:00:03. > :00:10.Helle Thorning-Schmidt. Is that dream of a united Europe from
:00:10. > :00:20.Scandinavia to the age Leigh-on-Sea well and truly over? -- the IAG in
:00:20. > :00:37.
:00:37. > :00:44.Prime Minister Helle Thorning- Schmidt, welcome to HARDtalk.
:00:44. > :00:49.you very much. Denmark's six months holding the European presidency has
:00:49. > :00:55.been dogged by the eurozone debt crisis. How disappointed are you
:00:55. > :00:59.that EU leaders have failed to find a common vision, a common strategy?
:00:59. > :01:05.Obviously I wouldn't put it like that. When you look at the E u
:01:05. > :01:09.during the last 10, 8, six months, what I see is a Europe that tried
:01:09. > :01:15.to stem the crisis. Tried to keep things together. Tried and failed,
:01:15. > :01:20.if I may say so? I wouldn't say so. There has been a lot of solidarity
:01:20. > :01:24.between the European countries. Even though we have had a very hard
:01:24. > :01:28.crisis to deal with, we have managed to take decisions at a
:01:28. > :01:33.European level. Nevertheless this is also what the Danish presidency
:01:33. > :01:37.is quite proud of. I do think there's been a big element of
:01:37. > :01:41.solidarity between the countries. And also a certain robustness. We
:01:41. > :01:45.have been able to take decisions even though it's been a very
:01:45. > :01:48.difficult situation. Interestingly you focus on the taking of
:01:48. > :01:53.decisions. It seems that what we have learned over the cost of this
:01:53. > :01:59.crisis is that it is impossible for the 27 member nations of the
:01:59. > :02:03.European Union to come together and take difficult decisions -- the
:02:03. > :02:09.course of. I wouldn't say that. I think in terms of the euro
:02:09. > :02:13.countries, I have a lot of respect for the euro countries' ability to
:02:13. > :02:17.take hard decisions. If we had looked at the EU just a year ago,
:02:17. > :02:27.he would have thought that we would have a lending mechanism for a
:02:27. > :02:30.country that was basically in a We would have a physical
:02:30. > :02:35.constitution, that we would have a lending package for the Spanish
:02:35. > :02:39.banks. With respect who would have thought that you would have five
:02:39. > :02:43.member states of the eurozone who have had to seek emergency
:02:43. > :02:47.financial bail-outs. Who would have thought that France and Germany
:02:47. > :02:51.right now would be at loggerheads over the next move in this crisis?
:02:51. > :02:57.I think that's true. You have to ask the question whether this is
:02:57. > :03:02.the failings of the European Union or the euro, or whether this is the
:03:02. > :03:09.failings of the member states that have not had... What would you say?
:03:09. > :03:16.We had a financial crisis which affected the world very hard. It
:03:16. > :03:21.hit us all very heart. Then we had a certain element of the economy
:03:21. > :03:26.not been in order -- very hard. The member states' economies were not
:03:27. > :03:31.in order and that is why we have the difficulties we have now. It is
:03:31. > :03:36.not the fault of the euro that they had problems in Greece. That is
:03:36. > :03:40.their own responsibility. I think when you ask half the eurozone
:03:40. > :03:46.countries, and the EU member states should have done something to stem
:03:46. > :03:50.the crisis and tried to exit that crisis, the answer is clearly yes.
:03:50. > :03:54.Talking about decision-making, I'm very aware that I'm talking to a
:03:54. > :03:57.Prime Minister of a country not inside the eurozone. Considering
:03:57. > :04:02.you have been holding the presidency for the last six months,
:04:02. > :04:08.it has been very difficult. It was widely reported that when he made
:04:08. > :04:13.an intervention in one of your early Riise re- reaching a fiscal
:04:13. > :04:19.compact, and you said it was very important that everybody was
:04:19. > :04:24.involved in the decision-making process, Nicolas Sarkozy said, "You
:04:24. > :04:33.are an out country, a small out country. And you don't want to hear
:04:33. > :04:36.from you." is that true? It is not quite true. I don't want to report
:04:36. > :04:41.from the meetings in the European Council, it's not right to do that.
:04:41. > :04:45.It is not true what you're quoting there. What did he say? I don't
:04:45. > :04:48.want to give reports on what we discussed in the European Council.
