Excerpts from an FT interview with Dominique de Villepin, French prime minister, on February 2.

The interview was conducted by John Thornhill, Peggy Hollinger and Martin Arnold in Paris.

FT: March 25 is the 50th anniversary of the Treaty of Rome. What has the European Union achieved in the last 50 years and what does the future hold for it?

DdV: The principal achievement of Europe is peace, which we often forget about as it has become so taken for granted by Europeans. Undoubtedly, Europe has allowed us to turn over a new page in our history. But we must not forget that for centuries the history of Europe was that of wars, rivalries and massacres. We have definitively turned this page. It required the audacity of the founding fathers and the ambition and enthusiasm of the leaders and people of Europe to write this new page.

It is also important that Europe has established itself as an area of not just peace, but also of prosperity after the war, thanks to innovative institutions and to a hard-core group of countries that set the example.

The difficulty is that, as always when you grow, you reach a point where you have growing pains. That is what we are facing today – a crisis of growth – after successive enlargements and I would add successive challenges, as it would be unfair to blame enlargement for all the difficulties. But this means we are facing new problems.

The first is an institutional crisis. With 27 members, decisions are by definition more difficult and take longer to reach, while strategic choices are harder to define.

There is a second crisis, which is a crisis of projects and results. We are faced with the difficulty of illustrating the value of Europe before its citizens, as we ask what tangible results Europe has achieved in recent years that people can be proud of. There is no immediately obvious answer to this.

The third crisis is about the ambition and the meaning of Europe. Is the European project just about the opening up of a big single market, or does Europe still have a real political vocation and ambition?

Faced with these questions, it is important that together we provide answers quickly. I saw in Romania and Bulgaria, the new members, that there is a strong ambition, a desire, a strong expectation for Europe. Equally, every time I travel overseas, in the Middle East, Asia, or Latin America, everywhere I feel a strong expectation for Europe, which is seen as essential for the balance of the world in a geopolitical sense.

We are at a pivotal time for the world. We are between two worlds. We are not in a unipolar world, because the US does not have the power or the capacity to organise the world all on its own. But nor are we yet in enough of a multipolar world. We are between the two. In a multipolar world, there must be more powers capable of taking responsibility, the US and Europe must be able to unite to achieve peace in the Middle East. We are not yet in this world, we are in an intermediary world between the two in the history of our planet.

I would propose three courses of action. The first would be to lay the foundations of institutional reform. That is urgent if we want Europe to work and to take decisions. I’m thinking of an extension of qualified majority voting, a durable and continuous president of the European Council, and a European foreign minister. These are all necessary if Europe is to assert itself both internally and on the international stage.

The second proposal I would make, is that we need a new treaty. There are two options. One is to choose from the elements on the table, based on the great work done up to now. Do we choose the elements that are most mature, allowing us to have a consensus today to adopt them quickly? Or do we, as was discussed in Madrid recently by the 18 countries to have already approved the treaty, choose to respect the main balance of the treaty, while improving the text. In my opinion that is without doubt the best solution. We should complete this text, improving it, by giving it a true potential, particularly in the social domain, and by bringing tangible proposals to address the worries of our citizens.

The third proposal I would make is to advance faster in the Europe of projects. The citizens of Europe need to be able to feel the achievements and advances of Europe, that is how we will convince them. Energy, education and research are three priority areas where Europe needs to go to the next level. How can we have a common energy policy? How can we get an energy representative to better negotiate our common interests? Why can’t each student that wants to spend a term in another European university do so? Why not have a common management of strategic energy reserves? What about a European loan to fund research? So many areas where Europe could become tangible for Europeans.

With this, Europe could return to its full place in the world. It is strengthened by its ideals and values. Europe has taken the lead in some fights, I can think of the environment, where we were the first to launch the Kyoto process, we are ahead in international justice, together we have achieved a Europe of defence. We must go further. In these great causes of peace, justice, the environment, we must win more attention and recognition.

FT: Doesn’t France have a particular responsibility for the current crisis in Europe?

