An edited transcript of the interview is as follows:
Stephen Fidler: It seems a settlement between Israel and Palestine is further away than ever.
Tony Blair: I’m more worried about the Israeli-Palestinian issue than I’ve been since I started to do work in Jerusalem. I think the situation is highly unstable. The politics on both sides are very difficult. There is an urgent necessity to set out some form of political horizon and then to make positive changes on the ground both in Gaza and the West Bank as well as calming the situation in Jerusalem itself. And right now those things seem hard to achieve.
So I think there is still a great desire and appetite in the international community to move the process forward but I think the next – I would even say – the next few weeks are going to be significant and important in trying to give back some direction and shape to what’s happening. One thing I’ve learned about the Middle East is that if you leave a vacuum it is swiftly filled by events that are usually negative.
Stephen Fidler: Do you see any prospects for that kind of initiative?
Tony Blair: The individual members of the Quartet [the United Nations, European Union, U.S. and Russia] remain very committed. John Kerry has put an enormous amount of energy into this process and he still remains highly focused despite Iran, despite ISIS, despite all the other things he has to deal with. And that does give us some opportunity, but we need to take advantage of that opportunity pretty fast.
Stephen Fidler: What do you think of the moves toward diplomatic recognition of the Palestinian state?
Tony Blair: I think it’s an expression of the frustration people feel at the absence of progress and also the anxiety people feel about the treatment of Palestinians. Now, in the end, the only way to create a Palestinian state is to create it on the ground so this issue won’t be resolved in the capitals of Europe or in New York, it’s going to be resolved between the Israelis and Palestinians, helped supported and guided by the international community, particularly the Americans.
But I understand entirely where it comes from and you can see from the debate in the British parliament the strength of feeling there is and I think the government of Israel would be sensible to take account of the strength of that opinion.
Stephen Fidler: Do you think it’s helpful?
Tony Blair: I think it’s inevitable if there’s not progress. So probably the members of the Quartet would not be agreed on whether it’s a good idea or a bad idea. No-one seriously believes that in the end that that is what is going to create the Palestinian state but it’s significant because it indicates the degree of dissatisfaction that people have with the status quo.
Stephen Fidler: To Russia. You were prime minister and met Putin early on. Did you see a change in him over time? What explains what’s happened to his approach?
Tony Blair: The key to understanding Putin is that he’s a Russian nationalist. He believes in a stronger Russia. He is on record as decrying the break-up of the Soviet Union. Now, I think there is a way of making Russia strong which is about internal reform, changing the institutions of the country and connecting Russia to the modern world. His brand of nationalism is popular within Russia and I think that he came to feel over time that America and the West were operating in a way that was hostile to Russia’s interest. So in my view, we need to be careful in how we approach the issue of what is happening with Russia today.
I support entirely a strong position on Ukraine. You can’t have the annexation of the territory of a country on the doorstep of Europe and be indifferent to it. Or to the fact that over 4,000 people have now died in Ukraine, including almost 1,000 since the declaration of the ceasefire.
I think the West has to take a strong and clear position on it. I think it’s also important that we are willing to cooperate with Russia where it’s absolutely necessary that we do so [for example] in the fight against Islamist extremism. It’s hard to see that you will have a solution ultimately in Syria without some form of coordination and cooperation with Russia. When I say we have to deal with Russia with care, it’s important we take a strong position on Ukraine but it’s important we also recognise Russia remains a powerful player, and in certain areas including the Middle East at the present time they are an important component of how we deal with these challenges.
Stephen Fidler: Do you think the West and the U.S. bear any responsibility for what has happened?
Tony Blair: Yeah I think we should be perfectly prepared to be self-critical not least in the handling of the issues in Ukraine. That said, you still can’t justify what’s happening. And for the sake of the other countries in the region, it’s very important that the West takes a clear position and stands with strength.
