JEFFREY BROWN: And joining us now is Jose Manuel Barroso, president of the European Commission, the executive arm of the EU. He's a former prime minister of Portugal.
Welcome to you.
JOSE MANUEL BARROSO, president, European Commission: Thank you.
JEFFREY BROWN: This is from The Economist magazine just out: "Without a dramatic change of heart by the European Central Bank and by European leaders, the single currency could break up within weeks."
Now, that's just one of many assessments, some of them even more dire. Do you agree? Is the euro in danger?
JOSE MANUEL BARROSO: I will not say the euro, but the financial stability, in fact, is affected now severely.
And I think there is a problem. And we recognize the problem. We are not complacent about it. At the same time, I want to tell you that I firmly believe it is the determination of all the European leaders, governments and also the European institutions to do whatever is necessary to protect the euro.
JEFFREY BROWN: Well, explain the problem for an American audience. What is the fundamental problem facing Europe right now?
JOSE MANUEL BARROSO: The problem is the following.
We have some countries with high levels of debt. And so we have a problem in terms of assuring the sustainability of this debt. At the same time, differently from the United States, that has, by the way, also a debt that is bigger compared to the GDP at the average on the European Union, we have different member states. We have 17 member states that are in the euro area and 27 for the European Union.
And so we have been reacting in an unprecedented manner. It is an unprecedented challenge to combine the reduction of the debt with some measures to enhance growth but, of course, without the instruments, because we are not completely integrated as a country like the United States. We have a common currency, but not, for instance, a common treasury.
And now we are creating those instruments. And this takes time, because democracy is slower than markets. But I believe we are going to overcome this crisis.
JEFFREY BROWN: Well, some of these steps being talked about are quite unprecedented, including a solution on the table is now more integration through a fiscal policy, a fiscal union, essentially requiring countries to get approval, right, for their budget and tax policies.
Now, are European countries ready for something like that, which means giving up a certain amount of sovereignty, one would think?
JOSE MANUEL BARROSO: I think so.
Already now, in the European Union, there is a pooling of sovereignty. We have an independent central bank. We have the commission that is a supranational institution that is independent from the member states, that puts the proposals on the table that afterwards have to be approved by the member states, sometimes by qualified majorities. It means that a country may be outnumbered.
So, you already have in the European Union some mechanisms of pooling sovereignty. But now, for the currency, my answer to you is, yes, member states are now ready to accept a higher level of integration, because we know now by experience that without more discipline, more convergence, the euro will be at risk. And I see now there is a willingness to do that, that before this crisis was simply not there.
JEFFREY BROWN: But hasn't part of the problem been precisely the differences among countries in Europe, the very strong ones and the very weaker ones? Some people have wondered if this crisis is sort of bringing out a fundamental flaw in the whole system that doesn't allow the kind of actions we're talking about.
JOSE MANUEL BARROSO: It's true that there are differences. And that explains why, sometimes, decisions take longer than what we would have liked.
But, at the same time, I can tell you that everybody wants to keep the euro. From Germany to Greece, nobody wants to leave the euro. And I can tell you that the level of interdependence and integration in the European Union is so important, that the perspective of rolling back on these achievements is simply too costly for everybody.
JEFFREY BROWN: What would the consequences be?
JOSE MANUEL BARROSO: No, look, it would be extremely damaging because it will be -- it could mean a breakup of the internal market.
The European Union has a 500 million people that, by value, is the biggest in the world, in terms of value, bigger than any other. And so it would be a catastrophe, I think. But I think we are not going that way. And, in fact, if you look at debate in Europe, nobody is proposing it. The debate is, how are we going to further integrate? What is the method? What competencies could we accept to be done at -- to be at the European level, instead of national level?
But all the member states are now ready to consider this. But, of course, at the same time, we have to consider more immediate measures.
JEFFREY BROWN: Well, but you mentioned -- you mentioned Germany earlier. Much of the concern now is that Germany, the richest European country, is resisting stronger actions that many people think are necessary, issuing euro bonds or having the European Central Bank play a much stronger role.
They fear that more of it is going to fall on them, right, to bail out weaker countries? Are they an impediment now?
JOSE MANUEL BARROSO: Germany is the country that is giving more support in financial terms to the others, because the support, the financial support, the so-called bailout programs, they are financed in a pro rata to the GDP. And so Germany is by far the biggest contributor.
And I can tell you from my contacts in the German government and also by their commitments formally, explicitly, they say that they are ready to do whatever is necessary to protect the euro and the financial stability.
Of course, I have to be frank with you. Not all the member states agree exactly on what is the best way to do it. And we are in the process of reaching that consensus, because some of those measures are indeed very important. And I have no doubts about the German determination about protecting civility, because it will be also damaging for Germany.
Germany exports more for the other countries in the European Union than for all the rest of the world. So it will be a full crisis in the euro area. It will be damaging for the business and for the workers in Germany as well.
JEFFREY BROWN: Well, let me ask you, finally. You say that some of these measures will take time. Is there time? I mean, all of these dire warnings say, within weeks, some within days, some within months, that a real crisis could unfold.
JOSE MANUEL BARROSO: The governments are unaware of this timing issue and the urgency.
And, besides, we are going tonight at this time. We are speaking now. There is a euro area meeting at the ministerial level in Brussels. And on the 9th of December, there will be a summit of the euro area and of the European Union to deal with these issues.
I believe progress will be achieved there. I think I can tell from my contacts -- and I'm telling that -- my full independence -- because these decisions, some of them, have to be taken by the member states, that I trust that they understand the magnitude of the problem, because it's a serious problem, and also the urgency of addressing it.
JEFFREY BROWN: All right, Jose Manuel Barroso is the EU Commission president.
Thank you very much.
JOSE MANUEL BARROSO: Thank you.