DdV: France is one of the countries that said ‘No’. Other countries, if they had been asked in a referendum, would have undoubtedly also said ‘No’. In a way, France served as a catalyst. We could have continued as we were without asking many questions, mechanically moving forward. The risk then would have been to end up with an even bigger split with the European people. I believe the French vote was a warning. It was saying: ‘Be careful, what Europe are we talking about? What Europe do we want? Don’t forget Europe’s citizens. Don’t build a Europe outside of to the countries and the daily life of citizens. Don’t build a technical, purely legal Europe, which would be an artificial construction. Don’t make Europe a simple market.

We have an opportunity to put Europe back on the tracks. We must seize this chance to put Europe back in its position in the world, which I think is at the top. Europe has a major role to play, of international conscience. What makes Europe special, what makes it the biggest political and historical adventure of the last century and perhaps the next century, is that no state has ever tried to do what we are doing with Europe: to build something new within respect of nations and peoples, a new governance, a new ambition. The problems we cannot solve individually, the Germans, the French, the Danes, the Italian, the English, like the environment, peace, justice, security, immigration, we can solve them together thanks to this European construction. It is a very original, highly enthusing adventure, if we are faithful to this ambition.

The risk was to leave Europe without soul, without ambition. The genius of Europe is for me resumed by a formula: creative dissatisfaction. We are never totally satisfied, always thinking we can do better. We are a continent founded on doubt and on an ideal. We are always preoccupied by universalism. So we have a primary responsibility to make sure Europe never betrays its founding ideal to be at the service of people.

FT: Can you explain your idea of a new institutional treaty?

DdV: We have a choice. Either we could take parts of the old treaty to create a new consensus, in a minimum treaty, limiting itself to what is acceptable for all states. The problem with this is that it does not create the dynamic we are looking for. I think we could agree at 27 on the basis of the old treaty, but to go further, with a new dynamic, particularly in the social domain and with tangible projects. Because this would give credibility to Europe. I think the German presidency is an opportunity to put all this on the table. From there, we must choose one or other option.

FT: Could such a treaty be ratified by parliament or referendum?

DdV: If it is a question of a simple technical and institutional reform, to go quickly, it could lead to a parliamentary procedure. If it is a question, which I believe it is, of adopting a real, ambitious treaty, I think it is important that it should be supported by all French people, that is my personal conviction. So they should vote on this text as they have done in the past by referendum.

FT: How can you reconcile this grand European vision with economic patriotism?

DdV: I think that economic patriotism is the very foundation of a European vision. Of course, with economic patriotism, I’m talking about European economic patriotism. There are many areas, where to be effective, we must unite our forces. In energy, we must aim to create global champions.

FT: What about the obstacles in Brussels that block this economic patriotism?

DdV: We need to think about a better definition of the role of Europe towards its own member states. Europe must pay more attention to protecting its citizens in a globalised world. China protects the Chinese, America protects the Americans, I don’t see why Europe should not protect the Europeans. We must correct the excessively liberal vision we have of Europe, which should defend liberty and markets, but also Europeans consumers and producers, just as others do. The idea we have sometimes of a competition pushed to extremes does not correspond to the vision I have of Europe.

As soon as alliances can be formed between big companies within Europe on a friendly basis, which is very important, as once we start to have unfriendly operations between European states we will enter into a dangerous logic of rivalries and competition that are risky. On the other hand, when Europe can gain big global powerhouses in strategic areas, that is part of my vision of how Europe should weigh more on the international scene. What happens in this case. We defend our jobs, our growth, our social model. Otherwise, we are weakening our growth, which is already below where it should be, and suffering consequences of unemployment, when we should be creating conditions of employment and fighting on equal terms with the other big partners of the world. There is a small revolution needed in Europe over the idea we have on the role of Europe and the weapons we give ourselves to act. We should have the means to impose a reciprocity. There’s no reason we should always be giving without ever receiving.

FT: Why do French people think they are the losers in globalisation?

DdV: It is the feeling that the world is changing so fast. Today we have an acceleration of exchanges, a modification of the balance of power, the appearance of new countries on the world stage, so we are constantly having to defend our jobs, growth and activity, as we are subjected to this process of globalisation. The vision sometimes given is that nothing can stop this process, which means spending power falls to make room for everyone in the world. The competencies of countries are being restricted as more and more countries impose themselves in the areas of new technologies and products, creating more competition.

