Lucas Zeise, a German economist and co-founder of Financial Times Deutschland, shared his views on the militarization of industry in a recent interview. Zeise said, “If more and more is being spent on the defense industry, this is actually a loss. Because this is a production that exists only for destruction. This is a sign of a general decline and at the same time an indication of the road to disaster.”

Born in 1944, Lucas Zeise is a financial journalist with a background in philosophy and economics. His career includes positions with the Japanese Ministry of Economics, the German aluminum industry, the Frankfurt-based Börsen-Zeitung, and the Financial Times Deutschland, which he co-founded. Until 2017, he served as editor-in-chief of UZ, the weekly newspaper of the German Communist Party (DKP). He currently writes a regular column for Junge Welt and contributes articles to various publications.

Lucas Zeise answered Tunç Akkoç’s questions about the debate on German industry and economy and global developments.

Tunç Akkoç: First of all, is deindustrialization a reality?

Lucas Zeise: Yes, I think so, but of course it is a long-lasting reality. Deindustrialization is a process that coincides with capitalist development in general. Industry has been the main surplus-value-producing element of capitalism in all countries, and in some of the more developed countries, notably Britain, deindustrialization has reached a more advanced level. Since Britain was the first fully developed capitalist country, this process started earlier.

Economists often refer to this process as the tertiary sector, i.e. the service sector in general. In capitalist countries, the share of services in the economy is steadily increasing. This is a general trend that can be observed everywhere, and is particularly related to the fact that developed countries are gradually shifting their industries to other regions, especially South-East Asia, by exporting capital. While industrialization is taking place in these regions, the process of deindustrialization in developed countries has accelerated.

In addition, the process of financialization has also accelerated and the financial sector has become stronger. However, the finance sector is a service sector, not an industry. Nevertheless, all these service sectors depend on industry remaining strong. When we analyze the UK, we can see that the country has experienced a relative decline compared to other regions. For example, Germany had overtaken the UK in the industrialization process and even surpassed it before the First World War. Likewise, the US has also overtaken the UK in terms of industrialization.

This is a long-term trend. However, two major industrialized countries, Germany and Japan, have managed to resist this process for a long time. The recent economic shocks, however, have accelerated Germany’s deindustrialization process, which has brought about an inevitable crisis. This is the essence of the whole issue.

Tunç Akkoç: Some influential figures in the European Union, such as Mario Draghi, have argued that Germany should move away from the car industry and invest in new technologies such as artificial intelligence. What do you think about such proposals for structural change?

Lucas Zeise: I think such proposals for structural change will happen spontaneously on the one hand. I mean, this process is already going on naturally. China has already overtaken Germany in the car industry. Therefore, Mario Draghi’s advice on this issue is actually a cheap suggestion. It is easy to suggest something like this and then say ‘Great job!'”

On the other hand, it would be ridiculous to think that it is possible to steer the economy in this way. It is not enough to say, ‘OK, now we are investing heavily in artificial intelligence and we will get ahead in this field.’ Moreover, it is debatable whether artificial intelligence is really a great revolution or just a passing fad. Artificial intelligence can actually be considered as a sub-branch of the semiconductor industry, i.e. microelectronics.

Of course, the development of microelectronics is important and all countries are making state-sponsored investments in this field. The European Union and Germany are already encouraging this. However, this is not something that is unique to Germany or something that makes Germany different from others. While it is possible to make great progress in this area, this alone is not the final solution to a problem.

Tunç Akkoç: In general, how do you assess Germany’s future energy supply strategy?

Lucas Zeise: Obviously, I am not an expert in this field, so it is difficult for me to give a really good assessment. But it seems very clear to me that all states have to pay attention to such a central sector of the economy.

Germany was already in a different position in that it did not have its own oil companies. This has become a historical tradition. As for natural gas, there used to be two big centers: one centered around BASF, the other around Ruhrgas. These two structures were interconnected and worked well for a while. Over time, however, this system changed and other areas of the energy sector, especially electricity generation, were restructured.

However, this does not change the fact that the energy sector must be guided by the state. Energy policy should be managed by the state in a holistic manner. Developing a common energy policy in the European Union already seems unlikely. However, such a policy should have been mandatory for such a large common market.

At this point, if we look at the example of Turkey, the energy sector there is handled, managed and coordinated in a relatively centralized manner. In Germany, and at the EU level in general, there is a major deficiency in this respect. The state does not really take enough ownership of the energy issue.

Tunç Akkoç: On the other hand, German industry is increasingly turning to the defense industry. Some see in the militarization of the economy the potential for a kind of ‘re-industrialization’. After the war in Ukraine, more and more German companies are breaking the taboo on supplying the defense industry and entering the military equipment sector. How should we assess this development?

Lucas Zeise: On the one hand, this is clearly a sign of the collapse of the still developing and relatively well-functioning global economy. If more and more of it is being spent on the defense industry, this is actually a loss. Because this activity is a production that exists only for destruction. This is a sign of a general decline and at the same time an indication of a road to disaster.

It is also clear that there is competition for the best defense tenders in the international arena. That is why everyone feels that it needs to enter this field strongly. Nobody just wants to buy aircraft from the US, but wants to build their own defense industry. Germany was already taking part in this process. Although not always at the forefront, tank production in particular has long been strong. This sector was progressing steadily, albeit at a slow pace.

However, this development seems to herald an impending catastrophe. It shows that everyone is preparing for war. This is very similar to the atmosphere before the First World War.

Tunç Akkoç: Elections are approaching in Germany. Do you think that after these elections, Germany’s economic policies will change with a new political order?

Lucas Zeise: More likely no, I don’t think so. I think that economic issues have become a bit more prominent, but if we look back, I remember that in the German Bundestag elections in 1969, one of the main debates in the election campaign was whether the German Mark (D-Mark) should appreciate against the US Dollar. So, a very specific and economically critical issue for Germany at that time was at the center of the election campaign. This debate was directly related to the position Germany should take vis-à-vis the US and Europe.

