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France/Spain/economy

Published on January 18, 2012
Interview given by Nicolas Sarkozy, President of the Republic, to the Spanish daily newspaper ABC (excerpts)

Madrid, January 16, 2012

(…)

FRANCE/SPAIN/ECONOMY

Q. – How could we strengthen French-Spanish cooperation on the European stage?

THE PRESIDENT – (…) We have ongoing dialogue and close consultation on all the European subjects. I’m thinking in particular of everything related to the Euro Area’s current difficulties.

I want to welcome the extremely brave measures taken by Spain to tackle the crisis and stick to her European commitments. The new government’s first decisions illustrate Mariano Rajoy’s determination to take all the measures necessary to ensure the Spanish economy gets back on its feet. It’s very important for France and for Europe. He can count on my full support.

I also want to pay tribute to the wisdom of the Spanish people, who understand these difficult decisions and are accepting them calmly and clear-sightedly.

With Mariano Rajoy – whom I know well and for whom I have great esteem – I know we’ll be able to continue strengthening the cooperation that is absolutely necessary between our two countries on all these subjects.

EURO AREA DEBT CRISIS

Q. – When can we expect to emerge from the Euro Area crisis?

THE PRESIDENT – No one can predict that with any certainty. What I do know is that we’re doing everything in our power to emerge from it as quickly as possible.

In the space of just a few months, we’ve carried out a profound transformation of Europe and the Euro Area.

We’re establishing the real economic government that Europe and the Euro Area so badly needed. Just think: until the Elysée summit in October 2008, the Euro Area heads of state and government had never gathered together. From now on, the Euro Area’s economic management will be ensured through regular meetings of the heads of state and government, with a view to bringing about the effective economic convergence of our countries, which is essential in the context of monetary union.

We’re making budgetary discipline within the Euro Area more effective by stating that each country will have to establish a jointly-defined golden rule. Budgetary discipline is essential, because when you share the same currency, excesses by some have repercussions on the others. But it can’t be imposed solely at European level: everyone must adopt this goal in order, as far as possible, to prevent backsliding. Those who still don’t comply with the 3% [of GDP] deficit rule will be penalized much more automatically.

Finally, we’re strengthening solidarity within the Euro Area. With the European Stability Mechanism, we’re in the process of establishing a real European monetary fund provided with its own capital and a total capacity of €500 billion, which will be a real financial shield to defend the Euro Area.

A genuine recasting of the Euro Area is under way that will enable us to take on board all the consequences of the crisis we’re experiencing today, so that the same causes never produce the same effects.

All these decisions made it possible to stabilize the markets at the end of December and the beginning of January. I hope the latest developments won’t add to the difficulties.

More than ever, we must demonstrate courage and audacity. That’s true of all the Euro Area member states that have embarked on the necessary reforms. It’s also true of all the European institutions, which must take a more active role than ever in safeguarding the euro.

FINANCIAL TRANSACTION TAX

Q. – If there’s no agreement among the 17 on the financial transaction tax, will France press ahead alone?

THE PRESIDENT – The issue of the financial transaction tax is absolutely fundamental for France, because it’s only natural – I’d even say morally right – for those who helped plunge the world into the crisis to help get the global economy back on its feet.

That’s why France has made the financial transaction tax a priority of her action, both in the international arena – by putting it at the heart of her G20 and G8 presidency in 2011 – and on the European stage.

We’re making progress, too, because the European Commission has drawn up and presented a draft directive introducing this tax.
The question today is how to move forward, overcome the current deadlock and move from words to deeds. From this viewpoint, I know that if we wait for others to decide, nothing will ever happen. If we want it to be done, we must set the example.

That’s why France is ready to show the way and press ahead with those who want to. How? Quite simply by implementing, as of now, the financial transaction tax. It’s technically possible, so why wait for everyone to agree before acting, if we believe it’s right and necessary to act?

I’m convinced this will spark a movement first of all within the Euro Area and then, once the Euro Area has introduced it, everywhere else, because the public worldwide will tell their leaders: “Why is what’s possible for them not possible for us? Why can finance be taxed in the Euro Area and not in our countries?”

The situation isn’t set in stone, either: look at the evolution of countries like Germany and Italy… I’m convinced it’s by pressing ahead that we’ll get movement on policies.

GROWTH/EMPLOYMENT/COMPETITIVENESS

Q. – During your last meeting with Mrs Merkel, you mentioned the need to emphasize growth and job creation. Are you going to make proposals to this effect in the next intergovernmental treaty?

THE PRESIDENT – Everyone must understand that in order to get Europe out of the crisis, we must – in addition to the essential deficit-reduction measures, which we’ve already taken – give priority to growth, employment and competitiveness.

In Berlin last week, Angela Merkel and I said that we were going to take initiatives to this effect and that with our European partners – a leading one being Spain – we wanted to take decisions in absolutely key fields for growth and employment. I’m thinking in particular of the training of unemployed people, the use of European funds, which must be harnessed for growth and competitiveness, and the necessary fiscal convergence.

The European Council of 30 January should enable us to join forces to support growth and employment./.

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