President of the Government. Ladies and gentlemen, a very good afternoon to you all. Many thanks for attending this press conference.
Mr. President of the French Republic, my friend Nicolas Sarkozy, thank you very much for being with us here today.
As you are all aware, I took responsibility for leading this Government on 21 December last year and this is the first visit to Spain by a top foreign leader since I took on this responsibility.
I should say that it is an honour for me that the President of the French Republic is here with us today, for both personal and political reasons. We know each other already because we coincided for a short while when he was Home Affairs Minister of the Government of the French Republic and I was Spanish Minister for Home Affairs back in 2002. Our collaboration began back then and has continued for many years over the course of successive Governments in Spain.
I would also like to say that it is an honour for me for the President of the French Republic to be here, the leader of our neighbours, with whom we have a magnificent rapport and excellent bilateral relations, with whom we expect to do many things together in the future.
Our two countries, as you are all aware, are both profoundly pro-European, and we are both very concerned about the situation that Europe is going through at the moment, and we agree on something that you have probably heard me say on other occasions - on the need to act soon, to act swiftly, expeditiously, tackling problems, taking decisions and resolving these problems.
We are not here today to waste time, not Spain, not Europe and I would suggest not any other Member State of the European Union.
We agree that it is necessary to continue with the process of fiscal consolidation and hence work towards reducing the public deficit in the various countries comprising the European Union. Spain has already taken major decisions over the last month. As you are all aware, we have taken decisions that affect the public deficit, for a sum of 15 billion euros, and we are seeking, as we have announced on many occasions, to present a General State Budget later this quarter with one major objective, that of continuing in the process of reducing the public deficit.
But, we also agree that it is not enough to simply reduce the public deficit and hence work towards budgetary stability, but rather that it is necessary to propose reforms for the economic growth of our countries.
During this quarter we will present - hopefully, and I would once again call upon the social stakeholders, with the agreement of all parties - a labour reform, because we believe that it is essential for economic growth and the creation of jobs.
We will also shortly present a plan to restructure our financial system; a plan that will be synonymous with transparency and synonymous with assets valued at their real value; a plan that will require new mergers in our financial system and whose principal objective is to provide credit in Spain, particularly for small- and medium-sized enterprises, and for families.
Furthermore, I would like to say that this quarter we will also implement a reform of the public sector which will affect the autonomous regions - because we will agree this with them at the Fiscal and Financial Policy Council - and, of course, the Spanish Government, to reduce the number of public bodies, public companies and public foundations.
And hence, reducing the deficit is something on which we agree; we also agree that structural reforms need to be made so that our countries can grow while at the same time creating jobs. And I would also like to say that at these times we also need liquidity and fiscal consolidation, a controlled public deficit and structural reforms to achieve greater growth that should be accompanied by the necessary liquidity, without which the major efforts being made and which, I repeat, we will continue making in the future, will lose much of their effect, as I believe a great many people in this country agree upon.
I would also like to say, and I mentioned this to President Sarkozy, that I politically support the tax on financial transactions. It is true that there are certain details that need studying, above all that this is not passed on to consumers. But Spain, of course, supports the tax on financial transactions - this is a matter which, as you are aware, has already been debated in the European Parliament and a Community Directive exists - which is something that was proposed a long time ago and which Mr. Sarkozy has fought hard for.
At the same time, we both share the view that Spain should maintain a post, as corresponds thereto due to its Gross Domestic Product and its situation in Europe, on the Executive Committee of the European Central Bank at such time as the term of office of the current director representing Spain, Mr. González-Páramo, terminates or he resigns or is dismissed from office.
We have also spoken about the need - which I, of course, fully agree on - for Spain to play a greater role in the European Union. I said to President Sarkozy that Spain will take part, that Spain is going to play a role in the European Union that corresponds to its Gross Domestic Product and that corresponds to what our country is, and that we will make our opinions known, proposing and helping to build this huge common project that is known as Europe.
