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RUDYARD GRIFFITHS: Ladies and gentlemen, good evening. My name is Rudyard
Griffiths. I’m the co-organizer of this debate series with my colleague, Patrick Luciani, and it is my privilege once again to be your moderator. I want to start by welcoming the worldwide audience that is watching tonight’s debate via the Internet, including Canada’s leading news website, theglobeandmail.com. A warm hello also to the global TV and radio audience tuning into this debate everywhere from the Business News Network, to
CBC Radio’s Ideas, to CPAC and C-SPAN throughout the continental United States. And finally, hello to you, the 2700 people who once again have filled Roy Thomson Hall to capacity for a Munk Debate.
We’ve had some stellar debates in this very hall. Who can forget that evening with Christopher Hitchens and Tony Blair on religion’s impact on the world? Henry Kissinger, a year ago today, was on this stage at 82 years of age participating in his first public debate, eloquently arguing against China owning the 21st century. And just a matter of months ago, Nobel laureate Paul Krugman and U.S. Treasury Secretary Larry Summers went head to head on the future of the North American economy.
As entertaining and engaging as those contests were, they did not have the urgency of tonight’s debate. In the last month, the unthinkable has become the thinkable when it
comes to the future of Europe. As early as next month, with the second Greek elections, we could see Greece — by choice or out of necessity — leave the Eurozone. Many people have predicted that could cause a catastrophic spike in the borrowing costs of two of the world’s largest debtor nations — Spain and Italy — and a bank run throughout the Eurozone. The result could be an implosion, both political and economical, of the European Union that might plunge not only that continent, but maybe North America and the world as well, into recession.
But as dire as the scenarios that have been promulgated in the media about Europe’s future are right now, they need to be set against a record of real accomplishment and important history. The European Union, born out of the Second World War, now encompasses six decades of continuous history, some 27 member states, 23 different languages — we have two in Canada and it’s a problem, they have 23 — and an advanced economy that is responsible for a quarter of the world’s economic output.
In the sweep of human history, Europe’s institutions, its values and its common goals are rightfully acknowledged as some of humankind’s most important accomplishments. So, I think we’re all wondering tonight — we in this room and people around the world, especially people in Europe — whether the considerable strengths that Europe enjoys will allow it to survive its unprecedented crisis and maybe even emerge from the other side stronger and more united. Or, as two of our debaters will make the case tonight, is the Eurozone crisis an expression of a series of deep and fatal flaws buried in the core of the Euro itself and the concept that animates the European Union?
Tonight, we are going to try and answer these all-important questions by tackling the big geopolitical question of our time. We will debate the motion: Be it resolved, the European experiment has failed. Before introducing the all-star European cast of debaters that we’ve assembled, let me take a moment to recognize the organization that alone is responsible for staging these evenings. It’s really thanks to its generosity and public spiritedness that we have the opportunity, twice a year, to gather here at Roy Thomson
Hall and listen to some of the world’s brightest minds debate the big issues facing our country and the globe. Ladies and gentlemen, please join me in a round of applause for the co-founders of the Aurea Foundation, Peter and Melanie Munk.
Now, let’s get our debate underway. Can I have a big round of applause for our two debaters arguing for tonight’s motion, Niall Ferguson and Josef Joffe, and their formidable opponents, Daniel Cohn-Bendit and Lord Peter Mandelson.
With Niall’s presence again on the stage tonight, Peter Munk joked with me earlier that we should rename these events the Ferguson Debates. Niall is one for one at the Munk Debates, having suffered a fairly staggering loss to Fareed Zakaria and Henry Kissinger a year ago on this very stage. But he started the Munk Debates in 2008 with a big win with Charles Krauthammer, defeating the late Richard Holbrooke and Samantha Power on the question of the world being a safer place with a Republican in the White House. Can he make it two for one tonight?
Undeniably, brain cell for brain cell, he is one of the most formidable debaters of his generation. He’s also a celebrated Harvard professor, a Daily Beast Newsweek columnist, a documentary film impresario and an internationally bestselling author. Please welcome our own Niall Ferguson.
Now, our second debater, speaking also in favour of tonight’s motion, brings a vital perspective, the view of the German people on the fast-moving Eurozone crisis. He is the publisher of the prestigious German weekly Die Zeit, Germany’s equivalent of Time magazine or Canada’s own Maclean’s. He is the author of numerous bestselling books on geopolitics, including Uberpower: The Imperial Temptation of America. His analysis of geopolitical events appears regularly everywhere from the New York Times to the New Republic to the London Times literary supplements. Representing Europe’s Uberpower in this contest tonight, ladies and gentlemen, Josef Joffe.
The life story of Daniel Cohn-Bendit is in many ways synonymous with the European experiment: born in France in 1945 to German and Jewish parents who had fled Nazi Germany, Mr. Cohn-Bendit burst upon the European scene in the 1960s as a key leader of the student revolts in France. Half a century later, he remains fondly known as “Danny the Red,” a highly influential voice in Europe, serving as co-president of the Greens/European Free Alliance Group in the European Parliament. He sits on the EU Parliamentary Committees on Economic and Monetary Affairs and Constitutional Affairs. He is also co-president of the respected Spinelli Group, a European
parliamentary association dedicated to the federalist project in Europe. Ladies and gentlemen, please welcome Daniel Cohn-Bendit.
Our final debater tonight, speaking against the motion, is one of Europe’s most prominent and eloquent advocates for the cause of European federalism in the face of the current crisis. He has held numerous senior cabinet positions in the United Kingdom as a Labour MP under Tony Blair and Gordon Brown. Most important to us tonight, he was Great
Britain’s EU Commissioner from 2004 to 2008, a role that gave him an intimate understanding of the internal political and economic workings of Europe. Today he is the Chairman of Global Counsel, an international strategic advisory firm. To cap off his many talents, he is a gifted writer. His autobiography, The Third Man, published in 2010, was the Sunday Times number-one bestseller for five consecutive weeks. Please welcome Lord Peter Mandelson.
Before I call on the debaters for their opening statements, I need to ask everybody in this hall to do something that is usually verboten in an auditorium such as this, which is to power up your smartphones and log on to Twitter. For the duration of tonight’s debate you can weigh in on the proceedings by tweeting to our hashtag #munkeurope. You can also follow the ensuing conversation by using @munkdebates. We want you to be involved in this debate with the audience watching online around the world.
We also have two VIP twitterers, who are coming in with large twitter followings. Ian Bremmer, who appeared on this stage last fall, is the founder and president of the Eurasia
Group, and a bestselling author. The second VIP blogger who is going to be tweeting tonight is Felix Salmon. He has more than 50,000 followers on Twitter — a veritable Justin Bieber of global finance — and we welcome him tonight via Twitter. We are going to have their handles up on the screen, so if you’ve got your smartphones, plug them in.
One last housekeeping point that works well at every debate. We want you to help us keep our debaters to their allotted times — six minutes for their opening remarks, three minutes for their closing remarks — by having our countdown clock appear on a screen. When it reaches zero, join me in a round of applause for our debaters. That will keep them on their toes.
You all voted on your way in here, and this is a critical part of these debates. We asked you to consider the motion: Be it resolved the European experiment has failed. Let’s see if we have those early numbers now. It may not be the complete count for the first ballot but it should give us a close idea of where public opinion in this room is right now. The numbers are interesting: 41 percent in favour of the motion, 22 percent undecided, 37 percent against. So this is a split room — public opinion is in play right now.
On the second question on your ballot we asked whether you are open to changing your vote, depending on what you hear at this debate. Whoa! This is an undecided audience. Ninety percent of you could change your minds in the next hour and 45 minutes. Only ten percent of you have your minds completely made up. So, ladies and gentlemen, this debate is very much in play.
I now call on Niall Ferguson for the first opening statement. Sir, you have six minutes.
NIALL FERGUSON: Thank you. Merci. Mersi, Grazie. Gracias. Grazzi. Go Raibh Maith.
Dziękuję. Danke. Aiteh. Köszönöm. Multumesc. Dêkuji. Paldies. Ačiū, Dakujem. Obrigado. Hvala. Dank u. Kiitti. Blagodaria, Merci villmahl. Efcharisto. And my personal favourite, Tak.
