:00:08. > :00:15.its independence in 20th August 14. Now if it is time for HARDtalk. --
:00:15. > :00:18.20th August 14. HARDtalk is in Brussels to talk to the men with
:00:18. > :00:27.the unenviable job of finding the way out of Europe's financial
:00:27. > :00:31.crisis. He is the commissioner of the euro. It is over two weeks
:00:31. > :00:36.since the Greek crisis blew up. Seven heads of eurozone governments
:00:36. > :00:43.had been replaced. They have been 15 different European sub mats and
:00:43. > :00:46.a number of department plans -- summits. Greece is still on the
:00:46. > :00:50.edge of defaulting. Angela Merkel said that next year will
:00:50. > :01:00.undoubtedly be harder than the last. What is the way out of Europe's
:01:00. > :01:29.
:01:29. > :01:38.crisis? We have a lot of challenges ahead of us. We were warned in
:01:38. > :01:44.November of a risk of recession unless much is done in the member
:01:44. > :01:48.states. There needs to be structural reforms and enforcing
:01:48. > :01:57.the financial firewalls. That is ongoing in several member states in
:01:57. > :02:05.Europe. New governments have taken substantial action to reduce the
:02:06. > :02:12.financial risks. They are also finalising their plans of firewalls
:02:12. > :02:18.to contain the problems. You warned at the end of last year that they
:02:18. > :02:26.were ten days to save the euro. fact, I said the next ten days
:02:26. > :02:36.would be the critical period. days to complete and conclude the
:02:36. > :02:37.
:02:37. > :02:42.crisis response of the EU? Correct, this crisis and level of
:02:42. > :02:47.persistence was necessary. We need a practical implementation of these.
:02:47. > :02:52.The European summit came up with, in December, was that enough?
:02:52. > :02:59.would not say that that was enough. It was a significant step in the
:02:59. > :03:04.right direction. Now, we have to complete the vote in order to
:03:04. > :03:11.reinforce the discipline of Europe. That is why there is a new treaty
:03:11. > :03:16.on fiscal conduct. We have to reinforce that financial backstop
:03:16. > :03:23.to contain the contagion in Europe. The member states have to take
:03:23. > :03:29.further action in order to ensure fiscal improvement and financial
:03:30. > :03:35.reforms. 26 members signed up for something Britain used its veto.
:03:35. > :03:45.Did the vetoed damaged the chance of saving the euro? Of course, I
:03:45. > :03:50.regret the British Road veto. I do not think it was constructive in
:03:50. > :03:59.order to contain the crisis in the eurozone. On the other hand, let's
:03:59. > :04:09.not cry over spilt milk. It is more important to focus on the future.
:04:09. > :04:10.
:04:10. > :04:15.The UK have entered into talks to focus on the treaty on fiscal
:04:15. > :04:24.matters and meanwhile they would do everything that needs to be done
:04:24. > :04:31.concerning the market. At the time, you said that she regretted it. I
:04:31. > :04:35.wonder if it did damage the chances of saving the euro? It is important
:04:35. > :04:42.that Britain should be at the centre and not on the sidelines of
:04:42. > :04:52.Europe for the sake of Britain herself and for the sake of Europe.
:04:52. > :04:53.
:04:53. > :04:58.Certainly I hope that it can bridge that gap and the UK will be
:04:58. > :05:03.involved in the negotiations. say they are involved in the
:05:03. > :05:06.negotiations, how much difference has that made? The inter-
:05:06. > :05:16.governmental in agreement that will be reached, will that be faulted
:05:16. > :05:17.
:05:17. > :05:23.into the existing treaty anyway? -- will that be faulted. The fiscal
:05:23. > :05:30.conduct of the inter-governmental agreement to which you refer to
:05:30. > :05:35.will ensure fiscal discipline in the eurozone. I believe and I know
:05:35. > :05:41.that the UK government is very strongly in favour of ensuring
:05:41. > :05:51.fiscal discipline and economic stability in Europe, because that
:05:51. > :05:51.
