Hello and welcome to the first edition of The Global Conversation. Joining us today: French President François Hollande and Italian prime minister Mario Monti.
They will tell us about their vision for Europe and give us their take on earth’s shaking events elsewhere.
Claudio Rosmino, euronews:
“Mr President, Prime Minister, welcome and thank you for being here. On the 22nd of November the last European summit ended in failure with no agreement on the next EU budget. How can we explain to citizens that, at a time when national governments are cutting back, the EU doesn’t follow suit?”
Mario Monti:
“The assessment of the European Union’s budget at about one percent of GDP of all member states is perfectly reasonable. It is a sizeable amount but when you look at the percentages, it’s really a drop in the ocean and it’s clear that, at this time of savings, economy and budgetary cuts, whenever we spend one euro, we have to check it and justify it, we have to control our expenditure to make sure our policies in the European Union are effective. But this doesn’t mean that we have to make savings everywhere, and it doesn’t mean that the EU should do the same, because it’s clear that there is some expenditure at community level which allows us to make savings, split this up at national level. And this is entirely true for the heavy cross-border investments, but it’s also true if you think about things like the common defence project, because, for example, it would be far too costly to have national defence policies that are not harmonised. And this is also true in other fields, so the position of Italy is that we are not against having a higher expenditure at the European community level but the condition is to show that this is useful. And also if we can share those savings afterwards.”
François Hollande:
“Well, as president Monti said, European spending amounts to one percent of European wealth. Now, do we consider that this is too much? No, we don’t. I genuinely believe that it is the right level of spending in order to prepare for the future because Europe requires a budget for investment, for growth. Should we spend less? We are already making many efforts in all of our countries. I would suggest, if we were to look at things at a European level, and if we suddenly introduced lots of restrictive measures, it would be detrimental to my ambition, which is to create more growth thanks to Europe’s contribution. We have to make a compromise, as always in European affairs. I have no doubt at all that we will find the solution. It is not the first time that Europe has had to have two or three test runs in order to get a budget set out, but I’m convinced that the different countries that are members, and those that joined more recently,
are exactly like us, they will want a good budget for Europe, exactly as we do. And those who are asking for checks, rebates, reductions, they should consider that Europe is not some sort of cash till or
a box where you put money in and then take it out, absolutely not, it’s not that, it’s about solidarity, it’s about a growth policy that favours everyone. We would have exactly the same approach to achieve this compromise but I want to stress in particular, above and beyond this budget, and I’m sure it will be voted in in 2013, the year 2012 has enabled Europe to move forward. And today we are seeing the results in Greece for example, as we find
a solution, but also in terms of the interest rates, in terms of the trust and the confidence that has been restored in the markets, and that’s thanks to the policies we have implemented and the action that we’ve implemented, Mme Merkel, myself and others.”
Sophie Desjardin, euronews:
“You’re speaking about those who are asking for rebates. David Cameron is insisting that he’s going to defend the UK’s rebate and has said he’s calling for more savings. What do you think of this position?”
François Hollande:
“I’d say he’s already making efforts. He’s attentive to what’s going on in the economy. At the same time, there are institutions that are out there, that exist in Europe, and we need to protect and preserves these institutes, I’m thinking about the headquarters in Strasbourg for example. We have a certain number of European sites that are part of the treaty, so it’s always very easy to make savings where we’re not affected. The president of the European Commission gave an excellent demonstration at our last meeting, where he highlighted that most of the spending dedicated to higher education for example, was in the UK, and it was the UK that benefited from it, so that’s not a reason for me to ask for reductions (in higher education or research in Europe).”
Claudio Rosmino, euronews:
“Austerity cuts are weighing heavily on European citizens, and in some countries the situation is extremely serious. Is the cure not worse than the disease?”