Today such a debate is missing. The issues that really need to be addressed —energy policy, deindustrialization— are being dealt with in a strangely distorted way. The only thing that everyone seems to agree on is the Agenda 2010 program that Gerhard Schröder launched in 2002 or 2003. This program meant lowering wages, reducing social benefits and increasing profit-making opportunities for companies.

But this approach was already wrong at the time. Schröder’s move enabled some big companies to make a big leap forward and strengthened German capital, especially in the European domestic market. This had certain advantages, but repeating it now would only worsen the situation.

That’s why I think the debate is being conducted in the wrong way and not particularly along party lines. On the contrary, there seems to be a consensus among most political actors on this issue.

Tunç Akkoç: How do you assess the first actions of the Trump administration and what will be the impact on international relations and the global economy?

Lucas Zeise: In my opinion, there is not a new wave of deregulation (liberalization). The US government’s more aggressive stance towards other great powers, or as Trump calls them, ‘shitholes’, or small states, ruthlessly suppressing and crushing them, is not deregulation. It is, in fact, a further intensification of the rivalry between the capitalist states, which are essentially allies, by any means necessary. We can see this situation clearly.

This is not deregulation; it is more like what happened during the Ronald Reagan era. At that time, the US tried to revitalize its rivalry, not with China, but especially with Japan and Western Europe. Reagan’s ruthless behavior towards his own allies was aimed at strengthening the US global position. Today, I think it has become even harsher, so much so that the President of the US can stand up and say, ‘Oh Denmark, you have to give us Greenland, or else we will buy it.’ They even imply that they can intervene directly if necessary.

This kind of behavior is actually a continuation of the past US policies towards Panama. Panama was detached from Colombia and made independent because the US wanted to build a canal there. In other words, this imperialist behavior towards weak countries is already a tradition. But the behavior towards medium-sized states such as Germany, Britain, France or Japan is becoming more and more brutal. I see this as the result of an intensifying and ever more bitter rivalry.

The US in particular is less and less reluctant to use its military power more recklessly, and this is becoming more and more prominent. This is not a new era; it is a further advance of neoliberalism and laissez-faire. The so-called ‘rules-based economic policy’ rhetoric has been completely discarded.

Tunç Akkoç: We see both overly optimistic and overly pessimistic comments about the Chinese economy. When government bonds lose value, pessimists sound the alarm; when exports break records, optimists raise their voices. Does China have the intention or the power to ‘share’ the world with the US?

Lucas Zeise: I completely agree with you; the overly optimistic comments are as exaggerated as the overly pessimistic ones. If I try to think from the point of view of the Chinese Communist Party and its leaders, their tradition has been to position China as the largest economic power and to take the first place in the capitalist world.

In the present situation, if I am the second most powerful country, naturally my goal is to equalize with the first. And I have to do this because there is almost no scenario in which the US will accept this and say, ‘OK, we can live in peace with China.’ For a while it seemed as if there was this understanding, that we were working well with China and we were happy with that. But this is clearly no longer possible.

The official US policy is based on not allowing China to become an equal power. They want to continue to set the rules and, if necessary, to violate them according to their own interests. Therefore, China is forced to act like an imperial power.

Alexander Stuglev, the Head of  Roscongress Foundation, spoke to Harici: “For easing the sanctions regime, national currencies are currently used, and potentially in the future, a digital currency developed by the BRICS can be used.”

With the Russia-Ukraine war, Moscow has increasingly turned to business diplomacy and international trade cooperation as strategic tools to mitigate the effects of Western sanctions. Central to this effort is Roscongress Foundation, Russia’s premier organization for fostering global economic dialogue and partnerships. Established to enhance Russia’s business ties internationally, Roscongress serves as a bridge connecting Russian enterprises with global markets through high-profile forums such as the St. Petersburg International Economic Forum (SPIEF). The organization plays a critical role in reshaping Russia’s economic development by emphasizing collaboration with emerging economies, strengthening ties with traditional partners, and exploring new trade opportunities in Asia, Africa, and Latin America.

Roscongress was organized a meeting in Istanbul and Alexander Stuglev, the Head of  Roscongress Foundation, replied the questions of Harici.

As we understand, Roscongress is the main tool for business diplomacy and to eliminate the impacts of Western sanctions. Can you tell us more about the organization?

Yes, you have noticed correctly, Roscongress was established in 2007 as a non-financial development institution that deals with the organization and holding of major international economic and political events in Russia in the interests of attracting investments to the Russian Federation and developing the economy of the Russian Federation.

At the same time, while organizing events we, of course, proceed from the fact that in addition to interaction between Russia and businessmen from a particular country, direct connections can also be established with third countries, that we are also welcoming.

Could you tell us more about the opportunities and risks you see in Turkish-Russian relations in business sector?

Undoubtedly, to some extent, sanctions affect the development of Russian-Turkish relations and, in general, business relations with Russia.

Nevertheless, today, all those who use these turbulences in a pragmatic way to build their business projects in Russia are winning, occupying the vacated niches from Western countries, developing their own business. And from the point of view of easing the sanctions regime, national currencies are currently used, and potentially in the future, a digital currency developed by the BRICS association (Brazil, Russia, India, China, South Africa) can be used.

First of all, there are always risks out there, marketing risks included. Secondly, in addition to the fact that Turkish companies have occupied the niches vacated by Western companies, we see a general change in the structure of the Russian economy with a greater focus on creating products and services within Russia.

Tourism for example; the number of tourist trips that have now emerged in Russia is many times higher than there were before COVID, about 83 million trips are made by Russian citizens annually within Russia.  And this requires the infrastructure development.

Taking into account the large number of support programs from the Russian state for companies that are developing tourism infrastructure, there are great chances, for foreign companies as well, if they organize a Russian legal entity in the format of an LTD and get the opportunity to develop their projects. This is one of the possibilities.

Creative industry, computer IT security, IT products; in all those areas we can cooperate completely freely. These are such cross-border industries, where, I think, it’s very difficult to be a subject for sanctions.

