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European Council

Published on January 4, 2011
Press conference given by Nicolas Sarkozy, President of the Republic (excerpts)

Brussels, December 17, 2010



Q. – You’ve said it’s necessary to go further with regard to the convergence of economic policies and to economic government; can you go into a little more detail about what the next phase should be and what the Euro Area and European Union’s priority targets should be in the coming weeks, or the first months of the year?

THE PRESIDENT – The aim is clearly to tackle the gaps in competitiveness between the economies of the Euro Area’s 16 Member States. That’s the aim, and because France is very anxious to gather as many countries as possible around these proposals, this concern, and ensure that quite in-depth discussions take place, particularly with our German friends, we’ll provide further information on the details of these proposals when we’ve finalized our discussion of them. But the aim is clearly for gaps in competitiveness to be reduced, for economic policy to be better coordinated among the Euro Area’s 16 Member States and for convergence programmes to established, rather along the lines of the one we have between the Germans and the French. This in no way diminishes, moreover, the importance of what’s been decided today, which is extremely strong. After all, we’ve agreed on a reform of the treaty, on the establishment of a definitive support mechanism, on the participation of the private sector; these really are extremely weighty decisions. But we’re conscious that consideration of this aim has yet to mature and progress.

As you know, I’ve made this economic government one of the priorities of France’s European policy, but economic government isn’t an end in itself, it’s a means, a means to help define a convergent economic policy; and a convergent economic policy isn’t an end in itself, it’s a means to help reduce gaps in competitiveness.

Finally, I’m convinced that you can’t reduce everything to a problem of budget deficits alone: there are other questions. We’ve just reformed the pensions system; the Spanish are preparing to do so; why don’t we imagine deliberating together, and announcing targets on that area together? The status of our universities, innovation policy: these go beyond mere budgetary criteria and even beyond mere fiscal convergence criteria.

Q. – There are two very different criticisms emanating from two French figures. Yesterday, Dominique Strauss-Kahn said that the financial markets were still one step ahead of the decisions taken by Europe and that we should perhaps go faster. And by contrast, Marine Le Pen, in France – drawing lessons from this year of crisis in the Euro Area – is now advocating departure from the euro. What’s your response to them?

THE PRESIDENT – On what the Managing Director of the IMF said, I completely agree with him. To say the markets move faster than European integration is quite right. The markets react by computer, in a fraction of a second, in response to interests which are very often lucrative and indeed, sometimes, speculative. That’s completely unlike European integration, where it’s a matter of getting 27 countries to agree. If your question is: “do I agree with this analysis by Dominique Strauss-Kahn?”, it’s difficult not to. And if you read his statement in detail, he also says himself – I think it’s the expression he uses: “it’s easier said from the outside than done from the inside.”

Apart from that, what I’ve just told you about the discussions we’ll have next year, to better harmonize economic policies, is entirely in line with that. I deeply believe in it. The difficulty is fairly simple: namely, that there are 27 countries in Europe, 16 in the Euro Area, they must be made to converge, they’re sovereign countries and this requires persuasion in the face of events we’d never have imagined experiencing, resulting from the gravity of the crisis. So from this standpoint I fully go along with his statements.


Regarding departure from the euro, I’d like to say very simply that it is, quite simply, irresponsible and unthinkable. I’ll explain why in very simple terms: the euro is the heart of European integration. If the euro collapses, if the euro were to disappear, European integration would be structurally damaged. Can you imagine the significance of more than 50 years of effort by visionary political leaders, who did everything to build peace between countries that have been in constant conflict throughout their history? Is that what we want? Personally, I’ll never agree to it.
France is the founding country of Europe. France has had to suffer so much from war, from the conflicts in Europe; for centuries we’ve been the most violent continent on the planet. It’s Europe that’s brought us peace, and the euro is the symbol of Europe. If the euro falls, Europe itself will explode. So the euro won’t fall, because we’re supporting it with all our might. (…)


Q. – How do you prevent in Europe, in the long term, with all the budgetary reduction efforts, a Japanese-style scenario of very slow growth over a long period? And the second question rather contradicts the previous one: could a coordinated VAT rise be envisaged in Europe to resolve this very budgetary problem?


