Halfway through the interview, Bolkestein turns directly to you readers. He says with a deep sigh that Swedes probably did the right thing to keep out of the euro: ”You saw that large European countries did not adhere to the rules, and thought ’that’s probably not for us’. I can certainly understand it.” Bolkestein is disillusioned with the euro, with the crisis management, and with the European leadership. The Dutch politician was born in 1933, and knows painfully well what European divisions could mean. That’s why he became a keen Europhile, and that is why he has worked hard to further European solidarity, as the leader of the Dutch Liberal Party (VVD) and then as the commissioner for the internal market in Brussels from 1999 to 2004. ”The EU is something quite amazing,” he says. ”Peace has become a normal state, something that has never existed before in the history of Europe.” But now he is afraid that the euro crisis is beginning to divide the continent, that the recession could become a depression, which may erode Europe’s openness and freedom. This old liberal, who invokes Adam Smith and FA Hayek and who sees Europe’s open borders as the continent’s greatest triumph, is afraid that the crisis could have the same effect as the threat of terrorism – that the fear is creating demand for a larger and more intrusive government; that we are giving up our freedoms to try to buy security. It would be futile, it would be counterproductive, but history shows that this is not an obstacle: ”Therefore, we must be very vigilant and careful. We must be careful that we do not go down a path from which there is no turning back.” What makes Bolkestein disillusioned is that Europe has set itself in trouble all by itself. The euro crisis is not the result of popular protests, dangerous protest-parties or foreign powers. The crisis is, according to Bolkestein, an inside job, where people at the highest level – in the member states and the commission – undermined the prospects for the European economy. According to Bolkestein, the Euro system has two fundamental flaws: it has violated its own rules so many times that its credibility has been lost, and that it included countries that were not ready for a single currency and the capital inflows that resulted. The two issues are closely linked. It was through rule-breaking and non-eligible countries entering the collaboration. Bolkestein has retreated from Brussels and from party politics. He is now back in Amsterdam, with a generous office within walking distance of home, with walls covered with bookshelves and overlooking one of the city’s many canals. He is 79 years old and now has a freer position like writers and opinion makers. But the criticisms he makes are not about hindsight or if he, like many others, only speaks out when he gets a free role. Bolkestein made himself known in Brussels as an outspoken person who dared to criticise even powerful interests and policy makers. He won, for example, no friends among his colleagues by suggesting that the number of commissioners should be reduced and that its budget should be cut. In his role as a senior Dutch politician, he tried up to 1998 to keep Italy outside the Euro. It was a country that had shown that it could not keep its costs down and built up huge debts. Like the German central bank, he was afraid that Italy would only use membership to postpone the necessary reforms and borrow cheaply while the good times lasted. He apparently had the numbers on his side: with its three-digit national debt, Italy is nowhere near the 60 percent of GDP that the EU in Maastricht set as the limit for what member countries could have. It should not have had a chance to qualify, but political considerations took precedence. The real core country, Belgium, also had too much debt, but it was not possible to keep it outside, so it soon redefined the requirement that it should have serious plans to reduce the deficit below 60 percent of GDP. And then Italy promised solemnly to do so by 2010. ”By letting in Italy when it failed to meet the criteria meant it was not possible to keep Greece out. That is the real reason that Greece got in. Not that they falsified statistics – which they obviously did.”

