THE PRESIDENT – Regarding our European Council, it’s the first summit since August 2011 that isn’t a crisis summit. We haven’t emerged from the economic crisis, but we’re in the process of turning a page on the financial crisis. The strategy we’ve implemented is in the process of bearing fruit. Spreads – the interest rate levels at which states borrow money on the market – have returned to their pre-summer 2011 levels. (…) As for France, spreads have reduced by 100 basis points. (…) Today, France borrows at a rate significantly below 3%.
So how has the system worked? How have we withstood the financial crisis? Why are we turning a page on this financial crisis, which could have swept away the Euro Area and the whole of Europe? Because over recent months we’ve profoundly reformed the European Union, the European Economic and Monetary Union. Let’s look at the distance we’ve travelled since December 2011. We’ve considerably speeded up the pace of decision-making. At the beginning of December 2011 we decided on a treaty. It was signed in March 2012. To all those who talked about a succession of summits bringing no results, here’s the clearest refutation: a financial crisis that’s passing by and a rate of decision-making that I think has never been seen in Europe: just think of it, a treaty in December and the signing of the treaty in March. The European strategy has been coherent, with four components: a budgetary consolidation component – we couldn’t continue building up deficits and debt –, a solidarity component – the European Stability Mechanism treaty, implemented in advance, because we decided to apply it as of this summer, even though it was due to be applied on 1 July 2013 –, convergence – that’s very important: it was the great weakness of the Maastricht Treaty, which didn’t organize convergence, the convergence among the 17 [Euro Area countries] that is the goal of the treaty we’ve just signed –, and finally governance, because the treaty establishes an economic government of Europe, because the treaty signed today and the ESM – the support and financial solidarity mechanism – form a single entity.
Remember, less than two years ago we couldn’t utter the words “economic governance”: today, not only are those words in the treaty but it’s also one of the facts of the treaty.
We’ve established a monetary policy of massive support for financial stability and for growth: two three-year operations between December and February, with a total value in excess of €1 trillion. I explained to you in December that this monetary strategy would enable us to reduce the pressure on sovereign debt; it worked. And I want to congratulate the governor of the European Central Bank, Mr Draghi. As you know, an unlimited supply of liquid assets was made available to the banks, at a rate of return of 1% over three years. And I told you this supply of liquid assets at 1% over three years would allow the European banks to buy sovereign debt and reduce the pressure on financing government debt; that’s exactly what happened. And then we had to find a solution to the Greek crisis. The Greek debt operation was launched on 24 February, and it’s enabled us to reduce the Greek debt by €107 billion. And today the elements for solving the Greek crisis are in place.
What do we still have to do? Finalize the introduction of firewalls. We decided today to release two tranches of the ESM’s capital in 2012. France pre-empted that decision, which has already been approved by parliament. Let me remind you that parliament approved a €6.5 billion stake in the ESM’s capital.
We must promote growth, competitiveness, research and innovation. The European Council today recommends, for example, reducing the tax burden on labour. That’s exactly our strategy. There you are.
So it’s a huge relief to see European summits no longer being devoted to the financial crisis. And it’s a huge relief to see that the crisis is no longer in the news – as it was morning, noon and night –, because we’re in the process of turning a page on this financial crisis. We must now put all our strength into gradually alleviating the economic crisis.
Q. – Doesn’t the stability treaty you signed this morning impose too many austerity measures for countries like Spain, for example, whose economies are currently experiencing a slowdown? Will this treaty finally give those countries a breathing space?
THE PRESIDENT – There are the automatic stabilizers we talk about in the communiqué. For my part, I’m convinced there’s no other solution for us than to reduce our deficits and pay back our debts. But you’re right: the solution can’t lie purely in budgetary discipline. It must also lie in returning to growth and improving competitiveness. In Spain, Prime Minister Rajoy has set out a number of measures. He’s going to undertake major reforms, particularly in the labour market, but it goes without saying – and this is entirely the policy we’re implementing in France – that competitiveness, structural reforms and growth are essential factors in overcoming the economic crisis. (…) The European strategy is indeed a two-pronged strategy: reducing deficits, and improving innovation and competitiveness in order to restore growth.
It’s both. It’s more difficult for certain countries than for others. In Spain, where the unemployment rate is 23% or 24% and the deficit stands at 8%, whereas they had predicted 6% – and I’m talking about 2011 –, it’s certain that this poses problems, but the Spanish government has said very clearly it will carry out the deficit reduction policy. And in the treaty – as you’ll see in the communiqué – we refer expressly to what we call the automatic stabilizers.
Q. – In a slightly related context, the United States is considering drawing on her emergency reserves to curb the rise in oil and fuel prices. Is a common strategy under discussion in Europe about possibly dipping into the emergency reserves, and what about France herself?
THE PRESIDENT – (…) You’re aware of France’s position – the finest, strongest energy source available is that of energy saving – and of France’s determination to continue developing nuclear energy, which is the answer to the rising price of the fossil raw materials gas and oil.
