Anna Buj, Rome, December 25, 2021
Antonio Masiello / Getty
The former Italian prime minister was the president of the European Commission who put the Euro into circulation. Two decades later, he continues to defend that the single currency is still an “extraordinary reality.”
Former Italian Prime Minister Romano Prodi (Bologna, 1939) was president of the European Commission when the euro began to circulate. Two decades later, in an interview with Dinero, the professor (as he likes to be called) continues to defend that the single currency was a great decision that helped strengthen Europe.
“If it had been managed with more unity, the Euro would be the leader alongside the dollar”
Twenty years later, was the euro a wise decision?
For Italy and for Europe it was certainly positive. If it had been managed with more unity and with more awareness, it would also be a world leader alongside the dollar. Now it is robust, it has a great value in the world, but perhaps not what it could have had if there had not been that European rupture during the great economic crisis.
What should have been done differently?
What came afterwards. In recent years we have shown greater unity in the world and we are recovering. When I was president of the Commission, or Italian prime minister, and there were summits with the Chinese president, the only thing they wanted to know was if it was true that we would make this single currency. They asked us if they could have it as a reserve. I would say, “Yes, yes, yes!” And the final speech was “if there will be the euro and next to the dollar there will also be room for the renminbi.” In other words, the great politics that believed that with the euro we were building pluralism. Therefore, the Chinese president said: “In our portfolio we will have many dollars and in our reserves as many dollars as euros.” Later, with the crisis, they stopped, but the euro is still an extraordinary reality with the potential to be at the same level as the dollar, as the Chinese said, with the delay due to our political divisions.
How do you remember the last moments before the introduction of the single currency?
In the last days there were no nerves, but there were before. There were many aversions against Italy for the debt, for the issue of interest rates … But they had been acquiesced with a letter that we sent to Helmut Kohl and Jacques Chirac where we clarified the absolute Italian will to enter the euro and illustrated the measures to adjust budgets according to European rules. Since then, the problem has shifted to the exchange rate. On the eve of the final decision I had a long conversation with Kohl. I wanted a convenient change, and insisted on 1,000 lire for each mark. Kohl said 950 or 970. At the end he told me: “Look, Romano, with 1,000 I can’t go to Parliament.” And we agreed to 990. The last hours were nice. Instead, the previous months were difficult. Then the Spanish president, José María Aznar, signed up with the famous interview with the Financial Times. It was invented that Italy conditioned his adhesion … it was the spokesman for him who was a hawk. It took a lot to disprove it by sending the text of the letters signed by me and Carlo Azeglio Ciampi to Kohl and Chirac. These are things that happen.
You were angry with this intervention by José María Aznar …
Not angry, very angry! Naturally, his press officer was smart about the mass media and chose the Financial Times to magnify his president. The documents are very clear. But I repeat: you have asked me if I regret it, and no. Outside of the euro it would be a tragedy. Above all, I realized that some of the European allies were no longer tolerating Italy playing with devaluations to take market shares. Either we adjusted the situation that my predecessors had created, or Italy would progressively be left out of Europe. This same week, Mario Draghi and Emmanuel Macron have chosen precisely The Financial Times to ask for a change in the fiscal rules in the European Union. They are stupid! Putting a fixed figure on the budget deficit or surplus is wrong. They have taught us all at school: in certain years you can have a big deficit, as this year has shown us, and in certain years you can have a surplus when you have to settle the accounts. It is good that they reform them, not to remove the rules but to adapt them to the type of deficit and the moment of the economy. One thing is a deficit for consumer spending and another is a deficit for productive investments. I think the new rules will take this into account.
If there had been more flexibility in the stability pact, would the last great economic crisis have been so harsh?
No, because the crisis today is even more serious than it was then, but we have recovered quickly because we have the necessary instruments. We have realized that the American policy of the new deal in the face of the tragedy increased spending a lot, and we have done so now. Keynes is still alive, not physically, but his books are still there. I am very Keynesian.
