In Germany, Drozdiak predicts a victory for the Christian Democrats, led by Angela Merkel, in next September's elections. He also expects a Christian Democrat-led government to have a warmer relationship with the United States. "I don't think you will see Germany offering to send troops to Iraq. That's ruled out. But there will certainly be a much friendlier tone."

Drozdiak was interviewed by Bernard Gwertzman, consulting editor for cfr.org, on June 1, 2005.

There is a lot of news in Europe these days. On May 29, the French rejected the proposed European constitution in a referendum. On June 1, the Dutch people followed suit. What do you think this means for European unification?

I think, first of all, it is an enormous defeat for the ruling political elites in France and in the Netherlands. It wasn't just President Jacques Chirac, but all the others who have been advocating a "yes" to the constitution, who were stunned by the overwhelming rejection by the public.

In some sense, it was irrational. You have the example of the French farmers who receive more subsidies than anybody else from the European Union [EU] Common Agricultural Policy voting 70 percent against the constitution. The problem was not that they were so antagonistic to the EU. It is just that they are fed up with their ruling political class, and in the way this referendum was cast, it became a vote against Chirac and other politicians who were prodding them to vote yes.

It was a vote against further enlargement of the EU as well, because I think the French population feels that the expansion of the EU last year, with ten new countries joining, was something that has pushed France to the periphery of Europe with the center of gravity moving toward central Europe. And finally, the anticipation of further enlargement, with Romania and Bulgaria joining in 2007, and then Turkey, perhaps in 2015, the feeling was that this is just too much to digest all at once.

Why didn't Chirac ask the French parliament to vote on the constitution, instead of submitting it to a national referendum? Germany went the parliamentary route and had no problem passing it.

I think it was a huge political miscalculation on his part. He took this decision about a year ago, in July 2004, when he saw that his popularity was beginning to wane. At that particular time, the idea of an EU constitution was rather popular. There was then a strong majority in favor. The prospect of holding a referendum and getting a "yes" would be a way, he thought, to boost his political fortunes heading into the presidential elections of 2007. He had been, until recently, expected to run for a third term.

But I think, given the severity of this defeat, his chances look very dim for that, and some people are even predicting he will resign before 2007. But that gets into other problems because he has been clinging to office, many people think, because he's afraid of being indicted for corruption charges from the time he was mayor of Paris. As long as he is president he is immune from prosecution.

It's interesting that in the Netherlands as well, both the government and the leading opposition party supported ratification, but the public was overwhelmingly opposed to the constitution. Why is that?

In some ways, the situation in the Netherlands is even more strange because, over the last 50 years, the Dutch have been among the most ardent advocates of European unity. Yet now you see them turning against further moves to bring Europe closer together. I think this is a reaction to the rapid pace of enlargement of the EU and also the perception in the popular mind that this has triggered uncontrolled immigration and a rise in criminality from gangs coming from the Balkans, Eastern Europe, and North Africa. In the Dutch mind, this has started to erode, and even to destroy, the Dutch way of life. There is a third factor, and that is the Dutch joined the euro, the common currency of many European countries, at a rate that was badly calculated, and therefore they have suffered a huge burst of inflation. Many people have vented their wrath against the constitution because of this.

But even with defeats, the immigration laws are not going to be changed. The EU stays as it is, right, with open borders?

Yes. This is one of the misunderstandings. In fact, the constitution calls for greater cooperation on immigration laws. Even today, for example, someone who can gain entry into Spain can work his way to the Netherlands without any border checks. The new constitution would pave the way to a common visa and asylum policy that would be much more effective in managing immigration, but this idea was never really effectively planted in the popular mind.

What will happen now? Will there be another vote in France, do you think? Or is the constitution effectively dead?

I think that with the Dutch voting "no," it will almost certainly be a dead letter. I think the EU leaders will have a summit on June 16-17 in Brussels to try to assess the damage and pick up the pieces. One of the things they can do is try to incorporate several elements of the changes that would have been made by the constitution and just simply push them through by fiat--by decision of the leaders themselves--or by votes in parliament. The key changes that the constitution would have brought would be: First, to abolish the rotating presidency in which member states take control of the EU presidency for a period of six months--something which led to a lot of difficulties in the managing of decision-making. Second, it would create a president of the European Council who would help streamline the bureaucracy and manage the way in which decisions are taken. Third, it would set up a EU foreign minister who has already been acting in that capacity, and that is Javier Solana, who is described now as the EU's High Representative for the Common Foreign and Security Policy. He would be formally anointed as foreign minister. These are steps they can take even in the absence of formal ratification by all the parliaments, or referendums.

We've also had some interesting political developments in Germany. Chancellor Gerhard Schroeder's ruling party, the Social Democrats, have suffered a major political trouncing. What will the repercussions be?

