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Derviş: European crisis is not over yet

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Derviş: European crisis is not over yet


Kemal Dervis was an important name who had to deal with a similar economic crisis at national level approximately ten years ago. He established the pillars of Turkey’s current economic structure and contributed to the recovery. He is known as one of the most gifted economists in the world and currently works as the Vice President of the Brookings Institution. He attended a seminar in Istanbul on the European Crisis and its effects on France and Turkey, hosted by the Institute of Bosphore. He said the crisis is not over yet and if the Europeans cannot solve the crisis there is a possibility of separation of the EU as South and North.

Bora Bayraktar/euronews: You are talking about a possible separation within the European Union between South and North. To what direction is the crisis in Europe going? How would you evaluate the situation?

Kemal Derviş: In fact, the crisis is still continuing. It looks like it is under control with the precautions or promised precautions of the European Central Bank. But the main problems have not been solved yet. When I say the main problems, I refer to the economic growth. Unemployment is still there and going up in Spain, Italy, France and Greece. So, the crisis could not be overcome yet but there is a consensus on reforms and on the direction of where the structural changes have to go. These have to be realised. If they can really do that I think the crisis will be overcome in a few years.

euronews: You earlier mentioned a possible North-South separation in the EU. Do you think it is likely?

Kemal Derviş: Northern Europe has a really different approach to things, it is on a different location, it has a different psychology and world view than the South. France is in between those two. I am underlining the fact that France is very important. Because it is the only nation that can combine North and the South. It is important to have a strong France, a growing economy. Now the North is recording huge fiscal surplus while the South is recording big fiscal deficit. They both need to seek a solution to that. Because having surplus is not a good thing for society, like having a fiscal deficit. Therefore both South and North need to find a solution together. In this respect France and Germany have a lot to do.

euronews: You have an idea for Turkey’s membership of the EU. Do you propose a center-periphery type of restructuring of the EU in order to prevent South-North division?

Kemal Derviş: Let me clarify this: I am not saying that North and South will be separated. But I say, there is this danger. But it can be overcome. If the crisis continues, if there is no improvement in Spain, Italy and Greece, then this division can happen. But I think the crisis will be overcome. So I don’t predict that the EU will be divided. My prediction is that the crisis will be overcome. It will be hard but they will succeed. The Eurozone will be more integrated, the sharing of sovereignty will be strong and we will see progressive Europe. The other part of the EU, led by the UK, they will not join this power sharing. They will not be part of monetary union (euro). But they will still be members of the EU. They will be members of the parliament, of the commission and of the council. Here my proposal or my approach to this is that this is giving a new opportunity to Turkey. Turkey must join the EU. But this is not like having a special status, or being bound without membership. No, Turkey must join the EU and have a say. But not to the highly power-sharing Eurozone, but to a Greater European Union. I think this will comfort both Turkey and Europeans and bring a more realistic dimension to the European project. Now Turkey is acting as if she will join the EU and the EU is doing the same. But our youth no longer believes this, rightfully. I think putting a realistic goal, will add a new impetus to this relations.

euronews: Political will is critical to overcome crisis. In this regard the most important political decision was the American election. Obama has been re-elected. How do you think this will contribute to the issue?

Kemal Derviş: I am happy that Obama is re-elected. It was hard, many presidents lost their elections because of this economic crisis. Sarkozy, Gordon Brown and Zapatero lost elections. Economies are in difficulty. Rich nations’ economies are in difficulty. Of course their people have sources but the economies are not growing and there is unemployment. Unemployment is growing in the US too. Despite this, Obama won the election. His personality played a role of course but he defended that the fairer sharing of national income is highly necessary for the US. I think this was important because in the last ten years, the share of national income deteriorated dramatically. Obama defended the rights of the women and women supported him. Also American society is changing. Today fifteen per cent of Americans are speaking Spanish not English. He stretched his hand out to those people. He worked on a law enabling illegal immigrants to stay and to send their kids to school. So he represents not White Protestant America but a multinational society with Africans, Spanish and Asians.

Bora Bayraktar, İstanbul

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