Hence, my commitment is to have the position that corresponds to Spain; my commitment is to help, to take part and to try to create more expeditious institutions that respond swiftly to the problems faced by our citizens.
Finally I thanked the President of the French Republic for the support that his country has always given us in the fight against the terrorist organisation ETA. Not many hours ago, as you are well aware, there have been further arrests of members of this terrorist organisation in France and I would like to say something with absolute clarity.
You are aware that in the past I asserted, and I would re-assert it now, that I was all in favour of a definitive ceasefire. All of that seems well and good to me but the Rule of Law has not been suspended in France or in Spain and hence, all the while that ETA exists it is still a terrorist organisation and its members are members of a terrorist organisation, members which, moreover, were armed and up until recently in possession of explosives and small arms.
Hence, the Rule of Law is not suspended and will not be suspended. And ETA needs to take a definitive step, which is what Spanish society as a whole demands and what is demanded by all that is decent and moral: respect for citizens' rights and the announcement of its dissolution as a criminal gang.
Finally, and although I have done this in private, I would like to say that all of us here in Spain are very proud and very pleased with the event that took place at the Royal Palace this morning, where the President of the French Republic was awarded the Golden Fleece by His Majesty the King in recognition of his friendship to Spain, to his great work and help in the fight against terrorism, and his efforts at improving bilateral relations and his status as one of the most important governors and political leaders on the planet. For us it has been a pleasure and we are all… All of the former Presidents of the Government of Spain were there, together with the son of Adolfo Suárez, as well as representatives of all the State institutions.
Thank you very much. And now over to you, Mr. President of the Republic.
Mr. Sarkozy. Thank you, Mr. President of the Government.
I wanted to say, for my part, that I am very pleased to be here again in Spain, in this great country, a dear friend to France, and to meet with the President of the Government, Mr. Rajoy, who I met for the first time in Rome at the first meeting of Home Affairs Ministers in my time in that post. We are used to working together.
The decisions that he has just announced and that Mr. Rajoy's Government is going to take are brave decisions. France wishes to continue working with Spain and, at a personal level, with the trust that exists between us, I would like to do this good work together at the service of building up Europe. Europe needs Spain.
We are facing an unprecedented crisis, that obliges us to reduce our costs, to reduce our deficit and to find the way back to growth whilst solving the problems of Europe's competitiveness. That is all the work we are carrying out and Mariano Rajoy will contribute his work.
I would like to say to you that France wholeheartedly supports the presence of a Spanish representative on the Executive Committee of the European Central Bank. And I would like to add that there is great harmony between us regarding our perspectives. The support from Mariano Rajoy for the idea of a tax on financial transactions is important and we have spoken about a whole range of major economic and political matters on which we both agree.
I would also like to say to the Spanish people that France will obviously remain at Spain's side in the fight against terrorism. The recent arrests in France are incredibly important for us, because I would like to remind you that one person died, another was murdered and that we have evidence that leads us to believe that, in one way or another, those who have been arrested must be brought to justice.
I would like to express what an honour it is for France to be awarded the Golden Fleece. It is a sign of congratulation. And how much I admire this Spanish democracy that has managed to bring together all the former Presidents of the Government (Felipe González, José María Aznar, José Luís Rodríguez Zapatero and Mariano Rajoy), without any of the feeling that their political identity is under attack. It is the same maturity of Spanish democracy that has allowed Mariano Rajoy, who is now the President of the Partido Popular (PP), to vote together with the Socialist Government of Mr. Rodríguez Zapatero to adopt the Golden Rule. This is evidence of maturity.
When you are in the opposition and you know what is in your country's best interests, a gesture towards the Government of your country can be very important, and from this point of view, we should all be inspired by Spanish democracy.
It has been a great honour for me to be at the Royal Palace, next to the Sovereign, and in the presence of all those who have formed a part of democratic life in Spain over the last forty years.
Q. Mr. President, do you think that France losing its Triple A rating is a disaster? Will this difference compared with Germany reduce France's influence in Europe and, at the same time, make the European Stability Fund more expensive?
