Press Release - Interview with Peter Praet, Member of the Executive Board of the ECB, conducted by Sabine Seeger and published on 24 March 2017
Mr Praet, the European Union is celebrating its 60th anniversary on 25 March in Rome. After a brilliant start and major achievements, the Community is now in a crisis. Can it be overcome, do you think?
The people of the European Union (EU) have got so used to the benefits of open borders and the Single Market that they can no longer imagine what it was like before or what it would be like without it. They live in a stable world and are not always aware that it’s a great asset, and one that needs to be preserved.
What has to be done now?
We have to re-convince people that the EU market, with more than 500 million people, forms the basis for our prosperity. When we laid the foundation for it in 1992 with the Maastricht Treaty, the EU was a grouping of relatively homogeneous states. However, as a result of the enlargement, countries were integrated [into the EU] which had much lower income levels or much weaker social safety nets. This has led to distortions which we have to address.
Some examples?
There can be no doubt that trade and a larger market foster prosperity. But we should not overlook the fact that this progress does not benefit everyone to the same extent. This may lead to resentment. Such feelings cannot simply be brushed aside; people’s concerns have to be taken seriously. Moreover, the enlargement was linked to the expectation that the Community would continue to come together and that people’s circumstances would steadily improve. This has happened for many, but not for all. Also, the financial crisis which occurred at the start of the recession in 2009 has led to a crisis of credibility. So there are reasons for many people to feel discontent. On the other hand, the EU is willingly used as a scapegoat. Some find this a cheap way to distract from national problems, such as undesirable developments on the labour market, in social security systems or in debilitating bureaucracies.
The world is less safe because of politicians such as Trump, Putin and Erdogan. Shouldn’t this make people think again?
We have been able to progress peacefully for a long time under the protection of the United States. We have set ourselves up in a multilateral world. But the old world order is being challenged. In the worst-case scenario, there is a risk that power and size will matter above all. In such a system the great powers, the US, Russia and China, would dominate. The voices of smaller countries would lose their relevance if they act in isolation. And let’s face it, even the biggest European countries fall into this category if left to their own devices. If we want to protect our interests and our conception of how we want to live together, then we have to stand together. And that’s only possible through the EU.
One of the biggest challenges is populism, which takes aim at the EU in many ways. How can we convince people that populism will lead to our undoing?
We are seeing mistrust in and scepticism about the elites. All too often, problems and grievances, which of course exist in our societies, are no longer being addressed in order to seek the right solutions, but are becoming the expression of a general rejection. Populists promise supposedly simple solutions which are, at the same time, specious and ultimately harmful. How can you take a stand against them? First of all, you should listen and take people’s concerns seriously, because it’s essential to consider carefully the real and supposed grievances and, if possible, resolve them. Lastly, it’s necessary to explain the consequences of political action: if people vote for populists who idealise the nation state and make its sovereignty absolute, then those voters have to know that, although they would live in smaller, easier-to-control markets, it would also mean much higher prices for consumers and reduced prosperity. Basically, as I see it, people vote for populists in order to protest, but not to reject the EU as such.
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