Visit to Italy

(…)

THE PRESIDENT – We see eye to eye on the major questions to do with the Euro Area, the European enterprise, Europe’s future and also the main international issues of concern today. We have the same concern, that of stable growth. We have the same determination to get Europe moving forward on a path which I call mutually-supportive integration, but we also have relations between our two countries which require us to meet up, and this will be the case in Lyon at the beginning of December. It’ll be the 30th Franco-Italian bilateral summit. The first took place between François Mitterrand and Giovanni Spadolini, so there’s continuity and, at the same time, situations have changed, the key personalities are no longer the same but the friendship has remained.

EURO AREA/GREECE/SPAIN

We also talked about the Euro Area situation and we finally have three phases: we’re in the first, which is to ensure that the conclusions of the 28 and 29 June European Council are implemented. We were working together on this and got a guideline to resolve the Euro Area issues for the growth side of things as much as for stability, which now has to be fully applied and implemented. That’s the first phase.

The second phase we must now get through is to manage to settle the Greece issue, still unresolved for months and which, following the Troika report, will allow the 18 and 19 October European Council to pursue – at any rate, this is what I’m very much hoping once the Greeks have proven their policy’s credibility – the plan as was envisaged to keep Greece in the Euro Area.

We’ll also – still in this second phase – have to settle the Spain issue, now that Spain has called for the recapitalization of her banks and may want to sign up to this or that programme. It’s at the European Council that we’ve got to find the solutions – and we’re on the way to coming up with them for Greece and Spain – and so move to the third phase, which will take place at the end of the year, that of banking union and the deepening of European Economic and Monetary Union. The Europeans have to know that we’re committed to this process and are settling the issues posed to us only a few months ago: the growth pact, stability, the intervention mechanisms which allow us to support states which, [despite being] well managed, can have interest rates deemed excessive, find definitive solutions for Greece, respond to requests – from Spain in particular – and move to deepening and the essential banking union if we want to establish supervision and support.

That’s the purpose of what we’re doing and it’s why I’m very committed to these phases being clearly set out and passed by the future European Councils once the 29 June European Council conclusions are fully implemented. It’s true – and I heard again what the Italian Prime Minister was saying – it’s true there are interest rates on sovereign debt that are too high in a number of countries, at the very time that all the conditions exist to demonstrate the quality of the plans that have been carried out and are being implemented in the countries considered, particularly Italy. So the role of everyone called upon to intervene in the Euro Area is to contribute to this – particularly the European Central Bank: it’s going to take decisions once again, in line with what its president has said, and I don’t want to comment any further here.

SYRIA

We also discussed – and I thank Prime Minister Monti for it – a number of international situations, starting with Syria. We know what’s happening there: massacres, a regime or – to be more precise – a clan that’s motivated only by its own future, i.e. safeguarding its interests, at the very time it knows that it’s doomed. So we must support the political transition. That’s why I’ve expressed the keen desire for an alternative government to be formed.

At the same time, at the United Nations Security Council, Minister of Foreign Affairs Laurent Fabius has enabled people to realize what’s happening there and that humanitarian aid must be provided, and there too we must mobilize all support.

We must also be very mindful that, insofar as there are refugees, areas can be made available and protection and the necessary support provided, as soon as we’re asked to. (…)

EUROPE/GROWTH/UNEMPLOYMENT

On the Euro Area – its deepening, its consolidation, its integrity – we have a common position. Fortunately the two of us are not alone in that shared position, and indeed, in all the meetings we’ve had with Chancellor Angela Merkel in recent weeks, Mario Monti and I have been very much in agreement with her about resolving, at the forthcoming European Council meetings, the problems which all Europeans share, because we must provide responses for the Euro Area once and for all.

If we want growth to return, we’ve taken measures to this end; if we want to inspire confidence, then we need there to be no doubt about the Euro Area. I think that between now and the European Council meeting in October, as you know, there are a number of key dates: the [ruling on the European Stability Mechanism by the German Federal Constitutional] Court in Karlsruhe; finding out what Spain’s request will be, if it comes; the Troika’s report on Greece; all these factors will enable us to act, after a Eurogroup meeting, at the European Council meeting of 18 and 19 October. These are the steps; they’ll all entail responsibilities for Europeans, but I think we’ve prepared for them well. (…)

Q. – The unemployment rate is very worrying. What do you both envisage doing to reverse the trend and put words we’ve heard repeatedly, words about growth, into concrete form? (…)

THE PRESIDENT – Europe is characterized by an unemployment rate which is high, too high, intolerable, and in the majority of countries exceeds 10% of the active population – if not more, as in Spain – so there’s a responsibility. And because the Europeans have been conscious of it, there was this growth pact at the European Council at the end of June which both mobilized financing and marked a turning-point, a new direction. Our determination is to implement this growth pact as quickly as possible and for the funds that have been released – €120 billion – to be mobilized everywhere on projects that can be immediately useful for growth and employment.

There are also the structural growth policies in each of our countries; we’re conducting them in France. This will take the necessary time, but this is the course that’s been set. Next, if we want growth and therefore to fight unemployment, we must ensure Europe is regarded as a stable area where confidence can return; it’s been lost for a while. And in order for confidence to be there, we need genuine budgetary discipline: Italy has demonstrated it, France is going to make a further demonstration of it with the budget we’re going to present at the end of the month, because genuine budgetary discipline enables us to reduce debt and provide credibility.

Let me remind you that France can borrow in the short term for her debt at rates close to zero. Only yesterday, funds were raised with negative interest rates in the short term. We’re conscious of this privilege, which unfortunately isn’t shared by all, but if we want to retain this ability to borrow at low rates, we must show genuine discipline and inspire confidence.

Next, if we want growth for employment, we must have competitive economies. Competitiveness doesn’t mean austerity, it means the ability we can give our companies to face up to the big markets under conditions enabling them to win the competition through innovation, research, the products’ quality, controlling costs; all this must be undertaken for growth.

But it’s true, we can’t wait: there’s an emergency – three million unemployed people in France, 14 consecutive months of rising unemployment. (…) And that’s why, with regard to France, I’ve asked the government to act quickly, particularly for young people, through these future jobs, the contrat de génération [job creation scheme] – in short, what I set out during the campaign, because I was fortunate enough to conduct a campaign and then be elected. But it’s true that everyone must do what they think is most useful to their country, but we’ll only get through this together. That’s the lesson too: Europe must show it can be an area of growth, competitiveness, stability and confidence and therefore jobs. That’s the challenge we share. (…)./.