There are 23 ways of saying thank you in the European Union, and I think that in itself illustrates why the European experiment has ended in failure. Do you remember those experiments that you used to do as a kid with a chemistry set, and you would keep adding chemicals, one after the other, to see what would finally produce an explosion? That’s what they did in Europe. It started with six; that wasn’t enough. It went to nine … nothing. Ten … a little bit of smoke, nothing more. Twelve … nothing. Fifteen … still nothing. Twenty-five … beginning to bubble. Twenty-seven [makes sound of explosion].
I’m absolutely certain that Lord Mandelson and Daniel Cohn-Bendit will tell you that the European experiment has succeeded because there has been peace in Europe since it began in the 1950s. Can we just knock that on the head? The European Union has had absolutely nothing to do with peace in Europe since World War II. That has been the achievement of NATO. Europe was not about war and peace — otherwise there would have been a European defence community, and that was vetoed by the French in 1954.
Europe has to be judged on its own terms and its own terms were always economic. How did it do? In the 1950s it grew at 4 percent. In the 1960s, it was about the same. In the 1970s, 2.8 percent; in the 1980s, 2.1 percent; in the 1990s, 1.7 percent: and so on, down to zero.
As integration has proceeded, European growth has declined. The share of Europe in global GDP has fallen since 1980 from 31 percent to just 19 percent. Since 1980, the EU has grown faster than the United States in only nine out of 32 years. Never has its unemployment rate been lower than the U.S. unemployment rate. Are any of you investors? What were the worst equity markets of the last ten years? They were Greece, Ireland, Italy, Finland, Portugal, the Netherlands and Belgium — the worst in the world. And on top of all of this, we have monetary union — the ultimate experiment gone wrong.
We warned them, ladies and gentlemen. We said, if you have a monetary union without labour market integration and without any fiscal federalism, it will blow up. I predicted that in an article in 2000.1 It is happening in real time in a chemistry lab on the other side of the Atlantic.
But this was also a political experiment gone wrong. Do you know what that experiment was? The experiment was to see if European peoples could be forced into ever closer
1 Niall Ferguson and Laurence J. Kotlikoff, “The Degeneration of EMU,” Foreign Affairs, March-April,
2000, vol. 79, issue 2.
union, despite their wishes, by economic means because the political means have not have been acceptable.
And the results were that if the European peoples voted against the experiment, they were told to try again. That happened to the Danes in 1992, to the Irish in 2001 and again to the poor old Irish in 2008. They gave the wrong answer in the referendum, so they were made to hold the referendum again. That tells you something about why this experiment has failed. It has failed because it has lost political legitimacy. And that is what we see not only in Greece but in government after government. Thirteen have fallen since this crisis began two years ago. And more will follow in the months to come.
Finally, this has been a geopolitical failure. The European Union was supposed to be a counterweight to the United States. Do you remember “the hour of Europe”? Yes, that’s what it was supposed to be in 1991, when Jacques Poos announced that Europe was going to solve the war in Bosnia.2 One hundred thousand people died in that war and 2.2 million were displaced, until the United States finally had to step in and sort out the mess.
“Who do I call when I want to call Europe?” was Henry Kissinger’s famous question.3
Finally the answer came several years later. Baroness Ashton.4 Nobody’d ever heard of
2 Then foreign minister of Luxembourg and one of the negotiators of the agreement ending the hostilities, referring to Europe’s obligation to assist in theYugoslav crisis.
3 Attributed (perhaps falsely) to Kissinger when he was U.S. Secretary of State, September 1973 to January 1977.
her, nor have they ever heard from her. Ladies and gentlemen, you’re Canadians. You know how hard it is to run a federal system with just ten provinces and only two languages. That’s why you will understand more readily than most why the European experiment, with 27 provinces and a staggering 23 languages, has ended in ignominious failure.
Thankfully, here in Canada I only have to use only two or maybe there words now. Thank you and merci.
RUDYARD GRIFFITHS: Daniel Cohn-Bendit, you’re up next.
DANIEL COHN-BENDIT: Good evening. I can say it only in English. You know, I have to calm myself. I’ve never heard such stupid things! And I will tell you why. My parents fled from Germany in 1933. My father was a lawyer who defended people and he would have been arrested after the Reichstag was burned. Then they had to flee to the south of France because my mother and my father were Jews. I was born after the landing of the troops in Normandy. Nine months later, by ***, in April 1945, I was born.
Imagine, if I had said to my parents that in 50 years there would be no military forces between France and Germany that weren’t part of NATO — no troops, no soldiers in all
4 Catherine Ashton, Baroness Ashton of Upholland, a British Labout MP who in 2008 became Commissioner for Trade in the European Commission, replacing Lord Peter Mandelson, and in November 2009 was designated High Representative for Foreign Affairs and Security Policy for the European Council.
of Europe — and that you could travel anywhere in Europe. My parents would have said,
“We have a problem. We have a kid who’s talking too early, and he’s saying nonsense.”
So I tell you that what happened in Europe was a big civilizatory step, because that Europe was the most murderous region of the world. We created colonialism, we created fascism, we created communism; every bad thing was in Europe. And we made two world wars, and these two world wars had to end. We could not continue like that, and why did we not continue? We said this has to stop. And we had to create something where the people could do business together, exchange things together. And wanting this, they took the big step of creating the European Union.
Then communism fell, and then there was the generation of François Mitterand and Helmut Kohl and there were 80 million Germans in the middle of Europe. Mitterand said
— and Margaret Thatcher agreed about this, don’t ever forget it — that you have to deepen European integration, you have to deepen it so that nowhere, no longer, could there be a hegemonic state in Europe; so that there would be no more battles and that countries would have to discuss together — they could fight in a parliament but no longer in war.
Then they created the Euro. And of course the Euro is in trouble and the Union is difficult, because never before was a common state like Europe created without war. And you are right about Bosnia: I supported the Europeans going in. It’s true. I will never forget this. And it’s true that the Americans came. But I tell you, we have to take
responsibility for the world. If you see the situation of Europe today, the nation-states can’t take on the problem of the crisis — the economic fiscal crisis and climate change. Not one of these states alone can do this. In thirty years no European state will be in the G8, none of them. Only Europe could then defend the European Union.
But it’s difficult, you are right. It’s difficult. But I prefer the Europeans having difficulties talking together than making war together. This is much better. We need only one language to make war. One language! So, this is a completely crazy argument about all the languages. Of course, we have translators. We can do it. Come to the European parliament and you can see how it works.
Finally, I will tell you, Europe is the dream of many countries. Tell me, why after the fall of the wall, did the Polish want to get in? The Hungarians, why did they all vote to get in? If it is so crazy, they could have said, we don’t want to get in. They want in because it’s the future. Saying it’s the future doesn’t mean it’s not difficult, doesn’t mean that we can’t have backlash. But I really believe that if we don’t continue European integration, then the European nation-states will be in trouble, because they are aging societies.
We need to be together to defend ourselves. Europe is an umbrella to defend our vision of how to live together, and we did it without war. You know, the United States of America came together after a civil war. Our civil wars were two world wars and then we Europeans learned to discuss, to discuss. I know discussion can be more complicated. But
I will tell you an old Jewish joke: if you have two solutions, always choose the third. And this is Europe.
RUDYARD GRIFFITHS: Now, up next, speaking for the resolution, Josef Joffe.
JOSEF JOFFE: I have to start by correcting my friend Niall. He’s wrong about the phone number. There is a phone number. The phone number is Catherine Ashton’s. You call the phone number and then you get a computer voice: for Germany, press 1; for France, press 2. That tells you where Europe is at.
Let me say something else. I think Europe was a wonderful idea. After all, Zeus, the god of gods, risked his marriage when he was so smitten with Europa that he ran off with her. And Ovid, the Roman poet, sings, “Till in the open sea he bore his prize … her right hand grasped a horn, the other lent upon his back.”5
Now, Europe was also a wonderful idea several eons later when it decided to unify after the two most murderous wars in history. What a magnificent story. First, six nations get together … they integrate coal and steel. Now they are 27. Then, blow by blow, a common market for goods, capital services and people; then, democracy à la Cohn- Bendit with a European parliament, and finally no more francs, pesetas and drachmas. The Euro now reigns from Portugal to the borders of Poland. Now what would come next? Of course, the United States of Europe.
5 Ovid (43 BCE–17 CE), Metamorphoses.
DANIEL COHN-BENDIT: Yes!
