On the 1st of July, Estonia will take over the Presidency of the Council of the EU from Malta. President of the European Commission Jean-Claude Juncker gave an interview to Eesti Päevaleht to explain the priorities of the Commission for the next six months.

Estonia is taking over the Presidency of the Council of the European Union. This is a country where public support for EU has been steadily high throughout past years. However this has not been the case in many other EU member states. Successive crises eroded public trust and caused upheaval because of financial difficulties, spiralling public debts, Russian aggression in our neighbourhood, migration and terrorism. Were there moments during your tenure as President of the Commission when you were sincerely concerned about the ability of the EU to stay together? If so, what moments were they?

Tere, eestlased [Hello Estonia]! Let me start by saying how delighted I am that Estonia is taking over the Presidency for the next six months – and not just because I get to visit Tallinn again! Estonia may be one of our smallest countries, but it is a country with great ambitions that looks towards the future and gets things done. That positivity and forward momentum is exactly what Europe needs right now.

Europe has seen many crises since its inception, and it has always emerged stronger from them. The crises we face now are no different in this sense, even if they feel more existential. Europe's great virtue is its ability to find forward-looking solutions. Take what we did with Greece to keep it in the Eurozone, and we now see the progress they are making. This is also the approach we took with the migration crisis and, even if we have more work to do, we have turned the situation on its head: 520,000 lives saved at sea, 98% drop in arrivals from Turkey to Greece, a European Border and Coast Guard up and running to help patrol our external borders.

Our economy has also improved. From the height of the crisis in 2013 we have created 10 million new jobs and our economy has now grown quicker than the US over the last 18 months. And Estonia's economy has even grown more than the EU's average.

We still have many challenges ahead of us whether it be on security, economy, migration or the digital economy. But what it shows is that instead of talking ourselves down or talking ourselves into an existential crisis, our job is to focus on the things that matter and to act quickly and decisively when we need to. I fully expect more of the same from the Estonian Presidency over the next six months.

After the extremely bleak year of 2016, the tide of public opinion in Europe concerning the EU seems to be turning, support for the EU is increasing pretty much everywhere. Does that, in your opinion, create a window or the EU for reforms that would make the EU even better for the needs of its citizens? What are the most important and feasible reforms or initiatives that the EU and the Estonian presidency need to start now?

The window for making the EU work better for its citizens is always open but you are right that confidence is returning. Back in 2008 only 20% of Europeans thought the economic situation was good in their country. Today, almost 50% do. But we cannot take this optimism for granted or assume that the threat of populism has been wiped away by recent election results. We must keep standing up for our Union and we must keep delivering for all Europeans. That is what the Estonian Presidency must be about. Its priorities reflect that – they focus on building a safer, and more prosperous, inclusive, digital and sustainable society.

Beyond that we must also look further forward. In March, the Commission presented a White Paper on the Future of Europe which sets out a range of ideas on how our Union could move forward at 27. We at the Commission have fed that debate by offering some different ideas on some of the key issues that matter: strengthening our Economic and Monetary Union, buidling up a common European defence, enhancing the social dimension of the European project, harnessing globalisation and just this week on the future of our common EU finances. Now is the time to decide what kind of Europe we want for the next decade and beyond and I expect the Estonian Presidency to help bring together all those ideas in the second half of the year.

Due to terrorist attacks in the EU as well as challenges directly behind our borders and worldwide, the EU leaders have put heavy emphasis on taking security and defence cooperation onto another level. There have been quick first steps like creating the Defence Fund, beefing up the EU Defence Agency, increasing information sharing capacity, small operations headquarters. As you yourself have noted, EU countries spend a lot on defence, but do it separately, which means a lot of duplication, less results for our euros. This could be helped a little by joint tenders etc. But what could in your opinion be the ideal level of future ambition in European Defence cooperation in order for the Member States to get the best defence for the money we put in?

I know that when I speak to Estonians about these questions, I am preaching to the converted. Defence and security are not abstract terms to Estonians. They are a daily, visible pre-occupation for people in this country, as they also are for other parts of Europe.

My starting point is that when it comes to making people feel safe in their own homes, we cannot afford to cut corners. So first we have to spend what is needed on our defence. Estonia is leading the way in this regard, spending 2.2% of its budget this year on defence, notably to host the NATO troops posted here.

