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EU political integration – Spanish crisis/EU banking supervision – France/Germany/eurobonds

Published on June 11, 2012
Interview given by Bernard Cazeneuve, Minister Delegate for European Affairs, to AFP

Paris, June 8, 2012


Q. – Does France subscribe to the proposals put forward yesterday by Angela Merkel? Put simply, is France ready to move towards a “political union”, giving up “powers” to Europe in the budgetary, taxation and even social fields?

THE MINISTER – France is in favour of deepening European integration at the political level. It must include the fiscal and social dimension and ensure a high level of protection for employees, and strong public services. Moreover, the current difficulties show the necessity of strengthening economic governance, including budgetary policies, particularly within the Euro Area.

This being the case, the strengthening of political integration in Europe requires talks and in-depth work. It can’t be considered without the people’s support, and this support will be impossible until the European Union demonstrates its ability to provide responses commensurate with the challenge of the economic and monetary crisis. Without those responses, the democratic crisis and the economic-financial crisis will combine, threatening to ruin the work done so far to integrate further our political decision-making processes. That’s why institutional reform can’t be a precondition for the urgent responses the crisis demands. We must provide those responses and, at the same time, further integrate our policies by moving the institutions forward, thus proving the European Union’s ability to overcome its crises.

Q. – If France subscribes to them [Angela Merkel’s proposals], does France believe those possible steps should involve only a hard core of countries, if the others don’t want to get involved?

THE MINISTER – France is strongly committed to the unity of the EU. However, it’s understandable that not everyone may be ready to move forward at the same pace, whether it be because of economic or social disparities or political choices by each member state. Moreover, there are already fields in which we don’t act as a group of 27, whether it be Economic and Monetary Union or the Schengen Area, for example. We can continue this way. There are subjects, such as the financial transaction tax for example, on which a few of us can make progress if it’s not possible for us all to do so together.

Q. – Would France be in favour of strengthening the Community institutions, like the European Commission, for example through the election of its president by direct universal suffrage?

THE MINISTER – France is committed to the EU institutions and wants to work to strengthen them. The European Commission plays a unique role within those institutions. We want a strong Commission. But again, the priority isn’t to set in motion a new institutional reform just a year and a half after the Lisbon Treaty came into force. If we want the people to support the European enterprise, Europe must demonstrate its ability to overcome the financial, economic and social crisis. If we achieve that, Europe will come out of the crisis stronger; I strongly believe that. If, on the other hand, Europe means austerity as far as the eye can see and the dismantling of social [security] systems, then people will judge it harshly.


Q. – One of Europe’s emergencies is the situation in Spain. Is France in favour of creating a banking union – in other words, supervision of the banks at supranational level? Furthermore, do you regard an intervention by the EFSF [European Financial Stability Facility] to stabilize the Spanish banking system as unavoidable? Is France considering any other options for saving Spain’s banks?

THE MINISTER – I prefer to talk about a “banking regulation union”. France wants to act to ensure effective regulation of the financial system. That means having, at European level, common rules and strong supervision of the banking system to ensure our financial institutions always have every guarantee of health and solidity. We’ll support initiatives enabling us to move in that direction.

Regarding Spain, it’s first of all up to her to determine the measures that seem to her necessary in the current situation. Spain is facing a severe crisis resulting from the bursting of the property bubble and aggravated by speculation. She’s undertaken serious reforms, which have involved heavy sacrifices for Spaniards. She must be able to meet her economy’s needs for financing while being protected from speculation. That’s why Europe must be able to use its tools better in order to ensure the stability of the financial system.


Q. – Germany is resolutely opposed to eurobonds. Does this idea still have any chance of being adopted at the end of June?

THE MINISTER – The subject of eurobonds seemed impossible to contemplate only a few weeks ago. It’s now under discussion as a result of the strong initiatives taken by President Hollande. The debate is moving forwards. The discussion between France and Germany today relates not so much to whether European bonds should be introduced as to when to introduce them: in France’s view, eurobonds must help overcome the crisis; they can also serve as catalysts in a process of integrating the institutions; in Germany’s view, they can come only when the crisis has been overcome at financial and budgetary level and certain steps have been taken at institutional level. For us, eurobonds are a tool; for our German friends they’re an endgame. We’re continuing the discussions on this point with our German friends and our other partners with a view to arriving at a “road map” at the summit at the end of June – that is, a method accompanied by a timetable, providing us with a clear outlook./.

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