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European Council

Published on November 2, 2010
Press conference given by Nicolas Sarkozy, President of the Republic

Brussels, October 29, 2010

THE PRESIDENT – Today the European Council has taken some essential decisions to actually put the European economic government in place strictly in line with the Franco-German Deauville agreement.

I’d like to begin by paying tribute to the work carried out by the Task Force and President Van Rompuy. The European Council has endorsed the conclusions of President Van Rompuy’s report. In concrete terms, this means four absolutely major steps forward:

- setting-up of a mechanism to coordinate macroeconomic policies, which we’ve continuously called for;

- genuine coordination of national budgetary policies, thanks to the so-called European Semester;

- strengthening of both the preventive and corrective arms of the Pact. Basically, it will be possible to apply [the measures in] the Pact at an earlier stage in the event of a country failing to honour its commitments;

- finally, every State is going to strengthen its national budgetary rules.

PERMANENT FINANCIAL STABILIZATION MECHANISM/TREATY REVISION

The Council also discussed the establishment of a permanent financial stabilization mechanism. Let me remind you that in May this year, faced with an emergency, we set up a stabilization fund for a limited three-year period. Today, we agreed on the need for a permanent stabilization fund. For this, a treaty revision is needed, which means we mustn’t waste any time so as to be ready for the 2013 deadline. So the Council unanimously decided to move in this direction. Mr Van Rompuy is going to begin consultations with the European Council members so that the final decision can be taken in December, I mean at the December European Council.

VOTING RIGHTS SUSPENSION

So as regards the suspension of voting rights, the Council decided that Mr Van Rompuy was going to look into the matter (…). As Mrs Merkel and I said, it’s a particularly important question and requires detailed study.

The European Council endorsed the conclusions of the Franco-German agreement through unanimous decisions. As you will understand, Mrs Merkel and I are especially satisfied about this.

TREATY REVISION

Q. – Someone you know well, Mrs Reding, has talked about a Franco-German diktat in relation to the agreement you concluded with Mrs Merkel and considers that a treaty review would open Pandora’s box. First question, isn’t the line between the Commission and you a bit crackly, since it’s not the first issue on which you disagree? Second question, fundamentally, are you, too, afraid of a treaty revision and its possible consequences?

THE PRESIDENT – We can’t be afraid of a treaty revision, since I requested it – unless it’s a form of masochism which I’m not spontaneously given to. I want to remind you that we asked for this treaty revision in the Franco-German decision (…). I attach a great deal of importance to the European Council’s unanimous decision.

OSAMA BIN LADEN RECORDING

Q. – The day before yesterday, there was a sound recording of Osama Bin Laden in which France was targeted, with references to our troops in Afghanistan, our hostages in Niger and the full veil ban. What’s your response to his message which has apparently been authenticated? And, secondly, aren’t the lives of our hostages, be it in Niger or Afghanistan, in even greater danger today?

THE PRESIDENT – The message has been authenticated. It’s self-evident that France doesn’t allow anyone, and certainly not terrorists, to dictate her policy. The Act on the burqa has been passed: it has been promulgated. The French Republic has clearly indicated its choice: it doesn’t want, in its territory, the possibility of women being shut away, even if it’s behind a piece of cloth. It’s a decision of the French Republic.

As regards our hostages, not a day goes by when we’re not working for their release. But I didn’t need Mr Bin Laden’s statements to make me worried about them or the others we’re working for. It’s our goal. And this gives me the opportunity to say how much I’m thinking about their families, whom I saw again a short while ago, about them all. And how mindful I am of the strong advice to our compatriots to be vigilant in that vast area of the Sahel, who must absolutely comply with the travel advice given by the Ministry of Foreign Affairs.

PENSION REFORM/CONSTITUTIONAL COURT

Q. – On 6 November, it will be the eighth day of pension protests. What’s your reaction to the continuation of the protest movement and the fact that the Socialist Party is lodging an appeal with the Constitutional Court?

THE PRESIDENT – Let’s wait until the appeal is lodged and wait calmly for the Council to give its ruling. Once the appeal has been lodged and the Council has given its ruling, I will promulgate the Act. You know, in this affair, there’s only one true victor: the social security system, the French who, once the Act has been promulgated will know that their pensions will be funded, that solidarity won’t be an empty word, that pensioners will be able to rely on their retirement pensions and that everyone retiring in the coming years will know that the French social security system, based on solidarity between the generations, is working. That’s all. For the rest, concerns, often legitimate ones, have been voiced. I’ve heard them. I’m mulling over them and, at the appropriate moment, will take the initiatives to address them.

DEBT RESTRUCTURING/TRICHET/PERMANENT STABILIZATION MECHANISM

Q. – Can you tell us a bit more about the nature of the discussions with Jean-Claude Trichet on the possible restructuring of the debt? As I understand it, he explained that heads of State weren’t aware of the gravity of the situation, which apparently irritated you. (…)

THE PRESIDENT – (…) M. Trichet had voiced, as he is perfectly entitled to, a number of reservations during the European Council. The European Council took its decision. It did so unanimously and gave M. Trichet the answer it wanted to give him. There are no grounds for any more polemics at all. Irritated? No. I think you can criticize heads of State and government for lot of things, which is totally normal in a democracy, but I really don’t think you can criticize them for not being aware of the gravity of the situation. When I see the courage of the decisions taken by the Greek, Spanish, Portuguese and Irish governments, by all of us, I’m convinced that Jean-Claude Trichet knows that we are aware of the gravity of the situation.