But as things stand, EU27 Member States spend only 1.32% of their overall budgets on defence. To put that into context, Russia spends over 5% of its GDP on defence while China has increased its defence budget by 150% over the past decade.

We must spend more together and we must spend more efficiently. Today, we achieve only 15% of US efficiency despite spending half what they do. And our lack of cooperation not only affects our ability to deploy our troops when we need to, but it's also costly for the taxpayer, costing us anywhere between €25 billion and €100 billion a year. 80% of defence procurement, and 90% of research and technology investment, is done at national level with no coordination between EU countries. That makes no sense.

The European Defence Fund proposed by the Commission in June is a step towards making that right. It will create incentives for Member States to cooperate on research, joint development and the acquisition of defence equipment and technology. After 2020, our proposals would see us invest €500 million a year from the EU budget on research, with a further €5 billion for development to be co-financed by Member States and the EU budget. That shows we are serious about spending more and spending more efficiently.

European Commission (EC) President Jean-Claude Juncker welcomes Estonia s Prime Minister Juri Ratas at the EC headquarters in Brussels, Belgium May 3, 2017.
Photo: Reuters

Is Europe ready to contemplate joint sovereignty in defence field?

I have thought so for some time. I said it from the offset during my election campaign in 2014 — I think the EU is ready to do a lot more together on defence. It is time to wake up the "Sleeping Beauty" of the Lisbon Treaty, the possibility to launch permanent structured cooperation by those countries willing and able to do so. This is a so far unused tool at our disposal that allows like-minded countries to move away from the current patchwork of military cooperation to more efficient forms of defence integration. We need to make full use of this. Last week's European Council saw my fellow leaders agree to do just that.

It is quite clear there is real momentum across Europe behind the idea of working closer together on defence. But how far we ultimately go is up to Member States. There are many options for this and in our recent reflection paper on the future of EU defence we presented a few. But even the least ambitious of those ideas will entail closer cooperation between EU countries and that reflects the current mood across Europe.

I would like to add that whatever we do to cooperate more within the EU, this should not be seen as in competition with but rather in full complementarity with NATO. On defence, the EU and NATO are like twins and we are working closer than ever before. Estonia knows first-hand the value of that partnership. Estonian troops have been involved in Afghanistan, Kosovo and elsewhere while the presence of NATO forces here continues to be invaluable.

The Euro area is exhibiting some real strong and welcome growth as we speak. This is good news for EU citizens. But can we not be complacent about reforms – both in member states and at the EU level? Should the Eurozone countries still aim at closer economic coordination and governance in order to be better prepared for future crises or can we afford to drop action in this field?

I have read with amusement those that have called the Eurozone's recovery some sort of surprise. These things do not happen by luck. It is the result of hard work, many years of difficult decisions and reforms. It is the result of a relentless focus on employment, stability, investment and growth. We have created a common European stability mechanism, we have established a single supervisor for our banks, and we have launched a €315 billion investment programme with the Juncker fund. Now we start harvesting the results. The figures speak for themselves: 4.8 million new jobs in the euro area since we took office, growth outstripping the US and taking hold in all EU countries, unemployment at its lowest level since 2009 and over €209 billion of investments unlocked across all 28 Member States thanks to the Juncker Plan.

But there is no room for complacency. We need to get on with completing the architecture of the Economic and Monetary Union to remedy economic and social disparities, ensure greater financial integration, tackle high debt levels and increase stability, growth, employment and social fairness. Our recent reflection paper presented a number of avenues for further coordination and we now need Member States to agree on a clear vision for the future of their currency.

In spite of brighter horizons for the EU, we still have to resolve considerable challenges. Given the recent political developments in the UK, how confident are you that the Brexit negotiations could be successfully completed in time for some sort of new arrangement to come into force between the EU and the UK by the end of March 2019 and the so called over-the-cliff hard Brexit will be avoided?

The Commission's chief negotiator, Michel Barnier and his counterpart from the UK, David Davis, had a first meeting earlier this month. As they both said at the time, the meeting was constructive and there was a lot of common ground. Most importantly, both sides agree on the need to provide certainty to all those people caught in the middle and to make sure that the UK and the EU remain partners and friends long into the future. That is a good footing for starting any negotiations. Of course, it is too early to say exactly what the final outcome will look like but I see no need to catastrophise about cliff-edges or worst case scenarios. I would rather let the negotiating teams get on with their job while we get on with the job of making Europe a safer, more secure and more prosperous Union.