The old, Dutch politician was once the editor of a satirical newspaper, and his lengthy bibliography includes a historical drama in five acts. He has different frames of reference than most politicians. Now he quotes Schiller’s Wallenstein, where Octavio tells Max that the evil deed’s curse is that it must always give birth to new evil deeds. ”There you have it,” says Bolkestein to me, referring to the EU’s heads of government that gave Italy the go-ahead for the euro and how that made it impossible to block Greece, ”the evil deed’s curse”. It went as Bolkestein had feared. Italian governments were hardly conscientious in the economy and had a lost decade. Instead, they borrowed cheaply when the euro and its implied guarantees made the state’s borrowing costs fall from 12 to 4 percent. In 2010, when the national debt should have been down to 60 percent of GDP, it was almost twice as high. The euro was in many ways a sleeping pill, as EU president Herman Van Rompuy has stated. Bolkestein agrees: ”A pill that allows members to fall asleep and dream pleasant dreams and lend to those dreams at artificially low interest rates. They do it with pleasure. They borrow and borrow and borrow. And it is of course fine as long as times are good, but as soon as the markets start going down, we get these deep problems that we now live with.” It is the Mediterranean countries with the big problems, says Mr Bolkestein, with deficiencies in both the ability to create growth and do the right thing. But he is careful to point out that those who set the precedent for the irresponsibility of the euro were the initiators: Germany and France. In 2003, just two years after the euro banknotes had seen the light of day they registered a budget deficit of 3 percent as the euro’s stability pact demanded. Instead of tightening, or at least take their penalty, Germany and France blocked sanctions. ”It is a sad, dismal story. The year 2003 was a very bad year for the euro.” Bolkestein was there then, in the commission that had the task of monitoring the rules, along with Sweden’s Margot Wallström. But, to Bolkestein’s dismay, the other commissioners did not protest, on the contrary, they turned immediately. The European Commission’s President Romano Prodi said that the stability pact was ”stupid”, and thus sanctioned the abuse. In a television interview, Bolkestein immediately distanced himself from Prodi. The morning after, an angry Prodi called him up: ”You insulted me, and I ask for an explanation.” It was not difficult for Bolkestein to offer such: the commission had violated its mandate, and if this was to be the commission’s approach in the future he would be forced to resign. Prodi abruptly ended the conversation, which was never resumed. Today, Bolkestein sees this as a crucial moment: ”This solemn declaration, that would be observed to the letter, ended up in the trash after three years. The question is which European declaration can we rely on in the future? ”Germany and France gave the green light to the other countries to ignore the rules and deficit ceiling. During the good years, when they should have been gathering into barns, most euro area countries, on the contrary, ran constant deficits, which made them extremely ill-equipped when the storms began to blow. But a perhaps worse problem is that it created a crisis of confidence in the euro. Since the systematic violation of their rules, market participants have begun to doubt everything that EU countries say. And markets can handle everything except uncertainty about the rules they operate under. Brussels deepened uncertainty over and over again when the euro crisis happened. The rules of the rescue packages, the purchase of government bonds, collateral requirements, the European Central Bank’s independence – all decisions were irreversible when they were taken, speaking with Birgitta Dahl, but as soon as they fought against the political will they were torn up, and turned into their opposite. ”Every rule has been broken. Each rule has been ignored. Any proposed solution to the crisis violates EU treaties.” The now disillusioned Bolkestein says that one problem is that it never dares to speak up: ”The European Commission is always afraid. It is afraid of governments, it is afraid of the Parliament, it is afraid of the Russians, it is afraid of the Americans. And I do not understand it, because it has very strong arms. But hesitates to use them. It suffers from too much political correctness, and it disappointed me. These people will not stand for election. They are there for five years, so why do they need to be so politically correct?”

Bolkestein has nothing but warm words for the ordinary, hard-working officials of the commission. But for the politicians and politically appointed commissioners, he has not much sympathy. He explains their attitude to what he calls a ”conspiracy of niceness”. One can come up with tough accusations and harsh words privately, but would rather break all the rules than put someone on the spot in public. They want to be diplomatic because it is dangerous to be known as a troublemaker with whom one cannot do business when 28 countries need to agree: ”Because we’re all friends, right? So, I’m kind to everyone I meet, and to the whole world, but I also have my principles. And I want to do what I consider to be right.” Most of the problems that have now plunged Europe into crisis were well-known, says the former commissioner. All knew about the debt problems and how a number of Mediterranean countries were mismanaging their economies, and it would have been much easier to do something then, before the situation got out of control. But no one did anything. Bolkestein thinks it says a lot about human nature; but what? ”Well, there are very few people who have the strength to stand up against others, all alone. Most follow the flock. Even if those who stand up for their own beliefs are not necessarily wrong. On the contrary, often they are those who have hit the nail on the head. But they take a personal risk.” Again and again, Bolkestein encountered this fear, time and again he got pats on the back in the corridor outside, ”very good, very good, don’t give in”, while the same people quieten down as soon as the meeting starts, and they suddenly start thinking about their career, that you should be nice. Bolkestein explains his habit of speaking plainly with his own position. It was clear even then, he says. ”I had no choice but to fight. I had left national politics and this was my last job, so why should I not say what I thought?” But Bolkestein stayed at his post even though the commission gave way to the large EU states, and after this initial reservation he let the matter be. He explains that now in terms of he had questions about the internal market to pursue. If he had continued to protest he would have been classed as a dogmatist and lost all influence. This is an illustration of how Brussels can get even the most critical to go the same direction. ”The EU is something amazing, but it would not hurt to have a little more common sense, a little more ‘what the hell’.” So far the diagnosis, but what’s the prescription? How can Europe overcome the crisis? Bolkestein has no sympathy for the idea that the rich countries should guarantee the debt crisis economies. ”Eurobonds would be a disaster,” he warns. It would be a way to reward irresponsibility and ensure that it will happen again. But, in addition, he is afraid that it will foster stronger antagonism between countries and nationalist resentment towards the Dutch, Finns and Germans who constantly pay for southern Europe.

