VIDEO. EXCLUSIVE INTERVIEW with Mr. Carlos Westendorp, secretary general Club of Madrid: Those who created the crisis, are now the beneficiaries of it. The only solution is a real European integration
Carlos Westendorp, secretary general of Club de Madrid, present at the VI Astana Economic Forum, offered an exclusive interview to CaleaEuropeana.ro, in which he talks about the economic crisis and the ways to get past it.
Calea Europeana: We are here, at the Astana Economic Forum, a very important meeting at an economic and political level. So last year, you held a presentation regarding the opportunities and challenges of economic integration, What has changed since? What is the situation now?
Carlos Westendorp: Economic integration is necessary because all the challenges are suffering are global and the only answer to these global challenges is by global responses. There are very few organisations that respond globally to these challenges. Second best is Regional Integration Schemes. (…) Referring to Europe, the Europe’s problem with the crisis was that the integration was monetary only, but not economic. And it may work in times of economic development, in times of economic boom, but whenever there is a crisis like the one we’re in, then there is no collective response, it has to be more integration in the economic field.
Calea Europeana: You used to be principle advisor to Felipe Gonzales, Chairman of the Reflection Group established by the EU Heads of State and Government to assist the European Union to anticipate and meet the challenges facing in the period 2020 to 2030. In the mean time, we had almost a failure, with Lisbon Strategy, now we have Europe 2020 strategy. Europe is now facing difficult challenges in this period, is this a reason to rethink it, to reconfigurate it?
Carlos Westendorp: The strategy is very valid. In the report in 2010, many fields were identified as critical, the immigrations, we have to take into account the fact that our societies are getting older, so the problem of retirement, pensions is going to become a serious problem in 2030, there are energetic problems – countries that are oil producing, but oil is not going to last forever, so we need to diversify the economy. Politically, the European Union, if they want to be of relevance in international affairs, now that center of gravity is shifting towards East, then EU must be united if it wants to be a credible actor in the international field. So there were many challenges, and the conclusion was “yes, we can”, we can we can go with these challenges if we integrate and do the things we have to do and some of these are in 2020 strategy, but the problem is now , we are in the middle of a crisis and the immediate thing is to get of this crisis.
Calea Europeana: Everybody is asking when are we going to get out of this crisis, but the question is how. Who is getting us out of the crisis?
Carlos Westendorp : I think nobody is going to get out of the crisis without putting their strength on it. Of course, there are countries in this world that are not in this crisis yet, but they may be. If there is no economic activity in the one of the most important actors in the world then the crisis will spread. So we have to get out of the crisis and we also need to support from other countries. The Chinese currency is devalued, so this is a problem additional to the one Europeans have. We need to do everything that we can.
Calea Europeana: You said earlier that “yes, we can”. It is a transatlantic slogan, President Obama’s actually. Do you think it could work for Europe?
Carlos Westendorp: Yes, we can do it, but we have a lot of work to do, it’s not going to happen as a miracle, we have to do our job very well. The problem is how can we get out of this crisis with this pressure to just austerity, just reducing cost, just reforming the labor market. The situation now is that so austerity is leading to a flat encephalogram, there is no economic activity, we have to intelligently combine austerity measures with stimulation measures.
Calea Europeana: As you probably know, Romania was one of the countries affected by the crisis and one of the first countries in Europe, 25% of the salaries. The model seems to spread all over Europe.
Carlos Westendorp: At first, the difference between east and west divisions was bigger, now the economic difference is less acute. The difference in coping with a problem of balance of your budget, is also very big because there are countries that are unbalanced. Now, what we all have to do, all of us , is to reduce the deficit, but we can not do it over night, we need time.
Calea Europeana: And people are paying the price.
Carlos Westendorp: The people are seeing that we are reducing our salaries, we are reducing our employment, while at the same time we are rescuing the banks. So, those who created the crisis, are now the beneficiaries of it. We are living in a very critical political and economic moment, we have to act quickly.
