A conversation with the Ambassador of the European Commission in the United State of America.

Question: How has Obama differed from Bush regarding climate change?

John Bruton: President Obama has differed quite radically from President Bush on the climate change issue in the sense that he made dealing with it and he made having a cap and trade system, to put a cap on emissions and to reward those who limit their emissions center of his campaign. And it would be fair to say that President Obama has received a mandate from the American people through he majority he obtain in the election to act on this issue. The challenge now is to ensure that the Houses of Congress, both of which are also Democratic in their majority, would act on this issue and produce legislation on climate change that is clear is going to pass before the meeting in Copenhagen in December when the rest of the world has to gather and make its commitments along with the United States.

Question: What is the biggest constituency in the U.S. opposing climate change?

John Bruton: I there is a constituency in the United States that distrusts government regulation of anything because they have doubts about the federal government and some of this goes back in to the middle of the 19th century in terms of its origins, or even earlier. And those people don’t want to see the government regulating healthcare, they don’t’ want to see it regulating climate, they don’t want to see it – some of them would prefer if they didn’t even impose any taxation. So, that’s one constituency. And another constituency clearly are those who might lose, or might have to make sacrifices to reduce America’s greenhouse gas emissions. The oil industry might be amongst those and some parts of the coal industry. But increasingly both of those industries are saying, look, we’re going to have to deal with this. We understand that the United States is vulnerable politically and in security terms that if it is this dependent on imported energy, and therefore for security purposes, the United States in any event needs to limit its emissions. But also, there is a real problem with climate change that has to be dealt with that is being caused in part, at least, by human action.

Question: Is the health care debate a legitimate excuse for the U.S. delaying climate change action?

John Bruton: I’ve been a politician for 35 years. I’ve been a member of a legislature for 35 years, and I do find it a bit hard to accept an argument that you can’t deal with two problems at the same time in the legislature. The House and the Senate are passing legislation on issues almost every week and they are very well staffed up, they have plenty of resources for studying issues. So, I don’t really think that it is adequate to say well because we are dealing with healthcare, we can’t deal with climate change as well. I think that a legislature that clearly has in both cases a majority of the same party as the President, ought to be in a position to deal with both items on the President’s agenda. Particularly on climate change because there is a deadline, and that deadline is December in Copenhagen by which the United States has to show that it’s willing and able to act on this subject.

Question: What role does the U.S. need to play in Copenhagen?

John Bruton: I think the United States needs to lead by example in Copenhagen. I think, if you are a country as the United States is which is responsible for a disproportionate amount of the greenhouse gasses that are already in the atmosphere, as is Europe as well, and if you are currently emitting 20 tons of greenhouse gasses per person per year into the atmosphere, and if you’re emissions constitute a quarter of all the world’s emissions, then clearly you can’t just say you’re going to lead by prescription, you’ve got to lead by example as well as prescription. And the background to this, of course, is, that the United States wasn’t able to join the global consensus in Kyoto, so there’s a big fear that we could have [that] all over again, that everybody else would come wanting to make commitments and the United States might agree to something at the conference, but then when it goes back and wants to get that treaty ratified in the Senate and the House, that it won’t be able to deliver. So, that’s why it is important that the Senate and the House should do their business before the U.S. delegation goes to Copenhagen because otherwise, the U.S. delegation may be giving commitments that the world will not be satisfied the Senate and the House will subsequently be able to validate.

Question: Are you confinement Congress will bring at least something to the table?

John Bruton: Well, there is something on the table now, and that is in the actions that are being taken by the Environmental Protection Agency that were announced this week. And that is a step forward, I don’t think it’s enough to get China and India and all the other countries on board, but it’s at least a sign of willingness on the part of the Administration. But for the result of an international conference to be binding in the United States, it’s not enough for the Administration to sign up to it. The Senate and the House must be willing to do so and those others who are committing themselves in Copenhagen want to know that if they commit themselves to something in response to something that the United States is committing itself to, then what the United States is committing itself to is real and will really be adopted by the House and the Senate. And that’s why the House and the Senate need to act on this before Copenhagen, not after.