JOSEF JOFFE: Wrong! Wrong. Europe is crumbling before our eyes. The grandest experiment since the 13 American colonies became E Pluribus Unum now faces its most deadly crisis. Why has that seemingly inexorable march of progress ground to a halt?
Think about integration as a mountain climb in the Rockies or on the Alps. In the beginning or in the foothills it is nice and easy. As we rise, the ascent gets tougher and the air gets thinner. Finally we reach the sheer cliff, the Eiger north face, so to speak. That cliff is the core of national sovereignty.
This is where we are today, with the Euro, our proudest achievement, about to bury us. We have gone too far, so what do you do next? There are only three ways. You retreat, stop or attack. What? Attack the summit and climb to the United States of Europe? “Just look at your party of seventeen,” this mountain growls, “all stragglers, miscreants, cripples, free-riders.” And because this is a very educated mountain, he would add that there is no unification without war, where the strongest forces the rest into a single state.
That is what happened in Italy and Germany, and of course, as Danny already said, in the United States where the Civil War was actually a war of national unification. Now there is no such war and there will be no such war in Europe, and thank God for that. There is
no Bismarck; there is no Lincoln in Europe’s future. And Frau Merkel is no Bismarck, of course.
But, what does this deadly crisis tell us? It says, you can’t go to the summit unless you are both willing and able. But you are neither of those things. Nor will you ever be, because: a) you can’t and will not give up the biggest chunk of democratic sovereignty, which is the power to tax and to spend; and b) you don’t belong in the same climbing party to begin with. Just two or three or four of you have the discipline and the stamina. The rest are overweight, lame or out of breath.
So let’s bring it down from the mountain metaphor. The hardcore political point is that
Europe is broke and that Germany neither wants to nor is able to pay for the rest. Even France is broke. Furthermore, the stragglers don’t want to go back to camp, to get into shape through a very painful domestic regimen that has already killed so many governments.
The deepest problem is the stubborn tenacity of the nation-state which will not submit when the core of its sovereignty is at stake. Money, as the Germans say, is where a friendship stops and so does integration. The EU is not cavorting in the foothills anymore. It’s facing the Eiger north face.
So is Europe history now? We don’t know. But we know only one thing: that the experiment has failed in the sense that the wonderful dream of the 1950s — up, up and away — has collided with the nasty reality of the nation-state that will not fade away. And if truth be told, how many Frenchmen, Italians, Germans, Poles, and so on will want to part with two thousand years of history? Who wants to be ruled from Brussels rather than from his own capital?
Let me conclude — if I may, with this audience that gave victory to Hitchens when they talked about God — let me conclude with a prayer, nonetheless. Let’s pray that the inevitable crash of the Euro, the most ambitious part of the experiment, will not bury the rest. And let’s plead with Zeus to save Europa from the angry seas and set her down at a cozy little harbour, because Europe cannot conquer the sea that is the nation-state. But if she drowns, Canada and the United States will not flourish. Amen. Thank you.
RUDYARD GRIFFITHS: Our final debater, speaking against the motion, is Lord Peter Mandelson. Sir, you have six minutes.
PETER MANDELSON: Thank you very much. First of all, I must take Niall and Josef up on their sneering remarks about Catherine Ashton. Two days ago the five permanent members of the UN Security Council and Germany, the great powers, went into very serious negotiations with Iran about the development of their nuclear capability. Who was leading the great powers? Who was leading the Security Council permanent
members? No, Niall. No, Josef. It was not Hillary Clinton, it was Catherine Ashton. So let’s have a little less sneering, please, and a little more seriousness.
Now, I was under the impression that Canadians actually watched hockey on Friday nights rather than debated politics, but I guess you couldn’t miss the opportunity of seeing all of us knock each other around this stage on the subject of Europe; me an Englishman, he a Scotsman, he a German, and he [turning to Daniel Cohn-Bendit] … a sort of Frenchman.
DANIEL COHN-BENDIT: A ***!
PETER MANDELSON: It sounds like the beginning of a bad joke really, which is what I understand many of you think Europe and its currency are at the moment. But Danny and I are going to ask you to step back and look at a more serious and a bigger picture. We are going to ask you to measure the European Union against a longer history and a bigger aim. Before we can define failure in this motion we have to know what we are talking about.
Indeed, the EU’s currency zone is certainly in trouble and it’s sending out distress signals. I don’t deny that. But the Eurozone is not the whole European project. That project started over six decades ago when it was realized that the whole in Europe could and should be, and would be, bigger than the sum of its parts; that by pooling elements of our sovereignty and of our decision-making we can achieve things that would not be
possible to achieve if we remained a collection of relatively small rather combative nation-states. In doing that, we have put behind us centuries of conflict in Europe. Not a small thing.
And we have ended the division of Europe, east and west, and successfully anchored all of the post-Soviet states and the post-dictatorship states of Spain and Greece and Portugal in a system of values and of irreversible democratic and human rights. No small achievement. And we also created the largest economic space of its kind in the world and all the ease of doing business and trading across the EU that goes with that.
In creating this unique model of supra-nationalism, we’ve succeeded in doing what has never been done before and has never been attempted in any other part of the world. This system has become absolutely central to European life — our commerce, our diplomacy, our security, and our policy coordination in so many different areas. I don’t think either
Niall or Josef could argue with this achievement if they were actually being serious. So presumably they agree that if the EU did not exist, European states would actually want to invent today something very like it.
And even the Euro itself: I don’t think we can yet write it off as failed. The currency union is certainly flawed, it’s true. It’s clear now that two decades ago Europe started to run economically before we could walk politically. This is not, in my view, because we were over-ambitious; rather, because we were actually not ambitious enough. We weren’t
ambitious enough to create the political institutions and machinery needed to make economic and monetary union work.
Now the question is: is this failure of the Eurozone permanent? In my view the failure is one of design and execution, not concept and principle. You’ve heard tonight and you’ll hear it again — the other side will tell you — that the whole thing is going to hell in a handcart. But the argument is that there is a workable version of a single currency; the question is whether Europe has the political will to implement this version.
So yes, a serious stumble, and yes, a serious flaw in design. But failure for the whole European project, for the whole of the European idea? I would argue not. As for the historical determinists over here, I don’t quibble with Niall’s qualifications as an historian. It’s very easy to be a historian, talking about the past, looking through your rear-view mirror the entire time. For a politician I’m afraid, and a minister, you have to be a little bit more practical and a little bit more serious.
So has Europe failed? I would say it is just too soon to know. Could Europe fail? Of course it could. But must Europe fail? Absolutely not. Thank you very much.
RUDYARD GRIFFITHS: Well done, gentlemen, a very strong opening to the debate. And I think you’ve flushed out something important, which is how this audience chooses to define the European experiment. Is it the Euro? Is it a larger civilizational experiment?
That’s going to be up to you to decide when you pick up your second ballot at the end of tonight — and for those of you voting online right now.
The next phase of this debate is to have these debaters engage each other directly. Niall, you were the first to speak, so I’m going to come to you. What have you heard from the opposing side right here that you fundamentally disagree with and that you think they’ve got wrong from A to Z? And then I’m going to have them rebut.
NIALL FERGUSON: Well, exactly as I predicted, Danny Cohn-Bendit fell into the trap of attributing Europe’s peace to the European Union, to the process of European integration. He did it in a very emotive and Gallic way, which has played well for him since 1968. But to be honest, it didn’t work for me in 1968 when, admittedly, I was only four.
DANIEL COHN-BENDIT: Ah, you…
NIALL FERGUSON: Please let me finish.
DANIEL COHN-BENDIT: You’re not honest!
NIALL FERGUSON: This is not Nanterre in 1968!6
6 Cohn-Bendit was then a student of sociology at the University of Nanterre, active in sparking student protests against the administration, which led to the massive student and worker riots in Paris against the de Gaulle government in the summer of that year.
DANIEL COHN-BENDIT: No, it’s what I want it to be! You will not tell me in which year I have to talk.
NIALL FERGUSON: So you can begin to see why the process of European integration doesn’t work very well.
DANIEL COHN-BENDIT: No, no, no, no.
NIALL FERGUSON: You see, already we are talking at cross-purposes. Europe’s peace, since the 1940s, has almost nothing to do with the process of European integration, which as I said, has been primarily economic. It is not the institutions of the EU that made peace. It was NATO and the division of Europe during the Cold War. The only attempt to make European institutions concerned with military affairs failed in 1954 because France voted it down in the National Assembly. So we mustn’t fall for this emotive non-sequitur, which is the one European language that everybody used to speak.