But Bolkestein also turns, somewhat unexpectedly, against the austerity policies demanded from countries already in deep recession: ”If you tighten dramatically in the middle of a recession, you can make it even worse, as we did in the 1930s. Nevertheless, we are trying to save money right now, and therefore we are deepening problems. We really need growth in order to manage the debts.” It is not obvious how this fits with Bolkestein’s requirement that the Stability Pact should always be maintained, although he points out that there were exceptions made for countries facing a very serious crisis. His criticism of austerity is reminiscent of that which French socialist President François Hollande put forward, and which is now gaining sympathy by asserting that the EU needs a growth agenda instead of austerity. But Bolkestein does not want to acknowledge any similarities with growth rhetoric that in practice means higher minimum wages, lower retirement ages and higher taxes: ”He will get the rich to leave France. It is not a new right, it is an old left. We do not need that. We need it like we need a hole in the head.” Bolkestein believes instead that growth is generated by structural reforms to get businesses to start up and hire more, by the liberalisation of labour and the removal of barriers to competition that means the Mediterranean cannot create new, growing companies. When the World Bank in 2010 studied the freedom to start a business in 183 countries, Spain placed 146th and Greece 140th. When it came to freedom in the labour market Spain placed 157th and Portugal 171st. But few know better than Bolkestein himself the resistance such reforms usually arouse from groups that have a protected status. As commissioner, he tried in the mid-2000s to open European countries for trade in services. Europe’s economy consists largely of services, and if the sector is to embrace new technology and new ideas, and give birth to large export companies, there must be a large, competitive market. But the ‘Bolkestein directive’ met strong opposition from trade unions and from the French government, and eventually also from Germany and Sweden. In the end, the fears of Polish plumbers proved to be weightier than the principles of free trade and the directive was watered down completely. Bolkestein got to feel the resistance physically. He has a summer home in northern France, and when the debate on his directive was at its peak the communist part of the electricians’ union went there and cut the wires to the house. They did not want in any way to face competition from foreign electricians. This kind of protest Bolkestein takes in his stride, but he’s more worried about France itself, and the role it often plays to block liberalisation: ”The French are always afraid of competition. I do not know from where they have got this pessimistic view of their own capabilities. It’s a big country, has a very well educated workforce and many, many innovative ideas. But they are afraid the Polish plumber will outrank them. I really cannot understand why they are so afraid.” Southern European pessimism about its own ability contributes in all circumstances to Bolkestein’s pessimism about Europe’s possibilities. He has difficulty to believe that reforms are sufficient, and he has difficulty to believe that the euro will survive in its current state. Even if one somehow patches up the project temporarily, the problems will return, and he’s beginning to think that the difference is too great between the constituent countries. And suddenly he starts to sound a little like those who now conjure up images of irreconcilable cultural divides in Europe: ”Basically, north-western Europe wants to have solidity while the Mediterranean countries want solidarity, which really means that they want other people’s money. So these frictions will return even when we emerge from this crisis. The different cultures will remain, so even after 20 years I believe my successor will face the same problems.” ”I realised this too late,” says the old commissioner self-critically, ”but this does not hold in the long run.” He envisions a reconstructed euro for northern Europe, a ‘neuro’. It would be one currency for the countries that base their policy on a stable economy, not for countries seeking political solutions to economic problems. That means, according to Bolkestein’s vision, that Germany, Austria, the Netherlands and Finland form a new kernel. Countries such as Sweden and Denmark would also fit. It is not an easy process, and when countries such as Greece and Italy leave the euro, it can be very messy. But Bolkestein no longer believes in political romanticism, and he no longer has any sympathy for those who believe that problems are solved by shelving them in anticipation of better times. Most European politicians would say that the euro project must be kept together, whatever the cost. Many economists would argue that a resolution might throw the financial system into chaos when millions of contracts and debt instruments are thrown into a no-man’s land. Bolkestein probably stands quite alone, against the herd. Something tells me that he is not so concerned about that.