Question: What’s the difference between American and European politicians?

John Bruton: Well, one very big difference is that American politicians are sole traders. Each one of them makes his own calculations as to what he is going to do in the interest of his reelection in his own particular district, or state. In Europe, there’s much more party discipline and members very often are placed on a list and they are elected from a national list that is selected by the party. So they are much more looking for the party for approval than to their immediate local electorate for approval. And in general terms, party discipline is much stronger in the Parliamentary System in Britain and Ireland, and indeed in all of the European countries. Whereas here in the United States, party discipline is important, but it is not that important and it is difficult to get members to do something that their constituents don’t like. But if you have a situation where people will not ever do anything that their constituents don’t like, you’re probably would not be able to lead or take initiatives on things that need to be dealt with.

Question: Are there any universal traits evident in all politicians?

John Bruton: I think that politicians are extremely varied. I mean, I obviously have very good knowledge of Irish politicians having worked with them, I know a lot of party leaders from European countries and many members of the European Parliament and now I know almost most of the members of the House and the Senate. And the thing that really strikes me is that they are all very different. They’re personalities are different; they are literally representative of the population in their variety. So, you can’t generalize, some are very academic, some are very stern, some are very cheerful, some are very populace, some are very relaxed, and some are not so relaxed. But that’s the case in every politician system. And I think that the overwhelming majority of politicians are not in politics for the money. They could, most of them in most countries, do better in some other career. They are in politics because they believe it gives them an opportunity to serve the public and to serve their ideals. Obviously, they have to make compromises along the way because compromise is the essence of politics. And sometimes those compromises maybe are more than they ought to have made, but politicians are there to serve the public interests in the majority of cases. And while there will be examples of people that ought not to be in politics because of things that they have done, the overwhelming majority are not in that category. And I think that its important that we don’t encourage and anti-politician attitude. Because if you have an anti-politician attitude in the country or in the media, then in essence, you have an anti-representative democracy attitude and representative democracy is the way we run our affairs. You can’t have every issue that’s important put to the electorate individually to vote in a referendum, you’d be having a referendum every two or three days if that were the case. And people would get thoroughly sick of it and nothing would happen.

So, what we have instead, representative whom we delegate to deal with things for us on the basis that we can sack them at the next election. Well, its important that people understand that that’s the essence of democracy and that the people who are their representatives deserve a modicum of support and respect in their work and that they should respect one another in their work while of course disagreeing when that’s the right thing to do.

Question: What has been your most surprising local political interaction in the U.S.?

John Bruton: Well, I suppose one of the most interesting conversations that I’ve had, I had very recently, and it was not so much the conversation as the situation in which it took place that surprised me. I visited Mayor Bloomberg, if you would call him a local politician. He’s the mayor of a city on an island. And there he was in a booth, on the phone surrounded by other people in booths on the phone. He has no office, and he does all his business surrounded by the people who may execute his decisions on his behalf and they all have eye contact with him, or potentially have eye contact with him all the time that he is in the office. And I couldn’t imagine any Prime Minister of a country running his country like that, and yet I was highly impressed by the way Mayor Bloomberg does things because he is personally accountable and personal accessible to those who must implement his decisions, and that shortens all of the bureaucratic paper trails that exist in governmental systems elsewhere for people that are exchanging memoranda and not replying to memoranda and decisions are taking weeks and months to be taken, whereas in the way that New York is run, there’s the possibility of decisions being taken visually the instant the problem arises. And that impressed me a lot.

Question: How has the Celtic Tiger economy affected Ireland’s culture?

