Positive about the future of Europe; negative about the prospect of a Brexit, and a Trump-led America, Jose Manuel Barroso was fighting fit, in the vein of EuroFinance’s conference theme. Anna Milne caught up with him afterwards for exclusive comment
Jose Manuel Barroso served two terms as president of the European Commission between 2004 and 2014, before which he was the Prime Minister of Portugal. At the beginning of 2015 he took up a post as visiting professor at Princeton university’s Woodrow Wilson School of Public and International Affairs.
AM: Can you give your view on the prospect of a Brexit?
JMB: I think it would be very negative for Europe if the UK leaves- it would be a disaster for Europe. Having a referendum is always risky. (Many people are not 100% either way) but a referendum only offers yes or no and frankly I do not know what the result would be – (the refugee crisis will probably play into it). I have a fundamental trust in the British people, in their wisdom, and they will not vote against their interests. The pragmatic side is in favour of staying. However, even if it did happen, it wouldn’t be the end of the European Union. Twenty-five percent of global economic output is European.
AM: You mentioned Europe needs migrants but how do you convince people of this?
JMB: It’s a question of leadership- leaders need to explain the situation. Chancellor Merkel has done it in a very enlightened and courageous way. At the same time we have to make the economic case. Europe, demographically, needs more people and more young people, in terms of our social security systems’ sustainability over the long term. It’s quite clear. We need more input from the labour factor also to increase our global output. People are concerned because of cultural differences. That’s why I think the governments of Europe should agree, not only on emergency measures to integrate the refugees that are now coming, but also on having a comprehensive plan for training people to teach them the languages of Europe, to have apprenticeships, to have training systems, many of those people coming from Syria have a relatively high level of education so they can absolutely, after some time, make a very important contribution to our economies. That requires leadership; it requires pedagogy; people explaining things and of course also making the moral case. As I said earlier, if I was living in Syria, if my town was destroyed, I would do everything I could to reach Europe. So if we put ourselves in the position of others, we understand the moral and humanitarian duty I think this argument also is strong. And we have seen in some countries in Europe people demonstrating, younger people mainly, for a more generous policy regarding the refugees.
AM: Could you expand a bit on your comments about a European banking union?
JMB: We made a point that to avoid a negative impact of the financial crisis, we need a banking union- a full Eurozone common rules of supervision, of resolution; of guarantees; to have as much as possible a level playing field for the banks in the Eurozone. And in fact we have made a lot of progress, in record time, the proposals put forward by the commission for the single supervisory mechanism, around the ECB and the European Banking Authority were in place. And so were the proposals regarding the common system of resolution. Now it was not yet possible to move the size of the EU on a common guarantee system. But we’ll have it because some countries, mainly Germany, have said they could not accept it before every country had created its own guarantee system. I understand that point. But basically I think that a banking union is important if you have a common currency because you have to be sure that there is a level playing field between the different banking systems across the countries that share the same currency.
AM: But there’s been pushback?
JMB: Compared with the situation before we’ve had push-forward not pushback; we now have the element of banking unity we did not have before. If you had asked most people in Europe before the financial crisis whether, if there was a common supervisory system- they believe the European Central Bank would be able to make direct supervision of national banks, people would say you were dreaming, it would never be possible. Now it is possible. Of course it was not as advanced as we wanted. We, I mean the European Commission, had some resistance but we are much more integrated from that point of view now than before the crisis.
Zanny Minton Beddoes, editor in chief of the Eonomist, on stage with Barroso, argued it was unrealistic to hold such a positive view amid the European debt crisis, the migrant crisis and that she was "increasingly pessimistic" about the union’s capability to deal with the various crises.
AM: Will the refugee crisis serve to make the Union ties stronger or will it threaten the cohesion?
JMB: Before the euro crisis, it was unthinkable to have a banking union- the first time I used the word banking union, two colleagues of mine, two prime ministers, said you cannot say that- this is not in the treaty. I said, ‘no, it’s not but to fulfil the goals of the treaty we need a banking union.’ And we do not yet have a complete banking union but we do have a single supervisory mandate, a single resolution mandate. It’s a question of time. Countries are benefiting so massively from European solidarity, they have to show some guarantees.
Zanny Minton Beddoes, editor in chief of the Economist, on stage with Barroso, had argued it was unrealistic to hold such a positive view amid the European debt crisis, the migrant crisis and that she was "increasingly pessimistic" about the union’s capability to deal with the various crises, to which Barroso replied:
"I’d be more worried about other parts of the world than Europe; against many predictions, Greece didn’t leave, the Eurozone didn’t crumble as per some predictions; membership has almost doubled in all these years of crisis; there is sustainable growth here; it is safer to invest here than in many other places in the world. The bailout countries are growing above average, eg Ireland. Spain is close to 2%."
Reiterating Angela Merkel’s leadership on the refugee crisis, JMB emphasised the fact that "Britain has put itself on the periphery; Germany is at the centre of the union".
ZMB: How about the impact on Europe if you have to deal with Donald Trump as president of the USA?
JMB: (Long awkward pause….) I teach at Princeton, I love the United States as a country… (even longer, more awkward pause …)
"I hope it will not happen and I fundamentally trust the wisdom of the American people."