In light of this, why will you postpone the three-party summit in Rome on Friday?
Mr. Sarkozy. Perhaps you don't have the latest information available. Why don't you ask another question with the latest information?
Q. The question is aimed at knowing whether you feel that the loss of the Triple A rating is a disaster and whether you think that this difference with Germany is of the nature…
Mr. Sarkozy. I repeat that you do not have the latest information at hand. If you ask me a question with the latest information I will answer it. If you ask me about something that happened last Friday, that relates to last Friday.
Q. So, Moody's, … What do you think?
Mr. Sarkozy. No, ask me a question. When you put it like that, the word 'Moody's' doesn't say much.
Q. Do you feel that Moody's, after what happened with Standard & Poor's, is dangling a kind of Damocles sword over French economic policy?
Mr. Sarkozy. I'm sorry, I don't understand the question. If someone can ask me a question that I can understand, I will happily answer. I don't understand your question.
Q. My congratulations on the Golden Fleece, Mr. President.
Mr. Sarkozy. Thank you very much, Madam.
Q. I also wanted to ask you about the reduction in sovereign debt of certain European countries by some of the ratings agencies, among them France and Spain. Today we have been made aware that another agency has stated that France is operating wonderfully economically, but I wanted to ask if this reduction in the sovereign debt of certain countries may imply or result in adjustment measures, specifically in Spain, Mr. Rajoy, in our country and hence a form of relaxing of compliance with the public deficit objective.
Mr. Sarkozy. Now that I understand the question, and with Mr. Rajoy's permission, I will try to answer it. It's so much easier when one understands the question.
In the first place, Madam, in France, and I imagine that in Spain as well, it is not the ratings agencies which must define the economic policies of respective countries. On Friday, one agency stripped us of the Triple A rating while on Monday another agency ratified the maintenance of said Triple A rating. Two agencies out of three.
You need to react to these decisions with sang-froid by taking a step back.
As regards the root causes, my conviction is that this won't change anything. We need to reduce our deficit, we need to reduce expenditure and we need to improve the competitiveness of our economies to get back on to the path of growth. That is what needs to be done.
Very justifiably you will allow me to highlight the lack of sang-froid of all those who were so worked up and agitated on Friday, and then so quiet on Monday, according to what one agency or another says.
The economic policy of a country is not defined in short bursts. I have no intention of taking into account what one or another says; I must rather take into account the real economy. Too much deficit, too much expenditure, not enough growth; that is the problem of the Eurozone as a whole.
I would like to add, to say something about Spain, that if Spain doesn't manage to come out of this, we will all be affected; if Italy doesn't manage to come out of this, we will also all be affected.
The overlap, Madam, between the French economy and the Spanish economy or the Italian economy ensures our solidarity with one another. But you asked me about Germany: the French and German economies overlap so much that any problem in France would be a problem in Germany.
We are interested in the Government of Mr. Monti being successful, in the same way as we are interested in the success of President Rajoy, because our economies are intertwined and because this is all one continent. Hence I would call on each of us to show restraint and sang-froid. It is not necessary to jump up and down or become agitated because such and such an agency makes such and such a comment. These aspects are interesting and should be taken into account, but it is not advisable to overreact.
As regards Italy, I will talk by phone with Mr. Monti this afternoon. If Mr. Monti, Mrs. Merkel and I have decided to postpone the meeting that we had planned until February, it is for a very simple reason: Mrs. Merkel received Mr. Monti and I also received Mr. Monti, and so hence it was not necessary that only ten days later we should hold a meeting that would be seen as a summit, at the same time as we are criticised for holding summits and we already have an event planned with Mariano Rajoy and the other Heads of State and Government on 30 January in Brussels.
There is solidarity and a common path to follow: lower expenditure, less deficit, more growth and more competitiveness. Regardless of what the agencies say, our paths won't be altered. Furthermore, if we look at the spreads today, as the Prime Minister said very well on Sunday in an interview, the situation is stable.