John Bruton: Well I think there was a lot of materialism in the last ten years where people, because they had to spend money, they had to make sure that all the people knew that they were spending it and knew that they had it. And that I think somewhat may have coarsened cultured life and social life a little bit in Ireland. And I think also people probably didn’t realize fully the sources of their wealth. They thought that it was all their own work. That is was just that they were so good at whatever it was they were doing that the salary that they were getting and the opportunities they were getting were all generated by themselves, which, of course, wasn’t the case. The reality of the Celtic Tiger is that the foundations for the economic growth that took of in 1994 were laid in the case of the low tax policy in 1956 by the late Jerret Sweetman, Minister of Finance. In the case of free education which produced the young people who were attractive to foreign investors, a decision taken by the late Donal O’Malley in 1966, then in the 1970’s, the establishment of the Regional Technical Colleges by Padraig Faulkner and other men, and none of these three people are much talked of today. And yet their decisions were the decisions that have created the Celtic Tiger that happened to just really burst out when I was fortunate enough to be the Prime Minister. But I will be the first to say that the foundations of that success were not laid principally by myself, but by people who had left politics before I even entered it.

Question: Do you agree with critics who say the Celtic Tiger boom was mismanaged?

John Bruton: I do think it was possible. I think you can divide the Celtic Tiger period up into two. There was the period from 1994 to 2000 when the very rapid growth, up to 11 percent per annum in 1997 took place. And that was entirely founded on productivity increases that were taking place at that time and export markets that Ireland was winning and competitiveness gains that Ireland had made. Around 2000, those factors started easing off and really, the growth should have eased off at that stage and we wouldn’t have so many problems today. But from 2000 on, there was this rush of credit into the Irish economy from the international banking system, thanks to securitization and other things. There were Irish banks pressing money on people, pressing money on individuals to borrow money to buy a house in the [country] or something like that. Pressing money on building developers–“we’ll offer you 100% of the cost to buy a hotel in New York, or to build houses in Bulgaria,” or whatever—there was this wall of money that was being pushed at people and it was the use of that that generated artificially rapid, and unsustainably rapid economic growth from 2000 up to 2007 which wasn’t founded on real improvements in productivity, but was founded on speculative activity which was based on the assumption that prices only go up, they never go down. Now we know house prices don’t always go up, they can go down, and there are a number of individuals with unsustainable financial positions, and a number of Irish banks with unsustainable financial positions from which they have had to be rescued by the Irish taxpayer. But I think you need to make the distinction between the earlier first seven years, if you like, and the second seven years.

Question: Do you place the majority of the blame for the global economic crash on the U.S.?

John Bruton: In the sense that securitization, which was a very ingenious way of spreading the risk was initiated in the United States. And spread from the United States elsewhere. Without people realizing that, although it minimized risks in the short run, it made what would otherwise have been localized risks, risks to the entire system as it spread more widely in the sense that nobody recognized that risk, the U.S. has a bigger responsibility because it was in the U.S. that the method originated. On the other hand, it has to be said that it wasn’t just American banks that bought these sub prime mortgages that bought these securitized products. The European banks with their eyes open bought these things and their supervisors of the Central Banks of Europe knew that they were doing it. So, if there was a supervisory failure, and clearly there was, that’s not just an American failure, it’s a failure of all of those countries and regulators that were regulating banks that were engaging in this risky activity.

Question: Do we need unified international oversight of global banking?

John Bruton: I think we need to have comparable standards or mutually recognizable standards for supervising banks. Because I think it is reasonable that banks should be able to operate in other countries. Otherwise you are going to have national monopoly banks and that’s going to be good only for the bankers and the consumer is going to lose. The margins between the lending rate and the borrowing rate will get very high and the benefit in the middle will be taken by bank shareholders. That’s not good. To control that, you need competition. And you need competition from other countries. But the problem is, that if banks get into trouble, the people who are asked to help them out and save them are the taxpayers of the one country in which they are located. Not all of the countries in which they are operating, but the one country in which they are operating. Ireland has had to rescue, for example, its banks. A lot of their business was overseas.