Will Olaf Scholz’s Germany agree to reform the stability pact?
If the rules are wise, they will accept them. But they must be wise. The Germans are right in saying that they do not accept a debt without order, without intelligence and without prudence. The problem is working to a budget projected into the future. If there is a deficit that increases productivity and investments, it may be good, if there is a deficit to cover useless expenses or for political demagoguery, no.
You were once a great defender of the European recovery plan. Is it appropriate for it to be conditional on reforms within the states?
Speaking of Italy, yes. Honestly, either our bureaucracy, our justice is reformed, as the Draghi government is doing, or it returns to low productivity, and then the Germans will be right. I think that a conditioned recovery plan is fair because if we do not behave well, we not only hurt ourselves, but everyone.
Was the outcome of the recovery plan the best possible?
It was a very big new event. It was naturally facilitated by unforeseen circumstances. Germany’s change of position was due to three reasons. First, the coronavirus: nobody could say that it was the fault of the Italians, the Spaniards or the Greeks. Second, Brexit. I loved the UK within the EU, but with them inside you couldn’t talk about solidarity. Third, much of the German establishment realized that Germany cannot be great if it is not in a European context in the world of the US and China. I hope the same will happen in defense and foreign policy, but this is a duty of France, which has the right of veto and has a nuclear weapon. Italy has just signed the historic Quirinal treaty with France.
How do you think the balances of power in Europe are changing after Brexit?
I liked this treaty because, in my opinion, it also involves Spain. I am convinced that the tragedy of Europe is unanimity. The Franco-German treaty, the Franco-Italian treaty, say that together we must do more. It is time for France, Italy, Germany and Spain, the four great European countries, to do something more together in foreign and defense policy. If they do, immediately many others will sign up and Europe will begin to move. I know very well that it would be better if all 27 moved together, but since this cannot happen, we cannot stand still. We cannot tolerate that in a country like Libya, Turkey, with a lower GDP than Spain, and Russia, with a lower GDP than Italy, rule. It is not tolerable.
We are at a time when Brussels has serious problems with Hungary and Poland…
With unanimity, all the dwarves feel giants.
Was the 2004 EU enlargement a mistake?
I was president of the Commission to 15 and 25 countries. The political strategy problems were all with the UK, not with the eastern countries. They have no alternative. Poland gives us a lot of problems, but when you do a poll, 90% of Poles want to stay in the EU. In the United Kingdom it was not like that, because in their head they had the idea of the American alternative, which then does not exist, because if the United States must choose between the United Kingdom and the EU, it will choose Europe. The eastern countries teach us that democracy is heavy, it requires training, it is slow, but rest assured because in a few years Poland will be collaborative and democratic. For that, it is necessary for others to move: then Poland will continue and change.
Would it be positive for Poland and Hungary to enter the euro?
In the conditions of the euro, yes. This will happen in the future. The euro has not lost any member, not even in the great crisis, and new ones are always arriving. If there is a serious management of the euro and from one day to the next they will come. The euro that works gives the sense of what Europe should be, it needs to be strong, and I repeat, it is necessary that the four countries that I have named, including Spain, take a leap forward.
In Italy the battle for the presidency of the Republic has already begun. This week Prime Minister Mario Draghi seemed to show his availability. Would you like him to be head of state?
He would be a guarantee of a serious authority for seven years. Draghi must decide whether he will spend one year in direct power, as Prime Minister, or seven years in authority, as President of the Republic. He is a very influential figure in Italy. He is more than a constitutional monarch as in Spain or more than the president of the German Republic. In moments of crisis he has a decisive value in Italy. Having Draghi reassures me, and I interpret this week’s speech as an availability that did not exist until then.
The other person who wants the position is Silvio Berlusconi. It is his big dream. Would Europe see it well?
It is highly unlikely. Europe may not take him into account. He is in a difficult moment at the polls and also … I am 82 years old and I have said that I am too old. He has some more than me. He perhaps has a concept of providence different from mine.