It is not the case. The issue is economic. And what I noted was that neither Danny nor Peter addressed my point that in economic terms Europe has failed to deliver. And I’ve just come back from Europe. Maybe you live there and so don’t notice, but there is a massive economic crisis unfolding on the continent because of the failed project of monetary union. What are you going to say about that?
DANIEL COHN-BENDIT: I will tell you, I will tell you…
RUDYARD GRIFFITHS: Danny, you’re up, you’re next. Let’s go.
DANIEL COHN-BENDIT: I will tell you two things. First, one of the biggest achievements of Europe — and you don’t make peace only with NATO — is that the people came together. Because if the people of Europe hadn’t come together so that you have no border inside Europe, then you wouldn’t have peace. This is one achievement and you can’t deny it. You can’t deny it.
JOSEF JOFFE: Yes, I…
DANIEL COHN-BENDIT: No, wait a minute.
JOSEF JOFFE: But I…
DANIEL COHN-BENDIT: It was Helmut Schmidt who made the biggest, biggest description of the reality of Europe and he is not a ’68er.7 He was one of the best chancellors of Germany.
JOSEF JOFFE: Okay, can I…?
7 Cohn-Bendit is likely referring to Helmut Schmidt’s speech at a farewell event for Jean-Claude Trichet,
out-going president of the European Central Bank, on October 19, 2011.
DANIEL COHN-BENDIT: No, I am not finished.
JOSEF JOFFE: This is not the European parliament!
DANIEL COHN-BENDIT: You’re always say to me, “This is not…” You do what you want, and I do what I want. I don’t need a teacher to tell me, “You’re not there, you’re not there, you’re not there.”
RUDYARD GRIFFITHS: Let’s stop talking about the style of debate and focus on the argument.
DANIEL COHN-BENDIT: I want to continue on the economic failure. When German reunification took place, it was Jacques Delors8 who made a plan to have German integration with money, with cash money. It was the European state together that made a big step to help the Germans with reunification. When Poland came in, it was European money that helped Poland to come out of communism, and today the Polish majority have agreed on this. It was the same with the other countries. It is true that Europe is also a success story of a lot of countries, and do you know why?
RUDYARD GRIFFITHS: Okay, last point, Danny.
8 President of the European Commission, January 1985–December 1994.
DANIEL COHN-BENDIT: Why did all the east European countries want to come into Europe? On the economy, then, he was right on one point. We must have political governance on the economy and a fiscal approach together. If not, we are in trouble. We have to be ambitious now. And we have to come together.
RUDYARD GRIFFITHS: Let me come back to Josef right now and just ask him to follow up on what Danny’s saying. Why is a United States of Europe not a conceivable outcome of this crisis, considering the cost of collapse and what would ensue?
JOSEF JOFFE: First of all, I think, I just want to say a word to Danny. If you are right, you don’t have to scream. The problem with the two of you is you assume the desire is there.
If we had political will, if we had political union, then we would overcome all the problems. But that is just putting the cart before the horse. The problem is that we don’t, and we have to figure out why we don’t. I’ve tried to explain it in a few sentences. None of us — and you, the Brits, least of all, by the way — wants to give up national sovereignty.
We don’t want to be ruled by Brussels. Neither do you want to be ruled by Brussels, nor you. Certainly none of us wants that. And that’s why, when we get to the Eiger north face, we can’t keep going. And that, Danny — let me just point out, this is not the European parliament — that is where we discuss. Let’s discuss. We try to talk to each other, rationally, quietly, politely, respectfully. You see, this is why we won’t have
Europe. That is the problem. I rest my case.
RUDYARD GRIFFITHS: Lord Mandelson, you come in on this point. Why would countries set aside some of these final key pieces of their sovereignty in return for a larger Europe that would come out of this crisis, in your view, stronger and more united.
PETER MANDELSON: I don’t think they do have to set aside their sovereignty, as you put it. I don’t think they need to cease being nation-states. They don’t have to cease being
Britain or France or Germany. The Spanish don’t have to stop being Spanish. And the
Belgians will continue to muddle through as they do. The point, frankly, is something slightly different. We’re not asking people to give up their nation-states. What we are observing is that European people have chosen to see their states and their governments pool their sovereignty and their decision-making in respect of certain key important areas of their lives. And the most important part of their lives is their economic life — how businesses are created, how jobs are generated, how wealth is created in Europe.
And by the way, far from Europe being broke, you know we do still represent 25 percent of global GDP and we don’t have anything like the debt mountain of the United States. Are you saying that because the United States have debt, they are broke? Of course, they’re not broke. The point about the single market, which, as I have said, is the biggest single economic space or block of its kind, is twofold, in my view.
The first point is that in enabling businesses to trade across a single market of 500 million people you enable businesses to grow in ways that would otherwise be possible if they
were limited to their own countries and if they faced a range of 27 different sets of regulatory laws and policies preventing them from trading freely across that single market.
Second — and I know this because I was the European Trade Commissioner — why is it that I am admitted in Washington or Beijing or Moscow or Delhi or Brasilia? It’s not because I am British, it’s not because I am Peter – charming, articulate, lucid – it’s because I represent a Europe, a market of 500 million people. And those countries, with their businesses and their job creation and their trade and their exports, want to get access to our 500-million-strong market.
And I tell you, if I was simply knocking on the door because I was Luxembourgian, if I was simply knocking on the door because I was Belgian — even, if you don’t mind me saying, Josef, if I was knocking on the door because I was German — representing a relatively small market and a small population, I would not get a hearing. I would not have the clout. I would not be able to negotiate with the force with which I was able to negotiate as Trade Commissioner representing the entirety of the European Union. Now that’s reality. With the greatest of respect, you asked me to engage with their serious arguments. I have yet to hear a serious argument from either of these two.
NIALL FERGUSON: Well sit back, sit back.
PETER MANDELSON: No, no, no, no.
RUDYARD GRIFFITHS: You’ve had your say. We’re going to hear the other side.
PETER MANDELSON: I am a practical man and I like practical politics. I’d like to hear the same from the other side.
RUDYARD GRIFFITHS: Okay. Let’s hear the other side a moment here. Niall, you’re up.
NIALL FERGUSON: Nor are we in the [British] House of Commons.
PETER MANDELSON: Oh, so what? Big deal. Niall, Niall, don’t worry.
NIALL FERGUSON: Shall I come back later?
PETER MANDELSON: You’ll get there. With a performance like that, you’ll get there [into the House of Commons], I promise you.
NIALL FERGUSON: Look. Number one, it’s all very well for you to sing the praises of the
European Union as an economic area, but it is actually 19 percent of GDP — check the numbers — and shrinking fast. Why is it shrinking? It is shrinking because Europe is inflicting on itself a completely man-made, avoidable recession. Why is it doing that? It is doing that because of the faulty design of the European monetary union. Who designed it? People like you, Peter. It was people like you, who designed it in the 1980s.
PETER MANDELSON: Oh that is lovely! I’d love to take responsibility.
NIALL FERGUSON: Can I finish? And the design flaw was there from the outset. If you read the Delors Report from 1989,9 it says at the end that for all of this to work, for the monetary union to work, there will have to be central control over national budgets. That didn’t happen. It never happened. There was a growth and stability pact — remember that? Every single member of the Eurozone violated it. The Greeks cooked the books but they weren’t the only ones. Even the Germans violated their own rules, and the net result of this has been an economic disaster. Do you know what youth unemployment is in Spain today? Fifty percent. You put on a face, Peter, because it is not your problem.
But I can tell you that it is the problem of young Spaniards and they are fleeing Europe.
PETER MANDELSON: Can I just come in? Can I just come in?
NIALL FERGUSON: Can I finish?
PETER MANDELSON: Rudyard, he’s challenged me, he’s challenged me.
NIALL FERGUSON: Can I finish?
RUDYARD GRIFFITHS: One second, Peter…
9 “Report on Economic and Monetary Union in the European Community,” April 17, 1989.
PETER MANDELSON: Do you think that the banking crisis might have had something to do with the fact that there is 25 percent unemployment in Spain?
NIALL FERGUSON: Oh, please. Can I respond to that?