So, if you have global banking, but national financial responsibility on national taxpayers you’ve got to find some way of mediating between the two of them. And one way of doing that would be to have mutually recognized supervisory standards where an American regulator would know that if a French bank was operating here in the United States, that the standards of regulation and the standards of making sure that that bank wasn’t making foolish decisions were equivalent to the ones that the American regulator would be applying to an American bank and competing on the American high street. So, getting more mutual recognition and more standardization of bank supervisory standards and perhaps placing particular limits on particular types of activities like securitization makes sense.

Question: Is the G20 an effective improvement over the G8?

John Bruton: I think the G20 is a big improvement. And indeed the creation of the G20 is one of the few good things that have come out of this appalling economic crisis that we have. We have had for a long time a lot of organizations dealing with the global economy. We have the World Trade Organization, the International Labor Organization, the World Bank, the IMF, we have a Financial Stability Forum, and I could go on and on and on. But they are all sort of separate silos operating in separate silos. And up to now, there has been no over arching board of directors, if you like, that is politically accountable to tell them, this is your agenda and this is the direction in which you should go and we’ll be checking up on you every so often. And if you haven’t acted on what we’ve said, we’ll be asking some questions the next time we meet. We now have that in the G20 where we have the politically accountable leaders of countries representing, I think over 90 percent of the entire income generation, in the entire world every year. And that’s much better than anything we had before. There is someone now in charge of the world economy, which there wasn’t before. There were a lot of independent actions, but there wasn’t coordination. So, I think that’s a huge step forward.

The G8 was a much more limited thing because it didn’t have representation of some of the major emerging economies, who are representatives in the G20. Obviously, the G20 may have to change. One of the things we’ve learned recently is we have set up organizations with a rigid format, but things change. There are countries who could now claim that they should be on the UN Security Council because they are bigger and more important than some of the countries that are currently on the UN Security Council. But we can’t change it because it’s all laid down in the UN treaties. But the G20 hopefully will be a more flexible instrument and we will be able to make the changes as we go along to ensure that it continues to be comprehensive and representative of the entire world.

Question: Will the U.S. will recover faster or slower than Europe in terms of unemployment?

John Bruton: Well, I think an increase in unemployment will always be faster in the United States than it will be in Europe because people have less job security here. But equally, a pickup in employment will be faster in the United States than it will be in Europe because firms are more willing to recruit people because they know, if necessary, dispense with their services if they need to. One of the effects of the very much heavier job protection systems in Europe is that it slows down a decline, but it makes the recovery also much, more slower.

Question: Which model is more sustainable?

John Bruton: I think a balance needs to be struck here. I think if you have employers who feel that they can just dispense with people very easily with no consequence and they don’t have to think very much. They recruit somebody and then they get rid of them. That’s not human. That’s no intelligent really. It’s not taking into account the fact that anybody you employ, he is a human asset, but it’s also that he is a human being and to get the best performance from him or her in his or her job, he has to feel that he has a measure of security because we all need – we need freedom, but we also need security. In each one of us, that need is there. So, a legal system that recognizes both I think is better than one which says, it’s all freedom, you’re free to go and I’m free to sack you, that wouldn’t work, but equally a system that said that, once you get a job with our company, you will never lose it. Well, people are not going to work hard if that’s the case, there’s not going to be adaptability if that’s the case. So, some sort of midpoint in this where there are some penalties involved for employers getting rid of employees and its not just a matter of clicking their finger, I think is preferable to no controls. But too [many] controls can lead to stagnation.

Question: Do European politicians take “being human” more seriously than American politicians?

John Bruton: In general, but there are wide varieties in Europe between countries like Britain and Ireland, which are closer to the United States. They don’t have the same rigidities built into their labor market to prevent people from losing their jobs. And other countries like France where it is very difficult, or if you are in protected employment in other countries as well, it is very difficult for you to lose your job. There’s a sort or a spectrum within Europe as far as this is concerned.