Calea Europeana: Now we are in the east, we are looking to Kazakhstan, Russia… also today, here is going to be a discussion regarding a solution that countries such mentioned before could offer to EU in order to get out of the crisis. Is this possible?
Carlos Westendorp: Unfortunately, no matter how much we would like that Russia and Kazakhstan to do that, it’s not going to happen. We have to work all together, each of us have different situations. Russia has very important and natural resources, like Kazakhstan, but the resources are not sufficient to create jobs, you need to diversify the economy, you can have all incomes come from oil, but oils isn’t going to last forever and oil production is not labor intensive so oil production covers something like 10- 12 % of the total work force. Diversifying the economy is the way in which this country’s reaching natural resources creates jobs. Immigration is an important factor for countries in the EU, it’s a global solution, we can not do it by ourselves.
Calea Europeana: Regarding the situation in Romania, we are for almost six years, a European member state, and in the few years before the crisis we felt the prosperity and the effects of entering the EU. Now, we are paying the costs because of the crisis. You have a very important experience, almost 25 years with Spain, inside the EU.
What is the main advice you would give to Romanian government, Romanian people? Some of them are running out of patience because there are less European funds, we have the lowest rate of absorbing funds in the EU. We didn’t use the money in the crisis like Poland and there is a pessimistic approach that Eurobarometer is revealing.
Carlos Westendorp: It is like that but not only in Romania, but also for the rest of Europe. The EU is becoming less and less popular because citizens believe that the main reason of this crisis is the lack of good action from EU, and it is not fair because the EU is doing what it can do, it is a very important instrument. Something is clear, we are not going to out of the crisis by ourselves, we need to do it all together; we have the euro for those who are in the euro-zone, it is a very important measure, but it is not enough, we need to go on further integration, but salvation is inside Europe, not outside Europe. I understand that Europe is losing support, but some guilt of this situation, mental attitude lies on the national governments complain, blame the Brussels. And it is not true, it does not mean that the European Union is doing what they could do, the problem is not from EU, but from Germany. it is the country that is benefiting from the present situation because they have the euro, a lower currency than the deutsche mark would have if they were different countries. And those paying are the rest of the Southern countries, Romania, Spain, Italy, Portugal throughout these austerity measures.
Calea Europeana: So we are paying the gasoline for the German engine
Carlos Westendorp: That’s right. Because we are buying their products, also. We are in an impossible situation. The only solution is a real European integration in the field of economic and fiscal integration.
Calea Europeana: Is it also a matter of credibility. People seem to be losing their interest and credibility in the European leaders.
Carlos Westendorp: In all leaders. Also in Spain, politicians are not well considered, they are losing support because there is a crisis and they do not see politicians responding their demands, not solving their problems. The citizens are living worse than they were living. The problem with Romania is that you came late, but countries that came before to the EU have benefited from the integration. In Spain, 10 years ago, the Eurobarometer for index popularity was very high, nowadays, they are very low. Why? Because of the crisis.
Calea Europeana: How long do you think this difficult situation will last in Europe?
Carlos Westendorp: I am not a prophet, but I know what I wish. And I wish that this would start recovering soon, I can not say how soon, it depends on many factors.
Calea Europeana: Can you give a message to all the people interested in European affairs, global affairs that are watching us?
Carlos Westendorp: I would say that in Europe is raining now, it’s not good weather, but we all should work together for the common good.
Club de Madrid is the Largest World Forum of the former chief of states and government.
About Carlos Westendorp y Cabeza: In 1999 he was elected Member of the European Parliament representing the PSOE. He served as Chairman of the Parliament’s Committee on Industry, Trade, Energy and Research until 2003. In 2003 he was elected Member of the Madrid Regional Assembly and Speaker on Economy of the Socialist Group.
He was co-founder and Executive Vice-President of the Toledo Center for Peace and is now member of its board. After the elections of 2004 he was appointed Ambassador to the United States of America, a position he occupied until 2008.
He is currently principal advisor to Felipe González, Chairman of the Reflection Group established by the EU Heads of State and Government to assist the European Union to anticipate and meet the challenges facing in the period 2020 to 2030.