Mario Monti:
“Well, first and foremost, we should realise and try and understand the cause of this disease. So we need to understand the cause of all this unemployment, particularly among young people. The cause is not necessarily because we’ve requested austerity or discipline from the budgets of different countries. The cause is really due to a lack of discipline in the past. If I take the example of Italy, until a few years ago, before the single currency came in and we had regulations related to the euro, we had a deficit which was 8, 9, 10 percent of GDP per year. This was something that was never discussed, never paid attention to in the past. But already at the time, somebody pointed out that the situtation was satisfactory for everyone. In fact, there was a consensus on this at the time and the problem is that this led to victims. The victims of the situation were the future generations, the children and those who weren’t even born at the time, who couldn’t vote. We can see today with youth unemployment, these problems are not due to any poor decisions taken by Brussels, it’s not due to an anti-social Europe: In fact, the problems we are seeing today are due to the excesses of the Italian political classes and political classes in other countries who, in the past, have always striven to strike an immediate consensus because they want to please their voters, and they haven’t thought about the future generations. So Europe has introduced this culture of stability and this is obviously going to lead to a form of a return of succession, but it’s not by preventative discipline and tightening our belts that we will be able to find solutions. We have to have even more tools at a European level, we have to be extremely rigorous, and Mr Hollande has called for this. So we’re going to have to think of enriching and adding to all the tools that we have available, in terms of economic policy, we’re going to be looking at things like intervention, various infrastructures, for example, which help young people seek employment. And I think that by doing so, we will be able to reconcile young people’s public opinion with Europe, and in that case, Europe will not be seen – even if wrongly – as this kind of creature which has no heart, and which has no sensitivity to these social issues. Europe is entirely the contrary, Europe is a tool, an instrument that imposes discipline on its country member states.”
François Hollande:
“Over recent years, there were some very damaging irregularities in public finance management in certain countries, so that had to be sorted out. This is as true for a country like France as for others. We’re gradually being overtaken by speculation on our debt, so the discipline that we’ve seen was absolutely necessary, but it’s not enough in itself. In other words, the countries that have public accounts that are in a balanced situation and the countries that have excellent competitiveness are supporting the interior demand, and that’s normal. It’s totally normal that there is solidarity between the richer countries and the poorer countries so that we can gradually create a balance. Europe is not just a reformatory, where we’re looking to whip those who behave badly, it’s also a space for solidarity, a space for growth, I want to stress that, I would refer to the growth pact of the European budget, we have to show solidarity, that we can be coordinated, provide support. Nevertheless, each individual country, and I want my country to be able to have both a public financial system that’s well managed, but at the same time our country has to be competitive, highly competitive, more competitive than it is today. We need growth for young people, and we need jobs, this is why I’ve placed youth at the very heart of my commitments for my term of office. I’m making massive efforts, despite all the budgetary constraints for education and training, I’m making efforts for jobs, providing jobs for those young people who find it hard to get employment, and Europe should put these targets at the centre of its targets for the next few years.”
Sophie Desjardin, euronews:
“Now we’re talking about austerity, let’s move on to Greece, which will get its next slice of bail-out aid if it pushes on with cuts, the goal being to cut its debt to 124 percent of GDP by 2020. It will require another eight years of sacrifices, will Greece manage to cope?”
François Hollande:
“I think that these goals are necessary, but everyone knows this is relative. Who knows where we will be in eight or ten years’ time? What matters is where we are today and in the coming months. Greece now knows it has support, financial aid, so Greece is going to be able to breathe, to feel more confident. Ireland, for instance, has been in a very difficult situation, at last the action that was expected has taken place. The eurozone is no longer under threat, whereas a few months ago we didn’t know whether Europe would suddenly burst, whether the interest rates were going to increase massively. So look at where we will be at the end of this year: Greece is now on track, it has its support, it has its turnaround plan, so there is no longer any doubt. Italy has seen its interest rates drop. Spain, for example, has also received aid, support for its banks, low confidence, trust has come back, so together we have succeeded. Now, we have to overcome the next hurdle, and the next hurdle after that is growth, solidarity. At the same time, we have to focus on enhancing our union, enhancing our cooperation, and we have to make sure everybody respects that.”
Sophie Desjardin, euronews:
“Do you not think it is inevitable that we will have to wipe out some of Greece’s debt, some of the official loans to Athens? What do you think?”
Mario Monti:
“Well it’s difficult to foresee what’s going to happen. Obviously, this might happen, because it is true that this is something that has already happened in the past. Germany benefitted from this at the start of the 1950s for example, so I really believe that Greece has to be perceived from a certain distance. Before it entered the euro, Greece was a country - and obviously I say this with all due respect, I respect the Greeks’ culture and history enormously – but Greece was a country where rules were not abided by, where tax evasion was probably the highest in Europe, and it was a country where there was no form of competition whatsoever. Meritocracy didn’t exist in Greece, corruption was rife, so Greece was really a melting pot, which crystallised all of these things which went against the emergence of a modern market economy. And obviously, this culture of stability which was developped in Germany, with the market social economy, the rest of Europe decided to follow this model, with the single market and the single currency. So we can assume that Greece, in fact, hasn’t done everything that we asked it to in time to turn itself around. This is the empty side of the glass. But the full part of the glass is the fact that, if Greece had not been part of the eurozone, then it would never have embarked on all of these changes, all of these modifications, all of these transformations to its policies and politics, and this has led to the modernisation of Greek society and the Greek economy, so this has been a true revolution. In general, it takes a generation to do this. So, in so few years, we can say that it’s well on the way now and, as I said to Chancellor Merkel recently, when we look at Greece, we shouldn’t only see its shortcomings but we should also see Greece from another angle, and see it as a testimonial to the success of export policy and export product, which is in fact the euro, because the single currency has been beneficial for everyone.”
