YES, YOU CAN LEAVE

Romano Prodi tells Daniel Hannan

that if Britain joined the euro, it could always junk it

IT is not easy being the most powerful bureaucrat in the world, and Romano Prodi is having a tough time of it. The French press is speculating avidly about his demise. His juniors, officials in the 13,000-strong EU Commission, are briefing against him. In his desperation, he has been driven to shift some of Brussels' most long-serving apparatchiks, with consequent vituperation. And, as the hostility builds, his friends in the EU capitals are melting away, leaving only Tony Blair as a firm supporter.

Curiously enough, Mr Prodi's critics seem unable to hang their doubts on any- thing specific. Some newspapers complain that he is as dictatorial as Jacques Delors, his illustrious predecessor; others that he is as ineffective as Jacques Santer. Some manage to accuse him of being both at once. The allegations are always insubstan- tive, unattributed, inchoate.

What seems to lie behind these briefings is a feeling that the president of the Euro- pean Commission is, of all things, too 'Anglo-Saxon'. An alumnus of the LSE, he has lectured at Harvard and Stanford. While his English is excellent, his French can be wince-making. He is, by Brussels standards, a free marketeer, and recently he caused a minor scandal by moving a number of Fran- cophone officials and replacing some of them — choc! horreur! — with Britons.

The criticism is plainly taking its toll on Prodi. When I saw him in Strasbourg last week, he looked worn-out. A sore throat had reduced his voice to a quack, and he seemed to be having difficulty keeping his eyes open. But his suit was dapper and his courtesy never flagged — although both his tailoring and his manners would, per- haps, strike his more paranoid critics as rather too British.

We met in Mr Prodi's parliamentary office, a suitably imperial suite set aside for the president's monthly visits to Strasbourg. The Commission president was accompa- nied by David O'Sullivan, an Irishman, who is to be the next Commission secretary-gen- eral. This appointment is viewed by the Prodi-bashers as further evidence of an Anglo-Saxon takeover. Never mind all those Irish songs about biffing the Saxon; in Brus- sels, Anglo-Saxon is more a state of mind than an ethnic label. So, Mr Prodi, I began, this British plot: is there one?

`I think this is silly,' he says, and goes on to explain his profound belief in the Franco- German axis. 'Europe depends on a strong engagement by France and Germany.' So, did he agree with Joschka Fischer, who recently called for these two states to forge ahead to a federal European government?

`Yes. He sets out a lot of different options. But the question of how you arrive there is still open. At least the debate on Europe is here again. We have lifted it out of the small daily problems.'

One of the charges sometimes laid against Mr Prodi is that he is a bit short on the vision thing. Where, I wondered, did the president see the EU going in the end?

`First of all you have to ask: "Why Europe?" ' All right then: why Europe? `It's simple: 50 years of European peace. We have engaged in building an enormous new structure of power.' Mr Prodi goes on to sketch a vision of a world divided into regional blocs. China might lead one such camp. Brazil, who knows, might lead another. If the European countries don't stick together, they will fall separately.

Yes, but why Europe? Surely there are other liberal democracies that are just as much a part of the Western world. What do Europeans all have in common with each other that they don't have in common with, say, Chileans or New Zealanders?

`History. Geography. Mixing. To put it in an extreme form, a relationship with Germany is instrumental for peace; a union with Argentina is not.' Mr Prodi then expatiated for a while on the benefits of the Atlantic alliance. 'Peace depends on strong bilateral relations between America and Europe,' he concluded. 'There is no feeling of revanche against the United States. But we must have a comparable capacity.'

So how did he feel when he opened the newspapers to read, day after day, of the euro's decline against the dollar? Was it a problem or an opportunity?

`An opportunity.' So would it be a prob- lem if the euro rose? 'Yes.'

Mr Prodi reminded me that he was a professor of economics. was never a fan of having a strong currency as a symbol. I don't know how you can manage with your strong sterling now.'

OK, so did he want the euro to fall fur- ther? 'No. I would be worried if we had inflationary tendencies in Europe, as they have in the United States. I would also be worried if we were pursuing strongly diverging policies within the euro zone.' So if he didn't want the euro to rise, and he didn't want it to fall, presumably he thought its current level was just right? `There will be a recovery in Europe soon. I worry when I look at the US balance of payments.'

Did he think, in retrospect, that support- ers of the single currency had been rather rash in their predictions? After all, only 18 months ago they were telling us that the world would have a new super-money, a reserve currency to rival the dollar.