Question: What keeps you up at night?

John Bruton: I think the one thing that worries anybody who is a parent is what their children will be doing ten years from now. Will there be employment for them? Will there be employment that they will be satisfied with that their talents will be used in? And will it is very hard to keep me up at night, I sleep very soundly, I suppose that has to be the number one worry. We all have our own families and we tend to worry about them proportionately more than anybody else. As far as the wider issues are concerned, I suppose I should worry more about nuclear proliferation then I do because it does represent an genuinely existential threat if you’ve got nuclear weapons into the hand, not of more states but of non-state actors and terrorists. That represents the possibility of wiping millions of people out almost over night. And that’s the thing I feel I should worry about more than I do, but it’s so overwhelming a threat that it’s hard to even get your head around it, so it’s hard to worry about it as much as you should.

I also worry a little bit, I say this as a European, and as somebody who is deeply committed to the European Union which I regard as the greatest piece of inventive statesmanship of the 20th century which voluntarily bringing together 27 countries which were previously many of them dictatorships and many of them at war with one another in recent living memory, they are now all working harmoniously, or relatively harmoniously together as Europeans. My worry has to be that the next generation of people will simply take all of that for granted and will revert to sort of playing a game of national advantage in Europe and forgetting that we’ve got to preserve the superstructure as well. We’ve got to preserve the union as well as pursuing our own individual state’s interests. And keeping a multifarious union like the European Union together isn’t easy. And you’ve had the experience in this country that a very successful union, the first federation in the world, the first democracy in modern times, the United States of America. It still tore itself apart between 1861 and 1865 on very, very important issues. Well, that might have been avoided if people were willing to put the preservation of the union first and to make compromises earlier than they were prepared to make them. And in the case of the European Union, I see sort of nationalistic tendencies coming up and countries trying to give aid to their industry, to give their industry the advantage over the industry over another European country. I see voters trying to blame European Union for things that they know really in their hearts are either their own fault or the fault of their own government, but the European Union is a sort of a convenient whipping boy for whatever it is they are frustrated about. And I see politicians blaming the European Union for things that they’ve decided themselves as well. And that sort of behavior is corrosive in the end. And in the end, this union, which is as I say, a tremendous creative experiment, is fragile, and it won’t be necessarily be there 50 years from now if we don’t take care of it.

Question: If you could have dinner with anyone, who would it be?

John Bruton: I think I’d like to meet Mr. Gorbachev. I’ve met him, shook hands with him, but I’ve never sat down and talked to him. Because if you think about it, he probably did more to change the world than anybody. Yes, there were these tremendous tensions within the Soviet system, but instead of using force to repress those tensions, he adopted a policy of openness and Perestroika and Glasnost. Glasnost is openness and Perestroika was reform. And he sort of let air in. Now, he didn’t know how it was going to happen, in fact, what happened wasn’t what he wanted. He wanted to preserve the communist system. But he had enough confidence in the Russian people that he let them determine the future and he let the nations that had previously been under Soviet domination determine their own future without militarily interfering, and in that sense, he put his own convictions second to the confidence that he had in the people who previously had been repressed by his predecessors. So, while I think Ronald Reagan deserves credit, a lot of people deserve credit, and of course Václav Havel and Lech Wałęsa and all of these people in Poland, Czech Republic, and so forth, they deserve credit too, but they really wouldn’t have been able to do what they did, to basically reunite Europe and liberate people who had been under communism if Gorbachev wasn’t the man that Gorbachev is. And I think I would like to meet him. I don’t know how the conversation would go, I might be just telling him that I think he is a great guy, and he might be telling me, oh my god, I didn’t intend this, I wish it hadn’t happened the way it had. And I don’t know what would happen after that. But he is the man I would like to meet and would like to shake his hand.