:04:48. > :04:52.These are discussions between European leaders and it should stay
:04:52. > :04:56.that way. The most important thing in that context is that there have
:04:56. > :05:02.been some very difficult decisions from the euro countries, but they
:05:02. > :05:07.have not excluded none euro countries from taking part in these
:05:07. > :05:12.decisions. Look at the fist the ball compact. The fiscal Compact is
:05:13. > :05:16.not something that is only for the 17 European member countries --
:05:16. > :05:21.euro member countries -- fiscal compact. This is why Denmark had
:05:22. > :05:26.decided to be part of the fiscal compact, and we have recently
:05:26. > :05:30.ratified the fiscal compact. have decided to go in that
:05:30. > :05:38.direction, would you agree that the direction of travel for the
:05:38. > :05:41.eurozone is Clear, it is going towards a massively increased,
:05:41. > :05:45.ambitious, fiscal union that is going to be the end product of all
:05:45. > :05:50.of the mess that we have seen in recent months and year. I think
:05:50. > :05:54.there's a very clear understanding that the euro has got certain
:05:54. > :05:59.shortcomings, and that we have to address these shortcomings. It's
:05:59. > :06:03.been very clear over the last year that we have these shortcomings.
:06:03. > :06:06.It's only natural that the countries in the eurozone are
:06:06. > :06:11.asking themselves how can we strengthen the euro, how can we
:06:11. > :06:14.avoid a situation from what we have been in two ever appear again.
:06:14. > :06:19.These are the kind of discussions we will have at the European
:06:19. > :06:22.Council at the end of this week. we're honest the most important
:06:23. > :06:28.country, the dominant country in these debates, is Germany.
:06:28. > :06:32.course. If we accept that, do you think it is time for Angela Merkel
:06:32. > :06:38.and the German government to once and for all say that they will
:06:38. > :06:42.accept a banking union, they will accept a neutralisation of debt.
:06:42. > :06:47.And in return they will get a fiscal union which will impose
:06:47. > :06:52.German-style discipline through a European finance ministry of sorts
:06:52. > :06:56.right across the eurozone. Is that a deal that will have to be done
:06:56. > :07:01.ultimately? There's no doubt there is a discussion going on in Germany
:07:01. > :07:04.like this and I have a lot of understanding for that. It wouldn't
:07:05. > :07:10.be fair in the long run to neutralise the debt without
:07:10. > :07:14.neutralising responsibility. This is very clear. I agree with that.
:07:14. > :07:20.We are not that far yet, though. You have to allow the discussions
:07:21. > :07:26.on these issues to mature. Do we have much time? How quickly is
:07:26. > :07:32.Germany going to have to accept the long run? This will take some time.
:07:32. > :07:37.First we have to address the clear, there are shortcomings in terms of
:07:37. > :07:41.the euro, and everybody agrees. That is why we are starting on this
:07:41. > :07:46.discussion with the upcoming European Council meeting. It is not
:07:46. > :07:50.my expectation we take decisions, but we're starting the discussion
:07:50. > :07:54.among the 27 member states. There will be a time when it will be
:07:54. > :07:58.needed to discuss certain treaty changes. It has got to the urgent.
:07:58. > :08:05.In the last few hours and days Cyprus has announced it needs a
:08:05. > :08:11.bail-out. The financial markets have no confidence any more. We
:08:11. > :08:15.look at the bond yields in Spain, Italy, these are pressing issues.
:08:15. > :08:19.Without dramatic intervention, a real signal to the markets, we
:08:19. > :08:24.could be facing fragmentation and break-up. But we have done a lot of
:08:24. > :08:29.things. The markets have and bought it. I hope the financial markets
:08:29. > :08:33.are seeing what has been done -- haven't bought it. In the last two
:08:33. > :08:38.weeks a bank package for Spain has been adopted. There's nothing
:08:38. > :08:42.written in our rules that we have to do that. There's nothing written
:08:42. > :08:47.about doing a fire Walk in terms of the Greek problems. Nothing written
:08:47. > :08:51.about the Cyprus problems that have just come up now -- a firewall. We
:08:51. > :08:56.are trying to sort it out. At the same time the Danish presidency has
:08:56. > :09:02.pushed hard for harder regulation and more discipline, if you want to
:09:02. > :09:06.use that word, in the other areas of our Corporation. We have now got
:09:06. > :09:11.a directives about capital requirements, which is good for the
:09:11. > :09:15.banks to avoid future crises. me stop you there. It is important
:09:15. > :09:19.to recognise decisions have been taken in order to create more
:09:19. > :09:23.disciplined, and in order to help one another in Europe. Some in
:09:23. > :09:28.Europe, and I'm not just thinking about Nicolas Sarkozy, will say
:09:28. > :09:31.it's a bit rich for Denmark to be talking about the need for more
:09:31. > :09:35.centralised discipline and regulation, as you're not actually
:09:35. > :09:40.inside the eurozone. You're going to face difficult decisions, and
:09:40. > :09:45.this could also apply to Britain, another out nation, you will have
:09:45. > :09:49.to decide if there's going to be some banking union in the medium
:09:49. > :09:52.term, and regulation and running of the banks from
:09:52. > :09:57.Brussels/Frankfurt/Berlin in the future, you're going to have to
:09:57. > :10:01.decide where you stand on that. Would you be happy for the Danish
:10:01. > :10:06.banks to be regulated by the ECB, the European Central Bank?
