NEWS Release - Interview of Benoît Cœuré, Member of the Executive Board of the ECB,
conducted by Marie Charrel on 27 June 2016, and published on 1 July 2016
Does the victory for Brexit in the referendum of 23 June put the European project at risk?
No, I do not think so. The British vote raises questions for Europe, of course, but first of all let’s read it for what it is – a decision of the British people. It’s up to them to be the first to draw lessons from it, and that will take time.
But Brexit highlights the dysfunctioning of the European Union. How can it be put right?
Let us be realistic: the urgent thing today is to clarify the timing and the method, as prolonged uncertainty would have an economic cost first of all for the United Kingdom but also for the European Union.
It’s also vital that responses are guided by the collective interest of Europe and not by national or sectoral interests. For example, knowing who would benefit from any relocation of British financial activities is not for me the most burning issue.
We shouldn’t overly chastise ourselves either. Europe is an extraordinary political construct which has brought peace and prosperity to a continent which has known division, war and poverty. Its raison d’être has evolved but it remains more necessary than ever. It has become a tool for managing globalisation through the implementation of common rules that protect employees and consumers. Is this protection imperfect? Let’s discuss it and reinforce it. But we won’t achieve this by rejecting Europe. Without Europe, a country such as France would find itself alone and without weapons in the face of ruthless global markets.
But concretely, what message could give renewed confidence to Europeans won over by eurosceptic movements?
There’s no shortage of long-term projects for Europe. I can’t imagine the future of monetary union without a more complete banking union and elements of fiscal union. But things have to be done in the right order. Let’s start by reconciling people with Europe by taking concrete initiatives that create growth and jobs. The Juncker plan, which invests in European projects, is one such initiative. Others are necessary. The ECB, in its field, is also contributing, for its monetary policy is one of the main factors in the current recovery.
The other priority is to restore confidence between European countries. Today each country doubts its neighbour’s ability to reform its economy and willingness to move forward together. Which country would want to share its budget with another one that is permanently testing the limits of common rules and is proud of doing so? Governments are continually adopting new rules while claiming they are exempt from them. We cannot move forward under these conditions. Once confidence returns, it will be time to integrate further.
What form should this stronger integration take?
Some issues are essential but do not fall within the remit of the ECB: such as defence, security, border control or climate change. Within a Union of 27 countries, different configurations are possible, but that mustn’t be done at the expense of the single currency! The euro is a reality and it must be protected. That assumes going further towards integration in financial and fiscal matters, centred on common euro area institutions accountable to the people. Without this, our capacity to react to new crises will be limited and once again it will be the most vulnerable and the youngest who stand to lose. The experience of the crisis has convinced me that an intergovernmental Europe, where fiscal and financial decisions are taken by governments alone would condemn the euro to long-term fragility. The Greek crisis has shown the limits of such a process: the decisions are too slow and incur a high cost for everyone.
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