PETER MANDELSON: Where have you been?
NIALL FERGUSON: I’ll tell you where I’ve been. In February of 2009 I was actually in this city [Toronto] and I said the European banking crisis is going to be as bad as the American banking crisis because the leverage is just as bad and probably the whole of the balance sheets is bigger. I’ve said that repeatedly since early 2009, and what has been done in Europe? Nothing. Nothing, nothing, nothing. Do you know what your policy was
— you and your fellow Eurocrats? You kicked the can down the road for month after month after month. But there’s one more point.
PETER MANDELSON: Hold on a second.
RUDYARD GRIFFITHS: I want to get everybody’s voice in here, so here’s what we’re going to do. I’m going to look at the clock, Josef, and I’m going to give you two minutes and then I’m going to give Danny two minutes, because we’re going to move onto questions.
Okay?
PETER MANDELSON: Jolly good.
NIALL FERGUSON: Wait a second — why does he only get two minutes? Because he is German?
JOSEF JOFFE: Do I get two minutes for screaming or for talking?
RUDYARD GRIFFITHS: For talking. Lead by example — Germany usually does.
JOSEF JOFFE: You know, you accused us of having no arguments. Let me turn this around and point out that you said something that is typical of all failed experiments, from socialism to Europe. The theory is okay … the concept is okay … the problem is just the design or the execution. You remind me of the French NATO officer who comes to NATO for the first time and says, “Oh, this works very nicely in practice but will it also work in theory?” The theory of Europe is wrong — it is wrong. Do you hear me? And I can tell that it is wrong by the way you argue. You spend about five minutes arguing about this wonderful economic space.
Nobody challenges this wonderful economic space. We are talking about whether Europe can acquire the will and the wherewithal to go the next step. And if you like an economic space, look at Canada and NAFTA [the North American Free Trade Agreement] and Mexico and the United States — almost as big as Europe. They have free trade, but who wants to get together? Do the Canadians want to get together with the United States or
with Mexico? So you’ve made a case for an economic free trade zone. I’ll grant you that case, but it’s not what we are debating in this room.
NIALL FERGUSON: Hear, hear.
RUDYARD GRIFFITHS: Danny, come in on this because you’re sitting in the European parliament every day. You’re at the proverbial mountain face there. Why do you think you can scale it to a greater level of integration when we are seeing a lot of political disunity in Europe right now?
DANIEL COHN-BENDIT: I can tell you we have European laws for the governance of the European economy or the banking system, the organization of the banking system, for the way that stability should be realized by all the countries. Before the stability pact, it was decided by the European parliament, and is now, since the first of January, a law in Europe. And you see what happened — and you were right — when the Germans and the French break the stability, it can’t happen anymore. And now, Josef, who wants to be ruled…
JOSEF JOFFE: Call me Mr. Joffe.
DANIEL COHN-BENDIT: No, no, no, I don’t need a father. My father died when I was 17 and I don’t need another father now? So please…
JOSEF JOFFE: I don’t want to be your father!
DANIEL COHN-BENDIT: So please, stop. Stop trying to educate me. I’m not educate-able.
It’s a lost cause, a lost cause.
JOSEF JOFFE: I agree!
DANIEL COHN-BENDIT: So I want to tell you …
JOSEF JOFFE: I agree with you, you’re not educable!
DANIEL COHN-BENDIT: I know you agree. But you know, I don’t want to be like you, and you don’t want to be like me. Okay? Can we keep it like this? I will tell you something, something that is very deep. You said that you don’t want to dismantle Europe today; what you want is for it to be more efficient. And you say that you don’t want to be ruled by Brussels. Okay. But what about the United States? Most countries don’t want to be ruled by Washington. But this is not the problem.
JOSEF JOFFE: Well …
DANIEL COHN-BENDIT: Stop it now, please?
NIALL FERGUSON: So you can interrupt others but we can’t interrupt you?
DANIEL COHN-BENDIT: But let me tell you something. What about England? Why does Scotland want to get out of England?
NIALL FERGUSON: This is so rude! For God’s sake!
DANIEL COHN-BENDIT: Who dismantled England? You know…
NIALL FERGUSON: Do you do this at home?
DANIEL COHN-BENDIT: You know, modern life is much more complicated than you understand and it is not a TV show. This is the problem.
RUDYARD GRIFFITHS: We’ve got two and a half minutes on the clock before we get to audience questions. Let your partner go next.
DANIEL COHN-BENDIT: When I talk, they are like little children, always educating me, so I want to continue. I want to finish one sentence.
RUDYARD GRIFFITHS: You’ve got 25 seconds left and then we’re going to Lord
Mandelson.
DANIEL COHN-BENDIT: No, no, I…
RUDYARD GRIFFITHS: Sir, continue with your argument, don’t debate the process.
DANIEL COHN-BENDIT: I debate the process if you are not fair. If you’re not fair I debate the process.
RUDYARD GRIFFITHS: Ladies and gentlemen, who do you want to hear? Do you want to hear Peter now?
PETER MANDELSON: I said at the beginning, you know, “I’ll talk like a minister.” But I said to Danny, “You talk from the heart.” And I haven’t been disappointed. I think he’s been brilliant. I love it.
RUDYARD GRIFFITHS: Do you want to add anything?
PETER MANDELSON: What do you want me to say?
NIALL FERGUSON: Danny could talk from the head for a change. He could try that.
RUDYARD GRIFFITHS: Let’s elevate the discussion a bit. Peter, I’m going to give you the remaining moments of this block of time.
PETER MANDELSON: I’d rather hear from the audience because I think their questions and the issues they raise will be somewhat more interesting for me to address than some of those I’ve had from the people opposite.
RUDYARD GRIFFITHS: Okay, then I’ll turn to your opponents. Is there anything final that you’d like to say before we go to questions?
NIALL FERGUSON: Yes. This is very simple. What you heard is the argument that in order to sort out the crisis Europe has to go to the next step. It has to take the next step to some central control of fiscal decisions at the national level. That is federalism, as you doubtless know from your own Canadian experience. The trouble is that that’s not what Europeans want. Indeed, when the question was put in referendums in 2005, when a treaty for European federalism was presented, it was rejected by the French and the Dutch, and then abandoned.10
So what you are calling for, which is the transition to the United States of Europe or a
Federal Republic of Europe, whatever you want to call it, doesn’t have political legitimacy, which his why it hasn’t happened. So your solution is a non-solution. It isn’t going to work. The Germans aren’t going to vote to make those transfers to the other countries.
PETER MANDELSON: I’m confused about something, Niall.
10 May 29, 2005 (France) and June 1, 2005 (Netherlands).
RUDYARD GRIFFITHS: Last comment.
PETER MANDELSON: I’ve been listening to what you’ve been saying this evening. But I also read an article that you wrote in the Financial Times earlier this month, in May.11
You were talking about the repairs that are needed to the Eurozone. Nowhere did you write that they were impossible to implement. You talked about a new fiscal compact, you talked about direct help for banks from the ECB [European Central Bank], you talked about the creation of Eurobonds, you talked about joint and several liability for Eurozone sovereign debt. Your only complaint was that Europe is not going as fast as the United States did in creating a fiscal federalism.
NIALL FERGUSON: Exactly, exactly.
PETER MANDELSON: And at the end, you finished your article — I don’t know who this audience in the Financial Times was, as opposed to your audience tonight — but you finished the article with a great flourish, quoting the Spanish philosopher José Ortega y Gasset.12 You said, “Europe is the solution,” not the problem. Now who is the true Niall Ferguson, may I ask?
11Niall Ferguson and Pierpaolo Barbieri, “Merkel can achieve fiscal union in Europe,” Financial Times, May 2, 2012.
12See Ortega y Gasset, The Revolt of the Masses (1930), in which Ortega argued for Europe to unite as a supranation, a United States of Europe.
NIALL FERGUSON: Can I respond? Since that article was published…
PETER MANDELSON: May the 2nd, 2012, just three weeks ago!
NIALL FERGUSON: Since that article was published, have you heard anything from the German government to suggest that any of those things are going to happen?
PETER MANDELSON: I’ve heard from you tonight!
NIALL FERGUSON: Answer the question.
PETER MANDELSON: And you’ve said the opposite of what you were arguing three weeks ago!
NIALL FERGUSON: Answer the question.
RUDYARD GRIFFITHS: Do we all agree that we want to hear from the audience?