One of the problems today is that some of these international questions are incredibly complex and some of them involve the relationship between issues where we will be in opposition to Russia on certain issues but where we have a common interest on others. And even though it sometimes strikes people as contradictory that you on the one hand say you’re strongly opposed to this aspect of Russian policy but on the other hand you’re prepared to cooperate on another international issue, I think you’ve got to do that. In particular in what I think is the largest long-term security threat we face which is around this Islamist extremism, there East and West – and by East I don’t just mean Russia, I mean China, I mean India and other countries of the East – I think we have a common interest.
Stephen Fidler: When you say the West needs to be self-critical on the issue of Ukraine, do you think the EU in some ways sleepwalked into this, into the association agreement? Should it have been better thought through?
Tony Blair: You can always say these things should have been better thought through but in the end the choice must be for the Ukrainian people to decide their own future. The difference between our position and the Russian position is that in the end, if the Ukrainian people had said we actually don’t want to be part of the European Union, we want to choose a future with Russia, we might have regretted that but we wouldn’t have tried by physical force to stop it.
So you have to take a strong position but you’ve got to recognise at the same time that there will be other dimensions of international relations in which you’re working with Russia. Now some people find that too hard or too complicated a position to adopt but I think the nature of the challenges we face in the world today means that you have to do it.
Stephen Fidler: In the eurozone, we have this problem of low growth. What would you advise Europeans to do to get growth going again?
Tony Blair: You’ve got to go back to the origins of the problem. The origin of the problem is that the single currency was an idea motivated in politics but expressed in economics. And the problem with the single currency is not complicated to describe, it’s very simple. It’s that we put together economies that were not in alignment. And what happened after the financial crisis and then the sovereign-debt crisis is that misalignment resulted in the countries in southern Europe being in crisis. What they are now having to do is make the adjustments necessary in circumstances where they don’t have the ability — at the same time as doing profound structural reform — to devalue their currency and gain competitiveness and growth.
My view is that you can do a certain amount through the European Central Bank and everything that can be done that way is being done. However, at the heart of this you’ve got to align monetary policy, fiscal policy and structural reform. And I think the only thing that works in these circumstances is for there to be as it were a grand bargain – and not a series of mini-bargains—in which Europe agrees to stimulate its economy and the countries that need to do those structural reforms agree to do them in very specific terms.
There is no way that a country like Germany is going to show any fiscal flexibility unless it is clear that those structural reforms are going to be done, but if it is clear, the demand side of the equation has got to be taken account of.
I’ve argued right from the outset there are two ways of getting through this crisis. One is how we’ve done it up to now, which I completely understand, which is a series of steps, they might be from the central bank or various arrangements with individual debtor countries, but the downside risk in Europe is political. It’s not the collapse of the single currency through the activities of the markets and so on because the European Central Bank can effectively prevent that. But it is that the political consent for the European project fractures as a result of low growth, high unemployment and social dislocation. So if you wanted to ensure that that political risk is taken account of, then you have to have policies that are policies for growth as well as policies for structural reform. And those two things have got to go together and be in alliance with monetary policy.
There is one thing that is more controversial: I also believe that we have got to be very careful that the weight and nature of financial regulation does not interfere with the essentially primary goal which is growth and jobs. We should remember the degree to which in European markets as opposed to American markets, European companies are dependent on bank finance. I share the anxieties of many people within the financial sector over the weight and complexity of financial regulation.
Stephen Fidler: You think it may have gone too far?
I think if your primary goal is growth and jobs you need a healthy thriving innovative financial sector to be part of that. In this sense, the distinction people keep making between the real economy and the financial sector is and always has been false. The real economy depends on a healthy financial sector and vice versa.
Stephen Fidler: A good thing the U.K. didn’t join the eurozone?
Tony Blair: The U.K. could never join the eurozone unless there was an overwhelming economic case for it to do so. And despite what people always say, I never advocated Britain joining the euro finally – not because I didn’t believe that there was a strong political case, there is a strong political case for Britain being a central part of Europe – but the economics has got to be right.
