Romano Prodi answers your questions

Future of the euro

Prodi: 'UK entry not vital for euro to be force in the world'

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Question: How can the euro single currency remain viable when countries such as the UK remain on the outside looking in?

Peter James, England

Answer: The viability of a currency does not depend on whether other countries adopt it. It depends on the sound economic and monetary policy of the country or economic area in which it is used.

The euro is already the currency of 11 (and soon 12) EU Member states and 300 million people. It is the second most important currency in the world. This is shown, for instance, by its share in financial market transactions, both within and outside the euro area, including in the UK.

New bond issues world-wide denominated in euro in 1999, only one year after the euro's launch, were as high in volume terms as those in US dollars. In stock market and foreign exchange trading the euro has a similar status.

The euro is supported by the good economic fundamentals of the euro area and by the monetary policy that the European Central Bank defines for the members.

Any enlargement of the euro-area, that is carried out under the terms established by the Treaty, will bring benefits to its members.

But the euro does not need the UK entry in order to become a force in the world. It is already an important currency.

Q: May I say how much I admire your leadership within the EU. Being a Maltese I also thank you for your sincere friendship and belief in Malta's place within the EU.

The applicant states are anxious that enlargement takes place very soon. Will it be possible to obtain a firm commitment from the European Council in December?

Certain sectors of our economy may suffer negative consequences due to meeting the conditions of joining the EU. Substantial and adequate financial and other aid may help counter-balance this and put people's minds at rest besides strengthening our government's position domestically.

Can more be done in this sense on the part of the EU? It is important that in Malta, accession is not seen as a give-away by us without receiving anything that may both in the long-term, and in the short-term, visibly improve our economic and social well-being in a way that being in the EU may be seen as far better than staying out.

IN-DEPTH   •  Embarking on expansion   •  EU enlargement map   •  History of EU growth   •  Nice: Europe's next steps   •  What kind of Europe?   •  Key leaders' views

Vanni Xuereb, Floriana, Malta

A: The European Council in Nice will, without any doubt confirm the commitment of the European Union to achieve enlargement as soon as possible. The best way for the EU to confirm this commitment would be, of course, to agree in Nice on the institutional reforms that are necessary to welcome at least twelve new countries in the Union.

I am confident that the EU leaders will show sufficient will to take this fundamental step. The European Union will then be in a position to confirm last year's commitment that, after the ratification of the new EU Treaty has been approved by the Parliaments of our Member States as well as by the European Parliament, the Union will be ready to welcome new members by 2003.

Compared to 1999, the European Union this year has doubled the total financial support for the candidate countries which amounts to more than 3 billion euros. This effort is substantial and will be maintained until 2006. It will help the candidates achieve the necessary economic and administrative efforts to be able to meet their obligations as full Member States.

Moreover, this support will make them fit for competition in an enlarged internal market of more than 500 million consumers. In return, the new Member States will benefit from the strong financial solidarity of the Union in favour of its less developed regions.

Q: If Europe is one market now why are phone calls between countries so expensive? You have penalised the car companies for non-competitive practices so why not the phone companies for maintaining what effectively is an anti-consumer cartel?

Adam Elke Cath, England

A: Prices for international phone calls have come down dramatically, more so than for local or domestic long-distance calls. In fact, it is the best example of the success of the opening-up of markets and the breaking of the monopoly of former state-run operators.

The Commission has been working hard on this over the last decade. And it is not only the prices which have come down, the service has also improved both in terms of quality and supply.

The Commission is also watching closely to ensure that the competing phone companies do not collude, and it would not refrain from using all its powers, including sanctions, if they were found guilty of running cartels. Sometimes it is enough for the Commission to begin an investigation for prices to come down -- the interconnection and roaming charges between operators for mobile calls is an example of that .

Q: I am most interested in understanding the role and responsibilities of the current European government departments. For example, you are the President of the European Commission, but the presidency of the European Union rotates every six months to a different member country. What is the difference in the EU and EC, and what does the presidency of each do?

Also, what is the European Parliament? Who does the EP report to? Who does the European Central Bank report to? I think that it is very unclear to the American eye what the differences are between the various organisations.

Philip Kopp, Kansas

A: Although the Commission is the executive body of the European Union, it cannot be thought of as "the European government". The 15 Member States have delegated only part of their competencies to the European institutions, while sovereignty remains at national level in particular areas.

Some of the responsibilities which in the United States belong to the federal level, therefore, are still handled by individual Member States in Europe, whereas other policies (such as agriculture, competition) are handled at Community level.

In all cases, the principle of subsidiarity applies, ensuring that decisions are taken as close as possible to the citizen and that constant checks are made as to whether action at Community level is justified, taking into account the possibilities available at national, regional or local level.

I'll try to give you a very rough sketch.

Through the Council of Ministers, the Member States approve Union legislation, set its political objectives, co-ordinate their national policies and resolve differences between themselves and with other institutions. The presidency of the Council rotates every six months, thus assuring the active participation of all Member States in the European construction. We are now in the French semester, then it will be the turn of Sweden, Belgium, Spain, Denmark, Greece, and so on.

The European Parliament, the largest multinational Parliament in the world, is directly-elected: the democratic expression of the political will of the peoples of the European Union. It has seen its powers increase with time, and is more and more involved in the legislative process.

The European Commission, at present made up of 20 Commissioners and 16.000 staff, is the largest institution. It initiates the proposals for legislation, is the guardian of the Treaties, and the manager and executor of Union policies and of international trade relations.

The Court of Justice ensures that the law is observed in the interpretation and application of the Treaties in all of the activities of the Union, while the Court of Auditors checks that the Union funds are spent according to its budgetary rules and regulations and for the purposes for which they are intended.

Amongst the other institutions at European level, we have the Economic and Social Committee, the Committee of the Regions, the European Investment Bank and the European Central Bank.

The latter is fully independent in its daily policy-making, but is fully accountable to the European Parliament, to whom it must explain and justify its decisions. For a fuller explanation of our institutional system, I invite you to visit out web site at http://europa.eu.int/index-en.htm, where you will find plenty of information.

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