Photo Gallery: Europe's Next Leader

Foto: Sven Paustian/ DER SPIEGEL

Leading Candidates Square Off The Race for Europe's Top Job

This May, European voters will decide for the first time who becomes the president of the European Commission. In a SPIEGEL interview, leading candidates Jean-Claude Juncker, 59, and Martin Schulz, 58, discuss their views on tax havens, euro bonds and the losers in the debt crisis.

SPIEGEL: Mr. Juncker, at the party event in Dublin at which you were named the conservatives' leading candidate for the upcoming European Parliament election, U2 lead singer Bono called Martin Schulz a "great European." Was he right?

Juncker: As the competing candidate, it isn't a very prudent answer, but yes.


Juncker: Because Martin Schulz represents European values and knows just how important European integration is.

Schulz: When he's right, he's right.

SPIEGEL: Mr. Schulz, Jean-Claude Juncker has been a member of the European Council, the powerful body that includes the leaders and ministers of the 28 member states for almost two decades. As president of the Euro Group, he also ensured that the common currency didn't implode. Would it really be so bad if he were to become the next president of the European Commission, the EU's executive branch?

Schulz: There wouldn't be anything bad about it. But I have a better plan for Europe. I believe the people should have the opportunity to have a greater influence on European politics with their ideas. We need a new impulse for renewal.

SPIEGEL: There have already been two European Commission presidents from Luxembourg. The last one served 15 years ago. Germany, on the other hand, has only succeeded once in landing the post -- and that was over 50 years ago. Could that play to Schulz's advantage?

Juncker: I don't think in national categories. For me it is about concepts and substance. But still, I would still say that it would be better for Europe if the next Commission president were from Luxembourg. My country has always played the role of a mediator in the EU, especially between the Germans and the French. I believe in the power of consensus. Martin Schulz prefers provocation.

SPIEGEL: Mr. Schulz, in light of Germany's already strong dominance in Europe, would a candidate from a small EU member state not be more appropriate?

Schulz: Europe is in a very dangerous situation. We cannot consider each other to be adversaries. I have a European calling and nationality plays no role for me. I think people know that.

SPIEGEL: What would you do better as European Commission president than Jean-Claude Juncker?

Schulz: I would no longer seek political solutions solely through the EU's institutional structures. I would open the Commission to the greatest degree possible. Brussels needs to stop interfering in every trifling detail. Whatever can be decided at the communal, regional or national level should be decided there. I am a man of parliament, a man of the people. Juncker is a representative of the executive.

Juncker: Nonsense. I am not a person who is only versed in the executive. I have always engaged extensively with the European Parliament and sought joint solutions on many issues. At the same time, it is in no way a disadvantage to understand the sensitivities and interests of the nation states on the European Council. I'm better at that than Martin Schulz.

SPIEGEL: Mr. Schulz, as president of European Parliament, you are currently campaigning on behalf of yourself and the Social Democrats. Last week, members of almost all the German parties represented in the European Parliament wrote a letter in which they called for you to step down from the presidency. Do you plan to do so?

Schulz: No, because it is a part of the parliamentary system to run for re-election. That's why I am astonished that this demand, which not a single one of my predecessors was ever confronted with, is now being made of me.

Juncker: The question is not whether Martin Schulz is a candidate for another term in European Parliament. The question is whether as the acting president of parliament -- an office that is supposed to be above party politics -- should be able to run for the office of president of the European Commission. Any president of a national parliament would have to immediately step down if that person were the main candidate for the highest government office in that country. I'm not calling for that. But it has to be clear to Martin Schulz that the question is being asked.

Schulz: I know that some are going to pose the question, and that's why I am very strict about making sure that I conduct my duties as president in a non-partisan manner. Incidentally, I don't know of a single country in Europe where an office bearer has had to resign during an election campaign. In his 19 years as prime minister, Mr. Juncker also conducted countless election campaigns as his country's leader. We should instead focus this campaign on debating the right course for Europe.