Turkish President Recep Tayyip Erdoğan and Russian President Vladimir Putin set a goal of increasing bilateral trade volume to $100 billion. Do you see an expansion or a contraction in the Turkish-Russian trade volume in 2025?

Firstly, this is practically 100% growth to what we have now.As for the forecast for 2025-2026, the main thing is,first: in my opinion, the construction of transport and logistics projects.There is the Black Sea and the Caspian Sea for example.Second; this is cooperation in the field of energy. Thirdly, this is cooperation in the field of chemistry (creation of chemical products) from supplied raw materials, from oil and gas.This is a promising area of pharmaceuticals, supplies of medical equipment, as well as medical services in Türkiye.Undoubtedly, the development of tourism is very promising but also creative industry, IT industry, Cybersecurity.These are the areas that, in my opinion, will develop in the near future. Of course, traditional cooperation in the field of metallurgy.Traditional cooperation in the field of agriculture and food supplies will grow for sure.

What challenges do sanctions pose to bilateral relations?

The first is an axis from the sanctions regime, including through payment in national currencies and using digital currencies. The second is business, thanks to its capabilities, will find a solution to any restrictions. I do not want to go into details now, do not want to disclose the details of the opportunities that companies can use to maintain a normal trade balance.

Anti-colonial movements in Africa seem to have opened up space for Russia in both diplomatic and commercial terms. How do you assess the situation there?

This is an anti-colonialist movement not only in relation to France, but also in relation to other countries. This is also a movement in relation to proposals that are unfair to Africa, for example, on the green transition, because it will destroy African business and will give great advantages to global companies. In my opinion, it is necessary to proceed from the interests of African countries, which, in fact, Russia always does. This is the advantage of our economy and politics.

We work in a ‘win-win’ mode. In the same way, the Turkish side can work in Africa. In the same way, Chinese investors have been actively working in Africa to this day in the form of the prospects of this market. But based on common interests, on the one hand there is a creation of profitable enterprises. On the other hand – the development of the African economy.  Only this will provide an opportunity for further mutual growth. If we simply export material resources from the colonies as a consumer and do not give anything in return, nothing good will come for sure.

After the fall of Assad government, does Russia have any interest in doing business in the reconstruction of Syria?

I am sure that Russian companies will take part in this process, just like other international companies. Now a period of political stabilization will pass and a period of certain growth will begin. The main thing is that extremist movements and non-constructive movements in relation to Syria and the Syrian people do not prevail in politics.  I believe that politics and economics will improve in the near future.

Prof. Franco Bruni, the President of Italian Institute for International Political Studies spoke to Harici: “I think Europe could be helpful because by  gaining some strategic autonomy from the United States, we could pay special attention to the global South and get the global South to make a bridge with us and, through us, with the Americans also.”

Professor Franco Bruni, President of ISPI, Italian Institute for International Political Studies, one of the world’s leading think tanks in the field of international relations and economics founded in Italy in 1934, discussed critical issues such as the current dynamics of the global economy, Trump’s challenges, the challenges facing Europe, the Draghi report and the injustices of representation in international organisations.

Opening the doors of ISPI to Harici, Professor Bruni gave a comprehensive overview of his views on many topics such as conflicts within the European Union, the role of BRICS and the clash of global economic blocs.

Professor Bruni says that Europe can bridge the gap between the Global South and the Global North. Ukraine, on the other hand, could be given territory in Russian-populated areas in order to make Putin feel that he has won a victory in order to sit at the negotiating table. Here is the full interview:

Please tell me what do you mean by your opinion that Europe could be a bridge between the Global South and the Global. Can you open up this?

I think that the world can be thought of as divided into three really sort of independent blocks. One is the West, the other is China, which makes its role part, and the rest is the Global South. Formally, the Global South includes China, but that’s just formally because the leader of the Global South is India really, and I don’t think their relationship with China is that perfect. Moreover, Russia is in the middle and it’s clearly with China. So, you have China and Russia on one side, the Global South, which is also South because China is also north, and then you have the West.

And we don’t find a way to really multilateralization of the world have a governance which pays full respect to all sides. So, we have to break the game and start again in a way after this disastrous world is coming out. And I think Europe could be helpful because by  gaining some strategic autonomy from the United States, we could pay special attention to the global South and get the global South to make a bridge with us and, through us, with the Americans also; and in a sense, also re-approaching diplomatically China. I’m not talking about Russia because Russia is out of, in this moment, completely out of any discourse. I mean, it’s a country which is dying by this war.

I look at China, not at Russia. This is what Europe could do: to diplomatically be very near to India, very near to countries like Egypt. Clearly I’m not talking about Türkiye because Türkiye, in a way, I think it’s part of Europe, but certainly, if you keep Türkiye as an independent country from Europe, Türkiye is one of our basic relationships that we must exploit in order to have a bridge with the South. But countries like Egypt, like all the Arab states, South America—I mean, these are crucial countries that constitute a group which has nothing really in common except one very important thing, which is the desire to participate in the world in an independent way without being with one block or the other block. This is a very precious quality, and we should sort of exploit it to help the world to get a truly multilateral governance. It’s going to be extremely difficult, and we can only do this piece by piece, year by year, but the strategy must be there.

How do you think Europe can be independent from the US? Because now in your speech again, you referred to that, and it is one of my questions. What do you think about the discussions about European autonomy? Is it really possible for Europe to be independent, have its own autonomy? Can Europe do something without the consent of the US?

Certainly, I think this is positive, and we did many things. Look, for instance, in trade, we are fully independent. We are able to combat a trade war. We have an antitrust system in Europe that prevents American companies from exaggerating in exploiting monopolistic powers in Europe. So, we have several fields where we have our autonomy.