:05:51. > :05:59.is in the fundamental interests of Europe. It is logical to expect
:05:59. > :06:04.that they will be supportive of this to help get out of the crisis.
:06:04. > :06:09.Even France, which is at the heart of it and the presidential election
:06:09. > :06:19.coming up, we know that the opposition candidate is in the lead.
:06:19. > :06:19.
:06:19. > :06:23.He says that he will no renegotiate if he gets into power. I believe
:06:23. > :06:31.that I trust that in the coming weeks that we can make some
:06:31. > :06:37.progress in order to conclude the new treaty. Most of the content of
:06:37. > :06:41.the new treaty, in fact, can be implemented for secondary
:06:41. > :06:49.legislation under the current treaty framework. That is what we
:06:49. > :06:54.have been doing in the Six Pack, the six pieces of legislation to
:06:54. > :07:04.reinforce economic governance in the European union. We are working
:07:04. > :07:08.at delivering it very sown. This legislation is applied to several
:07:08. > :07:14.countries who have already taken effective action in order to reduce
:07:14. > :07:24.their fiscal debt. They have been all sorts of things as to which
:07:24. > :07:24.
:07:24. > :07:29.agreed at the summit. Some very notable, very serious commentators
:07:29. > :07:37.have questioned the value of what you have achieved. They said that
:07:37. > :07:45.you have agreed many things and by the time you took it there was not
:07:45. > :07:51.enough time to manage the crisis? They appreciate his experience and
:07:51. > :07:58.insight but I believe that we have a chance to overcome the debt
:07:58. > :08:08.crisis still. We require very urgent assistance and we come back
:08:08. > :08:10.
:08:10. > :08:19.to the issue of how to ensure fiscal improvement. That's why it
:08:19. > :08:25.is important. We need action to boost economic growth and job
:08:25. > :08:31.creation, that is what the new governments of Mario Monti in Italy
:08:31. > :08:35.and the government in Spain are doing. Other countries are doing
:08:35. > :08:42.the same thing. We should not underestimate the concrete action
:08:42. > :08:47.that is going on in several parts of the. That goes to the heart of
:08:47. > :08:52.what people have criticised. There is too much focus on austerity.
:08:52. > :08:57.There are no plans to fix the floors of the, apart from fiscal
:08:57. > :09:07.austerity, there is no plan for growth? In fact, that is not
:09:07. > :09:15.correct. There are a contract -- there are concrete plans for growth,
:09:15. > :09:23.steps to implement single market's and the effective implementation of
:09:23. > :09:30.the services and the directive. Yes, the member states need to take
:09:30. > :09:36.action in a connected way. They should boost economic growth by
:09:36. > :09:43.different measures to release the growth potential in the member
:09:44. > :09:48.states. It is to wobble but it will take some time. It is not
:09:48. > :09:52.necessarily the beginning of the end. This is the end of the
:09:53. > :10:00.beginning. We are on the right track. By you on the right track?
:10:00. > :10:05.The critics say that you have this problem which is, Germany has these
:10:05. > :10:11.massive current account surplus, bigger than China, it is such a
:10:11. > :10:16.good exporter, so competitive. You are trying to keep it in this union
:10:16. > :10:21.with the likes of Greece and Spain and they are unable to compete.
:10:21. > :10:29.However much you can set-up which you already have set up is not a
:10:29. > :10:34.problem that is being addressed. fact, this has been addressed. This
:10:34. > :10:39.was addressed as part of the new economic governance that we need to
:10:39. > :10:49.address macro-economic imbalances inside the eurozone. This means
:10:49. > :10:51.