Q. – To return for a moment to the financial crisis, you talked about huge relief; that is indeed quite a widely-shared feeling. But despite that, isn’t there a risk, because we know this crisis has started off again each time when nobody’s expected it? And secondly, isn’t there consequently another risk, namely of slackening off, because the measures you talk about haven’t all come into force? And if the Europeans ease the pressure now, isn’t it too early?
THE PRESIDENT – I think I can say we were all shaken enough by the financial crisis not to want to find ourselves in the same situation. I’m being frank with you. The pictures we’ve seen from Greece, Spain, Italy, Portugal and Ireland – nobody wants to experience that again, especially the countries concerned, and not us either. (…) In any case, things for France are very clear: we’re perfectly in line with our deficit reduction targets. You have to understand clearly that this is a question of nothing more and nothing less than regaining our national sovereignty. A country that relies on the markets to adequately finance its debt is a country that’s calling its independence into question. So is there a risk of it [the crisis] starting up again? Of course I ask myself that question. Who here can guarantee 100% that there’s no risk? I wouldn’t allow myself to tell you so. Everyone’s grasped that the flaws which allowed the financial crisis to resume are no longer there. The agreement on Greece, which was very important, after all – particularly with the private sector, which voluntarily wrote off €107 billion of debts – has been sealed. The Greek political parties – not just the government, but the Greek political parties – all wrote a letter saying they’d respect the commitments they made to the troika. In Italy today, Mr Monti’s government has taken decisions enabling the tension on Italy to be reduced. And regarding Mr Rajoy’s government in Spain, the decisions taken in the past two months are also extremely strong. As regards Portugal – who, as you know, was under threat – the troika has just said Portugal is fully meeting her commitments. In Ireland – tribute should be paid to our Irish friends – spreads have been halved since the time of the financial crisis. (…)
The French people listening to us must understand that spreads aren’t something abstract. We must finance our debt. To finance our debt, we must go to the market and ask it to lend us the money we need. I was looking at yesterday’s figures: to finance a 10-year debt, we borrowed at 2.77%. That’s practically the lowest in our history. (…)
So those are signs that show things have stabilized. As for the euro’s value, the situation is calm. And I can tell French people today that after all these European summits and all the work we’ve done, France is borrowing and financing her debt at a very low rate – lower than we’d imagined. And all the Euro Area countries will be able to finance their debts, either by going to the market or through the solidarity mechanism we’ve put in place.
You can never be immune from a tragedy. I’ve learnt something about that in the past three years. I’ve learnt in a very practical way that one problem can follow another and one crisis can follow another. But I think we’re in the process of turning a page on the financial crisis. (…)
Q. – The big headline – the top story in the press – is unemployment and the demonstrations in Europe. Twelve countries, including Italy and Britain, have called for consideration of European channels for relaunching growth. Was this discussed at the summit? And if you’ll allow me a second question, what are people saying about Syria, and what are the leaders saying? Has anything been decided?
THE PRESIDENT – Of course unemployment, the economic crisis and growth are subjects that were at the heart of our discussions. There was this letter from 12 countries. On 90% of the subjects mentioned in the letter, Mrs Merkel and I could have said yes. For 10% to 15% of the subjects, we – or I, at any rate – believed it wasn’t possible. I’m thinking of a new Bolkenstein directive [on single EU market for services], for example, or a temptation still existing among our British and Swedish friends for deregulation, which we don’t want to see coming back. Basically, we managed to incorporate into the text of the conclusions many suggestions that were made to us, which also reflect what we ourselves are currently implementing in France.
As regards Syria, the situation is extremely serious. What’s happening is an outrage. There have been more than 8,000 deaths – hundreds of children – and the city of Homs is in danger of being wiped off the map. It’s absolutely intolerable. Alain Juppé and I have taken the decision to close our embassy. Secondly, the Council condemned in the strongest terms what’s happening in Syria – and not simply what’s happening to your colleagues, although when the press is attacked, a symbol is attacked, namely freedom of expression. I’m not saying one life is worth more than another, of course, but there are symbols, and it’s particularly intolerable with that symbol.
We’ve expressed our encouragement to the Syrian National Council – which is expressly mentioned in the European Council’s text – and we’ll continue to take initiatives at the Security Council to ensure a number of obstructions are removed. For my part, I can say I’m in favour of humanitarian zones being organized – at least on Syria’s borders – to take in people who are persecuted by the Syrian regime, which must go. It must go. From this viewpoint, France supports the Arab League’s plan. The attitude of the current government towards our two journalists was particularly intolerable.
Q. – On Syria, would you be in favour, in the raft of measures and initiatives you’re announcing, of going one step further and providing the rebels with military assistance – be it training or even weapons – as the insurgents themselves are asking and a number of Arab countries are proposing?