Sophie Desjardin, euronews:
“I just want to show you this frontpage from The Economist in June: “Please can we start the engines now Mrs Merkel?” with “The World Economy” written across the sinking vessel. The anecdote being that Europe is a sinking ship and that it’s only being repaired by patching up the holes to keep it afloat, with Germany as its skipper. Do you seek to build a new Franco-Italian alliance against German dominance in Europe?”
François Hollande:
“Well Germany is a strong economy. Nevertheless, it cannot succeed in anything without the other European countries, even for its own prosperity, and Mrs Merkel has fully understood this. France plays a very important role in Europe, because, like Italy, ours is one of the founding countries in Europe. We have an economy that is sturdy, it is sound, but we lay no claim to managing Europe over and above the other countries. But at some stage we have to come together and have a common design, we cannot isolate one country, we cannot isolate Germany, nor can Germany place itself in a situation whereby it dominates. This wouldn’t be good for Germany, it wouldn’t be good for Europe. We have to work together, we absolutly have to, and the advantage of Germany is that it’s in their interest for the European economy to be revived. If the recession continues, Germany, too, will suffer. Growth is slowing down so Germany has to make an effort to support the economy and we must demonstrate that we can be competitive. We have to avoid telling others what they can do. This boat… I don’t think The Economist is objective on European issues.”
Sophie Desjardin, euronews:
“You’re referring to the recent edition on France…”
François Hollande:
“It’s not the British who are going to teach us what we need to know about Europe. I’m talking about the British press, I’m not talking about the government of course. But if we’re saying Europe is a ship, we’re on this ship, and as a result we have to make sure we get it to go in the right direction and we set the right course, despite the slowness. Of course we all have our opinions, but nevertheless we have managed to overcome certain hurdles. We’ve moved on from one stage to the next, we haven’t got into the home port, but we have to gradually set the European economy on the path to trust and to growth, and in order to do so,
we need Germany. But I also must stress, Germany needs France, Germany cannot manage on its own. We have Italy, which is the third European economy, which I believe, for the last few months, has guaranteed and provided great consistency and shown how responsible it is.”
Sophie Desjardin, euronews:
“Mr Monti, in a few words, a Franco-Italian alliance – what do you think?”
Mario Monti:
“Well I’m neither French nor German as you know full well. I don’t like the word ‘collaboration’. I think we need to focus on this for Europe’s sake because this is a necessary condition. If France and Germany do not agree, then obviously, this poses a problem for Europe as a whole, but I don’t think this is a sufficient condition for Europe - for France and Germany to agree. I think we need more than that. I think it’s easier for France and Germany to find an agreement if they dialogue with other countries, and Italy is ready, is open to this dialogue, so Italy is very active as well. But it’s true that, a few years ago, Italy was not as present on the European stage, so we’re very open to this Franco-German discussion and we think that this Franco-German dialogue is more and more part of this community.”
Claudio Rosmino, euronews:
“You both say you favour a pro-growth policy to kick-start the economy. The motor has stalled and it won’t restart, how can we make this work? Why not follow the advice of several economists who suggest depreciating the euro.”
Mario Monti:
“Well I don’t think there are any taboos in the economy, I don’t think there should ever be any taboos in an economy because they can become interesting in themselves, drivers or lever of an economy. Having said that, I don’t think this is a tangible possibility for various reasons. I would tend to think that in other economic policy fields, we have to have a considerable level of coordination with common policies, because Europe only works when we have common decisions and joint decisions. Here I’m referring to investment policies, for heavy investments or for big industrial projects for example. Obviously, we need more European input in these projects, in terms of investment and expertise, and I think this will be possible. But I do think that, if it does happen, we will have a stronger Europe and we will be able to press on the accelerator, and this will not hold us back. There will be no breaking and speeding at the same time, we’ll move forward in a more balanced way, we will have greater discipline, and I think this will enable greater recovery as well. Don’t forget that, in the past, the engine has stalled slightly, and this is a problem with a single European engine.”