But my conviction is that we have shown in France that we are capable of defending our economic model, providing we take the right measures, like our poles of competitiveness and our agency for industrial innovation. I think French people realise that we are not without resources. We can score points. We have world leaders in numerous sectors, as in oil, electricity, in many other areas of services, like Air France or our carmakers. The French have the impression that for too long Europe only wanted to open up to the world without ever defending its interests in the world.

FT: Europe is often the scapegoat of French politics. Remember the Polish plumber?

DdV: That shows that there are fears. French people need to be reassured in this new world. This is why my first task two years ago was to put France back in place, to advance in the battle against unemployment, to recreate growth, to develop French competitiveness. I think we are starting to see the first fruits of these results, which should deeply change the morale of our country. To take the debt-reduction battle as an example, we have cut public spending and devoted all of last year’s €10bn exceptional receipts to debt-reduction. The ending of the deficit sanction procedure in Brussels is a sign of our policy achieving results.

FT: What have you achieved at Matignon?

DdV: My first concern was to respond to the worries of French people. The first worry was unemployment. When I arrived unemployment was at 10.2 per cent. We are now at 8.6 per cent and will be at 8.2 per cent by the presidential election in May and below 8 per cent by the end of the year. The unemployment rate is approaching its lowest level in 25 years, which shows that something has really happened. Growth is solid, even if it must be consolidated with a target of 3 per cent. We have targeted debt of 60 per cent of GDP by 2010, so we are making progress. To cut debts is to enrich the French people.

The second target of my government was a reform of orientation in universities, after the CPE crisis we wanted to draw the conclusions from this anxiety and if I decided to launch the CPE it was because I realised that the situation of youth unemployment was unacceptable.

The action we have achieved in housing has put France back on the front foot. We have reached a level of 430,000 houses a year, with a record level of almost 90,000 social houses built a year. We are introducing a legally enforceable right to housing. Measures like the ban on smoking in public places, measures in innovation, education, equality of opportunity, which were accelerated after the crisis in the suburbs, show that the country is advancing.

The ambition I set myself was that during these two years, on the big issues, employment, growth, competitiveness, debt, we could build a sort of minimum consensus to look at these questions with the necessary pragmatism. On unemployment, for instance, I wanted to fight the fatalist idea that existed that everything had already been tried against unemployment. I wanted to take a pragmatic approach, refusing ideology, to use all means, without asking if it was a left-wing or right-wing policy.

FT: What do you think about Nicolas Sarkozy’s call for a ‘rupture’?

DdV: The political debate has shown that nothing done or said by my political family on the right is incompatible with me. It is a question of building on the basis of action that has put the country back in order, to see how we can go further. I am the first to say we must go further. How can we go from 8 per cent unemployment to 6 per cent? How can we go from 2 per cent growth to 3.5 or 4 per cent growth? How do we get to debt levels of 60 or 55 per cent of GDP? These questions are totally justified.

But what I also believe, and on this I am totally in line with Nicolas Sarkozy, is that we must respect the French model. There are fundamentals, a certain idea of the social model, the republican values, which we must defend. We are on the same line, in the interest of defending these values and this model, even if we can still, of course, improve and modernise further to find more room for manoeuvre. I don’t think there is any difference between the two approaches.

FT: You are the first sitting prime minister in many years to not run for president. Why are you not standing in this year’s election?

DdV: Firstly because, as I have always said, I accepted a mission on arriving at Matignon in a very difficult situation. As things are going better, people have partly forgotten how bad the situation was at the time. But in 2005, just after the failed referendum and the defeat in the regional elections, we were in an extremely difficult situation of anxiety among the French people. So my first objective was to turn things around for our country. I want to govern until the last day in the service of French people. There is an election coming up, that is a different matter. My choice is to serve as prime minister and assume my responsibilities.

FT: How will you support the campaign of your party’s candidate, Mr Sarkozy?

DdV: The situation of my political family is a bit unusual today, as there is a candidate chosen by the UMP party and at the same time the president of the republic has not announced his decision. I am Jacques Chirac’s prime minister, so I will wait for the president to declare his intentions. It is the least I can do, in my position, to let the president decide in total serenity and liberty. We will see. The president said he will make a declaration in the first quarter and we will go from there. What is obvious is that the best asset for my political family, which is something I am best placed to do something about, is to ensure that the conditions of the country keep improving. That is why we need a government at work until the end.

FT: Is France ready for a woman president?