SPIEGEL: Europe is in a state of crisis. Turnout for the last election for the European Parliament was less than 50 percent. Why should people give you their votes?

Schulz: Election turnout will increase. The competition between Juncker and myself will help to ensure that. With the European Parliament in the past, voters had to cast ballots for an anonymous institution. Now, for the first time, it involves people. Personalization is the icing on the cake of democracy.

Juncker: It is true that Europe is currently in need of clarification and that EU detractors on both the left and the right are on the advance. People have to vote in order to prevent their breakthrough. It is great that Schulz and I are being supported as the main candidates for the largest parties in parliament in both the northern and southern part of the Continent. That is symbolic of European unity.

Schulz: For the first time, the European election is no longer going to be a national election in disguise. This isn't about German Chancellor Angela Merkel or Vice Chancellor Sigmar Gabriel. Those who want Martin Schulz (as European Commission president) will have to vote for the (center-left) Social Democrats in Germany, and those who want Jean-Claude Juncker will have to vote for the (conservative) Christian Democrats.

SPIEGEL: The only problem is that it is the job of leaders of EU member states to nominate the president of the European Commission and not that of elected members of the European Parliament.

Juncker: But under the Lisbon Treaty (ratified in 2009), the European Council must take into account the results of the European election. Leaders of the EU member states cannot simply make a decision that circumvents reality. They have to enter into consultations with the European Parliament -- that is also stated in the treaty. The times in which the national leaders can agree on a president in back rooms are over.

SPIEGEL: Chancellor Merkel has said that it is not a foregone conclusion that one of the two leading candidates will become Commission president in the end.

Schulz: There's also the normative power of the facts. Both the Social Democratic and conservative national leaders have stated this at their party conferences. If you say in advance there is going to be a main candidate and then that doesn't count later, then that's going to be a highly problematic occurrence in a democracy.

Juncker: If a decision is made that runs counter to that of European voters, then the rift between politics and the people will grow -- and no one can afford to risk that. Angela Merkel knows that, too.

'The Inequity Is Enormous'

SPIEGEL: Would you both agree that the next president of the Commission will be the one with the party that performs strongest during the European election?

Juncker: The person who is ahead in the end will have the advantage. If there is a majority for me in parliament, then I will become Commission president. If Schulz has the majority, then he'll get the job. But let's be clear about this: One of us will get the job.

Schulz: That's how it will be. That is a normal process. That's how things work in German parliamentary elections as well.

SPIEGEL: And what will you do if you are able to secure a majority in parliament, but the European Council still rejects you?

Juncker: I will be angry.

Schulz: The treaty states that the European Council makes the nomination on the basis of a qualified majority. Currently, there are more prime ministers on the Council with Social Democrats in their governments than there are leaders with Christian Democrats in their governments. I view my chances more optimistically than SPIEGEL does.

SPIEGEL: Mr. Juncker, in 2004, you had the opportunity to become president of the European Commission, but you turned it down. Now, after losing your position as prime minister of Luxembourg, you suddenly seem to be interested in the job. Why should voters find that to be credible?

Juncker: In 2004, the European and Luxembourg elections were held on the same day. At the time, I said I would only take a position in Europe if I was not re-elected prime minister. I was re-elected, so I didn't switch to Brussels.

SPIEGEL: In 2009, you preferred to become president of the European Council instead of the Commission.

Juncker: I recognize that the German press is speculating that I allegedly don't want to become president of the Commission. This is what I have to say to voters: I am serious about my candidacy.

SPIEGEL: In your opinion, should each EU member state be allowed to have a commissioner?

Schulz: This discussion is a thing of the past because EU leaders, including Mr. Juncker, decided on that in 2013, despite the fact that things had actually been envisioned differently. There are 28 commissioners and we have to live with that now. There are some European capitals that have even more ministers in their governments.

Juncker: I believe a smaller Commission would be more efficient, but I also understand the member states' sensitivities. If you were, for example, to tell Ireland that it would no longer have a commissioner, then support for Europe would slip dramatically there.

SPIEGEL: So efficiency is being sacrificed for the sake of national sensitivities?