`I am convinced that the euro will be that. When I travel, let us say, in the Mediterranean, I am accustomed to carry- ing dollars. Soon in those countries they will be taking euros.' Certo, certo. But what about Britain? Here's a government with a whacking great majority, led by the most pro-European prime minister since 1974. Are you sur- prised that Tony Blair isn't doing more to push his country towards the euro? `No, I'm not surprised. The public is too biased now. A politician must be aware of public opinion. Of course a leader cannot only follow, but this does not mean that he must make a mission impossible.' Mission impossible, eh? That's putting it pretty strongly. `You will be convinced only by the good behaviour of the euro. And, of course, by the good behaviour of the Europeans. YOU can change your minds in one weekend when you realise that London and the stock exchange will be better off. It will be like the Common Market. You were against it for a long time. Then, in one weekend, you decided: "These terrible Continentals are boring, but they sell and buy a lot." Maybe you will change your minds like that again.' In reality, of course, Britain is not likely to have a referendum for a very long dole. Denmark, on the other hand, will vote on the euro in September. Polls suggest that the Danes are evenly balanced, and the 'Jai campaign is becoming noticeably edgy. Pon' Nyrup Rasmussen, the pro-European Prnae Minister, is so concerned that he has taken to arguing that an endorsement of the euro need only be temporary. Even if the Danes vote 'yes', he claims, they could always change their minds later. Unfortunately for Mr Rasmussen, none of his Continental allies is prepared to OP; port his rather singular interpretation of the rules. On a recent visit to Copenhagen Mr Prodi pointedly refused to accept tne notion of a provisional 'yes', much to the embarrassment of Danish Europhiks. So, just to get this straight, did Mr Pro°. believe that, if the Danes voted 'yes', they might later be allowed to change their minds?

The president hesitated, hefting his words carefully. 'What I have said is that there is no provision in the treaty for with- drawal. This is stating the obvious. But, of course, in an extreme case, one could always foresee, for example, that Texas might leave the dollar. But this is not strictly in the US constitution.'

If I had understood him, the president seemed to be saying that it would be all right for European countries to reissue their own currencies. Golly, I thought to myself. If he means what he says, he'll be the toast of every bierkeller in Germany. I pressed him for clarification: are you really saying that existing members of the euro might choose to opt out again? If there were exceptional circumstances, and provided it was not done in a way which was hostile to the European Union. It is impossible to foresee for certain.' But, in theory, a country could go back to its old money while remaining a full member of the EU?

"Certainly it's possible. There are coun- tries today which are full members of the EU but are outside the euro.' There had been no provision for Greenland to leave the EU, he added helpfully, but it had still happened.

Mr Prodi is nothing if not an adroit Politician. To have shoehorned Italy into the euro was an astonishing achievement, which looks all the more impressive in the light of the current Italian government's retreat from his reforms. But there is a much earlier incident which sheds a fasci- nating light on Mr Prodi's character.

In 1978, the Red Brigades kidnapped and later murdered Aldo Moro, the for- mer Italian prime minister. While he was being held, a young academic called Romano Prodi indicated to the authorities that Mr Moro could be found at a place called Gradoli. He was partly right: the Red Brigades did have a safe-house at Gradoli street in Rome. Unfortunately, however, the carabinieri instead tore apart a small northern village which happened also to be called Gradoli. When asked later how he had come by his information, Mr Prodi replied that he had been playing with a ouija board to while away a rainy afternoon, and that the spirits of dead Christian Democrats had moved the glass to spell the word `Gradoli'.

Mr Moro's death is one of the enduring mysteries of Italian politics. He was like the murder victim in an Agatha Christie novel: almost every faction had some rea- son for wanting him out of the way. But what is clear is that Mr Prodi acted bravely in an attempt to save a man's life. Looking back, I wondered whether he suspected that other parties had been involved in the murder. Or, as his countryman Cicero put it, cui Bono?

For the first time during the interview, Mr Prodi began to mutter. He was not, I think, being cagey; he simply found it painful to recall the whole era. 'Those were difficult times for Italy,' he said, with a faraway look. 'Some were trying to take us out of Nato. The politicians were gloomy, the church was gloomy. These young people, these Red Brigades, they killed dozens. The country has changed unrecognisably.'

To cheer him up, I asked whether he still used ouija boards. 'Never. Never. Even on that one occasion I was assisted.'

Every president of the Commission is, to some extent, an enemy of the British press: that is part of his constitutional function. And there is no denying that Mr Prodi is a Euro-fanatic. But it is worth thinking on why he has made himself so unpopular with the Brussels old guard.

A commitment to federalism is a neces- sary qualification for the post; but, within that constraint, Mr Prodi is about as pro- market and pro-Nato as could be hoped. Where his predecessors either accepted or actively promoted the supremacy of the Commission apparat, Mr Prodi has at least tried to introduce some notion of meritocracy. And, although he is unfail- ingly polite, he has refused to show some of the Francophone leaders the deference to which they feel entitled. All in all, he is probably the most pro-British president to date, Roy Jenkins included. Given who the alternatives were, I'm beginning to wonder whether I was right to vote against him.

Daniel Hannan is Conservative MEP for South-East England.