Obviously, what I mean is strategic autonomy. It doesn’t mean to break the alliances. The important thing is that the alliances are true alliances so that we decide together, and we have full reciprocal respect. But this requires that Europe is much more united. As soon as Europe is able to express its strategy in a uniform and united way, immediately the alliance with the United States will become much more balanced. So, we can be allied, but having lots of autonomy also in proposing to the US different ways of action and speaking at the same level.

The problem is that now you have the US on one side, which is one big thing, and in Europe, you have these little governments and states that fight one against the other—France against Germany. And this is the problem. So, we’re not talking about autonomy in an aggressive way or saying we are going to be outside. For instance, we can have a full alliance in terms of defense, like your country has. By the way, you are in the NATO system, so Türkiye is in the NATO system, but you have a lot of autonomy, strategic autonomy, and you exploit it very well. So, we can have strong alliances with the United States in many fields, but be autonomous enough to contribute to world diplomacy in an autonomous way.

Then my other question is also about the US and President Trump and his threats to Europe about the trade tariffs. Do you think it will work? Whenever he wants to teach a country something, he’s using his trade stick.

It’s more a strategic weapon. But I don’t think he will exert this or put the tariffs at the level he is threatening to do. I don’t think, especially with Europe, simply because the United States is full of large firms, important firms, powerful businessmen, etc., that do not like this and don’t want to. They are very open. Their firm’s profits depend on the fact that there is full trade integration in the world.

I think that Trump will use in a very effective way his threats of tariffs, but, for instance, one thing that could happen is that he points at specific products and puts tariffs on that. This is different from a full tariff war, and we can reciprocate because we have specific tariffs we can put on American products, and therefore we have our weapons. The point is that even there Europe must be united. In this case, Europe has the power to be united because, as you know, trade policies are centralized in Brussels, so the commission has full authority to maneuver with tariffs. Unity in theory is already there. The problem is that even the commission wants to be in agreement with the major countries so that if France starts diverging from Germany in trade issues, it’s going to be very difficult for the commission to act.

This is—we’re going to see. Anyway, I had a meeting at the Minister of Foreign Affairs in Rome. I was on video, and, well, the idea is that it’s going to be a bit of a mystery what is going to happen.

What do you expect from Trump era’s global politics? On the one hand, you have Western global economic blocks like G7. On the other hand, there’s now BRICS emerging. Some people are hopeful about BRICS, and some people criticize, asking what has BRICS achieved until now. Now Middle Eastern and Gulf countries are also being part of BRICS. This multibillionaire countries are in BRICS. BRICS is getting really stronger. Türkiye is eager to join too, but Trump recently made a declaration that anybody, any country, any person who wishes to reduce the power of the US dollar will be punished. What do you think about this global economic war and the clashes between these global economic blocks of the West and the East?

One thing we can immediately say is the issue of the dollar—the dollar being the privilege of the United States and the idea that somebody could compete with the dollar is not possible. I don’t think that this is a fruitful way for the BRICS. It doesn’t make any sense. You can have an independent circulation of another currency like the Chinese currency, but it’s going to be only to pay for goods and to cash what you get from exports.

As soon as you have assets and you want to invest them, you have to go to the States because this is the only place where you can find a menu of activities, a menu of financial assets that satisfies anybody—short, long, risky, less risky, everything. Moreover, as soon as you have an investment in the US, you can take it away when you want. It’s liquid, large, big, accepted all over the place. There’s no way for China to compete with the United States in this—no way. Absolutely.

I mean, they have controls; they have a political climate that is frightening for any investor. So, the renminbi can be useful, can have its own circulation in the East, in the Southeast, but it’s just circulating money. You can use it for doing the payments or keeping the wealth. As soon as you have assets and wealth to keep, you cannot keep your wealth in a sustainable way in that country. Even the euro is a problem in this sense because Europe is divided. Financial regulations are different in different countries, and when a Chinese investor wants to invest in Europe, investing in Italy is different than investing in France or Germany because banks are regulated in different ways, and the liquidity of the markets is very different.

The euro at the moment cannot even—cannot flank the dollar. So, the dollar is the dollar, full stop, for the moment. Then, when financial markets all over the world will be free, flexible, modern, well-regulated, and safe, then we might have a single currency at the global level. And that currency is not going to be issued by the States; it will be issued by a multilateral organization like the IMF or something similar.

The BRICS, when they talk about money and monetary matters, are really weakening their points. Sometimes, they are even, a little funny. It’s like theater. Look at what happened between Brazil and Argentina when they wanted to separate themselves from the dollar circuit. Nobody wants to put their money in Argentina, so it doesn’t make sense. It’s better to concentrate on real things, not on money.

Another thing that might be of interest is the issue of sustainability and the green transition. This is something that Trump criticizes and would like to stop, as he did or tried to do in his previous presidency. This can be worrying, but as far as I understand, he will find a lot of opposition—mainly from firms. In Europe, firms are moving sufficiently fast toward a green transition. They are fond of it in a sense; they are investing and following the rules. In America, also, large companies are like that. In certain states, the green transition is in progress. So, I doubt that Trump’s war against the green transition can be successful. It might slow it down a bit and give some voice to opposition, but in the end, it will fail.

The consciousness of the fact that if you don’t provide a sustainable green transition, we are going to face enormous problems is now very clear to everyone. Look at the costs of climate damage—it’s incredible. Banks are understanding this; they are measuring it. Central banks are putting rules in place and want to know the risk that each firm runs by having a plant near a river, the sea, or a mountain, or in a risky area.

If this happens, the interest rate for loans to such firms will be higher. So, the tendency of the economy to move in this direction is clear—faster or slower, but it will move. This process is going independently of Trump or general public opinion. This is my idea. Sometimes, I even see friends who are skeptical about the green transition when we’re having coffee together. But when I see them at work, they act as strict managers, pushing the green transition very seriously. So, I tend to be optimistic about this.

Please tell me: do you see any positive sides in BRICS? Because you said it is weak considering monetary policies and common currency issues. But do you see anything positive? You are a professor focusing on the global South. Considering the role of the global South in the global arena, which role do you give to BRICS?