Is there a chance that Estonian Presidency will have to look at the possibility of asking member states to prolong the two year article 50 period or even ask other EU capitals to open new negotiations on EU Brexit mandate?

As I said, there is no need to speculate at this stage. It doesn’t help either side. Theresa May's letter from March is very clear: the UK wants to leave the EU by the end of March 2019. This is very regrettable but we have to respect this decision. The mandate from the 27 Member States is also very clear and Michel Barnier, my chief negotiator, will report back regularly to all 27 Member States and be fully transparent in everything that he does. I know he is already in very close contact with the Estonian Presidency to make sure they are fully up to speed and that will continue throughout the six months and beyond.

Mr President, one area where we have not been very successful in joint response has been the challenge posed by migration. Member States took commitments in relocating refugees from certain parts of EU after the big refugee wave in 2015-2016. However a lot of member states fail in their promises and the Commission started infringement processes against Poland, Hungary and Czech Republic due to their lack of cooperation. Do you think mere infringement process is enough for a solution? What could be done if they just ignore legal process and warnings as some of them have done in other fields?

I think it is unfair to say that the joint response to the migration challenge has not been very successful. Together we have come a very, very long way since 2015. This should not be underestimated — the situation today compared to 2015 is like day to night.

Arrivals in the Eastern Mediterranean have dropped by 98%; we have tripled resources for EU operations at sea, we set up a European Border and Coast Guard in record time to help ensure our borders are better protected than ever before. We have opened safe and legal pathways in the first ever EU wide resettlement scheme – offering homes to over 16,000 people – 6,000 Syrians from Turkey alone.

And when it comes to Member States' commitment to make pledges to relocate refugees – which, is not voluntary, but legally binding under the 2015 Council Decisions on relocation, almost 21,000 people have been relocated from Greece and Italy, and we are on track to relocate all other eligible people by September this year, with a final push from Member States.

Unfortunately it is true that a handful of Member States are not honouring their legal obligations at all and their commitment to Greece and Italy. This is why the Commission started infringement proceedings. I have no illusions about this bringing about solutions for the people on the ground any time soon but it is a question of principle. The European Commission is duty bound to uphold and safeguard the application of European law. If not we, then who? The law is the law.

This does not have to be a dramatic situation. I would prefer instead that we now turn our energy and focus into reforming European asylum laws for the long term, in a way that works for all of the EU's Member States. The Commission proposed improvements to all aspects of our asylum law. I called on EU Member States in the European Council last week to make progress over the next months on the reform of our asylum system, with the Estonian presidency in the lead. I know that this is already on the Estonian agenda.

Estonia has not taken a single refugee from Italy under its relocation commitment, finding suitable excuses that contravene agreed relocation procedures. Could the Commission consider infringement procedure also against Estonia, because in the end you need to treat member states equally?

Estonia has not relocated anyone from Italy, but it has relocated people from Greece. In fact Estonia has nearly fulfilled its pledge. I applaud this. The regretful but necessary decisions we had to take concerning Poland, Hungary and the Czech Republic were taken because these three Member States are in clear breach of their legal obligations, having not even made a single pledge for over a year to take in any refugees. Estonia does not fall into this category.

The agreement with Turkey basically stopped the refugee flow in the Eastern-Mediterranean. However the migration flow to Italy in the middle of the Mediterranean is still wide open and we have failed to put a stop on it. This is not sustainable, neither for Italy nor the rest of the EU. How can we stop it?

It is true that the Central Mediterranean Route remains an issue of serious concern, it is also true that the EU has never been better prepared. We have reinforced our external borders with the European Border and Coast Guard, the flows from Turkey have been stemmed thanks to the EU-Turkey Statement. We are now working jointly with North African partners to tackle the root causes of migration, fight smugglers and save lives at sea.

First and foremost we have to work where we can to improve the situation in Libya. There is no quick fix to the situation, but we are working in parallel on all fronts, namely at sea, in Libya, on the southern border and in countries of origin of the migrants, making our contribution to resolve this global challenge, to improve conditions of people along the migratory routes and in their home countries. We are cooperating with those international organisations, such as the IOM and UNHCR, who have the capacity to work in Libya and access to the centres, as well as with the Libyan authorities.