THE PRESIDENT – On the Japanese scenario, I’m wary of passing judgement on what’s been happening in Japan for 10 or 15 years against a background of an ageing population and a banking system which, as you know, is extremely destabilized. There’s no comparison with the European banking system, where virtually all the banks withstood the stress tests. Let me add that, when you see the growth figures for 2010, we’re a long way from the forecasts which spoke of totally flat growth in 2010. Some forecasters explained that, in France for example, growth in 2010 would be 0.2%. Today, we’re assured of reaching 1.6%. We’ll see if we go a bit higher, but we’re assured of that, including in the latest message published by INSEE [National Institute for Statistics and Economic Studies]. I don’t believe in a deflationary scenario, if that’s the question which was asked, because basically that’s what Japan’s experiencing.

If you’ll allow me, I’ll answer your second question by also posing the question of “eurobonds”, and I don’t think it’s bad for there to be ideas on that. Ideas in themselves aren’t guilty – these no more than others – but it would be a curious system which consisted in saying:

such-and-such a country has autonomous and sovereign freedom to set its rate of corporation tax at the lowest level in Europe, but the country which can do that would have the ability to transmit and transfer its debt to the European level. There’s absolutely no sense in that. There’s no sense in that in the current state of affairs. When there’s an economic government of Europe, harmonized and more integrated economic policy and reduced gaps in competitiveness, then we can think about tax harmonization and indeed a system of “eurobonds”, without taking sides – why not? But to do that now would make no sense. Am I making myself understood? You can’t say: I’m totally autonomous and totally sovereign when it comes to my revenue, but I can transfer my debt to the next floor up. Can you imagine what that would mean and the incoherence we’d see, in the present situation? (…)


Q. – A question on Côte d’Ivoire. The European Union is preparing a number of sanctions targeting individuals. Should Laurent Gbagbo appear on the list of people targeted by these sanctions? More generally, what’s your assessment of the situation? Do you fear we’re getting near the time for evacuating the French nationals?

THE PRESIDENT – The fate of Laurent Gbagbo and his wife lies in their hands. If, before the end of the week, Laurent Gbagbo – with his wife – hasn’t left the post he’s occupying in violation of the will of the Ivorian people, their names will be added to the list of sanctions. What’s happening in Côte d’Ivoire is totally unacceptable. An election took place under United Nations supervision. It was validated by the United Nations. Even better, every African State recognized the election of Alassane Ouattara, the democratically elected president of Côte d’Ivoire. Every ECOWAS State recognized President Ouattara as the sole democratically elected president of Côte d’Ivoire. What’s happening? In violation of the will of the Ivorian people, who had already been deprived of an election for 10 years, M. Gbagbo remains in power and his supporters are firing shots. We don’t know how many dead there are, but people were killed yesterday in the streets of Abidjan. It’s an outrage.

Côte d’Ivoire used to be one of the most stable countries in Africa. She’s been deprived of elections for years. M. Gbagbo finally organized this election; it’s for him to choose how he wants to be portrayed in history. Does he want to portray himself as a man of peace – there’s still time, but time is short and he must go – or does he want to portray himself as someone responsible for the shooting of perfectly innocent civilians? In which case, there are international courts such as the International Criminal Court. The Prosecutor himself said he was looking at the situation very closely and that those who had ordered shots to be fired will be held accountable. The position I’m expressing is that of France, the position of a unanimous Europe – we’ve just adopted a position, as the General Affairs Council had done. It’s also the position of the United States, of all the States in the world, of the United Nations Security Council and Secretary-General. M. Gbagbo has no alternative but to very soon give up a power which isn’t rightfully his.
As regards the French nationals, of course we’re watching over their safety. But I want to say that it’s a concern for us, of course, but the concern is [also] for the Ivorians to be allowed to have the president they elected. That’s what matters and that’s what we’re trying to get across.


Q. – Let’s go back to the budget. This letter [from five European leaders to President Barroso] which seems to have less support than that of October, which had 13 signatures: there seems to be a divide between the older Europe and the newer, more recent Europe, Western Europe and Eastern Europe, and there seems to be a problem regarding the CAP and the British rebate. One wonders if the agreement that seemed acceptable in 1984 still holds in the 21st century. Where do you stand on this?

THE PRESIDENT – I hope the largest number of people will sign this letter. At any rate, it’s true, we’re working with our British and German friends on sending a signal that the European budget shouldn’t in our opinion increase faster than inflation. There are no grounds for raising the British rebate, structural funds and CAP issues now, it’s simply a direction we wish to set. Moreover, it’s plain common sense. All the budgets are being maintained at zero, indeed they’re decreasing. I don’t see how you could have a European budget increasing above inflation. It wouldn’t make any sense. (…)./.

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