The role of BRICS is the role they want to perform: to establish a different type of governance at the global level. Each country has to be represented for its true weight in the global economy.

For example, take the governance of the International Monetary Fund (IMF), the United Nations, or other international multilateral agencies. The way we regulate large markets—the ocean, the green transition, etc.—must ensure that decisions are not dominated by one or two blocks while forgetting the rest of the world, particularly the global South.

The global South’s presence at the right tables is essential. This is the only real aim of BRICS, apart from rhetoric, that makes sense. Otherwise, what do Argentina and Türkiye have in common? Or Egypt and Vietnam? They are culturally and socially different, with different aims and tendencies.

It’s not like the West, where people watch the same movies in Milan and Florida. BRICS countries are very different, but they make sense as a group because they can help re-equilibrate the world.

Take the IMF: its governance and the number of votes do not correspond to the actual weight of individual countries in the global economy. China doesn’t have the number of votes that reflect its weight. The same goes for India, Brazil, and Egypt.

We need to increase these countries’ weight in the IMF and their role in the United Nations, the International Labor Organization, the World Health Organization, and other global governance platforms.

The Global South must actively demand its representation. This is the only meaningful way to understand the concept of the global South. Otherwise, it’s just rhetoric. They can protest because they are forgotten and criticize the lack of help for poor countries to manage their debts and survive.

Look at the problems of the poor countries in the world. There are 40 to 70 very poor, heavily indebted countries today. These countries need help for several years now. Economists have developed proposals, techniques, and ideas to address this, but nothing is done quickly enough. There are proposals, there are techniques. Economies have developed and elaborated a lot of ideas. There is a possibility to do it, but nothing is done quickly enough to solve the situation. So this is what—and it’s a common interest because even the United States, or Europe, or all the lenders, as usual, have an interest in the fact that the borrowers can repay their debts.

Fixing this problem and relaunching the growth of countries that are today too poor to sustain their life in the world is a common interest. It has to be pursued by a multilateral organization. And the BRICS—BRICS excluding China or with China, depending on certain issues—

Europe can act as a broker because we understand these dynamics better than Americans do, normally and obviously. Sometimes even a sacrifice is needed. For example, Europe holds more votes in the IMF than it deserves. We should give up some of these votes to BRICS and then use our remaining voting power more effectively as a united bloc.

Europe has instruments to broker agreements with BRICS, even making sacrifices to achieve results. This can lead to a new approach to multilateralism.

The government in France is also on the verge of collapse due to the budget crisis. Is it possible that the EU’s two most indebted countries will be dragged into a Greek-style debt crisis? On the other hands, in Italy, the government’s budget plan has sparked debate and strikes. It calls for increased purchasing power for wages and pensions, and more funding for health, education, public services and industrial policies. What do you think of the budget plan?

Well, let me say first one thing on Greece, on the Greek example. The Greek example is famous because apparently European authorities and the IMF have dealt with Greece in a bad way. And they caused a lot of suffering. Now this is true, but it is also true that at the end, Greece was able to profit from the enormous financial help that we gave.

And I was recently in Cairo and there was a big conference. And what the Egyptians did was to invite Greek people from the treasury, from the parliament, from the political parties and from the think-tanks. And they organized an entire morning on Greece, citing Greece as a potential example for Egypt in getting out from a debt trap. And these Greeks that are now in power, they were explaining the way they did it in the last ten years. They were able gradually to get out and now they are in much better form. And I asked very squarely the question, but look, what about this fact that apparently the IMF in Europe has made you suffer enormously and this was counterproductive? And they answered in a very unexpected way. “Yes, we suffered a lot. We probably could have suffered less if the approach would have been different. But suffering was indispensable for solving our problems and we were able to solve our problems. So, now we are much better off.” And this was important because Egypt was learning that you can be rigorous with finance, suffer a bit, but getting out of the problem and attracting capital.

Now as France and Italy, it’s a totally different story. We have so large countries, so large debts. So as soon as we have difficulties, we will be under the control of European financial help, the central bank, the commission. So, it’s going to be a problem at that point of re-managing our countries. My impression is that if we don’t do before our tasks our homework and reorganize our public finance in a sustainable way, we will do this anyway under the control of the European Central Bank, the commission, and I think it’s difficult to do these things without the IMF. So, because you know, nobody can allow France or Italy to have a true financial crisis. It’s impossible to bear.

Look what happened in 2010, 2011. Greece failed, Ireland failed, Portugal failed, Spain, not the whole country but the banking system failed, and Cyprus. All these countries were bankrupt basically and were, say, officially bankrupt. They were not able to repay their debts. They were helped and re-managed by the international community. But the worst situation at that time was the Italian one. Because we had the largest problem in terms of public debt and speculative attack. And we were the biggest country there. So, officially, we were not bankrupt but we were helped very, very much.

We were being helped in many ways including the fact that they’ve changed the rules in Europe. They admitted that the central bank can officially help a country that proves to be constructive in solving its debt crisis.

So, regarding my questions about France and Italy’s budget today, you said that it is not a problem because this country cannot be bankrupt.

They cannot be bankrupt. I was looking at what’s happening to the spread of France these hours, to the interest rates on long-term debt. And you can see clearly that when it comes a certain time during the morning, the price of long-term bonds of France -and also Italy are the same- but France is currently much more under speculation than Italy. The price of bonds, which is going down the very first part of the morning, second part of the morning, comes up.

The reason is we cannot say this officially but since the central bank is buying, I’m sure. And at the end we can see this statistically because once every month, there is a statistic where the central bank is obliged to show how many bonds it has purchased or sold. And if you analyze carefully this data, you can discover that they are clearly manipulating for stabilizing this. So, I think that politicians in both countries must sooner or later discipline themselves and suffer some costs of austerity and readjustment. Otherwise somebody else will come up and do it for them.

Among the suggestions put forward in the report prepared by Mario Draghi to make the EU competitive again with the US and China is the issue of joint borrowing. He proposes joint borrowing. France and Italy want this but it is not okay for Germany. It is not okay for Netherlands. What do you think of the suggestions in the Draghi report?

