disaster. I cannot -- imagine the EU without France. So we
:04:28. > :04:37.can survive without the UK but not France. Yes. What about Italy? Of
:04:38. > :04:40.course, Italy, most polls would suggest that Italians are happy with
:04:41. > :04:46.the European Union but they are not happy with the euro. Think they are
:04:47. > :04:50.still satisfied with the European joints. I think this is more
:04:51. > :04:53.rational than emotional in the sense that people are aware that the
:04:54. > :04:57.European choice is still a good choice for Italy. People are not
:04:58. > :05:07.satisfied with the function of the eurozone that this is not a problem
:05:08. > :05:11.with public opinion. We, as the Italian government, feel that the
:05:12. > :05:16.austerity approach, the economic approach, the existing rules that
:05:17. > :05:20.are implemented in the eurozone, are not the best rule to tackle the
:05:21. > :05:26.current economic challenge we have in Europe and Italy. We need a new
:05:27. > :05:30.investment policy. We need to post internal and domestic demand --
:05:31. > :05:37.boost. Winnie to boost growth and we need to shift from a set of obsolete
:05:38. > :05:41.rules -- but we need. To a new policy mix in terms of economic
:05:42. > :05:47.investment. This is what we want to do. Before we look at what you are
:05:48. > :05:56.proposing as the solution, in terms of the scale of the problem, we talk
:05:57. > :06:02.about Brexit and France, the Economy said, quoting officials in Brussels,
:06:03. > :06:10.if you ask them what keeps them up at night, the answer is always the
:06:11. > :06:16.same, Italy. Well, honestly, I wouldn't waste my night thinking
:06:17. > :06:23.about Italy. Italy is a country that finally has come back to recovery
:06:24. > :06:30.after years of recession. When debt government took office, -- when the
:06:31. > :06:36.government, today we got a growth of plus 1%. It's not enough. Are
:06:37. > :06:41.projected to be the slowest of this year, barely grown in three years.
:06:42. > :06:50.The reason why is that Italy has wasted time in not addressing
:06:51. > :06:58.reforms. There is still work to be done. The second is that the country
:06:59. > :07:06.that suffers the most in public and private investment is Italy. This is
:07:07. > :07:14.why we do believe that it is not enough. We want to keep our public
:07:15. > :07:23.debt under control. And we expect public debt is a high percentage. We
:07:24. > :07:31.had an irresponsible Italian government. I was there, I remember.
:07:32. > :07:43.We have reduced the deficit but we cannot reduced the deficit. There
:07:44. > :07:48.has been very little growth in that Italian economy. You have a huge
:07:49. > :07:54.problem, yes, of public debt, and of your banks which are in serious
:07:55. > :07:59.trouble. 290 billion pounds of bad loans, a fifth of the loans that
:08:00. > :08:05.Italian banks hold are bad and that works out to about a third of bad
:08:06. > :08:09.loans in the EU. Part of the reason that everybody else is looking to
:08:10. > :08:15.Italy, thinking, there is a very big problem with the Italian banks.
:08:16. > :08:21.Watch you said confirmed one things and brings me to emphasise and
:08:22. > :08:24.other. It confirmed that if there is a problem of bad loans in Italy
:08:25. > :08:30.because in other banking systems around Europe, you still have a
:08:31. > :08:37.problem. In Italy, you don't have a problem with their vets, you have a
:08:38. > :08:42.problem with bad loans. Why? Because the growth has been too low. But
:08:43. > :08:46.also because you didn't deal, Italy didn't deal with the problems in the
:08:47. > :08:50.banks when other countries did and now that or has close. Jelena that
:08:51. > :08:56.is totally correct. I think that was a very serious mistake -- that is
:08:57. > :09:01.very correct. It was a serious mistake by previous governments to
:09:02. > :09:06.not do what other governments have done, to inject fresh money... So
:09:07. > :09:10.what needs to be done now question mark the longer you leave it, the
:09:11. > :09:16.bigger the problem becomes. The reason it is a systemic problem...
:09:17. > :09:22.There is no systemic problem... We are talking about six banks of which
:09:23. > :09:30.one is national. The other are very local, territorial, banks. I rule
:09:31. > :09:35.out the existence of a systemic problem with the Italian banks.
:09:36. > :09:41.Certainly, there are some specific issues... So no need for the EU to
:09:42. > :09:46.modify its rules because you all know that Matteo Renzi, your party
:09:47. > :09:51.leader and former Prime Minister, he asked the EU to suspend state aid
:09:52. > :09:57.rules to allow a recapitalisation and Angela Merkel basically said no.