President of the Government. The truth is that my response to your question is very similar to that of the President of the French Republic.
We are watchful, as you can imagine, of everything that is going on. We take heed of what is said and done in the world. We were very pleased with the bond auction last Thursday; we weren't so pleased with Standard & Poor's decision last Friday, as can be easily understood; today we have seen that there have been no major changes in the differentials, but I believe that, in the end, the most important thing is that, on the one hand, Europe acts, that it acts quickly, decisively and realistically; and on the other hand, that each one lays out his own path forward in his or her country.
The Government that I preside over has already mapped out its own path, including reducing the public deficit and implementing structural reforms that will lead to growth. I spoke to you earlier about the labour reform, restructuring the financial system and our public sector, and that is what we are going to do. Our ideas are clear: we will defend general interests, that is what we have been thinking about, defending and saying for a long time now; and everything else undoubtedly affects us and we will place close attention to it.
Some pieces of news are good and others are not so good, but in the end, if the Member States of the EU carry out our duty and do things well, and the EU as a whole, in other words the European Council does things quickly, expeditiously, realistically and with common sense, then we will overcome this crisis in the not too distant future.
Q. Mr. President of the Government, Spain has just come out of elections, France is just going into them; many people have observed your campaign and have highlighted that you did not go into much detail before the elections about what measures you would take after them. Has the crisis obliged politicians not to make promises? In other words, is that the only way to win elections in these troubled times?
President Sarkozy, will you be asking from the French people the same as Mr. Rajoy asked from the Spanish people? How do you respond to those who consider that you are taking too many political risks at the start of an election year?
President of the Government. What you are saying is that the most effective way to win elections is not to say anything; that is what you are saying in short. I have to say that I have shown that there is a different way to win elections, which is saying what you think and what you are going to do.
I have spent years, not just one election campaign, defending in Parliament, even when this country had, because at one point it did have, a budgetary surplus - I'm not talking about a deficit but a surplus - that we should moderate public spending. Hence, this was one of the Partido Popular's commitments, one of the wars that we waged for years, even in periods of growth, of high growth, and when jobs were being created, and the whole world knew that the Partido Popular was going to reduce the deficit and that the Partido Popular was going to meet commitments it assumed before its European partners; firstly, to comply with its commitments but, above all, because we firmly believe in that.
There is no Spaniard that does not believe that the Partido Popular has the reduction of the public deficit and containing public debt as its main priority.
I believe that we also made a clear commitment to structural reforms and that we explained that. In Spain, there have been two labour reforms over the last few years. We didn't oppose either of them, we abstained from voting on them both and for that reason they were approved. But we declared that they did not go far enough and that, if we wanted to create jobs, one of the things that we had to do was implement a labour reform that was effective.
We submitted to Parliament 71 amendments to the Draft Law presented by the Socialist Party but not a single amendment was accepted. Those 71 amendments constitute a significant part of what we want to do in Spain in the future, and I will say this now, I refer to the near future. This will be done soon.
I have asked the main trade unions, both in private and in public, as well as the business organisations, to make an effort, because this is not a problem of the Partido Popular, nor of five governmental ministers; no, this is a problem of the nation, and at difficult time, although it is the Government that has the greatest responsibility, we all need to pull in the same direction, which is that of job creation, economic growth and well-being. And I repeat that.
And I also told the Spanish people that we were going to restructure the financial system, I have said this time and time again, and we greatly support the measures taken by the previous Government, but we don't think they went far enough. They took some steps in the right direction and we supported that, but I believe there is still much to do.
And hence, I don't believe that anybody should be surprised if I say now that I am opposed to the public deficit, that I want us to meet our commitments and that I want structural reforms. Sometimes someone in opposition is asked to specify whether they will reduce item 1715, Section C by one euro or by five. Well that is impossible. But I don't believe that anyone is surprised by the general objectives of my Government.
