Community leader
Published in the Budapest Business Journal, Mar 2004
When he concluded a 28-year career with the European Commission in 2001, John Pearson envisaged an active retirement spent partly in Hungary, a country he has been visiting regularly for over a decade.
That was more than fulfilled when Pearson was asked to continue working part-time, advising officials in Hungary and Poland on managing public finances and EU funds.
Since his retirement, the 65-year-old U.K. native has borne the title of Honorary Director General of the European Commission. In his last executive post, as senior director of the commission’s financial control directorate general from 1999 to 2001, one of his tasks was to advise the ten countries that are joining the EU this May, helping them improve their skills in financial management and their control of EU and national funds.
Pearson started his career with the commission in 1973, the same year the U.K. joined what was then the European Economic Community. All told, he worked in four directorate generals – transport, fisheries, regional development, and financial control.
Pearson’s main home now is the Catalán village of Maureillas in southwest France, but he spends a lot of his time in Budapest, a part-time home for him and his wife since 1990. Their five children live in Hong Kong, Sydney and Geneva.
A languages graduate, Pearson is fluent in French and German, has a working knowledge of several other languages, and is learning Hungarian. He enjoys orienteering, a sport involving cross-country running and navigating.
Q: Does joining the EU involve a loss of national sovereignty?
A: Yes, but the transfer takes place by choice. Member states agree that some subjects are best dealt with at community level. They still influence what happens, through their membership of the Council of Ministers.
The benefits, when looked at seriously, are so great that it’s no surprise that all ten countries voted to join.
It is true that when a subject has moved from national level to being a community competence, it usually stays that way. There has been little return of competences to member state level. This is despite the principle of "subsidiarity," which says that everything should be done at the lowest feasible level, as near to the citizen as possible.
But I cannot think of any significant field that it is a mistake to deal with at community level. The Common Agricultural Policy is a bad policy, but it is the policy that is wrong, not the fact that it is a community policy.
Q: What is wrong with the CAP?
A: The CAP makes life hard for farmers in developing countries, by subsidizing our own agricultural exports into their markets and maintaining tariff barriers against their exports to us. We need to make our farmers produce less and act more as guardians of the countryside.
Q: Is a small country like Hungary at risk of being steamrollered by larger countries?
A: The smaller member states, in population terms, are proportionally overrepresented in the European Commission and the European Parliament. Moreover, there will always be a Hungarian minister at any meeting of the Council of Ministers, who will have the same right to speak as any other minister.
The Council of Ministers may sometimes, after long debate, take decisions by majority vote that do not suit one or more states. But if a member state makes it clear that it cannot live with an imminent decision, the others try to find a solution acceptable to all.
Q: What are the benefits to ordinary Hungarians of joining the EU?
A: Peace and prosperity. Decision-makers from every member state and at every level are constantly meeting one another. You can never develop enough misunderstanding for a major long-lasting fall-out. The trouble is that peace comes to be seen as normal.
Another problem is that many of the advantages of membership are not noticed much by ‘ordinary’ people. Such things as the right to live, work and invest in another member country.
But these freedoms increase overall economic efficiency. That is in the interests of every citizen.
Q: Isn’t it a bit pessimistic to say that one of the benefits of union is that it stops Europeans fighting each other?
A: A union is not the only way of avoiding war. Nevertheless, in Europe, periodic major armed conflict between nations was par for the course until 1945. The EU is one main reason why that stopped.
Q: Couldn’t countries just decide to allow each others’ citizens, capital and goods to flow freely over borders? Why does it have to be done in the form of the EU?
A: It becomes too complicated. Individual states know too much about their own situations and too little about each other’s.
The European Commission is a central, independent and powerful body. It can look at issues objectively, and make and defend an overall proposal, taking account of every aspect.
You also need a mechanism that forces states to consider a proposal. The Council of Ministers cannot amend a commission proposal without commission agreement, unless the council decides unanimously.
Q: Why are so many new members joining at the same time?
A: The ten acceding countries have made tremendous efforts to prepare. I think it’s impossible to say ‘no’ to a European nation that wants to join and fulfils the conditions. The implicit position has been that we’ll let in anyone capable of playing the community game.
Q: Will it be difficult to reach agreements when there are so many member countries?
A: It can already be difficult. However, member states usually fall into two or three camps.
Q: What does Hungary need to work on as it prepares to join?
A: I hope Hungary will take seriously the need to manage community and national money properly. Hungary will suffer if serious flaws are found in its management of community money.
Q: What are your impressions of dealing with Hungarian officials?
A: Talking to senior officials here feels like talking to their counterparts in the member states. Hungary has a long and serious administrative tradition.
At local level, though, it may be difficult for the responsible people to get together enough sound projects for using up the resources due to flow to Hungary. EU money is useful if it’s well used.
Q: What will Hungary bring to the EU?
A: Hungary should aim at playing a full part in the life of the union, as a significant middle-sized member state. It can bring to bear its serious administrative tradition and its educated civil service and workforce. It could be the Netherlands of Central Europe – a country that ‘punches above its weight.’
Q: Some businesspeople see the EU as a source of red tape. Do EU bodies base their decisions on a desire to serve business?
A: Brussels is not anti-business. Economic efficiency is one of the union’s central aims. Though EU rules are not drawn up by businesspeople, there aren’t any rules – except for very good reasons – that are anti-business.
A good, competent company ought to do better operating under community rules than under national ones. There is a wider market and cheaper input.
Q: There is a problem with Hungary meeting the Maastricht criteria. When should it adopt the euro?
A: It would be wise to join the euro as soon as possible. To do so would increase certainty and reduce costs for economic operators.
It’s hard to predict how seriously the Maastricht conditions will be taken when the time comes. They are not being respected by every existing member state.
Q: How do you think Hungary has changed since 1990?
A: It has become a normal "Western" country. A bad and inefficient system was replaced by a functioning democratic system, which is still relatively rare in the world.
My only regret is that there seems to be so much ill feeling between the two main parties, making people enemies rather than opponents. I would like them to compete in policy.
Some Hungarians have profited from the changes, others have not. One of the faults of capitalism is that differences of wealth can become too great.
Q: What are the current member states’ views about expansion?
A: Some of the original member states probably fear that a community of 25 will never be able to achieve as much integration as they would wish.
Others will be happy about that. The Brits are in favor of widening, because it makes it harder to deepen the EU.
A country like France may fear that there will be more competition for CAP money. A country like Spain might think it may get less from the structural funds.
Q: Do you see any truth in the contrast between Old Europe and New Europe?
A: I see no basic difference between the present member countries and the newcomers. They have the same fundamental interests.
Q: From the defense point of view, Europe is a protectorate of the U.S. Do you think that could ever change?
A: Some would like the EU to have a defense dimension, but it’s not necessary. The community and the U.S. are on the same side and have their hearts in the right place on how the world should be.