:09:58. > :10:03.Well, she wasn't supposed to say yes or no because it is not the German
:10:04. > :10:07.government who decides this. She made the point, we wrote the rules
:10:08. > :10:13.for the credit system, we can't change them after two years. We
:10:14. > :10:20.should evaluate and as I say, it is whether there are rules on this
:10:21. > :10:24.banking recovery, have been really implemented in the rest of the
:10:25. > :10:28.union. If you look, the only case where there have been really fully
:10:29. > :10:36.implemented has been in the case of Cyprus. In the other cases, there
:10:37. > :10:43.hasn't been a full implementation of this rule. If everybody is trying to
:10:44. > :10:47.adapt, to add just, common rules to the specific situation, probably it
:10:48. > :10:52.is because the common rules are not so efficient. So what are you
:10:53. > :10:58.saying? Are you saying to ignore the rules? I am saying is we are playing
:10:59. > :11:03.by the rules on public debt... But nobody else is playing by the rules.
:11:04. > :11:08.Well, on public debt and deficit, front and Germany didn't play by the
:11:09. > :11:13.rules. We are. We are saying that as long as the rules are there, we must
:11:14. > :11:19.respect them but that doesn't prevent us to raise a problem with
:11:20. > :11:22.the existing rules and there is a problem with existing rules on the
:11:23. > :11:26.fiscal economy but in some rules in the banking sector, there are
:11:27. > :11:31.problems. Those rules are not fit any more for the needs of the
:11:32. > :11:35.eurozone economy and banks. I want to stay with a particular problem
:11:36. > :11:41.that Italy presents to the EU at the moment because the Financial Times
:11:42. > :11:45.European economic economist says, "If Italy wants to stay in the euro,
:11:46. > :11:48.it needs to send a clear warning to Germany and the other northern
:11:49. > :11:53.European countries that the eurozone is set on a part -- path of self
:11:54. > :11:57.destruction unless there is a change of parameters". He makes the point
:11:58. > :12:01.that you could be in a situation that Italy's withdrawal from the
:12:02. > :12:06.euro would make the biggest default of history because of its eyes of
:12:07. > :12:11.the Italian economy. I hardly can imagine a eurozone without Italy. --
:12:12. > :12:16.because of the size of the Italian economy. With that, I share with
:12:17. > :12:24.what Angela Merkel wrote but I think it is clear that the eurozone must
:12:25. > :12:30.be completed, it is the words of the European Union. We have several
:12:31. > :12:39.times in the last month, lastly with do roam speculation on the 25th of
:12:40. > :12:44.March -- Rome. We say yes, we must completed and better shape it. There
:12:45. > :12:49.has to be an election in Italy before the end of early 2018 and who
:12:50. > :12:53.is topping the polls? Topping the polls at the moment is the five Star
:12:54. > :13:02.Movement who want a referendum on Italy's membership of the euro.
:13:03. > :13:08.Well, it is folly. Can you imagine a month of a referendum campaign on
:13:09. > :13:13.whether Italy should remain or get out of the eurozone? This means that
:13:14. > :13:19.they are totally unfit to rule the country and it showing they are
:13:20. > :13:27.totally unfit to rule from the capital of Italy, Rome, where the
:13:28. > :13:34.disaster of the 5-star campaign is totally wrong. It is clear that this
:13:35. > :13:38.must be avoided. It depends on us. It depends on how effective we are
:13:39. > :13:45.with our government and how convincing and persuasive we would
:13:46. > :13:52.be in the general election. I wouldn't look at the opinion polls.
:13:53. > :14:02.At the moment, it's too soon. Instead of bringing the debate to
:14:03. > :14:09.this, I mean, in a way it is better to open a debate to strengthen the
:14:10. > :14:17.eurozone. It is not only the Italian problem. The fact that the eurozone
:14:18. > :14:23.rules are not adequate to tackle today's challenge is a something...
