Mark Breddy and Stephen Evans: What have been the presidency's main achievements?
Nicolas Schmit: We achieved the reform of the Stability Pact, which was absolutely necessary after all the discussions on how stupid or inefficient it was. If we hadn't got this reform, the pact would have been out anyway. I think in the end we achieved a reasonable relaunch of the Lisbon Strategy [designed to boost EU growth]. We succeeded in restructuring it, focusing the various objectives and making it leaner in terms of implementation. We now have to see what the developments will be in the different Member States.
I also think we were quite successful in the transatlantic relationship. Having a summit in Brussels first and another one in Washington ... and the Iraq conference was also quite important. Showing that Europe was once again more united on the Iraqi question, but also that there was renewed cooperation with the US. Then there were the decisions reached on development aid: the commitment to dedicate 0.7% of national budgets to aid by 2015. There was also the agreement on the contracts [and pay] of MEPs. We established a new objective for negotiations, which should prepare the post-Kyoto era. Then there was the difficult subject of the euro-vignette [cross border road funding system. It still needs approval from the European Parliament].
There is one issue which you might call a failure, but which I prefer to refer to as a non-success, because the presidency did whatever it was able to do to present a coherent and balanced compromise on the financial perspectives.
Mark Breddy and Stephen Evans: Mr Juncker has said the EU is in deep crisis. But the EU has worked well for over 50 years without a constitution, delayed budget deals are the norm and has just completed a successful expansion. Where is the crisis?
Nicolas Schmit: I wouldn't speak about a crisis, but it depends on how you define a crisis. A crisis is a situation where you have serious problems which you don't exactly know how to resolve. But at the end you are confident that you will be able to find a solution.
Europe has experienced a lot of crises. Very often the crises have led to new impetus and a new start.
If we remain in this kind of stagnation, that would be much more serious and much more problematic. It is a difficult moment because of enlargement and because we have somewhat lost the support of public opinion.
The constitution is not the reason behind this. Europe's lack of contact with its citizens is a broader phenomenon which goes back further. If you add to that a number of national issues, then you can understand the results in France and the Netherlands.
I would not emphasise the failure of reaching an agreement on the financial package too much. It would have been better to solve problems now and to have come to an agreement... but we all know that in politics too early is just too early.
Mark Breddy and Stephen Evans: Mr Juncker suggested that all EU expenditure be reviewed as from 2009. Did this mean a complete, binding rethink of all spending including CAP, rebate etc?
Nicolas Schmit: We had agreed with the British that there could be some opening on the whole financial aspect of different policies, including the financing of the Common Agricultural Policy (CAP). This could have started around 2009-2010. We considered that there had been an agreement on the CAP until 2013, including the phasing in of new member countries. It was a difficult agreement made in 2002, but it was an agreement. You cannot just call into question this kind of agreement a few days before an overall agreement on the budget is expected.
This was the big surprise, when the British suddenly not only questioned the 2002 agreement, but said 'well, we have to reshuffle the whole financing of European Union policies in a much more radical and a much more global way. I do not put the necessity of this kind of debate into question... but to block the conclusion of the financial package for that reason was difficult to understand.
Mark Breddy and Stephen Evans: For a man that was perceived all over Europe as an honest broker, Mr Juncker used some rather undiplomatic language. Has he lost his reputation as an honest broker?
Nicolas Schmit: I'm not responsible for Mr Juncker's comments. He was certainly tired and disappointed and ... it can happen that you are harsher. I think the disappointment was shared and that [Juncker] believed he had put forward a fair deal, even on Britain's terms.
Mark Breddy and Stephen Evans: Some have said that the changes in the Stability and Growth Pact rules have set a precedent for EU rules to be ignored by powerful countries. How do you counter this argument?
Nicolas Schmit: We had to reform the Stability Pact. We had to make it more flexible, align it more to economic and financial constraints in Europe, otherwise it would have anyway been out and nobody would have taken it seriously any more. What was done in the end was not to abandon the rules, but to perhaps make it easier to apply the rules, by taking into account that budgetary policy is strongly linked to the economic situation. So I think we now have to see if this is workable, if it can be applied. We have seen with Italy that the Commission has said 'well, OK, we will give you one more year to start adjusting your public finances'. Forcing Italy to reduce her budget deficit dramatically now would certainly worsen the situation.
What is the major weakness in continental Europe? It's the problem of unemployment. I fully agree with Tony Blair that this is where Europe's real challenge lies and that we have to do something for growth and to bring people back into jobs. I'm not convinced that economics is an exact science. You need some political margin to manoeuvre.
Mark Breddy and Stephen Evans: Are you with the Luxembourg vote result?
Nicolas Schmit: Given the circumstances, it was a good result. There has certainly been some influence from the outside. So I think in terms of the European environment the result is quite satisfactory.
Mark Breddy and Stephen Evans: The traditionally industrial areas in south-eastern Luxembourg went against the trend and voted against the constitution. Do you have an explanation for this?
Nicolas Schmit: Traditionally this area has been more reluctant to follow indications or orientations from the capital. Even if you look the last two referendums, there was also a difference between the vote in this area in other regions. More importantly, it is the old industrial base of Luxembourg and it's an area which is going through some long term restructuring, because of the situation in the steel industry. It's also an area where problems like unemployment are more critical. The question of the social dimension and the outcome of liberal policies are more felt in this area.
Mark Breddy and Stephen Evans: How can you envisage the constitution being passed by all 25 EU Member States?
Nicolas Schmit: The process has gone on and it has not been stopped and why should it have just because the French had a problem. We have to see how we can solve their problems and any others which may occur. We are entering a period of serious debate on Europe which will give new impetus to the European project. I fully agree that we need a strong economy, as without it we cannot sustain our social model. So by that argument the tide may change again.
Mark Breddy and Stephen Evans: Do you think referendums are the best way for countries to decide on such complex issues?
Nicolas Schmit: [Pause] Well. [Pause] It's a very difficult question. When was out in the villages talking to people I was asked 'why did you ask us, was it really necessary? You have approved all the previous treaties, why now? That's right, but on the other hand we need to open a debate to move Europe forward again and there is probably no better way, even if you run the risk of failure. For years we have never had such a political debate here as it was always a non-issue.
Mark Breddy and Stephen Evans: Would the constitution allow/or the European Court of Justice to act in a legislative fashion?
Nicolas Schmit: Will law be decided by judges? [Pause] All our constitutions (except the unwritten UK constitution of course) have a lot of general principals and declarations. Europeans have much in common and we have to identify ourselves with some values and common objectives. It is up to politics to give some content to this text and this is the best solution.