Europe Needs to Wake Up

Published on SPIEGEL Online International, Interview with Gerhard Schröder, September 5, 2011.

SPIEGEL: Mr. Schröder, is the euro in mortal danger?

  • Schröder: No. If you look at the external value of the euro in relation to the dollar, we were once at 82 cents and are now at 1.40. The euro is not in danger. What is missing is a political concept.

SPIEGEL: But something is going fundamentally wrong with the euro at the moment. 

  • Schröder: (Former French President Francois) Mitterand and (former German Chancellor Helmut) Kohl were pursuing two basic ideas in creating the euro. Mitterand wanted to contain Germany’s economic power within Europe by means of a common currency. That couldn’t work. If you create a common currency, the stronger economy will prevail. Kohl’s mistake was to assume that the common currency would inevitably lead to political union. And the crisis we are currently experiencing makes it abundantly clear that you can’t have a common currency without a common fiscal, economic and social policy.

SPIEGEL: You said the same thing before you became chancellor, and then you didn’t pursue it.

  • Schröder: Europe is a very tough nut to crack. Everyone who has ever done it knows this. That’s why I am also hesitant to criticize administrations now in power. I admit that I would like to have achieved more than I did. When I was in office, I would have liked to bring the European constitutional process to a satisfactory conclusion. But it didn’t fail because of us.

SPIEGEL: Helmut Kohl blames you for the crisis, arguing that you were too quick to accept Greece into the euro zone. Does that mean that you are to blame for the euro debacle?

  • Schröder: Anyone who considers the issue fairly knows that this isn’t true. At the time, it was the European Commission that felt that the conditions had been met. All the relevant groups in the European Parliament agreed to Greece’s acceptance into the euro zone, as did the (center-right Christian Democratic Union) CDU and the (pro-business Free Democratic Party) FDP. Only the (conservative Christian Social Union) CSU was opposed … //

… SPIEGEL: The experience made over the years in Europe is that many agreements are made, only to be broken when necessary. Why should anyone believe that this would ever change?

  • Schröder: The weakness of Maastricht and the Stability and Growth Pact was the lack of political control. Merkel and Sarkozy are now taking steps to correct this. But when taken to its logical conclusion, this mean that countries will have to give up some of their national sovereignty.

SPIEGEL: How exactly?

  • Schröder: The Commission or a European finance minister will have to retain the right of initiative, but the control mechanisms will have to be democratized. National parliaments cannot be expected to accept a loss of sovereignty on budgetary matters without parliamentary control mechanisms being implemented elsewhere. The decisions reached by the national parliaments must end up in the European Parliament, as the ultimate authority. A possible approach would be for the parliament to form a special committee, which would consist of the members of the euro zone and assume this control function. The transfer of such parliamentary rights to any expert committees would pose a serious risk, because it would be associated with the curtailment of democracy.

SPIEGEL: Would you entrust the European Parliament to perform this task?

  • Schröder: Yes, of course. This sort of parliamentary control mechanism is needed, and if the crisis results in the problems we have discussed being corrected, there is a good side to the crisis. (full long interview text).

Comments are closed.