:14:24. > :14:29.The difficulty with those rules as they have worked with everybody
:14:30. > :14:34.else. The situation with Italy is a recent one and it isn't an ancient
:14:35. > :14:38.one. Since Italy joined the euro in 1989, real income per head has gone
:14:39. > :14:42.down, it is lower than it was then. I am not sure it didn't work for
:14:43. > :14:45.everybody. I think that they have been... I have worked well for one
:14:46. > :14:48.country, one big country at the centre of Europe. For all the other
:14:49. > :14:52.countries, they haven't been proved to be effective. Otherwise you
:14:53. > :14:56.wouldn't have a problem of unemployment. You wouldn't have the
:14:57. > :15:01.rise of populism. You wouldn't have an issue of economic problems in
:15:02. > :15:06.Europe. So the rules of today have only worked for Germany? They have
:15:07. > :15:11.been very favourable to Germany. Now they are changing. We must push,
:15:12. > :15:16.further push this change, because it is clear that we need to have a more
:15:17. > :15:20.balanced approach. Why haven't they changed until now, if it is only in
:15:21. > :15:23.the interests of one country? Probably because nobody has the
:15:24. > :15:27.courage and the strength to run this issue. We thought that it was high
:15:28. > :15:31.time. Also for the reason you mentioned, to open a debate on how
:15:32. > :15:36.the eurozone functions, and how the eurozone should function, and we
:15:37. > :15:45.think that there are many reforms to introduce. And what you said about
:15:46. > :15:49.the... I mean, the difficulties is Italy since 1999, I agree. And this
:15:50. > :15:55.has been the golden thread of our action since 2013. We have said we
:15:56. > :16:00.have wasted too much time, and we must carry out reforms not because
:16:01. > :16:04.we are a member of the European Union, not because we are a member
:16:05. > :16:08.of the eurozone. We must carry out reform because it is an eye on
:16:09. > :16:11.national interest. Because it is in the interest of the Italian people.
:16:12. > :16:15.And even if tomorrow we decided to trigger Article 50, and to get out
:16:16. > :16:19.of the union, we would, however, need to implement these reforms.
:16:20. > :16:23.Well, let's turn to something else where I know that Italy feels that
:16:24. > :16:26.it has carried an unfair share of the burden, which is the number of
:16:27. > :16:30.people arriving on Europe's shores. There have been 500,000 over the
:16:31. > :16:37.last three years, and there has been an increasing number in 2016. And
:16:38. > :16:40.some have suggested, a senior EU official has suggested, that
:16:41. > :16:47.actually it is the very mission to pick people out of the water that
:16:48. > :16:51.has led to more coming over. Do you think that is true? I think that
:16:52. > :16:58.Italy has been alone in saving the European dignity for too much time
:16:59. > :17:07.in the Mediterranean. Because until 2016, Italy was the only one that
:17:08. > :17:11.was searching and rescuing human beings in the Mediterranean. And I
:17:12. > :17:16.think that we should put the life of women, children, families who flee
:17:17. > :17:22.from the Islamic State, Isis, before, first and foremost. Now,
:17:23. > :17:26.finally the Mediterranean has become an issue of common interest, and it
:17:27. > :17:29.has been thanks to our action. Now finally we consider Libya not an
:17:30. > :17:34.ancient legacy of Italian history, but a common problem. A European
:17:35. > :17:39.international problem. And it is clear that we must do more together.
:17:40. > :17:44.As the European Union, and in the future I hope it will be OK to
:17:45. > :17:47.tackle the root causes of the migratory flows, to work with the
:17:48. > :17:51.country of origin, to stabilise Libya. Because it is clear that the
:17:52. > :17:55.central route through the Mediterranean is a problem for all
:17:56. > :17:58.of us, and we should be much more effective and more united in
:17:59. > :18:04.managing this problem. But I have to say, that if I have to compare the
:18:05. > :18:10.situation of mid April 2015, when 700 people died in the
:18:11. > :18:14.Mediterranean, and they had to convene the first extraordinary
:18:15. > :18:18.European summit on migration, and the European summit on the third of
:18:19. > :18:22.February this year, a lot of things have improved. But there are still
:18:23. > :18:29.many things to be done together. Notably in working in a new
:18:30. > :18:33.partnership relation with the country of origin. Because you want
:18:34. > :18:37.more countries to take some of those that Italy is taking in. It has not
:18:38. > :18:42.yet granted asylum, because you have actually grown asylum to a tiny
:18:43. > :18:46.number. We have to work more together in relation to Europe. We
:18:47. > :18:51.have to share the burden, because in the union, and in the continent, and
:18:52. > :18:55.in the Schengen area, we have something which is extraordinary. We
:18:56. > :19:00.have freedom. We have freedom to move, freedom to circulate. We don't
:19:01. > :19:04.have internal frontiers in the Schengen area. If we want to keep
:19:05. > :19:07.this, into something which is the biggest outcome of the European
:19:08. > :19:15.Union for our citizens, we certainly must work on the external border,
:19:16. > :19:19.and we must revise rules on asylum, which were conceived during the
:19:20. > :19:24.Balkan war. How can we imagine the truths which were conceived two
:19:25. > :19:29.decades ago, in another century, for another crisis, it can be effective
:19:30. > :19:34.when the reason you state, going around the war, which is composed of
:19:35. > :19:38.50 million asylum seekers, are called on the UN statistics. Your
:19:39. > :19:44.government is now building detention centres, something that under Renzi
:19:45. > :19:50.it refused to do on humanitarian grounds. No, it never refuse to do
:19:51. > :19:56.on humanitarian grounds. They have built 16. Yes, because we also say
:19:57. > :20:01.that we must work and be more effective as Italians and Europeans,
:20:02. > :20:06.also on return policies. And we have said it is not only... We have been
:20:07. > :20:08.negotiating for months with the European Commission on the so-called
:20:09. > :20:13.hotspot, it identified the potential asylum seekers, but we have also
:20:14. > :20:18.said this is only a part of the issue. The other side of the
:20:19. > :20:22.problem... A representative of the northern league, the right-wing
:20:23. > :20:26.northern league, were the league and I are not made out to be racists
:20:27. > :20:30.inventing fears when we were calling for these centres, and suddenly, as
:20:31. > :20:35.he says, I thought everything was under control and there was a change
:20:36. > :20:39.of policy. If it was right then, why has it changed? He pretends to
:20:40. > :20:43.understand, he understands perfectly but he pretends not to understand.