So you see, there was a discussion, it’s always useful to have a discussion. A decision was taken, that’s all. It was unanimous, it has to be respected. What we wanted to do was to achieve an unprecedented strengthening of European solidarity.

I’m not going to go into how the permanent stabilization mechanism is going to work, since that’s the job of the President of the European Council. At this stage, it isn’t for M. Trichet, me or anyone one else to go into how the mechanism will work. We’ve decided on a mechanism, a permanent mechanism, and to take the final decision in December. Mr Van Rompuy will talk to everyone concerned and then we’ll see the details of the mechanism.

It’s very important; it means that in the event of a speculative attack on one country, this European solidarity, including financial solidarity, will come into play. Actually it’s excellent news. It means that what we decided in the middle of a crisis, we’re deciding to extend in the form of a long-term European solidarity mechanism. This is clearly what was expected of us. And from this point of view I believe even M. Trichet is satisfied and he’s right.

PENSION REFORM/FRENCH GOVERNMENT

Q. – You had explained that after the pension reform, once the pension reform had been passed, there would be a new era in your five-year term, particularly through a change of government. Does that mean you wish to change your prime minister or that you wish to go on with François Fillon?

THE PRESIDENT – Everything live from Brussels! There have been a lot of discussions, debates. Everyone is facing up to their responsibilities for this important reform of our pension systems, important for solidarity, because – and I’m thinking particularly of those with small pensions, who would have been the first to have been penalized had there not been a pension reform, if there had no longer been the money to fund them.

Now, as I’ve told you, I’ve got an extremely heavy international schedule, but my duty as Head of State is to listen to what people are saying. There are a lot of lessons to learn from all this. Speed mustn’t be confused with haste. We have to take the time to reflect calmly, deeply, on the views expressed by people in their various capacities, and to draw the conclusions. I will keep you informed when the time comes, of course.

TREATY REVISION

Q. – Whenever a treaty in Europe is amended – even in a very minor way – or adopted, we inevitably come back to the Irish case. Are you counting on the legal creativity of the European legal experts to avoid referenda and what did your colleague, your Irish opposite number, say?

THE PRESIDENT – First of all, yes, I’m counting on legal creativity. You are perfectly familiar with the European issue, you know that legal creativity, or simply creativity, in Europe is important. Why is it important? We are 27 countries with different cultures, histories and, often, interests, so compromise is obligatory.

Now it’s true that with Lisbon, we want to turn the page on the institutional saga, to speak plainly, that’s indisputable. But, at the same time, when we negotiated and ratified Lisbon, none of us, and I don’t think many of you in this room, imagined that we would have such a huge financial attack on a number of European States. Frankly, no one had anticipated it.

We faced a decision: do we, from 2013 on, abandon this solidarity mechanism in the event of a speculative attack on a European country, with all the consequences that would entail for Europe and the euro? That amounted to saying: “we don’t know what we’ll do after 2013”. Or do we decide to make the pre-2013 system permanent and in that case we needed a slight revision of the treaty to facilitate the task of our German friends, particularly, when it comes to ensuring the necessary – I was going to say essential – support of the German Parliament. So you see there was no easy solution.

But I think it’s nevertheless good for Europe, its solidarity, including for Ireland, who hasn’t been spared – that’s the least one can say – over the past few weeks, to have the assurance of a permanent financial stability mechanism, rather than for us to say to ourselves: “after 2013, we don’t know what we’re going to do”.

But I think the best way to resolve the problems, in France as in Europe and the rest of the world, is to confront these questions and not sweep them under the carpet. This is the compromise which was made, the discussion we had, and I believe it’s primarily in the interest of all the countries which were attacked.

I’d nevertheless like to say that it’s not a priori for France and Germany that we’re establishing this stabilization fund. I’m also counting on Mr Van Rompuy’s creativity when it comes to taking the decision in December, but I won support for the argument that everyone needed to be on board and for this we needed this slight revision, call it what you like, but this is the reason for it. It’s really in order to ensure a permanent system that we want to make a technical revision, and I don’t doubt that, when the time comes, our Irish friends will be convinced that it’s primarily in their interest, like that of our Greek friends and a number of others.

Perhaps a final question?

SEOUL G20/TRADE RELATIONS/IMF REFORM

Q. – A fortnight before the G20, what message is Europe taking to Seoul? And what will it be asking for, particularly as regards exchange rates, the currency war?

THE PRESIDENT – This morning we had an enthralling discussion on the issue of reciprocity in trade relations. A number of heads of State and government – and the majority, I think – are asking for Europe to be less naïve in trade negotiations and agree to use the word “reciprocity”. And I think President Barroso and President Van Rompuy have taken this message on board. Europe is the world’s most open continent; it’s very good that it is. We don’t want protectionism, but nor do we want naivety.

Secondly, we are very satisfied with the reform of the International Monetary Fund, negotiated by the finance ministers, since we’ve kept 24 members on the board. The reform of global governance is making progress: after the World Bank, it’s the International Monetary Fund.
There are other issues and you will understand that I’m holding back a bit, because since we are taking on the G20 presidency just after our Korean friends in Seoul, I’m not necessarily best placed to side with one camp rather than the other, given that in a few weeks’ time I may have to pull together all the views, something which will, moreover, be at the heart of the discussions I’ll be having with the Chinese President in a few days’ time in Paris./.

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