DdV: We are a country that today is totally focused on equal opportunities. There is no blockage of any kind. What French people want is the best president for France. The best prepared and trained and able to give the best answers. I do not think that being a woman is either an obstacle or an advantage.

FT: What is blocking reform in France?

DdV: There are two keys to our country. The first is the conviction that it is necessary for our country to evolve. I think French people have understood for a few years that there is a new world and we cannot carry on as before. The rules of international society and economy have changed and we need to be able to fight on equal terms with other countries. A part of French conservatism is disappearing de facto before this necessity. French people are also realising they are capable of scoring points, with the big French companies that are world leaders, the French technology that is particularly advanced, and they see in traditional areas, like luxury goods and agro-alimentary industries we still able to defend ourselves and score points. Psychologically that is an important element for the French.

The second key is time. For too long we have been tempted to do a yo-yo. By that I mean a shift to the right, a move to the left, a shift to the left, a move to the right, thinking that political alternation would give us a magic remedy. I think the French understand that no action can be effective without being given time. We need to go to the end with reforms and over a long period of time. If tomorrow we decide to remove the tools that have allowed us to cut unemployment, then unemployment will rise in France. If you erase the CNE, as the left has proposed, unemployment will rise. We must be pragmatic. For too long France has fought on ideological fronts.

FT: Do you see evidence of this new pragmatism in the presidential campaign?

DdV: I think there is something quite remarkable in the campaign. Unlike the past, when the game of political alternation was in full swing, with the left saying the right had done nothing and was rubbish, and the right doing the same to the left, today it is different. Nobody can say things are not improving in our country. Nobody can say employment is not better than it was a few years ago, that growth isn’t stronger and that the debt reduction effort has not made a difference. We are in a new situation. The candidates must explain how they would go further to get credibility for their campaigns. This completely changes the campaign. They need imagination. It must be a positive campaign. It is not about demolishing what has gone before.

FT: Does France need a grand coalition like in Germany?

DdV: Each country has its own history. Our country needs a minimum consensus. To put ideology to one side on the big issues with the concern of finding what works, you need a minimum of consensus between right and left. We are not Germany. We have the taste for clear majorities to make decisions and choices, but we also need pragmatism and results. Me, an unelected person who has come from outside politics, if I have contributed something, it is this pragmatism and focus on results. What we have done allows French politics to get rid of these old demons.

FT: What should be done over Iraq?

DdV: On the international stage we are facing an extremely important moment. We are not in a unipolar era and we are not yet sufficiently in a multipolar era, simply because we have not got the means for a true global governance, for international action in service of peace, justice and development. It is urgent that everyone understands, I am thinking above all of the US, that there are things they cannot do alone, perhaps they cannot do themselves and others could do better than them. In some cases the idea of global governance is really in the interests of the whole planet, including the Americans.

In Iraq, it’s true, the diagnosis is cruel. The US have failed in Iraq. More than 3,000 US soldiers have been killed since 2003, 12,000 Iraqi civilians in 2006. We have seen very bloody attacks in recent days, with hundreds of civilian deaths. The question now is how do we stop the spiral. I think it is very important that we all work in the same direction to reach a new stage. I said in 2003, we said it strongly with president Chirac, that there is no military solution in Iraq. What we said in 2003 remains true in 2007.

I see there is a big debate in the UK and US on how to get out of this. The answer must be a gradual and global response. We must act on every level to be effective. The first level must be an interior mobilisation in Iraq and a taking of responsibility internally in Iraq. We must start a national reconciliation, which means giving a place to everyone, which is not the case now. Everyone must participate in the recovery and reconciliation of Iraq. The second stage is on a regional level. All interests in the region must have an interest in the stability of Iraq. Is that the case at the moment? I am not sure. So we need to reinforce dialogue with the neighbouring states of Iraq, and we must create conditions for these states to have an interest in peace for Iraq and the region. We can clearly see today that lots of countries have ulterior motives and are getting an advantage from the instability in Iraq and the region. So we must act. Each of our countries has its own power or influence, which must be put in common, but there must be an objective.