:10:51. > :10:57.that both countries who suffer from account deficits, and loss of
:10:57. > :11:03.competitiveness, like Greece, or Portugal, or to an extent Spain or
:11:03. > :11:09.Italy. It also means that we have to address the issue of current-
:11:09. > :11:18.account surpluses. How are you proposing to address that? There
:11:18. > :11:24.are basic means to enhance the demand within the country's with
:11:24. > :11:29.current account surpluses. I do not believe that that kind will go
:11:29. > :11:35.across the board for recommendations. Rate increases or
:11:35. > :11:45.fiscal stimulus in Germany would solve Europe's problems. Germany
:11:45. > :11:49.
:11:49. > :11:53.also has public 80 debt of 82%. We have to be careful that we are not
:11:53. > :12:02.making such kinds of recommendations that would create
:12:02. > :12:07.another problem. So there is no solution to back? In the context of
:12:07. > :12:13.the fiscal consolidation and the high public debt we cannot assume
:12:13. > :12:19.that we can solve the problems of Europe by fiscal stimulus. No
:12:19. > :12:24.amount of fiscal stimulus will solve Europe's economic problems.
:12:24. > :12:30.Unless we solve the crisis of confidence. This is, in the first
:12:30. > :12:36.place, a crisis of confidence. It is a crisis of trust and the way to
:12:36. > :12:46.solve it is, in the first place, to resolve the severely intertwined
:12:46. > :12:48.
:12:48. > :12:55.sovereign debt crisis has been banned in the bank sector as well.
:12:55. > :13:01.Such measures will boost sustainable growth in the member
:13:01. > :13:05.states. Let's look at another issue. What was devised at the summit in
:13:05. > :13:10.December was a situation where there were a lot of stricter rules
:13:10. > :13:16.brought in. That could mean that the commission, the unelected
:13:16. > :13:22.bureaucrats, could be in a situation making a judgement on a
:13:22. > :13:28.country that does not have a good enough budget. They could impose
:13:28. > :13:38.sanctions on an elected government. They could be difficult for the
:13:38. > :13:41.
:13:41. > :13:50.I have to correct at least one of the points. The commission
:13:50. > :13:54.president is elected in the European Parliament. Its
:13:55. > :14:03.commissioner candidate is appointed by the governments. Do the people
:14:03. > :14:13.of Europe you're happy about that? They have decided on the political
:14:13. > :14:13.
:14:13. > :14:20.governance of the European Union. It has been ratified. I agree that
:14:20. > :14:30.we have to insure that we are governed not only effectively, but
:14:30. > :14:33.
:14:33. > :14:43.fairly. We are reinforcing our capacity to assess the member
:14:43. > :14:50.
:14:50. > :14:58.state's economic voices and the assumption and rules imply that we
:14:58. > :15:04.can assess their peaceful economic policies. You will want to better.
:15:04. > :15:10.-- monitor. Also, introduce sanctions. Looking at a country
:15:10. > :15:20.that has breached its issues, Greece. It has not had its bailout.
:15:20. > :15:20.
:15:20. > :15:30.What if it? -- will it get it? are reaching the final stage
:15:30. > :15:36.
:15:36. > :15:46.trickery. -- shortly. When will that be? What sort of time friend?
:15:46. > :15:53.In the coming weeks. Are we talking more than 50% of the debt? I will
:15:54. > :16:03.not go to any number. It is based on the agreement of October. That
:16:03. > :16:08.was 50%. It depends how you define it. It will be based on the October
:16:08. > :16:16.agreement. You are confident a deal will be reached with the private
:16:17. > :16:26.sector and a bailout will follow? Subsequently the second programme
:16:27. > :16:32.
:16:32. > :16:39.will be renegotiated by the EU and the IMF. In the coming weeks we can
:16:39. > :16:49.work out a new programme for Greece. Should Greece be in the row? --
:16:49. > :16:58.Euro. Greece did not reveal the truth of its fiscal situation.
:16:58. > :17:08.what should not? It is in member of the euro and it will be a member of
:17:08. > :17:09.