Juncker: It is not a question of sacrifice. We respect the interests of the individual member states, even if there are fewer people living in Ireland than in Germany. Nevertheless, I will continue to push for a more efficient Commission. We need reforms.

SPIEGEL: If you become president of the Commission, will you appoint "super commissioners" under whom other commissioners will be subordinates?

Schulz: We need better networking between the commissioners on issues because contradictory decisions are too often made in the commission. It may be that we need a coordinating commissioner on central projects.

SPIEGEL: The euro crisis showed that the coordination of budget and economic policies needs to be made a chief priority. Would the kind of European finance minister proposed by Germany's Wolfgang Schäuble be the answer?

Juncker: At one point we intended to create the post of a European foreign minister. Everyone supported the idea, but when it came to committing, some governments were suddenly of the opinion that there are already enough foreign ministers. In the same way that the European foreign minister became the high representative for foreign affairs, after the election I would also like to see Schäuble's idea of a full-time Euro Group president in the long term.

SPIEGEL: I think Schäuble's idea is good, but so far, a European finance minister is little more than a title. We don't need a European Finance Ministry to assert fair taxation. There are large companies that make profits but pay no taxes. And when speculators make losses, taxpayers are forced to cover them. The consequence of this has been a dramatic loss of trust by the citizens. As president of the Commission, I would introduce a simple principle: The country where the profit is made is the country where the tax is paid.

SPIEGEL: Mr. Schulz, your party colleagues in France issued a press release stating that a person like Juncker, who was the leader of a country that is a tax haven, should not be able to become president of the Commission.

Schulz: I firmly believe that the inequity is enormous. The people have the feeling that you are allowed to do anything if you are rich. But if you're poor, you have to pay. We have to counter this. We will use European initiatives to fight tax evasion and ruinous tax competition.

SPIEGEL: Do you consider Luxembourg to be a tax haven?

Schulz: We need greater transparency, also in Luxembourg. That applies to both the current and past governments.

Juncker: Hang on a second. We agreed in the EU under my (rotating) presidency in 1997 to harmonize interest taxation in Europe. We established a codex against unfair tax competition. It is a fairy tale to say that Luxembourg has special rules with regard to company taxation. The allegation made by French Socialists that I actively promoted tax evasion is an outrageous attack on my country and my person. I will not accept that.

Schulz: I do not expect that the former prime minister and long-time finance minister of Luxembourg will subscribe to my tax policy beliefs. Luxembourg is an important financial center, but that cannot mean that we should have to continue making concessions.

Juncker: I have never given any more support to Luxembourg as a financial center than the German chancellors have to their automobile industry. However, I do agree that we need rules against tax dumping just as we do against social dumping. Europe needs to have a minimum basis of workers' rights.

Schulz: But the Greek bailout wasn't very social. As president of the Euro Group, you had significant influence on it, Mr. Juncker. If you travel to Southern Europe, you will notice that the people consider the EU to have been extremely unfair on this issue. On the initiative of the Social Democrats, the European Parliament voted by a broad majority last week to criticize the work of the troika in the crisis countries.

Juncker: I warned from the beginning of the Greek crisis about the kind of dramatic social consequences excessive austerity policies would have. It wasn't just conservative governments that disagreed. When I fought against a lowering of Greece's minimum wage in the Euro Group, it was ironically a few Social Democratic finance ministers who opposed me. That considered, I am very pleased about the fact that my nomination as the leading candidate for the European People's Party has been supported not only by a Northern European party, Germany's Christian Democratic Union, but also by a Southern European one, Greece's Nea Dimokratia.

SPIEGEL: Mr. Juncker, you're the conservative candidate, but are you seeking to steer left of the Social Democrats?

Juncker: I am a Christian Socialist. As such, I would not cede a monopoly on social policy to Mr. Schulz. I can do that better.

SPIEGEL: Mr. Schulz, why have you distanced yourself from the demand on the left for a pooling of national debts in Europe?