:20:44. > :20:47.We need to do much more on the return policy. So it was a mistake
:20:48. > :20:51.not to do it? We must be more effective on the return policy,
:20:52. > :20:55.because we want the policy to become an EU issue. You coined the phrase
:20:56. > :20:59.the Erasmus generation, which was the idea of politicians like
:21:00. > :21:05.yourself who were pro-European, outward looking. It is a past tense
:21:06. > :21:08.that use it towards me. Which brings me to my question. Because many
:21:09. > :21:13.people will say it was your generation that benefited from
:21:14. > :21:20.arguably the best of the EU. Now you look at the polls, you look at the
:21:21. > :21:23.generation who are supporting Le Pen, for example, who are very
:21:24. > :21:29.young, it is the youth who are unemployed, who feel betrayed by
:21:30. > :21:33.much of what the EU has done. Is that a picture that you recognise? I
:21:34. > :21:37.think that when I was 20 years old I got a lot from Europe. Now that I am
:21:38. > :21:41.in a governmental position I feel the duty to give back something to
:21:42. > :21:47.Europe of what Europe has given to me. And this is why I am so
:21:48. > :21:51.committed in tribute into a better European Union. We should never
:21:52. > :21:54.forget that in a little bit more than 40 years the continent has
:21:55. > :21:59.shifted from the Auschwitz generation to the Erasmus
:22:00. > :22:05.generation. This is what Europe has meant for Europeans. This democratic
:22:06. > :22:11.revolution that was mentioned. Why today are so many young generation,
:22:12. > :22:16.many youngsters, who are against the European Union? Because they didn't
:22:17. > :22:21.find the union where they expected to find the union. They didn't find
:22:22. > :22:25.the union promoting... Because they don't have jobs. Exactly, they
:22:26. > :22:29.didn't find a union developing new social policies to create jobs. Your
:22:30. > :22:34.argument to them as more integration, more union? Might
:22:35. > :22:40.answer is a better economic policy, to boost growth, to create jobs, and
:22:41. > :22:44.I don't believe that going back to the national borders, going back to
:22:45. > :22:48.nationalism, can be a solution for these young people who do not have a
:22:49. > :22:54.job, and they are probably much more qualified than we used to be when we
:22:55. > :22:59.were 20 years old. And those policies have been devised in the
:23:00. > :23:02.institutions of the EU, in Brussels, are they? Well, it is clear that we
:23:03. > :23:06.need to shake the Brussels institutions. I owe a lot of respect
:23:07. > :23:09.to the European Commission, are you work in the European Commission, I
:23:10. > :23:14.work in European Parliament, but they have lost touch with reality.
:23:15. > :23:18.In the last eight years, they lost touch with the increasing social
:23:19. > :23:24.inequalities. And if you want to tackle this, national policies,
:23:25. > :23:30.local policies, are not enough. We must do more and better also as the
:23:31. > :23:34.European Union. Otherwise we will have lost the battle. Because if you
:23:35. > :23:37.have lost the battle of the young generation, you will lose the
:23:38. > :23:41.battle. Because Europe was always meant to be a project for the young
:23:42. > :23:50.generations. Is the EU losing the battle at the moment? We must
:23:51. > :23:57.prevent it from losing. Until 2013, it took a very bad direction. Now we
:23:58. > :24:02.must correct and redress the direction it has taken. We must save
:24:03. > :24:06.Europe from those who want to destroy Europe. But we must save
:24:07. > :24:13.Europe also from the mistakes Europe made. And there are many mistakes,
:24:14. > :24:18.and they need to be corrected. Sandro Gozi, thank you for coming on