PETER MANDELSON: Come on, come on!
NIALL FERGUSON: But this isn’t the point. Not a single thing, not a single thing.
RUDYARD GRIFFITHS: Ladies and gentlemen, help me here. Applaud. Well done. This is certainly a lively debate. The first question is going to come from a good friend. She’s well known to a lot of us, CBC’s senior business correspondent, reporter and on-air personality, Amanda Lang, you’re up.
AMANDA LANG: Tough act to follow. The question is for Niall. I’m going to build on Josef’s analogy of the mountain climb, facing this Eiger north face. I think mountain climbers would tell you that as many die on the way down as on the way up, so the question I have is a very practical one. Is it not better, more sensible, in this time of crisis, to press on to closer monetary and political union, rather than retreat, with all the losses that might entail.
NIALL FERGUSON:, One point on that, Amanda. I’ve been arguing for some time now that these steps need to be taken to avoid a major banking crisis comparable in its magnitude to the crisis of 1931.
PETER MANDELSON: Well done, I agree!
DANIEL COHN-BENDIT: We agree!
NIALL FERGUSON: But the problem is that since I wrote that article, nothing has come from Berlin but a single word. “Nein.” She [Ms. Merkel] says no.
PETER MANDELSON: That’s where you’re wrong.
NIALL FERGUSON: And here is the problem. You can say “thank you” in 23 different languages, but when it comes to saying no, there is only one language that really matters, and that is German. The single biggest problem right now…
DANIEL COHN-BENDIT: Now you have to talk…
NF: The single biggest problem…
DANIEL COHN-BENDIT: Now you have to talk about…
NIALL FERGUSON: If I can answer Amanda’s question with a little peace! The single biggest problem is that the proposition before the German government and people is: do you want to take the next step to a federal Europe? And when the Germans look at how much that is going to cost them, they say no. So, although I would very much like to avoid the break-up, right now — and I’ve just been in Berlin — I’ve seen no no sign that the German government, from a domestic point of view, is willing to take the massive political risk that would be involved in Eurobonds. It ain’t gonna happen. That is the significance of the piece you quoted from Peter. You know it.
PETER MANDELSON: Can I?
RUDYARD GRIFFITHS: Okay, Peter, you spoke last, so Danny, go ahead.
DANIEL COHN-BENDIT: Because you talked about the German…
JOSEF JOFFE: Can I answer the question that was posed from the floor?
RUDYARD GRIFFITHS: We’ll have the other side respond first.
DANIEL COHN-BENDIT: No, I just want to tell him that they have taken a poll in Germany about the question: do you want Germany to take on more debt to invest in Europe? And a big majority said yes.
JOSEF JOFFE: No.
DANIEL COHN-BENDIT: Yes, it was to take…
JOSEF JOFFE: Nein, nein, nein.
DANIEL COHN-BENDIT: You know, Josef is really incredible. This is really … I don’t know. He knows about the poll in Germany, but all he knows here is “nein.” He says
“nein.” Now give your response.
JOSEF JOFFE: Danny’s Green and Red friends said they wanted to take on more debt, but not the nation as such.
Can I answer the initial question? First of all, I want to say something about Ortega y Gasset. You don’t understand, Peter, how much you played into his hands with that quote, because Ortega said that Europe is the solution about 150 years ago.13
PETER MANDELSON: No, two weeks ago he quoted it.
JOSEF JOFFE: No, Ortega said it 150 years ago. It makes the point that this wonderful desire which the two of you share in your dream-like approach to politics does not work. Otherwise something would have happened in these 150 years.
DANIEL COHN-BENDIT: Excuse me, but sometimes you should dream.
RUDYARD GRIFFITHS: Excuse me, but we have lots of questions. We’re going to go to the next one right now. To Athens, Greece, to the front line of the Eurozone crisis to speak live on Skype with Thrasy Petropoulos, the managing editor of the leading English language daily in Greece, the Athens News. Thrasy, are you there?
THRASY PETROPOULOS: Yes, I can hear you.
13 Ortega y Gasset’s The Revolt of the Masses was published in 1930.
RUDYARD GRIFFITHS: Excellent. You’ve been listening in live, watching the global webstream. What have you heard tonight that you fundamentally disagree with in terms of what these two teams have presented?
THRASY PETROPOULOS: Well, it’s interesting. I’m living in a country that might soon find itself outside of the Eurozone. And I suppose it’s more of a comment than a question. I’d like to know, given that there are ten members of the EU that are not in the Eurozone, what life you think there would be for the European Union without the Euro, or at least with more countries than just the ten outside the zone, given that the union is built on fundamentals of freedom of movement and trade and that there are so many issues like immigration and the environment that are going to affect all of us?
RUDYARD GRIFFITHS: Peter, I think that question is up your alley.
PETER MANDELSON: I’m afraid it’s not because I don’t understand the question.
JOSEF JOFFE: Yes, what is the question?
RUDYARD GRIFFITHS: Right, so if we have these core Eurozone members holding the currency right now, this group—the 17—what is the potential to add to that now in the face of this existing crisis? Has the future expansion and growth of Europe stopped at this moment?
NIALL FERGUSON: I’m sorry. My understanding of the question was quite different. My understanding of it was, can Greece…
JOSEF JOFFE: How can we save Europe if we can’t even understand the question?
NIALL FERGUSON: …can Greece leave the Euro and remain in the European Union as for example, the United Kingdom does?
RUDYARD GRIFFITHS: I think that’s it, yes. So let’s deal with the first part of this question, which is: Can Greece exit? Can you have a “Grexit” and still have those other countries hold together in a single unit? Can it survive?
PETER MANDELSON: Well, 70 or 80 percent, on the basis of opinion polls, of the Greek people say they want to remain in the Euro. They don’t want to leave, they want to stay.
There must be some reason for that, and I think the reason is they know full well that if they were to come out of the Eurozone now and revert to their own national currency it would in all probability sink like a stone. Inflation will soar, and the sovereign default and the default on Euro-denominated contracts both within the country and externally will create a lawyers’ paradise. It will create the most extraordinary economic and social chaos in Greece. That is why, for Greece’s sake, we have to move heaven and earth to keep it within the Euro.
DANIEL COHN-BENDIT: And I want to tell you, if they leave the Eurozone — and I criticize the government because the austerity measures are too strong and the Greek population can’t stand it, and I think we should be clear on this. But if they leave, the new government will have no money to pay and so there will be an uprising. And what happens with population uprisings, as we know from history, is that the military will take over, So I think it’s a big danger and I think we should really do more to keep Greece.
I know it is difficult and we have to ease the difficulties. But it is very dangerous. Of course, there are countries outside the Euro, like Denmark, but if the Euro moves at 12 o’clock, at 12 o’clock and one second the krone moves in the same direction. So there are a lot of countries that are not in the Euro, but they are completely linked because they are economically linked to Europe. The Euro is a [means of] stability even in difficulties. The dollar was a [means of] stability even when California had no money, or New York. Even in difficulty.
JOSEF JOFFE: How can you say that, given how the Euro is moving? The Euro is tumbling. It is the strongest force for instability in our lives. I don’t want any Brit to tell me about what the Euro is and what it should do, because it isn’t your issue. Otherwise, Britain would have been in the Eurozone instead of sitting there and gloating, “Thank God we never got into it!”
RUDYARD GRIFFITHS: What Danny and Peter are saying is important: that Europe will do whatever it takes to keep Greece in Europe regardless of a new government that will reject the austerity measures. So will Germany sign on to that?
JOSEF JOFFE: I’ll do it! I’ll gladly do it under the following condition: if you tell me where the money will come from. Will we get it from the Brits, who are broke? Will we get it from the French, who are broke, whose national debt has risen in 20 years from 35 percent of GDP to 90 percent? Will we get it from the great state of Luxembourg? Or maybe from broke Spain? Where will we get the money? If you tell me where the money is, we can talk business.
DANIEL COHN-BENDIT: Can I talk business with you? I want to…
NIALL FERGUSON: That’s a really good question. What’s the answer? Where will the money come from, Danny? Where will the money come from?
DANIEL COHN-BENDIT: No, no. All countries were in big deficits. The deficits started after the sub-prime crisis of 2008. In 2007 Spain had a 39 percent deficit. And now it is at 90 percent.
NIALL FERGUSON: You’re not answering the question.