THE PRESIDENT – We’ll be in favour of stepping up assistance to the democrats in Syria. But we won’t do anything until there’s a Security Council resolution. There’s no question of taking action – direct or indirect – as long as the Security Council hasn’t established legal stability, the legal conditions for stepping things up, whether as regards humanitarian zones, deliveries of arms for the opposition, or corridors. I recall that every time we’ve intervened – in Côte d’Ivoire as in Libya, in Lebanon as in Afghanistan – there’s been deliberation beforehand at the United Nations Security Council. This is, after all, about international law! It isn’t possible for a country such as France to act somehow or other without the international standard-setting body having stated its position. It’s frustrating. I’m well aware of the deaths, the atrocities piling up. We’re doing our utmost to remove the obstacles to this. It’s difficult, as you can see, but I hope that when a number of political events in other countries are behind us, we’ll be able to have a calmer discussion on the international community and Syria.
I might add that we’ve already asked for those committing crimes – and this will be in the Council’s text – to have to account for them before the International Criminal Court. Globalization doesn’t bring only good news, but at least it provides the certainty that dictators – one day or another – will have to account for what they’ve done.
Q. – About Iran: the day before yesterday the Iranian government said it didn’t really believe in the sanctions but at the same time a delegation is going to negotiate around a table with IAEA members this week or the week after. What’s your analysis?
THE PRESIDENT – They don’t believe in the sanctions but wanted to discuss them again the moment the sanctions were in place. So they’re not being asked to believe in them; the sanctions are being implemented, they’re having very severe consequences for the regime and I’m convinced that stiffer sanctions are the only way to avoid a tragedy. I repeat that military intervention wouldn’t be the right way to resolve the problem. The only right way to resolve the problem is to implement sanctions so that the Iranian regime understands that the world won’t accept the possession of an atomic weapon by a country which says it wants to wipe Israel off the map. That, really, is the problem. For France, there are no solutions other than these tough sanctions.
Q. – Your comments on the granting of candidate status to Serbia: do you think Serbia could soon begin pre-accession talks?
THE PRESIDENT – As far as Serbia is concerned, this is a very important matter. (…) As I see it, getting some Balkan countries to join and not others – especially Serbia – is unthinkable. I’m not saying “straight away”. I’m not saying “immediately”. I’m well aware of how far there is to go. But if Europe’s message to Serbia was to say “never”, that would be crazy, because let’s not forget that a world war was born in that part of the European continent and that the best way of calming any kind of tension (…) is for each to have the prospect – one day or another – of joining the European family and having democratic principles. This is the best response to counter nationalist feelings, which have always been strong in this part of the world – no offence intended by saying so – and territorial wounds which are still very fresh, let’s be frank about it. France campaigned for Serbia to have candidate status. This doesn’t mean it’ll happen straight away;
it doesn’t mean it’ll happen now. Moreover, it backs up my idea that there’s the Europe of 17, and more, which must move towards greater integration: the Europe of the Euro Area; and there’s the Europe of 28 – since there are already 28 of us with Croatia and there’ll be more of us with the Balkans – which must move even further towards confederal management so that it isn’t an obstacle. I choose my words carefully: it would have been unprecedented to deny Serbia any prospect [of a future in Europe], unprecedented. It would have been a major mistake, I assure you; I’m talking in terms of peace.
You can clearly see that the more this happens, the more the European Union will be enlarged and so become confederal, and the more the Euro Area will have to assimilate economic and monetary convergence. This only reinforces my firm belief.
Q. – Mr Juncker said yesterday evening that if the programme for Greece and the work done for Greece didn’t succeed, there was a Plan B. Is that true? And can you perhaps give us some details?
THE PRESIDENT – I have nothing more to add to that original statement by Mr Juncker. I don’t see what a Plan B is, and I know very well what the Greek plan is – I negotiated it with Mrs Merkel and Greece’s creditors – and I can tell you we negotiated without any possibility of a Plan B. We have confidence in this plan; we’ll implement this plan, which mustn’t be dismissed. (…)
Q. – A question about the European Stability Mechanism and strengthening it. No decision has been taken yet. When do you expect one? And do you think a summit of heads of state is necessary in order to take a decision?
THE PRESIDENT – To tell you the truth, we talked about it – Mrs Merkel and I among others – and we’re taking it step by step. There may be initiatives by the end of March. Not necessarily a summit, but there are still a few decisions to finalize on the two mechanisms. Do we abandon one while the other is operating? Do we merge them? Or – third solution – do we let them both operate for a while? Those are the facts of the problem. Sorry, I’m probably not being very clear, but that’s not deliberate, and Mrs Merkel and I agreed we’d take a decision on the subject at the end of March.
Q. – Mr Cameron said it was his letter that was the driving force behind this communiqué. Mr Cameron said that, at the end of the day, everyone agreed with the content of his letter. Do you agree with it?
THE PRESIDENT – In case you weren’t there at the start – since I suppose that the 11 other signatories will appreciate David Cameron’s statement on “his” letter – I said that I was able to agree with 90%, 85% of the content and that it’s always the 15% which makes the difference. I even pointed out that across the Channel there was still a temptation for deregulation and liberalization which didn’t resonate with me. It didn’t cause any particular problems and I’m still happy when our British friends like Europe so much that they write to it.
Since, after all, what better way to pay tribute to Europe than to send it a nice letter! (…) I took Mr Cameron’s letter – after the decisions not to be involved with the treaty – as a desire not to be left behind, and I welcome this because we need the British in Europe. (…)./.