People used to think that our economic tests were a smokescreen to hide what is essentially a political hesitation. It really was right from the outset and I was there at the formation – I wasn’t there in the treaties that gave rise to the euro – but I was there when it actually happened. And it was perfectly clear when it was taking shape in the late 1990s that countries were being pulled into it altogether on the basis of political will and that was always going to be risky. So for us in Britain I was very clear politically that you couldn’t win in any case unless there was a clear and unambiguous economic case, but the fact is there wasn’t, because our economy was never fully aligned with those of France and Germany.
Stephen Fidler: That not being the case, therefore it was a good thing?
Tony Blair: Since it wasn’t in our interests to join. Now that’s not to go to the other extreme and say we should now pull out of the European Union altogether because that would be disastrous.
Stephen Fidler: It looks as if that is a higher risk of that now than at any time.
Tony Blair: When you have got [former] cabinet ministers advocating that we should activate the two-year period prior to withdrawal, I find it quite shocking actually. I don’t know… to pull Britain out of the European Union altogether would be regarded around the world as an extraordinary act of self-destruction. That doesn’t mean to say that you decide not to do it as a country but you should do it mindful of the fact that if you talk to people — never mind the rest of Europe, in the U.S., in Japan, China — and when they ask is Britain seriously contemplating leaving the European Union when the only honest answer to that is that it’s obviously a possibility, there is a high degree of alarm about the prospects for the country as a result of that.
Because of course if you actually take Britain out of the European Union, you’re in for years of tough renegotiation of all the basic treaties and massive economic uncertainty as a result.
Stephen Fidler: What do you think explains it?
Tony Blair: The British have always have had views on Europe that, contrary to popular imagination, are not views totally out of line with the rest of Europe. There’s a reaction against the European Union everywhere in Europe now. That’s not the issue. The issue is “Is that reaction enough so you say, well let’s break the whole thing up?” In most of the rest of Europe, people would say “Well, no, you obviously wouldn’t go that far, you’d try and change Europe.” So we’re in a situation where, ironically, if the issue of Britain’s membership wasn’t on the table we’d have a far better chance of getting far-reaching reforms in Europe because we’d have many allies on that. But when you make this simply about Britain’s own relationship with Europe, it’s a lot harder.
Stephen Fidler: One clear question relates to immigration. It does appear that there are concerns among significant number people in the U.K. about the numbers of immigrants. And there are certain things under the EU treaties which you are unable to do, such as limit the numbers of working people from the EU who come to the U.K. How do you see squaring that circle?
Tony Blair: First of all, immigration is an issue everywhere in Europe today. Le Pen’s National Front in France is fighting essentially on immigration; it’s a big issue in Germany; it’s a big issue in Italy. Immigration is probably the single hottest domestic topic in the United States of America right now. The first thing to understand that this isn’t just a British issue – it doesn’t make it any less important by the way — but it’s just important to realise round the world as globalisation continues to gather pace, and technology and travel and migration continue to push the world together, issues of immigration are going to be more prominent.
Now in Europe, we have the free movement of people as a fundamental principle of the European treaties. You’ve got to work out what you are going to do about the people coming to the U.K. who come under that freedom-of-movement principle. You can take all kinds of measures around the rights to claim benefits and so on. But when you actually analyse it, those coming in from eastern Europe to the U.K. have had a positive net impact on revenues, not a negative one. Most of them don’t actually come for benefits, they come to work, they work extremely hard.
So, I understand why it’s a major issue and I understand why people may want to put in place restrictions on how much the host country is prepared to pay for people to come in terms of benefits and so on. That’s a perfectly sensible debate and by the way that’s a debate that would have a resonance anywhere in Europe today. Interfering with the free movement-of-people principle altogether is a completely different thing. And we shouldn’t forget that there are almost two million British people living in the rest of Europe. So these things are also two-way streets.