Question: How does your conservatism differ from U.S. conservatism?

John Bruton: Well, I was never an ideological conservative in the sense that I believed that the free market was always right. I was more of somebody who put caution beside innovation whenever innovation had to be considered. And I would try my best to see what, or the downsides of something as well as the upsides. And I think there is always in any political system a need for a strong conservative voice in that sense that looks at the affect on the overall organism of the change that is proposed rather as whether the particular change is merited in and of itself. And that sort of conservatism is something that will never die and will always be necessary. And its quite different from radical free market thinking, which in fact, in some respects can be anti-conservative because it can cut away some of the – or undermine some of the sort of social habits that people have, of solidarity for others, of charity, of providing protection and security for people because those don’t cohere exactly with the free market. So, the free marketeering can in fact be anti-conservative rather than conservative depending on the circumstances. And any way, it’s only a means to an end. The free market is a means of delivering welfare to people and prosperity. It’s not an end in itself. Whereas conserving what is good, while adapting is something that is good in itself. I would describe myself, first and foremost, as a Christian Democrat rather than as a conservative. Because I think, and I’m a practicing Catholic, but I don’t think you have to be a practicing any religion to recognize that Christianity have moderated some of the most extreme aggressions that were seen in pre-Christian Europe by creating a sense of responsibility to one’s fellow man, of loving one’s neighbor, of a sense of there was a next life and that what you did wrong here could not be to your advantage in the next life and therefore that is quite apart from whether the police might catch you. Your own interests would suggest to you that you should behave yourself in a reasonable way relative to other people. Those were the [important] issues–wanting the social justice that emanates from Christianity—and that’s why I think I am happy to describe myself as a Christian Democrat. And that’s a strong European tradition as well. Chancellor Merkle of Germany is a Christian Democrat too. But there are elements of conservatism in Christian democracy, but also there are elements of acquiring to make changes.

Question: What will be the effect of the successful Lisbon Treaty referendum?

John Bruton: Well, I think that the fact that our Irish people have voted twice now to reject the EU treaties, they rejected the Niece Treaty first, and then they changed their mind and accepted the second time, and now they are – it looks as if having rejected the Lisbon Treaty, they will vote to accept it. This has created a measure of uncertainty which would remain and will make it more difficult for the European Union to contemplate future treaty revisions because it will say to itself, well, we have to get this through an Irish referendum as well as getting the Irish government to agree to it. It is not enough to get the government that the people have elected to agree, we’ve got to have a referendum as well, and that added uncertainty is going, I think make European Union leaders hesitant to amend their treaties. Now, in my view, any organization has to have the capacity to amend its rules. It has to have, not the capacity to do it easily, but to do it when necessary, responsibly. And the main worry is that we have by cause of the way in which referenda have gone in Ireland and the insistent on referenda on matters of detail that normally wouldn’t be the subject the referendum because of Supreme Court decisions. We’ve created a sort of an artificial blockage in the renewal of the European Union, which isn’t a very good thing, and it’s a problem that will remain with us.

The second consequence, however, I think will be as there would be a yes, is what I would expect, will be that Ireland will be, for day to day purposes, in a more influential position in influencing what the EU does than it would be if the Irish people had voted no. If the Irish people had voted no, the priority would have been for the rest of Europe to find a way of basically of circumventing Ireland, to go around Ireland rather than involve Ireland. In whatever they needed to do. And to try to find a way of doing anything that they didn’t – that they could do without having to get Ireland involved because Ireland has this complication. And so that’s not a good position – and would not have been a good position for Ireland to be in because Ireland needs to be able to influence EU decisions We are the most open economy in Europe to the rest of Europe. We are more influenced by what other countries do than any other country in Europe is influenced by other countries. So, therefore, we need to be able to influence our surroundings more than others need to influence their surroundings. And the way we have of doing that is by being a full hearted and fully participating member of the European Union.

Recorded on October 2, 2009