I am a very good friend of Draghi. Well, in fact we gave him the ISPI prize. I like the report. It is full of good ideas. At the end, it is convincing in saying that there is no way to do what we have to do to be competitive if we don’t borrow together. But, I have a big “but”. One should also emphasize the fact that maybe with a slower rhythm, but we must spend less at the national level. We must have less debt at the national level. And in a certain sense, I criticize Draghi because he doesn’t say this. I know he thinks this, but he doesn’t say this in an explicit way. Borrowing together means that we spend together also. Okay, but this must not be only additional expenses. We have to give up something at the national level, bring some of our expenditure under the authority of Brussels, save something so that the global debt, including national debt, doesn’t grow very, very much. And the idea of Draghi is that there is this concept of “good debt”. And good debt is the debt that you can do but because it is productive. And I agree that it is productive. If you go into debt to spend in a useful thing, it’s going to be a deal at the end. But, in the meantime, the markets will not follow you. So, you can have a very good debt, but you cannot have it too large. Because, at the end, the market doesn’t look very much to the fact that after 5 or 10 years, your debt will be productive.

From now to the next 5 years, the market must support you and must believe that you really are going to reimburse this thing. And in order to do so, you must show some financial discipline. You must give up something in order to spend in other things.

So, I am fully positive on the idea of having joint borrowing. I think Germans are fairly confused. I mean, they don’t even want their own debt to increase. They want this “zero budget” rule that doesn’t make any macroeconomic sense. Because, at least, the national debt must grow at the same rhythm as GDP. And in order to grow, you have to have more debt. Because, otherwise, the ratio between debt and GDP goes to zero. Because GDP grows and debt stays put. It doesn’t make sense.

So, you have to abolish this rule. And Germans are understanding this. So, sooner or later, things will change in Germany in this sense. So, it’s fine to have more debt and have it as a global debt together. But there must be something that officially centralizes certain expenditures and takes away financial autonomy from national debt. Because, otherwise, you add debt to debt, add debt to debt. In the end, the markets will not accept it. Also, because these debts are in Euros, as I say. And if they are in Euros, then you don’t follow another important suggestion of both Letta and Draghi.

That is, unify capital markets. If you don’t unify capital markets, they don’t even will buy this debt. By the way, this is what happened to the joint debts that we made for the COVID crisis. We issued this common debt to finance the Next Generation EU program. But the interest rate on these bonds happens to be very high compared, for instance, to German debt. The reason is that the market is not liquid.

When a Chinese wants to buy one of these securities, he doesn’t know exactly who is the real debtor, where is the market where he can sell and buy these things, how many, even when JP Morgan buys one of these securities, they don’t know how large will this market be. Because, okay, we issued that today, but what about tomorrow? So, we have really to make deep reforms to make the Euro market uniform, united, a big pool of funds. And this is what Draghi argues very well in the report.

So, you have to do this, and then you can issue debt in common and be credible and have low interest rates. Otherwise, the Chinese, at the end, they will buy this debt only at a discount, because it’s not that liquid. If they want to invest their money better, they buy US treasuries. I mean, why should they buy this if there’s no public finance behind it? So, it’s very important to make unification of capital markets and then some transfer of expenditure, so that the national debts decrease and common debt increases. But the fact that Draghi doesn’t have the courage to insist on the fact that we have to decrease national debts in a much more rigorous way, I think it’s a mistake. He should have insisted also on this.

Let’s talk more about Europe. French Prime Minister Michel Barnier emphasized strengthening France-Italy ties. This emphasis was interpreted as a sign that France increasingly sees Italy as a partner in EU matters. Will Italy take on such a role? France also needs some partners because in some cases in Brussels it feels not backed enough. What is Italy’s position regarding France’s global international policies and European policies? Where does Italy see France?

Well, Italy is sort of a vague concept. We have a government which is now different from the governments we had in the past. And so the Italian government now has a different idea of Europe. But for instance, I don’t know, ISPI for instance, or researchers and thinkers in ISPI have different ideas. So in this way, what really has to be stressed is that it’s not an issue of France and Italy. The issue is Europe.

We have to put together our countries in a common policy and this has to be done as quickly as possible. The problem is that France is a difficult country in dealing with foreign policies because they are rhetorically very, in particular Macron is, rhetorically very pro-Europe. But then when you come to concrete issues, they always are very much nationalistic.

So look at the defence issue. The defence issue is now very important and we want to sort of build a common defence system. We want to put in common defence strategies and form a substantial European army, etc. And France is crucial because they are the most powerful military power in the European Union.

Italy is not bad too in defense production.

 No, we have good producers of arms, but certainly our army is much, much weaker than the French army. I mean, France is a nuclear power, has a very strong army, super technologies in the army. So they are much more powerful than we are. Moreover, they are in the United Nations Security Council. So they are extremely powerful in terms of military power. And they tend to keep it. For instance, they would never give up their position in the United Nations Security Council. And this prevents Europe to have its role in the Security Council. We should be represented by one person coming from Brussels.

And I think Germany would approve of this. Italy, perhaps not with the current government, is going to be a bit more difficult. But I think that at the end, we would approve. Spain would approve. But France wouldn’t approve. Maybe they would say yes, but then they would put a lot of difficulties.

In Türkiye, President Erdogan says the world is bigger than five, referring to the United Nations Security Council. This motto became widespread in the World. Many others also discuss that the UN needs reform, UNSG needs reform, but how should be the UNSG reformed regarding the way it operates. In your case, France practically does not represent the whole continent of Europe. So, can you tell me how the representation should be amended? Should the new international organizations such as BRICS have also representation in the UNSG?

Well, it’s a question of having a larger group of countries and not full unanimity. So a larger group of countries having a decision power that currently is with the Security Council. Or if you want to increase the powers of the Assembly, which includes everybody, and changing the weight of the countries. And Europe should act together, should be represented as a single country. Somebody from Brussels should represent the EU in the UNSG.