The third mobilisation must be on the international level. For me this is the starting point of a recovery in Iraq. The situation must be clarified. We need a clear horizon for the departure of foreign troops and the return of full sovereignty to Iraq. Until this is clearly stated, with the stages and the objective of a total withdrawal, things will not improve. I do not know a single diplomatic subject that can be fixed without a clear schedule. When you want to solve a crisis in the world, you will not advance without fixing a schedule. The international community is lacking ambition and solidarity, but most of all it is lacking a fixed and dated objective.

I believe we are well placed today, with the international community and the US, to change the situation in Iraq. It is not romanticism or naïvety on my part, I think today it is possible. I refuse to believe in fatalism for the Iraqi crisis. Everyone can see today what risks of destruction and terrorism we face from the gangrene in Iraq of a civil war, with the dramatic consequences of Shiite-Sunni clash for the whole world. I also believe that the world has not fully realised this and we are not giving ourselves the means to avoid a crisis in Iraq.

There are voices capable of weighing in favour of an improvement of the situation. But this must stem from the realisation that the starting point is a clear date for the prospect of a withdrawal of foreign troops. It is the basic principle of the world today, the respect of identity and sovereignty. If we start there, we can turn things around, with a real national reconciliation, a true regional dialogue and an international conference for Iraq that could really put things back on the rails. But as long as there is a worry and doubt over Iraqi sovereignty and there is presence that is a factor of instability, despite being seen as a stabilising factor, we will not escape the spiral of violence. Whatever the level of foreign troops in Iraq, things will continue to deteriorate. It is not a question of numbers, it is a question of principles. One must understand that principles are the foundation of international relations. That is why international life is complicated. I do not think we should approach foreign policy with ideological blinkers. The recognition of the other, the identity and sovereignty of others are essential elements. So the most powerful driver of instability in Iraq is the feeling of illegitimacy towards the foreign presence. It is the founding stone of the crisis. If you do not fix that, you cannot fix the Iraqi crisis. It is the barrier we need to lift.

FT: But what about the consequences of a withdrawal of foreign troops?

DdV: You see, the awful thing is the lack of work on this question. What you are saying is not incompatible with what I am saying. I am not saying foreign troops must leave tomorrow. I am saying we need to build a schedule that says on what date foreign troops will leave and from that date we start a turnround, organising a national, regional and international schedule. If you do not say that in one year there will be no more American or British troops in Iraq, nothing will happen in Iraq except more deaths and crises. Why? Because no one is taking responsibility and even some people are fuelling the crisis. Who has an interest today in solving the crisis in Iraq? There are lots of people who don’t want to see the crisis solved. In the region, all the forces of terrorism, all the people playing on confrontation between peoples, all those who benefit from regional instability, who don’t want the international community to solve the Middle East problem, who are happy Lebanon is in crisis.

You must not be naïvely optimistic, look at the world as it is, there are power struggles, there are strategies. If we want to recreate a dynamic of peace in the Middle East, we must start from reality. The reality is that there is something wrong in Iraq. There are symbols that are stronger than anything else. Today the military presence is seen as illegitimate by Iraqis, so we must change things. We must start with that, not finish with it. The idea of saying that foreign troops will leave when Iraq is democratic and pacific is absurd. It will never happen. No, it should be foreign troops will leave on such a date and here’s how we will make sure that afterwards things will better. That is all, you must be pragmatic.

FT: Do you fear a repeat of the Iraq crisis with what is happening over Iran?

DdV: I am very worried on Iran. I think that the international community is also lacking imagination on Iran. There are two issues that are mixed up in the Iran crisis. The first is the major issue of nuclear proliferation, on which I want to be very clear. Iran with nuclear military capacity is unacceptable. Iran must respect its international engagements, notably the Non-Proliferation Treaty, which it has signed. It must suspend its sensitive activities, in line with the demands of the United Nations Security Council and the International Atomic Energy Agency.

The second issue is that we must not ignore the fact that this crisis has its origins in Iran’s desire to assert itself as a regional power for its national pride and security. We must take this factor into account if we want to achieve a political settlement of this crisis, in which we know the military option must be excluded. This means we must show Iran that firstly it has more to lose than gain from an enrichment programme that worries the international community, but also that if Iran accepts to respect its international obligations, it has much more to gain than to lose. That is where we need to be more imaginative. We must combine dialogue and firmness in our approach. I think the US and Europe can go further in dialogue and proposals. It is sensitive, in so much as Iran is starting to debate the consequences of sanctions.

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