The voice of the EU commission has 'gone soft'

But despite the new economic governance powers granted to the EU executive during the crisis, Prodi says that these days member states are increasingly setting the agenda.

"The European engine in my time was the commission," he told EUobserver.

"The direction was towards some sort of quasi-federal Europe. In the coming years, Europe will also make progress, but it will not be [led by] the commission but by the Council," he noted.

"There is a complete change of focus in the new Europe," he said.

Referring to the current German and French leaders and the head of the EU Council, he added: "The voice of the commission is very, very soft. Even when it proposed its last very interesting paper, it didn't give rise to a strong debate. There is interest only when Mrs Merkel and Mr Hollande … meet together. Van Rompuy, who was really unknown, is step by step becoming the centre of Europe."

And while the commission is becoming less political, national politicians are becoming more selfish, he warned.

"As in many other countries, things have changed in Germany. There is no longer the same passion for Europe - it is a completely different vision. Mrs Merkel comes from east Germany and not from the Rhine. It is a new phase," he said.

The 'stupid' stability pact

Despite leading the commission in what he sees as its heyday, Prodi's time at the EU helm had its difficult moments.

One of the best-remembered episodes was when he called the EU stability pact "stupid" in an interview with Le Monde.

The Stability and Growth Pact was created in 1997 to harmonise economic policy in the run-up to the launch of the euro.

It requires member states to run public finances "close to balance or in surplus," with budget deficits below three percent and debt below 60 percent of GDP.

Recalling the Le Monde incident, Prodi said: "For some weeks I was considered an idiot ... I was almost killed for that."

He added, however: "I was right ... the stability pact is an arithmetic rule, but politics is not arithmetics. You have nuance, you have problems, you have political change. You must have a political body, not a primary school master, which controls things. So, I think I simply told the truth."

When Germany and France could not meet the stability criteria, they changed the pact instead.

Prodi described Germany's behaviour at the time, in 2004, as "post-modern."

"They had pushed for the stability pact and yet they were the first to disobey it and to put it in the dustbin. I can't forget that night ... I was shy. I said: 'Look, but you can't go beyond three percent.' And I remember they told me: 'Shut up. We are the lords of this.' It was [EU] history changing," he said.

Chinese push for euro

The euro was introduced in 2000 in a move which Prodi described as "a change in the concept of the state."

Referring to the 17th century Peace of Westphalia, a treaty which defined the modern European notion of statehood, Prodi said: "The Westphalian state is basically dependent on its army and its currency. When you have a common currency, you have a different kind of state. I personally pushed for it [the euro], because it was a great step for the European Union and, even more, an absolutely necessary step in the context of globalisation."

The newly-born euro suffered a drop in value in its early years.

But China invested in it anyway because it wanted an alternative to the US dollar, the dominant currency in world reserves.

"I remember we had the annual visit to China, one of these bilateral meetings with big dossiers with everything from coal to steel and butter, but the Chinese President was interested only in the euro," Prodi noted.

"He said to me: 'Look, you have given me bad advice to buy the euro, but I shall go on doing it for two reasons. First of all, because the euro will go on, and it will go up [in value].' And he was right. But the second reason was even more important: 'I want to live in a world where there is not only one in command. Having the euro side-by-side with the Chinese yuan is better'," Prodi added.

The Constitution came too early

Prodi spoke of the euro-launch as a golden age in the Union's history.

But he said the next big leap in terms of integration - the European Constitution, which was signed by EU leaders in 2004, but rejected by Dutch and French voters in referendums in 2005 - was premature.

Prodi remembers his discussions with the German chancellor in power during the build up to the euro - Helmut Kohl.

Both men agreed that the single currency was not perfect but that it could be fixed over time. "It was almost touching to see how the chancellor was saying that his position is not popular. But he was thinking of the future. Of our children and our grandchildren," Prodi said.

The failure of the constitution broke the spell.

"Europe changed and the optimism changed into pessimism and then came the break-up of the European Constitution. It was too early to do it. The failure of the constitution created the idea of Europe on a stand-still," Prodi noted.

He added: "I understand now that if you want to change the concept of nationhood in a peaceful way, as we are obliged to do because of globalisation, then you need time. You need patience. You need to be flexible in your idea, you need to respect the weakness and the problems of people - this is life."

Prodi still hopes that one day the European Commission president will be directly elected, an idea frequently mentioned by federalists as a way of getting citizens more involved in EU politics.

"In the end, it must be like that. But I don't see it coming soon," he said.

"You need a point in which the most important national leaders say it is in our interest to see a strong new leadership to strengthen the EU's role in the world. The necessity of globalisation of foreign policy will push for this - but I don't see it happening tomorrow," he added.

The 73-year Italian says he remembers his years in Brussels as "nice, with intense, but well organised working days" which also included jogging in the Parc du Cinquantenaire in the EU quarter.

"I remember Brussels as a period of ordered life. I knew in the morning what I had to do in the afternoon. When I went back to Italian politics, you have an absolutely unexpected political life very day," Prodi said.

The first part of EUobserver's interview with former Commission President, Romano Prodi was published on 2 February, looking at his current role as UN special envoy to the Sahel region