And so, but currently there are lots of proposals. They are discussing a bit. Italy has its own documents. But I think it’s irrelevant because it’s a confusion. And the crucial point is that there’s no agreement on changing the current situation. 

Why do you think Italy’s proposal is complicated? What does it say?

To give more room to the Global South. But Italy cannot express a proposal which is too different from what can be agreed in Europe given that we have France in the Security Council. Moreover, we have this question of the British. Because, you know, Britain was in the Union previously. And it’s no longer there. And now we’re going to see what happens with the United Kingdom because with Trump, who knows, maybe that Trump manages to sort of eat the United Kingdom and put it also from the military power completely on their side, as they are now. But perhaps also something different could happen and the opposite could happen that is, the United Kingdom being near to Europe, also in geographical terms, and having the same threats from the East, etc., maybe she can be re-approached by Europe also on military issues. At the moment, this is what is happening. During the last months, there’s been a very important re-approach of the British defence system in Europe. We had different strategies about Ukraine. The UK are much more sort of radical. We are more prudent, if you want. But even trend can change now.

Italian Prime Minister Giorgia Meloni also didn’t like the fact that the US President Biden approved the use of US-made ballistic missiles can be used against Russia by Ukraine just before he leaves his post. She found it risky and provocative.

This probably has been a mixture of propaganda and inertia of the Biden administration. It’s probably a mistake, diplomatically speaking. And it’s not really happening. Because as you see, Zelensky keeps saying we don’t have the arms to win the war.

But Zelensky said we waited 12 months to receive this ballistic missile, but they will receive it.

They don’t receive what they need, because these are not weapons you can use just like that. You need really a lot of assistance. I mean, this is really a mystery for everyone. But for instance, we have information that Russia is in enormous economic difficulties in this moment. They have inflation that is growing very much. There’s a deep division between the central bank and the government. And so the economic situation is going badly perhaps not to be able to stop the war, but to change in a very radical way its rhythm. So maybe a ceasefire, a pause… Moreover, we have to wait for Trump, really, because Trump has gone so far as to say, “I will get out from NATO”. This is absolutely improbable. He will never do such thing. But still we have to wait, because when he will start governing, we’re going to see what can be done also in these terms, because, for instance, Zelensky deserves at least a clear answer on the fact that they should be defended by NATO or not. And if we deny the defense, we have to provide something else, a substitute. It should sort of manage the diplomatic settlement with Russia in a rather different way. Because, in principle, if Zelensky was not satisfied, but would stand a stop of the war and giving up a substantial part of their land, like the peninsula and maybe a couple of regions there…

Do you mean that some land should be given?

No, but suppose that at the end the situation is such that they have to give up something.

You mean Crimea?

Crimea and maybe a couple of lands smaller than the Russians are now occupying, but something. When you sit at the table and start discussing, the important thing is if the red line has been placed backwards with respect to the position, “we will never give not even a square meter to the Russians”. This has been the red line up to now. But this red line is not sustainable. And it will be changed, I think. So, the problem is not so much how much it will be changed, but it will be changed. And therefore it will, at a certain point, in exchange of the stopping of killing people, there will be this red line. But Zelensky has basically already said that this red line is now much more flexible. If you look at the very last declarations, you can see that. And moreover, you must understand what Russians do want, even for them. If you give maybe only Crimea and Putin thinks that he can exploit the fact that he has been able to get Crimea in a way which is sufficient for him to declare and to pretend that he has done a fruitful thing for Russia, which is a crazy idea because the cost for Russia has been enormous. But suppose he is convinced that if he can declare that having a little piece of Donbass and Crimea, he has won. Well, this can help Putin to come to terms and stop the war.

But all this has to be seen. And the only thing that I know for sure, because this is a common sentiment, it’s not my personal conviction, is that during the last couple of months, things have been progressing. In spite of the fact that they still bomb. But the diplomatic work is going on. And China, I think, is also crucial. And it has been activated. And I think that the relationship between the US and China is the relationship that will find a solution. Because China is in full control of Putin, full. I mean, they can stop it from one day to the other. I mean, they buy the gas, they buy the oil, they provide the arms, they defend…

China will not blackmail Putin to stop the war or to stop trade.

Well, if they want, they can do it.

If they want the war to finish, why would China want the war to finish?

Because they might turn the point aside, that they want to improve very, very much their relationship with the rest of the world. They are sufficiently powerful to deal in a peaceful way and be the winners in many fields.

So that after all, it’s better to live without the war than with the war. Because they need investments, they need to be considered a serious country. Obviously, we have to offer to them a different attitude in terms of their culture and their political ideas. We cannot ask China to become a Western country. It doesn’t make sense. We have to pay full respect to their values, full respect to their political system that is different from us and will stay different. And we must hope that it stays different. Because if you try to impose on a country, on a culture, a system which is not good for their culture, it’s going to be a failure. So, as soon as we give the right attention to China, and they understand, I think they will stop. Moreover, it’s a danger also for them.

Look, now they have North Korea… North Korea for China, you know, they’ve been in charge in the past, they’ve been in charge to keep control of North Korea. And now, they’ve lost control of North Korea, I suppose. And today, we have the news from South Korea. And China is extremely attentive to economics. They want to grow. They want to be rich. They want to be successful economically. It’s not like Russia that has lost its mind, and they don’t know what they want. China knows what they want. So, I think it’s reasonable enough. And they have an enormous amount of relations with America. They have an enormous amount of investments in the US. And the United States and European investments are very rich and very important in China.

