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"Open Europe" is a British conservative, but pro-European for the local standards, non-government organization established in 2005. It is funded by donations from business circles in London and it maintains the ideas of free market and free movement of people. In 2005, it held its first campaign for calling a referendum on the new European Constitution, and in 2007 - for a referendum on the Lisbon Treaty. In addition to in London, it also has an office in Brussels. The Research Director of Open Europe, Stephen Booth, talks with Maria S. Topalova.

Recently, I have listened to the British Prime Minister David Cameron ’s speech about the European Union and he said that the European Union is an organization in peril, representing a continent in trouble. How great is this peril and how serious is this trouble right now?

I think the European Union faces huge problems, huge challenges.  I don’t think it is just the UK that sees it that way. I think Chancellor Angela Merkel is also making similar statements that Europe is facing the worst processes since its foundation. People are right to be concerned because as well as there are these structural problems, as well as there are the other issues like bad demographics, aging populations, big welfare  that needs to be paid. And there is also a more pressing issue – the Eurozone crisis that has also started to create huge political problems, because you see that like now in Greece and Italy, governments are falling, and there has also been early elections in other countries as well. The current crisis is also reaching its economic as well as its political limits.

The most troubled country Greece. How can this country be pushed to implement the measures that will govern the financial discipline in the country?

What we are seeing now is that it is very difficult to force countries on the periphery of Europe like Greece or Italy to implement the reforms that many people agree are properly needed. But what we are seeing is the political limit of the Eurozone integration. However, much Germany or France, or the European Central Bank or the European Commission are making the changes they like but they are actually getting the changes implemented on the ground. It is a very difficult thing. Likewise, you can have governments come in. You can have a technocratic government replace the existing governments and they can again promise to deliver, make and sign memorandums of understanding and so on.  The crucial thing is delivering those reforms on the ground and implementing them. I think, there are fundamental problems with the Greek and Italian states that would prevent any government from actually implementing them because these are deep structural problems.  And without the political will behind those governments, it is very difficult to see how they can actually make these reforms work, because many of the reforms needed are not only short, a kind of superficial austerity cuts and so on. These are deep structural problems that may take kind of decades to really enact. We are looking at huge welfare bills, restructuring of pensions systems and so on that are changing the way that these societies actually live. And that is not an easy task. It seems that we are drowning inside the current Eurozone framework.

If we take as an example Ireland, which is a successful example of implementing the measures and if we take on the other hand Greece, which is unsuccessful in the implementations of these measures, what is the difference between the two countries? Why do these measures work in one place and not in the other?

I think Ireland and Greece are different countries for several reasons. The first one is that economically, they are very different models. Ireland has always been a much more open economy and it has been much easier to adjust to side shocks. Irish people are used to immigrating if necessarily and so on. They are more flexible in that way than Greece is. And in Greece, you have the problem with the closed professions, you have a much bigger welfare state, early retirement, big pension systems and so on. Ireland is much more by the Anglo-Saxon model in that sense. I also think there are other areas that appear to have some success in making the reforms. The problems are by no means over because there is still a huge housing market bubble that is yet really unwind. It is huge and it is standing to banks and given that the government is actually standing behind the banks, it is difficult to see how that is going to be unwound without more pain in the next 5-10 years. I think that Ireland although has made some progress, there are still big difficulties there economically.

I think in Greece the problem is not just economic. In Ireland, there is seen to be an acceptance among the public no matter how painful the reforms are. But these things need to happen and there is too much that needs to be changed. Whereas in Greece, there are huge problems that need to be fixed but there is no consensus whatsoever how to go about fixing them. And I think that is going to be a huge political challenge as well as an economic one.

Do you think that the new governments in Italy and Greece have any real chance to change things?