Mr. Sarkozy. I would like to remind you that Mariano Rajoy was not only pleased to tell you about what he was going to do. When he took the decision to vote for the Golden Rule proposed by the Government of Mr. Rodríguez Zapatero, this was a risky decision.
Furthermore it wasn't exactly popular but it was in the general interest of Spain. How can you criticise someone of disguising his election manifesto who, whilst in opposition, was brave enough to vote in favour of an unpopular measure just a few weeks before the elections.
Let's go back to the French situation now. Did any opposition political party support us in the pension reform? Was any Member of Parliament in the opposition brave enough to say that he was going to vote in favour of the Golden Rule? No leader of the opposition in France did what Mariano Rajoy did while in the opposition in Spain.
The crisis that Europe is going through is an extremely serious crisis. We are going to have to take decisions and we have taken decisions that were essential to reducing the deficit. I would like to remind you that as regards the 2011 deficit, France will end up doing more than it had originally committed to; substantially more.
Our work now needs to focus on growth and competitiveness. We cannot resolve France and Europe's problems by simply reducing expenditure.
The day after tomorrow there will be a summit with the social stakeholders about the crisis. And before the end of the month, with the Prime Minister and the Government, we will announce some very important decisions to support growth, to improve our competitiveness and to provide a response to all those who are on the dole. Do you believe that anyone on the dole can allow themselves to think, imagine or say that "the President and the Government will not be taking any decisions because there are elections coming up in about four months"? Four months lost! Risks need to be taken.
And I am very aware, I admit this, of the problem of our friends in Spain, who have an unemployment rate of 22 to 23%, while ours is only 9%. But for those who are on the dole, do you believe that they have the time to wait until the election campaign comes around or that we need to act now? I believe that we need to act now and that is what we will do, calmly and with sang-froid.
That is the difference between those who talk and those who act, that's normal. Those who talk may be swayed by fanatics; those who act do not have this right. You can, when you are in opposition or when commentaries are made, say things that are forgotten the next morning. But when you are in Government, you do not have this luxury, because you are running a country and because there is much suffering in the country. This type of commentary cannot be permitted. That is the difference.
Q. I had a question for the President of the Spanish Government. He said that you are in favour of a tax on financial transactions, but I would like you to specify whether you are more in favour of Mr. Sarkozy's proposal, who seems disposed to establish it immediately, or would you prefer or commit more to the idea of Mrs. Merkel, who would first like a discussion and a consensus from European countries.
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President of the Government. I am in favour of the tax on financial transactions, as I said before. But I do not believe there are different points of view between Mr. Sarkozy, simply because he wishes to implement it now, and Mrs. Merkel, who in her own words, wishes for a prior discussion and consensus. I believe that what we all want is to discuss it, reach an agreement and implement it as soon as possible, because one of the things that we have been talking about today is that on many occasions decisions are slow in being taken and many more times, after having adopted them, they take even longer in coming into force.
Hence, I believe that this is a matter on which decisions can be taken. This has been much talked about for a long time now; there has already been a debate in the Spanish Parliament; another debate in the European Parliament; a draft Directive, and I believe that, as with so many other things, the quicker this is done the better.
Hence, I believe that the two positions can be reconciled perfectly.
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Mr. Sarkozy. Just a few words about the tax on financial transactions. I am aware on what Mrs. Merkel's position is and there is no disagreement between us. In the same way as Mariano Rajoy, I am convinced that the best thing is a tax on financial transactions imposed on the whole Eurozone, on the whole European Union, and even on the whole world. So you don't need to explain to me that a global tax is much better than a tax that only affects a few countries. But, if you will allow me, that is not the problem. If we have to wait for other countries to create a tax on financial transactions, what happens if they don't start? Do we wait for them? Won't it be implemented?
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My last point. I believe that there is no risk in telling the truth to the country that one is responsible to. People are lucid, intelligent and understand everything. If we never sought to hide anything from them, whatever they may think is, in general, worse than what their leaders hide from them. Hence I believe that the truth and courage, in times of crisis, is the least risky path.
President of the Government. Thank you.