So, China is completely on different footing. I think that they are in full talking with the US since the beginning of the work. By the way, we had a very important meeting between the two. A very powerful Chinese delegation came to Italy, came to Rome at the very beginning of the Ukrainian war and entered the American Embassy, and they stayed in 48 hours. And we don’t know what they said. It was on the media. We saw on the television news, we saw the cars coming also from Washington, because there was a special delegation from Washington. And we saw the cars of the Chinese. And the doors of the American Embassy, where you, by the way, you have a very large part which is occupied by the CIA. So, they opened up and then they closed up. And this happened during late afternoon, or it was already dark, I remember. And some say that, Jake Sullivan was there, so some say that something has been decided that has been kept during the war. Because, politicians are, they declare the wars, but the true power is with the generals. And the generals are very, very reasonable. People that know what the war is, they know exactly what they’re talking about. And they prefer not to be in war. They want to have a lot of arms, a lot of power, a lot of money but not the war.

You said that Zelensky became flexible in his red lines recently, and there was much progress. Why do you think is that? Because several Western leaders, such foreign minister of UK, somebody from US and somebody from Germany, they were like several declarations that Ukraine is being like a buffer zone for protecting the West. And some ministers said that Ukrainians are dying bravely for Europe. And for these two years, we see that seriously. Ukrainians are dying for Europeans. And Zelensky is now, what do you think, figuring out that he’s not supported enough? The West actually looks like now provoked Ukraine to get in a war with Russia. And now it is almost all alone. Zelensky, joined the radio program. He told, “I am waiting the US to confirm the arms sales for one year.” And why do you think he’s getting now flexible? Because he accepts the situation that the West is actually not giving him what they promised?

Yeah, I don’t want to exaggerate in saying that it’s becoming flexible. But the impression is that he’s saying, “you should have given us much more help. You should send us immediately very powerful missiles. You are bad if you don’t do it.” I still expect that this happens. But he keeps saying some buts because he understands that things cannot go on like this. And by the way, I think he should have done this much before if he could rely on his population to confirm him after a peace treaty. The problem is that, you know, the real danger is that the war stops, from a military point of view, Russia doesn’t go beyond a certain limit, maybe just a really small part like the peninsula is given to the Russians. But Ukraine falls in the hands politically of a puppet government similar to the Belarusian. So, Zelensky is sent away and Ukraine is governed by a pro-Russian government, corrupted and financed by Moscow, etc. So, these are the two things to be avoided. If you can avoid this in exchange of giving up pieces of land that are, moreover, whose inhabitants are also more or less Russians, I think that it’s something that at this moment would be at least attractable at the table, also for Zelensky. He cannot say this clearly, but I’m sure that it is.

Why he cannot say it clearly? Because he needs approval of the bosses from Europe or the US. Who should allow Zelensky to make a peace deal?

His population. These guys are dying massively to defend. And then if you say stop, they have been convinced of the possibility of winning this war. Because they had the West in their favor, etc. So, if you are the number one of a country like this, you have to say that the war has to be won, etc. I mean, it’s very dangerous. You have also this nuclear power plant in Ukraine. In Ukraine, it keeps being a nightmare. So you cannot…

So, you said that it would be for Ukraine a good idea to give up from some land where there is already Russians are living and it is already kind of taken by Russia. And for example, in Kherson and Zaporizhzhia, there are more Russian population living. Russia said they made a referendum. We really don’t know the content as we were not there. On the other hand, it has another outcome. When I go to Baltics, I spoke with several politicians and they say that the Ukraine, it is important to keep the territorial integrity because they are very afraid that if Ukraine loses any land, they are afraid that Russia can go to Estonia, Latvia, Lithuania. There is the Suvalki Corridor problem. You know, if Russia, with the support of Belarus, gets the Suvalki Corridor, all these Baltic countries’ ties and connection can be cut with Europe and NATO borders.

Yeah, it’s a Hitler model, you know, with the Czechs back in the beginning. This is clearly the position, but this doesn’t change if you keep Ukraine without concessions. I mean, they are on the frontier of Europe. What they can ask is a super support of all Europe and America and the West and everybody to their borders. This is what they can. Moreover, Ukraine is a cushion between part of the European Union, the southern part of Russia, but Estonia and Lithuania have a contact with Russia. So, it’s fairly natural that these countries are very sensitive to this, but I don’t think they can change the reality. Ukraine has been a disaster. Perhaps things could have been conducted in a different way and perhaps, the outcome could have been better. But moreover, once Russia is out of this war, its economic and political conditions will be very weak, not very strong. Even if the solution could be giving up a little part of Ukraine. This will give Putin the right to, in turn, domestically, to argue in favor of what he did, but it doesn’t strengthen the Russian economy, etc.

China, again, is crucial because China, at that point, could do one very aggressive thing, that is really to conquer Russia. In the sense that a very weak Russia could become a province of China, basically. Metaphorically. And they could sort of seal this with a lot of very important things such as Chinese population being settling in Russia, in Siberia, in Russia. Very strong agreements in terms of resources, etc. This means that Russia will cease to exist independent of China. And this can be done also in an aggressive way to the West. So, at that point, China could say, “well, I take Russia and I keep being extremely aggressive with the West”. Or the opposite could happen. “Well, now that I helped to solve the Russian problem, I will be able to deal with the West in a peaceful but diplomatically strong way”. And then you have Taiwan at that point. If you give up something in Taiwan also, you can buy Chinese consensus. So, it depends a bit. And Trump in this can be a surprise.

And by the way, finally, Türkiye. I mean, Türkiye should take much more responsibility in this. Because Türkiye is playing in all the fields, doing everything and mediation.

They could do an enormous job. Because they have a relationship with Ukraine in terms of sea shipping. Odessa is a crucial thing for Türkiye. You could really contribute… Türkiye could really contribute to make a deal with Russia and Ukraine and help Ukraine to accept a deal that will bring peace. Because you have something to offer. And to offer in a way also to get something.

This is very unique. Türkiye is buying S-400s from Russia and giving Baykar UAVs, drones, to Ukraine for air defense. Baykar is not a government company. It’s a private company. So it looks like complicated, but it’s really a balancing situation.

You have a lot of money. You can make enormous investments in Ukraine and cheap price, basically. Of course, when the reconstruction starts, the peace deal should be signed for that.