Schulz: I'm still for euro bonds, but I also recognize that there will not be majority backing for it in the foreseeable future. It would already be progress if we could just agree on providing financing for major projects using joint bonds.

Juncker: In December 2010, I pleaded together with Italian Finance Minister Giulio Tremonti for euro bonds. We are not yet at a point where we could simply introduce them tomorrow. Certain conditions have to be met before this step can be taken, including a more efficiently organized coordination of economic and finance policies. But I still consider this to be the correct instrument for the long term. It is wrong to claim that they would place a greater burden on some member states than on others. That may be true in the short term, but it wouldn't be in the long term.

'We WilL Not Enter Into War Because of Crimea'

SPIEGEL: The conflict with Russia in Crimea is escalating. Are tougher sanctions against Moscow needed?

Juncker: Pressure and dialogue are needed. Anyone who thinks you can create a European Security Agency without involving the Russian Federation is making a fundamental mistake. We will not be entering into a war because of Crimea or because of Ukraine. I urge everyone to be patient and reasonable and I warn against shooting from the hip in the truest sense of the term.

SPIEGEL: Was it a mistake to offer Ukraine the prospect of EU membership?

Schulz: That was not up for debate. We were prepared to sign an Association Agreement. It was Viktor Yanukovych who didn't sign. What needs to happen first is for Ukraine to be stabilized, and we need to do everything we can to prevent a war. Perhaps we can talk about membership 20 years from now.

SPIEGEL: Where, in your opinion, do the EU's borders lie?

Juncker: You wouldn't have asked the question if I knew that. I don't. What we do need to do is ensure that any accession candidate first becomes an EU member after it has fulfilled 100 percent of the criteria.

Schulz: I do not believe that we can continue to expand the EU permanently. First we need to reform it.

Juncker: The Ukraine question shows that this eternal dilemma between war and peace is not yet a thing of the past. Around 25 years ago we had rape and torture in the western Balkans -- that wasn't very long ago. To put it bluntly, it shows that the chapter hasn't been closed when it comes to the issue of war. But if the EU didn't exist as an area of peace and solidarity, the Ukrainians wouldn't have anyone they could turn to. And if the euro didn't exist, circumstances in Europe would be dramatically more unstable. If we only had the European currency system from the time before the euro, it would have collapsed by this month at the very latest. The euro brings stability to the Continent.

Schulz: If I become Commission president, I will push for the following: Before we talk about further accessions, we have to consolidate the EU internally. People are increasingly losing faith in the EU's effectiveness.

SPIEGEL: How do you intend to keep Great Britain in the EU?

Juncker: In the next 10 years, we have to have a new discussion about the architecture underpinning the EU. That includes questioning whether every democratic and market-oriented European country has to be a member of the European Union as it is currently defined. Or whether there needs to be an orbit around the EU where those countries can find a place that don't want to support all EU policies or for whom the kitchen has already become to hot.

SPIEGEL: You both want to become Commission president. Are you interested in transforming the body into a kind of European government?

Schulz: No, but I do want to see the EU return to its role as a solver of problems. We need a change in mentality in the Commission such that it focuses on the essentials. I want to repair the inequalities that have resulted from tax dodging and tax havens. And lastly, we have to do something about youth unemployment, because thus far we have spent lots of money on the banks but very little on young people. The divide in the EU has grown as a result and I want to reestablish faith because only in a European coalition we will be able to defend our values and our prosperity against others in the 21st century.

Juncker: The Commission makes proposals, the Parliament and the Council make decisions. The EU has a governing system that doesn't exactly resemble that of its member states. Mr. Schulz talks about tax havens, without bothering to name them. (He certainly can't be referring to Luxembourg.) The banks were saved to prevent economic collapse -- in a joint effort, by the way, by the Christian Democrats and the Socialists. The Commission is all the stronger when it focuses on important challenges and avoids getting lost in European trivialities.

SPIEGEL: Mr. Juncker, Mr. Schulz, we thank you for this interview.

Translated from the German by Charles Hawley and Daryl Lindsey
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