:17:09. > :17:15.Europe. Should it be? That was my response. This goes to the question
:17:15. > :17:19.of trust. At the heart of this whole problem is one of confidence.
:17:19. > :17:29.People need confidence. Politicians are saying things that they do not
:17:29. > :17:47.
:17:47. > :17:57.believe. I mean what I say. Under the Roser. That did to this up to.
:17:57. > :18:00.
:18:00. > :18:09.This was based on information. That was ten years ago. Now the Greek
:18:09. > :18:19.authorities have a reformed politics. They have stated that the
:18:19. > :18:24.statistical data... It is something to be trusted. Moving on to another
:18:24. > :18:33.issue. We have these tensions as a result of different country's views
:18:33. > :18:43.on how to resolve the problem. We have been asking about safeguards.
:18:43. > :18:44.
:18:44. > :18:52.Britain is discussing a financial transaction tax. any financial
:18:52. > :18:58.transaction would be taxed. Will it happen across Europe?
:18:58. > :19:07.discussion is now going on on this proposal for all the member states,
:19:07. > :19:14.including the United Kingdom. The citizens of Europe have had to
:19:14. > :19:19.carry heavy burden for the financial crisis. The financial
:19:19. > :19:26.sector was at least partly to blame. It is only right that the financial
:19:26. > :19:32.sector carries its part of the burden. In terms of the way it
:19:32. > :19:42.works, if there are two institutions conducting a trader in
:19:42. > :19:46.euros, will there be subjected to the tax? It depends on the
:19:46. > :19:55.technical details among the member states. We are discussing the
:19:55. > :20:00.principles. It is not for granted. That is the way it would work. The
:20:00. > :20:10.fear amongst those in Europe is you could have a London doing well out
:20:10. > :20:11.
:20:11. > :20:17.of it. In that sense the cover of a famous financial magazine last week
:20:17. > :20:27.was not misleading. It gave the impression that cities... That is
:20:27. > :20:31.
:20:31. > :20:40.not the case. It would affect them at? A financial transaction tax
:20:40. > :20:47.could be adopted in the European Union. The discussions are ongoing.
:20:47. > :20:51.We should wait and see how the discussions go. You met George
:20:51. > :21:01.Osborne this week. What did you say to him about the financial
:21:01. > :21:10.transaction tax? The proposal is a public proposal. Our proposal is
:21:10. > :21:15.that it would cover... I wonder what a conversation with him was
:21:15. > :21:21.about. We always have a constructive conversations.
:21:21. > :21:24.told him he was wrong on the tax. He believes that it is not the
:21:24. > :21:34.banks and financial institutions that would be affected, it is the
:21:34. > :21:36.
:21:36. > :21:44.pensions. From my point of view on the basis of the proposal, the
:21:44. > :21:52.banking sector has to share the part of the burden. The way to do
:21:52. > :22:02.that is with this tax. Can we turn to Hungary. Hungary is in danger of
:22:02. > :22:05.
:22:05. > :22:09.going bankrupt. It wants more money. Yet you stopped negotiations with
:22:09. > :22:19.the government, partially because of what is going on. Should they be
:22:19. > :22:21.
:22:21. > :22:30.given another bailout? Hungary has recently taken some decisions that
:22:30. > :22:39.seemed to be not in mind with its European law. We are currently
:22:39. > :22:47.assessing the content and impact of decisions related to media freedom,
:22:47. > :22:57.central bank independence and in the field of economic Affairs. We
:22:57. > :23:02.
:23:02. > :23:12.have major concerns on the war on central bank independence. It is
:23:12. > :23:15.one of the preconditions of a new rescue package. There have been
:23:15. > :23:22.various comments of Hungary that they will change what every is
:23:22. > :23:32.necessary to get that money. Will they? We will wait and see. We have
:23:32. > :23:38.regular contact with the Hungarian authorities. Probably towards the