DANIEL COHN-BENDIT: It’s linked to the sub-prime crisis. You have to say this also today.
NIALL FERGUSON: You’re not answering the question. Where will the money come from to keep Greece in?
DANIEL COHN-BENDIT: The money will come from Eurobonds.
NIALL FERGUSON: But the Germans are saying no.
DANIEL COHN-BENDIT: No, the Germans won’t say no.
PETER MANDELSON: Hold on a minute.
RUDYARD GRIFFITHS: Final interjection.
PETER MANDELSON: Two weeks ago, I was in the Federal Chancellery, seeing the
Chancellor’s person responsible for Europe. The other month I was visiting the president of the German Bundesbank in Frankfurt. Prior to that, I had been in the ministry of finance in Berlin. On not one occasion did any official — president, counsellor or whoever he was — ever say to me that Germany did not want to become part of the solution of the Eurozone crisis. And secondly…
JOSEF JOFFE: But I think…
PETER MANDELSON: I’m sorry but you’re going to have to listen to this. Are you really serious or not?
JOSEF JOFFE: But you’re faking the answer.
PETER MANDELSON: Secondly, secondly…
JOSEF JOFFE: I’m all ears.
NIALL FERGUSON: So what did they tell you? Did they tell you what they were going to do? Because I read the Financial Times too, and every statement that has come out from Berlin since I wrote that article has been negative about Eurobonds and negative about using funds to bail out…
DANIEL COHN-BENDIT: If you want the answer…
PETER MANDELSON: You’re wrong, actually. Do you want the answer? Why do you think it is, Niall, that they keep on saying no and they’re not prepared to do anything, and an extra 500 billion Euro exposure has come onto the balance sheet of the German Bundesbank.
NIALL FERGUSON: Because they can’t stop that, because they can’t prevent it.
PETER MANDELSON: No, because they’ve agreed to it, Niall. They want to be part of the solution.
NIALL FERGUSON: No, that is not how it works and you know it. Their Target2 liabilities, which are now hundreds of millions of Euros, were automatically run up under the terms of the monetary union. The Germans didn’t have to say yes or no. It happened automatically. And they’re extremely worried about it…
PETER MANDELSON: I thought you said the Germans could always say no. They could always say “nein.” They haven’t said “nein,” they’ve said “ja,” and that is the point.
NIALL FERGUSON: No, Peter, that is not correct.
RUDYARD GRIFFITHS: We’re going to go to another question. This one is important because, as Niall mentioned, this crisis affects a lot of young Europeans. There is fifty- percent unemployment amongst 18- to 25-year-olds in both Greece and Spain. So I’m going to go to Melanie Greene, a Master’s student in International Affairs at the Munk
School. Melanie?
MELANIE GREENE: Thank you. I’d like to ask the debaters tonight what hope, if any, do
young people in Europe have for the future, given the extremely high youth unemployment across the continent?
RUDYARD GRIFFITHS: Danny, why don’t you weigh in on that? Your political career began as a young man on the streets of Paris. Was unemployment at 50 percent?
DANIEL COHN-BENDIT: Well, you have two things. First, in the last European Council, they decided on an extra program for young people, and the first decision was that they would take 25 billion from the European budget to start some programs in Spain, in Italy and in Greece. Second, the German Chancellor agreed with François Hollande — they didn’t agree about a lot of things, but some things — to put together a program and to propose for the end of June summit a special program for young people all over Europe, exactly in response to youth unemployment. And Ms. Merkel said that Germany will participate the most they possibly can in this direction.
They really have a positive attitude toward this. Youth unemployment was a concern, and the European Parliament has made a proposition, and I think this will put it on the right track. So I think nobody can say no to this.
RUDYARD GRIFFITHS: Niall, you’re a historian; you’ve looked at revolutions through history. Is there a tipping point? I mean, does 50 percent unemployment in that demographic suggest that social instability is now just seething beneath the surface?
NIALL FERGUSON: When I arrived in Barcelona just a few days ago it took me over an hour to get to the hotel because of the demonstration by students. It’s not only in
Montreal that this happens. And the mood is very bleak. The mood is very bleak with good reason, because when you look not only at the current unemployment rates for young people but at the future prospects for European growth, it is hard to see what kind of a future lies ahead.
Moreover, when young people look at the fiscal policies of the generation that screwed Europe up, what they see is a mountain of debt that is going to be their inheritance. If you do any calculation about the future path of taxation for the next generation of employees
— those who are lucky enough to be employed — the taxes are going to be far higher than they were in the last generation. We see this almost all the time, with the exodus of talented young Europeans to study in the United States. And it’s really, really perceptible. It was already happening even before the crisis, partly because of the bleak economic prospects. It’s also because — and let’s be absolutely candid — the continental European universities have been rubbish since your generation screwed them up in 1968.
RUDYARD GRIFFITHS: Our final question from the stage is a good one, because it’s going to take this somewhat acrimonious foursome and force them to think in a new way.
BRITNEY [LAST NAME]: There’s been a lot of great debating tonight, but what I would really like to know is, which of your opponents’ arguments do you find the most compelling?
RUDYARD GRIFFITHS: I’ll repeat that. It’s going to be a bit of a mental shift for all of you, but which of your opponents’ arguments do you find the most convincing. Josef?
JOSEF JOFFE: The most convincing part is what Danny said, when he said that he was not educable. The most convincing thing that Peter said — and I’m amazed because he is such a steeled and well-trained debater that I assume he went to Oxford, where he must have won some debates at the Oxford Union — is that he stubbornly defended something that is not the issue.
You defended something I totally agree with, which is that it is much better to have free trade and open borders than to have closed borders and not free trade. But that was not the issue of this debate. I agree perfectly with you about trade, but that was not the issue.
The issue was whether Europe — the experiment — has failed. And the basic failure, I think, is that we have ground to a halt, that we cannot continue. And the reasons for that are deeply buried in our societies, in our social contracts and our political cultures, and above all in the fact that we are not a nation-state but 27 separate nations with 27 different histories and ways of doing things. And if you don’t believe that these cultural differences can’t be overcome, just look at the four of us, the way we debate here.
RUDYARD GRIFFITHS: So, Lord Mandelson, I’m going to have you end the question-and- answer session. Which of Niall’s and Josef’s arguments do you give credence to in the context of this discussion.
PETER MANDELSON: Well, I’m trying to give credence…
JOSEF JOFFE: But you haven’t heard a good argument here, correct?
DANIEL COHN-BENDIT: You are like a little child.
RUDYARD GRIFFITHS: Gentlemen, let’s not make this personal.
JOSEF JOFFE: Oh, but I don’t agree with that one, I don’t agree with that argument.
RUDYARD GRIFFITHS: Lord Mandelson, you have the final word here.
PM: What I was trying to do is give credence to Josef’s argument that somehow we have achieved free trade across a 500-million-strong market in the European Union, without anyone doing anything about it. Now, how do you think we came to create this market? It didn’t happen by accident. It happened by political design. It’s been built up over 60 years and culminated in the creation, finally, of the single market in the late 1980s and the early 1990s. By the way, the architect was the then British Commissioner in Brussels,
throughout the course of the 1980s. Thank you for all your sneering remarks about the British in Europe!
But the question I want to put to you, Josef, is, would you rather see this fall apart? Would you rather dismantle it? Would you rather see a single market cease to exist? Because if you do, if you want to end what you call the European experiment as you claim to do, I would then have to put it back to you: where do you think business is going to grow, where do you think jobs are going to be created in the middle of a depth of economic chaos that is going to blight Europe not for years, but for decades?
And that’s all I’m asking you to do. I’m not denying that there are problems in the single currency. I’ve acknowledged those. I think they’re very serious and we’ve got to put them right. I happen to think that we can put them right. Niall disagrees. He thinks it is impossible; he thinks the Germans will always say no. I hope I’m persuading him that the
Germans are actually in the middle of saying yes, but they want certain things to be put in place beforehand. They want a little more discipline, a few more rules, and they want a little more control over the Eurozone before they start turning on the spending taps even more. I don’t blame the Germans for asking for that.
But to go back to my point to Josef. If you think this European experiment is so terrible, what effect do you think it would have on our economy, our businesses and our jobs if we just let the whole thing fall apart? I don’t understand your point.
JOSEF JOFFE: I didn’t argue for letting it fall apart.