With our international partners, we have programmes in place that are specifically targeted at the protection of migrants in reception centres at disembarkation points and in detention centres. Under the programme we also provide the possibility for voluntary repatriation and reintegration. Since the beginning of 2017, around 4,600 migrants have voluntarily returned from Libya to their countries of origin under this programme and we are looking to increase this number as quickly as possible.
There is still much work to be done but I am confident that with renewed efforts we can turn the situation on its head, all the while maintaining our humanitarian imperative to rescue lives at sea in the meantime.

The EU is based on shared values and principles of democracy. However some member states have in recent years notably diverged from true commitment to this. I have mostly Hungary and to some extent Poland in mind. It has been very hard for the EU and the Commission in particular as the guardian of the treaties to influence these governments to correct their paths. Do you think that the EU should take much stricter view in case of such divergence and if so, what could be done to influence these governments- financial sanctions, activation of so called article 7?

Freedom, solidarity, the rule of law and democracy are non-negotiable and they are what make our Union so special. I fell in love with Europe because of those values and what it helped us achieve since 1957. Anything that puts those principles into question should be a concern to us all – not just to "Brussels".

But if the rules of the club are breached, the Commission stands up and enforces them. Where our common values are called into question, the Commission defends them. Where our members pull in opposite directions, the Commission brings them together and finds common ground.

I don't believe in sanctions or punishments as a first resort. I came into politics to tear down walls and build bridges between people. And that is what my Commission has tried to do.

With Poland we have worked tirelessly with the government to find a solution that respects the country's constitutional order. We have seen that dialogue can work, notably with Romania when the government rushed through a number of anti-corruption reforms which brought people to the streets. Where infringement procedures or other measures are needed we will not hesitate to uphold the law and defend our values. But we will always try to be constructive and find a solution because I believe in building bridges rather than closing doors.

For as long as we remember we have been used to a shared outlook on both sides of the Atlantic – unity of the West, backed by strong transatlantic relations. Now we are faced with an unprecedented situation when in some ways this relationship is under strain due to the unpredictable US administration. How must Europe now go about defending its values in the wold? Case-by-case, for example building coalitions in particular fields – with China when it comes to climate change – with Japan or Australia when it comes to free trade?

Transatlantic relations are essential. We are home to the world's biggest economies, markets, and currencies. The EU and US help to keep each other safe and create jobs and growth on both sides of the Atlantic. I am confident that none of that will change under the new President.

At the same time, the EU must now step up as a leader on the issues that matter. We are already the biggest humanitarian and development donor. Our leadership on climate and clean energy will become even more important in the wake of the US decision to pull out from the Paris Agreement. We are fully committed to it and we will support others to implement it.

And we are committed to free and fair trade that opens up new markets for our businesses. We depend on it: a third of our national income comes from trade with the rest of the world. It already supports 1 in 7 jobs in the EU and for every €1 billion we get in exports, we create 14,000 extra jobs. More than 90 companies in Estonia export to Canada and more than 1,000 jobs will be supported by the trade agreement between the EU and Canada. We are not naïve either and as long as there is a level playing field for all, the EU is open for business.

Our relations with Russia have been very sour since their aggression against Ukraine. Sanctions have become part of our life, because Moscow refuses to take steps to fulfil the Minsk agreements. And what is worse, they have instead chosen to make matters worse in Syria, even in Europe itself by messing in our elections. Is there any way for the EU to make Mr Putin to behave better or have we exhausted our toolkit?

Our aim is for a peaceful resolution to the conflict in eastern Ukraine. And for that to happen we need the full and unequivocal implementation of the Minsk agreements. That is the only way that EU-Russia relations can start to substantially and sustainably improve. No ifs, no buts. And that is why at the European Council last week we decided to extend sanctions for a further period. These have proven to be effective.

But we should also not close all communication channels either. At political level we will keep engaging Russia on international matters of key concern to us from the fight against terrorism and climate change, to relations with Iran, the Middle East Peace Process or others. And just as importantly we should continue to promote people-to-people contacts and engage with Russian civil society.

Mr Juncker, you made achieving a digital single market one of the top priorities of your Commission. Estonia plans to make this one of its priorities during the presidency. What do you think could be tangibly achieved by the Estonian presidency and the European Commission working together by the end of this year in advancing the digital single market?