Stephen Fidler: Do you think the Labour Party should offer a clear pro-EU position in the next election?
Tony Blair: I’ve always thought that the Labour Party would not lose by standing up strongly for Britain’s membership of the European Union. That’s been my view all the way through. I’m not saying that with the rise of UKIP there isn’t a strong anti-EU vote, there is.
My view is and has been right from the very beginning that the way to deal with a party like UKIP, to analyse their policies, show how destructive they would be and to make it clear that we stand for positions that are about the future, that are about genuinely helping people to get access to the world of work, that are putting emphasis like things like education skills regeneration and the new industries of the future, rather than joining in selling people a false and illusory elixir of hope, which is around if you stop more Polish people coming to Britain you’re going to provide more jobs in the poorest communities in the U.K. You’re not. That’s not the answer.
I always say to people that there’s always a difference between the politics of anger and the politics of the answer. And we’re best to be in the position of giving people the answer. You can understand the anger and you can sympathise with it even, but you will never out-UKIP UKIP. Now I’m not saying the Labour Party is trying to do that by the way, it’s not. I think if the Labour Party kept on the analysis of UKIP policy then I think some of the attacks the Labour Party has made recently would be very effective.
I’ve always said the right way to deal with immigration is to have answers to it that meet the concerns people have, but also to point out the positive benefits of immigration and in any event to take on the notion that if you withdraw from the European Union that you are going to solve all these problems, because you’re not.
Stephen Fidler: Are you concerned that at this stage before a general election with an unpopular government. that the Labour Party isn’t doing better in the polls?
Tony Blair: I’m going to take self-denying ordinance on the Labour Party today. If I ever do an interview on it, it will have to be at length.
Stephen Fidler: I’m here.
Tony Blair: And maybe the European edition of The Wall Street Journal is not the right place for it.
Stephen Fidler: It’s a global audience.
Stephen Fidler: In the U.K., do you think politics has shifted so that coalition governments are more likely in the future or is what we are seeing now a temporary phenomenon?
Tony Blair: I think politics is far more fractured nowadays. On the other hand, I don’t think we should take anything as written in stone. It can change again. In fact we went through the situation in the 1980s, when I remember the SDP-Liberal alliance coming through and at one point the Tories were third in the opinion polls. I do think you’re in a situation where there’s a lot more fragmentation in the political vote, but I still believe personally there is still a majority for center-ground politics in the U.K. and if you had a strong political lead that was combining the politics of aspiration with the politics of compassion, I still think that’s where you could get a substantial majority.
Stephen Fidler: Before we close, I’d like to ask you about Tony Blair Associates. You’ve come under criticism for giving advice to countries like Kazakhstan, Saudi Arabia and so on. Is that something you feel sensitive to? Have you ever felt that that criticism has some justification?
Tony Blair: I spend probably 70% of my time on the unpaid work, the role in the Middle East which is ex officio and takes an enormous amount of my time, and the two foundations, one is Africa and interfaith.
The business side is important however. It helps create the whole infrastructure. We have 200 people working for us now.
But I don’t do anything that I don’t think is justified in its own terms. As I always say to people about Kazakhstan, I totally understand all the criticisms and the need for the country to evolve politically and in human-rights terms. But the work we are doing there is to help the country make reforms around things like civil administration, public procurement and rule of law, these are important reforms and Kazakhstan is an important country. It’s the size of western Europe with a population of 17 million people, between Russia and China yet an ally of the West, majority Muslim population country, yet moderate, and open-minded and tolerant. It gave up its nuclear weapons rather than retaining them, and multiplied its economic growth 10 times over the last 20 years. It’s an important ally for the West and the work we do there is important for the future of the country. In the end, I work in places where I think it’s justified. And I don’t where I don’t.
This interview first appeared on the Wall Street Journal Europe on 25 November 2014