An interview with Prime Minister Lawrence Gonzi

Is Europe in a crisis? Has an earthquake hit Europe?

No, I do not think this is a crisis. It is more of a crossroad, although it has been long in coming. It is also an odd sequence of events because the Constitutional Treaty is the result of a full consultation process, not just of the 15 ‘old’ member States but of the full 25 even before the most recent enlargement. The Convention also involved consultations with the representatives of civil society which discussed the functioning of the EU following enlargement. The Treaty is supported by all the 25 governments but not, as recent popular votes seem to suggest, by those citizens who had the opportunity to express themselves in the referenda of France and The Netherlands.

It shows the EU is not as yet communicating well with its citizens. It would seem that the European political project is not being accepted by all Europeans.

There are many reasons for the recent negative outcomes of the referenda: the economic situation, and the real situation of citizens on the ground. At the same time it is obvious that the EU requires an organisational set-up and modus operandi to be able to function effectively within an enlarged context.

This is not a crisis. It is a good project which has not been explained well enough to the citizens and which has, so far, not been accepted by all. This is now the next big issue and during this week’s summit we will surely discuss this situation and find a way how to reinvigorate Europe. What we are experiencing is a moment of reflection, not a crisis situation! The EU has been there and done that before: there were other instances… both the Maastricht and the Nice Treaty were rejected by the citizens of some member States. The political project underlying it, however, was not abandoned: on the contrary, it was brought to fruition.

All this is also taking place against the backdrop of forthcoming national elections in some countries, so the situation becomes more intricate and complex. Yet I am still optimistic that a solution will be found. I do not believe that the countries which voted No are saying No the EU project. Their No was specific to certain aspects of the Treaty, but not the EU as such.

Will the EU leaders choose to continue the ratification process and then take stock at the end, as Giuliano Amato has suggested? Or do you think that the Summit will stop the process fearing a domino effect? Do you think enough reflection has been made and that the time is ripe for a decision?

The worst thing that can happen is to stop the process. Maybe some countries will decide to lengthen the process, but to completely stop the process is not in Europe’s best interests and I do not think the Summit will walk down this lane. Let’s wait and see! The actual process foresaw the possibility that a number of countries might not ratify the Treaty. Article 30, which was inserted in the Treaty with this predicament in mind, established a proper mechanism which applies in this eventuality. That is why I am saying that the negative outcome of the referenda in France and The Netherlands should not stop and block the decision of other countries.

Will the EU apply the brakes to enlargement and unification as a result of these two NO votes?

No. On the contrary, enlargement has now taken place and more countries will be joining in the future. In no way should enlargement be influenced by these votes: enlargement must go on because it is in Europe’s best interest, economically, politically and socially. The expansion of the EU to Turkey and the Balkans is of direct interest to us in Malta as it will help stability in our region even more.

Nor should the process of unification, especially economic integration, be stopped. It would be a big mistake if this were to happen. Economic integration has been and still is a key ingredient of the EU’s success.

Has the French vote placed France on a course which goes against the modern world, economic liberalisation and growth?

One must be prudent when interpreting the French vote. My reading is that there were a whole range of reasons driving the No vote, for example, the argument about Polish plumbers entering the country and taking the jobs of French plumbers at a time of high unemployment.

I believe the reasons behind the French vote were economic, rather than political. The French are founding members of the EU and the EU project is an integral part of the French psyche. There has been nothing to indicate that the French have changed their minds at this level.

As for the Dutch No vote, this too was also influenced by the economic situation. I tend not to believe that the Dutch or the French have turned against the EU as a project.

Malta has joined the UK, Poland, Slovakia and Cyprus against the working time directive. Does that put Malta firmly in the New Europe as against the Old Europe, or in what is derogatively called in France the Anglo-Saxon ultra-

liberal group?

Malta took a position on the working time directive because we believe that a balance needs to be struck between the protection of health and safety concerns and the right of individuals to take decisions regarding their way of working. There are also particular circumstances and specificities of the Maltese economy where important sectors depend on seasonality.

Malta’s position was motivated by these reasons, and not in support of a particular group in the EU.

Can this crisis lead to the demise of the euro or will a number of member States revert to the national currency as Italy’s Northern League is saying?

No. Only one minister in the Italian government, Roberto Maroni, has said so and got quite a quick reply from fellow minister, Giovannni Siniscalco who told him that switching back to the Italian lira would incur economic costs ranging from e60 to e80 billion. Reverting to the national currency is thus impossible.. In this context I share Jean-Claude Trichet’s (ECB President) statement that such a theory is absurd.

Does the electoral process in so many countries, notably Italy,

Germany and France itself, have an important bearing on the summit’s decisions? Could victories by the CDU in Germany and by Sarkozy in France hasten the way for Europe to accept a free-market solution? Could a core group of like-minded nations, open to eventual membership by France and Germany after electoral changes, be the solution to this crisis?

Political realism is very important. The coming elections will undoubtedly have an impact. Ultimately, however, it is economic success that will have the greatest bearing, and the EU is a story of economic success.

Nobody can escape this reality. It is only economic growth that will help the EU be an ongoing successful project.

Do you think the European Council will choose the way of the French No in favour of a more social Europe, and therefore less liberalisation (against the services directive, or financial services liberalisation) and more protectionism? Or will it go more in the direction of Anglo-Saxon capitalism, more growth, market-led flexibility, more economic reform?

We were already presented with this dilemma at the mid-term review of the Lisbon agenda. During the meeting of the Heads of State we had a real debate between those who defended the social model and others who urged robust economic growth. A balance must be found between the European social model, which is the EU’s bulwark – and which distinguishes the EU from the US and Asia – and responding to the global economic realities and the impact of Asian economies.

I think that as happened in the case of the discussion on the Lisbon agenda, the European social model and the EU economic policy guidelines must be fine-tuned and harmonised to achieve better goals.

This balance is a very difficult issue to establish. The European model must have enough ingrained flexibility to enable faster economic growth and responsiveness.

I remember that in the first summit I attended, UK Prime Minister Tony Blair emphasised the need for the simplification of the EU regulations to enable a level playing field and to enable entrepreneurs to stimulate growth. My hunch is that this could now be one of the objectives of the UK presidency: to prune regulations so as to catalyse entrepreneurial spirit while retaining a solid social policy.

The financial perspectives issue will also play a significant role, I believe. I would not be surprised that the present situation will lead to an 11th hour unexpected solution on the financial perspectives.

The latest news, following my discussion with Council President Jean Claude Juncker last week, is that there are still strong differences, but I think that the events of the past days may make it possible to reach an agreement which will also be very much to Malta’s benefit.

A strong positive message needs to emerge from the Summit and an agreement on the financial perspectives can make Europe’s day!