On May 22, in the largest and most populated state in Germany, North Rhine-Westphalia, the Social Democrats went down to a stunning defeat. They lost power there for the first time in 40 years. This led Chancellor Schroeder to announce that, given the fact that ten of Germany's 16 states are now in the hands of the opposition, and they control the upper house of parliament, he would bring forward the elections by one year, call for a vote of no-confidence in his government, and hold elections, probably on September 18.

This is a bet on his part that he can go head to head with the Christian Democrats' candidate, Angela Merkel, and succeed in out-campaigning her. I think that all the polls indicate that the Christian Democrats [CDU] should win very easily, given the state of the economy, and the extent of exasperation by the voting public in Germany with the Social Democrats and their ruling partners, the Greens, who have been in power now for about seven years. This will bring in some important policy changes, notably in the way that relations are conducted with the United States.

Will it improve relations?

Yes. The CDU will have a much more friendly approach to the United States than we have seen with the Social Democrats. I don't think you will see Germany offering to send troops to Iraq. That's ruled out. But there will certainly be a much friendlier tone.

Can you describe Ms. Merkel, who might very well become the new chancellor and the first woman elected to that position in Germany's history?

She comes from one of the states in former East Germany, and as a result of her background growing up in a Communist society, she's extremely leery of the motives of Russia's president Vladimir Putin. She grew up as a physicist and came to politics very late. She was embraced by Chancellor Helmut Kohl as one of his favorites at the time of German unification. She has been able to work her way cleverly up the ranks and become the most powerful person in the CDU.

Schroeder is noted for his charismatic qualities. Does she rival him in that?

She is not known for her charisma. She is good at fending off rivals within her party. But I would say that in terms of personality, Schroeder has proven himself to be a very effective campaigner. I think one of the methods he will probably use in the campaign is to try to divide the Christian Democrats from their constituency. He will tell the public that if you think the reforms I have introduced were painful, just wait until you see what the Christian Democrats will do, because they are captive--that is the image he will try to portray--to free market forces that will destroy the social welfare state Germany has painstakingly built up over the years.

Germany right now has an unemployment rate of some 11.8 percent. What's causing this problem?

A lot of the problem has resulted from the growth and free-market policies pursued by the neighboring states in the East, which have attracted a lot of investment, not just from people beyond Germany, but from German companies themselves. For example, much of the automobile industry, for which Germany is justly famous, has moved its manufacturing plants across the border to Bratislava, the capital of Slovakia. Bratislava is now described as "the Detroit of Europe," because you have cars being built there by Volkswagen and other German companies for the German--and not just for the eastern--market. This has been replicated in several different sectors; so much so that it has triggered a debate about capitalism within Germany in which the leader of the Social Democrats, Franz Muntefering, has described some of these investors, who come in and strip down German companies and then flee, as locusts.

Germany has long been one of the world's great exporting countries. Has this been affected?

There are some companies like BMW, Bosch, and Miele that are considered to make the best products in the world. They continue to export at a record pace. But it is not enough to sustain the entire economy, nor is it enough to reassure the public so they will go out and spend more money. What has happened is that demand in the German economy has been shrinking greatly as people fear for their own livelihoods and jobs.

What about the social welfare arguments in France and Germany? The impression here is that France, Germany, and other European states have had such liberal benefits, long vacations, short hours, that they have been living beyond their means. Is this still the case?

In an era when the boundaries to capital and trade have been breaking down at a record pace, with the rise of China and India you see the forces of globalization really threatening these social welfare states. In addition, particularly in the case of Germany, this is combined with some of the lowest birth rates in the world, so you have a demographic situation where, in a fairly short period of time, nearly half the population will be of retirement age, and their pensions will have to be supported by a dwindling labor force. This is why the Germans are confronted by a very painful dilemma. Either they have to absorb many more immigrants in order to sustain their current living standards, and pay for their pensions and welfare entitlements, or they have to reduce their standards of living and keep the immigrants out.

The German government recently did a study that said the country would require, given current birth rates, at least 400,000 immigrants a year for the next 25 years. But as we've seen in recent elections, this is something that is unsustainable for political reasons, given the antipathy toward high immigration rates.

Are the new immigrants coming mostly from Turkey or Eastern Europe?

They come from Turkey, North Africa, and also from Eastern Europe. A lot of people working in the hotel trade, for instance, have come from Ukraine, a country beyond the EU. But with the incorporation of Poland and other eastern states into the EU, their populations are free to move about within the EU. This has led to one of the scaremongering images in the French referendum: the so-called "Polish plumber" who comes across the border and works for one-fifth of what a French plumber would work for, and thus steals his job.