RUDYARD GRIFFITHS: Gentlemen. I’m conscious of the clock. Let’s move to closing statements. Lord Mandelson, because you just spoke, I’m going to change the order slightly. Daniel Cohn-Bendit, you’re up first with your closing arguments. You have three minutes on the clock.
DANIEL COHN-BENDIT: Well, I want to make it simple. I agree totally that Europe and the single currency are in difficulty. I would sign Niall Ferguson’ article in the Financial Times. But we have to go on. Now, our opponents say the problem is that Germany will say no, no. But Ms. Merkel wants to get a fiscal compact, and she needs a two-thirds majority. For this, she needs the votes of the Social Democrats and the Greens. And the Greens and the Social Democrats say, we have to take a step toward more solidarity, redemption funds, it’s called — a communitarization of part of the debt — then you get Euro obligations. Second, we need to take common responsibility in the future with countries like France. And I just want to say it’s going in this direction now. But, knowing European history, it is of course very difficult.
But we are in a situation in Europe where we see that the majority of the population wants to go forward even if they are afraid. And he [Niall Fergusson] is right: France and Holland voted against the constitutional project. You are right because we made a mistake. I never said Europe didn’t make mistakes. I just said that because the crisis is like this, the way out of the crisis is through more Europe. And now we are debating this.
How to do it is an interesting debate and a complicated debate. It takes time and it is difficult.
But to say the European project has failed is to go backward. If you have scrambled eggs, you can’t get the eggs back. You can’t do it. If you have scrambled eggs, you have to try to organize it so that everybody can eat it. And you know, I want to say to everybody here, don’t fool yourself or don’t be fooled. Europe is a vision, a perspective, historically something completely new, and I’m proud that I’ve put twenty years’ work into this project.
I’m proud that I could change the history of Europe a little bit, Today we are Europeans with big cultural differences, but with the feeling that together we can in the future be something, because any single state in Europe in the next 30 years will be nothing. We will be something together and we will still own our cultural differences or we will disappear as a political force. And that’s why I defend Europe.
RUDYARD GRIFFITHS: Josef Joffe, you’re next with your closing remarks.
JOSEF JOFFE: Let me just dispense with the argument once and for all that Europe keeps the peace. That is historically false; that is conceptually false. The problem is that security and peace were assured before we started integration. In fact, we couldn’t have started integration unless there had been somebody else in the game, stronger than France, stronger than Germany, stronger than all, which happened to be the United
States, who protected each against the other and guaranteed everybody security against the others. Once the security problem was solved, we could go on to build Europe.
I agree with the second point, the fact that Europe has to be part of the solution. But you know, we’ve just heard the two other debaters restating and restating what is desirable … what should be: that’s why I will defend Europe; it should go on and climb the Eiger north face, and so on. What neither of them has said is how it can be done, given that we are talking about 27 nation-states.
So let me stick with the metaphor for a moment. Yes, I guess we could climb the cliff. But the problem is that we need somebody who leads and somebody who follows. And the problem with Europe is that most of us are just much better at saying, “no,” “non” or
“nein,” but nobody really wants to accept anybody as a leader to rule the roost and to rule the rest. And if you look at it that way, then you will necessarily become more modest about what Europe should and can do. There is no Abraham Lincoln. There is no Cavour. There is no Bismarck who can pummel and beat the rest into following it. And thank God for that, by the way. There are certain kinds of French deputies I would not want to be led by.
As to the more prudent argument of Peter, who asks, would you want to live in a Europe that is not Europe? That was not the issue of this debate. The issue of this debate was: has the experiment failed, and it seems to me that with some powers of observation you see
that it has failed. And that does not mean we want to dismantle the whole thing. Nobody has argued that. Nobody in his right mind would argue for dismantling.
What follows from what we see is that we should be less ambitious, preserve what we have, while at the same time preserving the kind of realism that tells us, no, we are not going to be E Pluribus Unum.
RUDYARD GRIFFITHS: Lord Mandelson, your closing arguments, please.
PETER MANDELSON: I don’t expect people to show blind faith either in the Euro, the single currency or in the European project. What I do ask people, though, is not to accept the view of those who oppose this motion, that everything that is wrong in the Eurozone and the operation of the single currency will remain wrong, that every mistake that has been made is irreversible — in other words, that all politics is hopeless. I’m asking you to accept the view that you can actually repair things, reverse mistakes, change things for the better. It’s not academic but it is politics, Niall.
I think that so much of what we’ve heard from the other side is, quite frankly, a sort of nihilistic council of despair. Now I don’t expect you to share my commitment to Europe, Niall. And I don’t expect you necessarily to agree with my pro-European views — although, as I pointed out, you did do so three weeks ago in the Financial Times, at the beginning of May. What I ask you to do is just bear in mind what is at stake. This isn’t actually a laugh. We’re talking about people’s livelihoods. We’re talking about people’s
jobs, people’s futures. We’re talking about a whole generation of young people who need this to succeed, not fail. So please, stop praying for failure, stop arguing for failure.
I’m not saying that necessarily we will prevail. Or that necessarily we will win. But all of us have got to make a huge, combined political effort to make this thing succeed and stay on the road for two reasons. One is that there is no such thing as a velvet divorce in the Eurozone. The fallout would be absolutely tremendous for all of us in Europe. But second and equally important, we’re talking about in the European Union as a whole, a single economic space which is the second largest in importance of its kind in the world. It would not just be the Europeans who would be hit if this thing fell apart. It would be people in advanced economies and developing economies, rich people and poor people, including many in Canada and right across the world.
That is why we have got to combine to make this thing sort itself out and I believe that we can and that it will take leadership. And there is leadership. There is Germany There’s a very good president who has just been elected in France. And while it is true that Britain is not, at the moment, in the forefront of Europe’s leadership, I wish it were.
RUDYARD GRIFFITHS: Niall, you have the final word.
NIALL FERGUSON: In February of 2009, I gave an interview to the Globe and Mail in which I said that there would be blood; that in the wake of the financial crisis, there would be such political upheaval and social dislocation that the result would be
violence.14 I believe that that prophecy is being fulfilled, and it is being fulfilled in large measure because of the failed experiment of European integration. My opponents have the direction of causation all wrong.
Why are there depression levels of unemployment in countries like Greece and Spain? It wasn’t an act of God; it was a direct and predictable consequence of the failed experiment of monetary union — an experiment that was so obviously doomed to fail that your government elected not to join the Euro, Peter. If you’re such a big believer in
European integration, why was it that year after year the Labour government refused to join? You know the answer. The answer was that at least some people in your party, including your old friend Gordon Brown, saw what was coming.
The magnitude of the crisis that is being inflicted on the European periphery by this failed experiment can hardly be overstated. And the stakes are very high. We could be on the brink of a second phase of Depression. If this thing turns into a bank run that sweeps right through the Mediterranean region, it could be 1931 all over again. And what happens after that? What happens if the worst-case scenario takes place? What happens if the Germans continue to say no to the kind of federal measures that might possibly staunch the flow of money out of Spanish banks?
Other experiments are also failing in Europe right now: the experiment of the excessively generous welfare states; the experiments of multiculturalism, which has created huge
14 Niall Ferguson, “There will be blood,” Globe and Mail, Feb. 23, 2009.
ghettoes of un-integrated immigrants who are most likely to be the focal point for the populist backlash that is in the pipeline. The experiment has been more dangerous than any of the Eurocrats have ever admitted, and we have yet to see the full consequences when the laboratory blows up.
The great Viennese satirist Karl Kraus once described the Habsburg Empire as an experimental laboratory for world destruction.15 My fear, ladies and gentlemen, is that this is what the European Union is poised to become. This experiment has failed. Thank you.
RUDYARD GRIFFITHS: Ladies and gentlemen, let me just reiterate something Peter Munk has said at past debates. It’s one thing to get up on stage and give a set piece speech. Speakers of such quality and calibre as these do it all the time. It is something quite different, though, to put your ideas forward, to have them contested the way they have been tonight, and frankly to talk about an issue that is, again, hardly academic. This affects the lives of hundreds of millions of people, possibly even the future of the global economy. It’s been a spirited debate that has given us all a larger understanding of Europe, as well as an enriched conversation. So please join me in a round of applause and appreciation for our debaters.
15 Eine Versuchsstation des Weltuntergangs (1914).