François Hollande:
“Well, the euro has seen its parity drop over the past few months. It’s not something that’s been favourable to growth, so I do not believe in the use of a monetary weapon in order to kick-start our economies. In the same way, the interest rates are relatively low, except in a certain number of countries, but that in itself is not sufficient to kick-start investment, so what do we need? First and foremost, we need to re-establish trust and confidence. Secondly, we also need to have competitiveness. It’s important to remind everybody that Europe is the world’s biggest economy, even bigger, stronger than the United States, bigger, stronger than China. So it is up to us to create the momentum, a dynamic approach in research, qualifications, so that we can be the best in this global competition. And finally, we need solidarity and also growth, and this means we have to have national policies, but also European policies. The worst thing for Europe is for it to imagine that it’s on the decline, because when we use the word, that means decline is already on the way. We need to inject a bit of hope, we need to inject enthusiasm, particularly for future generations, we need a vision of what Europe is going to be. For example, on the 10th of December, the Nobel Peace Prize is going to be given to Europe. Some people are surprised by that decision - a Europe that has been capable of extending beyond conflicts and wars, a Europe that has been capable of bringing together the continent. You’re saying it wouldn’t be capable of providing a vision for its economy and its growth? Well, I say, this is the challenge of our generation, the challenge for those of us who are in power today and would like to be in power in the years to come.”
Sophie Desjardin, euronews:
“We are now going to look at a few more images, this is a snapshot of Gaza - 166 dead in Gaza, 6 in Israel, the latest death toll from the Isreali offensive. Nearly 20 years since the Oslo Accords… what is Europe doing?”
François Hollande:
“Europe speaks with a very firm voice, repeating the same message, saying that it is necessary to enter into dialogue and negociation. Europe is friends both with Israel and with Palestine, hence Europe can say to the different protagonists that this conflict has lasted for too many years. Time has come for negociation, you talked about Oslo, why should we not resume with the basis and the principles of what happened in Oslo once and for all.”
Sophie Desjardin, euronews:
“But why is Europe not being heard?”
François Hollande:
“Because this Europe that has this economic power doesn’t yet have the political clout in line with its power. This is due to the fact that certain countries have their own diplomacy, France first and foremost, but it’s also because too many European countries consider that it’s up to the United States to make the decision in their place. The answer is no. It is our responsibility to implement a European security and defence policy, a joint policy, that is our ambition in Europe. If you think about it, we have succeeded in ensuring that a number of European countries vote in favour of the recognition of Palestine as a state at the United Nations. More countries could have done this, but there are already quite a few of us.”
Sophie Desjardin, euronews:
“This vote is an illustration of the divisions of Europe.”
François Hollande:
“Nevertheless there is a high number of countries that has done what we have done.”
Sophie Desjardin, euronews:
“But it still illustrates the impossibility of launching any kind of European diplomacy…”
François Hollande:
“No, no it doesn’t have different voices. I think it’s simply that each country, at a different time, is not ready to carry forward European economic and foreign policy. Let’s stress that I’m very much in favour of a great Europe, a Europe of 28 countries or more. Nevertheless I believe we also have to build and develop what we call an after-war Europe, a Europe that moves ahead with a certain amount of European economic projects, and a certain amount of political projects, and the time will come when, within this enlarged Europe, we will have to have a more audacious, a more daring Europe, which pools its resources. And it’s within the eurozone, first and foremost, that this must come about.”
Sophie Desjardin, euronews:
We are reaching the end of our programme. If you will allow me, I will ask you one last question.
What keeps you awake at night?
Francois Hollande:
“There are so many issues that can potentially keep us awake at night, we can’t pick out one subject in particular. You’ve talked about Gaza, you’ve talked about Syria, Europe, the demonstrations – what we call the popular protests, the young people. However, what is the role of the political head of state? Our role is to take action, our role is not simply to sit back and make observations and to speak of our emotions, in the face of circumstances, no, our role is to be able to say, in the end of our term in office, we will have done everything in our power to solve the problems.”
Sophie Desjardin, euronews:
“Mr Prime Minister?”
Mario Monti:
“Two comments: I’m prime minister, I’m not a head of state, so maybe that’s why I sleep very well at night, because when I have the feeling and the conscience that I’ve done everything that I can do, even in very difficult conditions, it’s very easy to fall asleep.”
Sophie Desjardin, Claudio Rosmino, euronews:
“President Hollande, Prime Minister Monti, thank you for joining us here on The Global Conversation on euronews.”