When it comes to digitising our economies we not only need Europeanisation of the rules but we also need more ‘Estonisation’ of Europe. Having a Presidency with your level of expertise and leadership in digital matters could not come at a better time for Europe.

We are still some way off completing the Digital Single Market. Since this Commission came into office we have put 35 legislative proposals and policy initiatives on the table. We need to make progress on all of them and I count on the Estonian Presidency to help us do that.

Let me give you a couple of examples to show just how high the stakes are.

Firstly, I am delighted that the Presidency has highlighted 5G coverage as a priority area. We want 5G to be commercially available in at least one major city in each EU Member State by 2020 – I suspect that will not be difficult for Estonia. But in the long-term all urban areas as well as major roads and railways right across Europe should have uninterrupted 5G coverage. And if we get that right, the knock-on effects are substantial. Successful deployment of 5G could bring €146 billion in annual benefits to four industries and is likely to create 2.39 million jobs in the EU.

The second example is cybersecurity. We stand to lose €640 billion in potential economic value if we do not respond to the challenges we face. But more importantly we will lose the trust and confidence of EU citizens in the digital economy and society. That will be fatal for our digital ambitions. With at least 80% of European companies experiencing one cybersecurity incident over the last year, the risks are very real. Over the next six months we need to make real progress and by September 2017, we will renew the EU Cybersecurity Strategy to ensure it is able to tackle the new challenges we face.

Juncker and Andrus Ansip back in 2011 when they were still heading governments of Luxembourg and Estonia, respectively
Photo: Reuters

When you came into office you put our former Prime Minister Mr Andrus Ansip in charge of the digital issues as Vice President of the Commission – has he delivered results as you have expected?

When I took office I wanted a heavyweight team with real political experience. The Commission now has 4 former Prime Ministers, 4 former Deputy Prime Ministers and 20 former Ministers. I wanted the broadest shoulders to take on the biggest responsibility and in Andrus I found someone who was up to the challenge. Before he took this job, he was the longest serving prime minister in Estonia and having been a Prime Minister myself for almost 19 years — the longest serving in the EU — I know what that entails.

I needed someone used to taking on big responsibilities, but also someone who understands well the importance of connectivity for European citizens. What better person than Andrus? And just as I expected he has got on with the job and delivered just as he has always done. He has been just about the busiest Vice-President in terms of proposing legislation and he has led by example.

The results of his work are visible to everyone, not only me. Just about two weeks ago roaming fees across the EU countries became a thing of the past. This was a long held ambition for the EU and there have been many pioneers over the last ten years. But Andrus was there to bring it over the line. Thanks to all the people involved, any citizen – young or old, a businessman, or a student – can now travel around Europe and roam like at home.

Estonia along the rest of the Baltic states is preparing to connect to the rest of the EU via a rail link called the Rail Baltic. This is a multi-billion and multi-annual project. There are people who fear that Estonia will take up a major financial commitment at a time when the future of the EU budgets is most uncertain. They are anxious that if the EU cannot afford to co-finance the project from the next financial perspective, the country could be left in financial difficulty because of the expensive project. Can you see a realistic scenario that if Baltic states start building Rail Baltic in the near future, the project could be left totally without support from the next EU budget perspective or the pledges of the co-financing amount significantly reduced?

The Rail Baltic project is the type that I like because I like projects that unite. It brings people and businesses closer together and connecting Europeans is what our Union should continue to prioritise. It will create new opportunities and build new partnerships in some of the great European cities from Helsinki, to Tallinn, Pärnu, Riga, Panevežys, Kaunas, Vilnius, and eventually to Warsaw.

This is the largest infrastructure project in the Baltics for over a century which, taking over a decade and investing €5 billion of investment into the region. These projects cannot happen overnight or within one financial period. It took 12 years and two financial periods to complete the high-speed link between Frankfurt and Brussels.

Discussions on the new financing period just kicked off last week with our reflection paper on the future of EU finances. We now need a Europe-wide debate on what the next budget will look like, not just in terms of size but also in terms of design. I cannot pre-judge the outcome of those discussions as I have learnt never to make too many predictions in politics. But I think that we can be confident that the financing of cross-border transport networks will still remain a priority.