:10:06. > :10:10.you're asking me if that decision would be easy, clearly know. I
:10:10. > :10:14.don't think the Danish tax buyer is that interested in paying for debt
:10:14. > :10:18.that they haven't created themselves -- Danish taxpayer. This
:10:18. > :10:23.is something that would have to be discussed. I don't think that if
:10:23. > :10:27.you just put it like that, the way we see it now, that the Danish tax
:10:27. > :10:33.player would be that interested in paying for debt that they haven't
:10:33. > :10:42.been par of. But' he is the problem, you're a country of 5.5 million
:10:42. > :10:46.people been part of -- but here's. You stand to lose a lot. If a
:10:46. > :10:50.European union creates an inner core of bound by a much closer
:10:50. > :10:56.integrated fiscal union, and Denmark six outside of it, it will
:10:56. > :11:05.deeply damage your economy -- six outside? Not necessarily. We have a
:11:05. > :11:08.better economy in the Denmark and the UK right now. It is not the
:11:08. > :11:13.case that euro countries have a bad economy and non- euro countries
:11:13. > :11:17.don't. That differs quite a lot in the European Union. We are attached
:11:17. > :11:21.to the euro and that is one of the reasons why I thought it would be
:11:21. > :11:25.better for the Danish economy to adopt the fiscal compact, and that
:11:25. > :11:28.is why we have adopted it. Of course we are very close to the
:11:28. > :11:35.euro and that is why we follow these discussions and we want to
:11:35. > :11:40.participate in these discussions, part of the euro because the Danish
:11:40. > :11:46.population decided against it -- but we are not part of the euro.
:11:46. > :11:50.What is the point? You don't have a seat at the decision taking table.
:11:50. > :11:54.Your personal message to all people is that we have to accept in the
:11:54. > :11:58.long run Denmark must be inside the eurozone. The problem is your
:11:58. > :12:03.people aren't listening. The latest opinion polls show they are more
:12:03. > :12:08.against the euro than ever. I would not discuss that at this stage.
:12:08. > :12:12.Because you know you would lose? There is simply too much insecurity
:12:12. > :12:16.about the euro project. We are talking about treaty changes now,
:12:16. > :12:20.so it is not the time to talk about these things now. Personally I
:12:20. > :12:26.think it would be difficult for the Danish taxpayers to be responsible
:12:26. > :12:31.for debt made in other countries. Also you ask, why is it good for
:12:31. > :12:36.Denmark to be attached to the euro? It is no doubt that it is extremely
:12:36. > :12:39.good for the stability that it brings. Denmark is one of the
:12:39. > :12:45.countries that has the lowest interest rates in Europe right now.
:12:45. > :12:48.It is seen as a safe haven right now. You took over the presidency
:12:48. > :12:53.of the EU saying you would push hard for your green environmental
:12:53. > :12:57.agenda. It seems to me on a host of issues you have failed. If one
:12:57. > :13:01.looks at the ambitions, the low carbon road map, the energy road
:13:01. > :13:11.map, they have been drastically watered down because some member
:13:11. > :13:12.
:13:12. > :13:18.states, like Poland, have refused I think we have succeeded in those
:13:18. > :13:23.areas. We had the plan of creating more grit. We had a very difficult
:13:23. > :13:29.agenda that we embarked on and recently we adopted the energy
:13:29. > :13:34.efficiency directive. Again, water down. This is politics. But your
:13:34. > :13:38.member states are not on the same page. It is often the case were
:13:38. > :13:44.there is a proposal, you negotiate and find a solution. And I'm very
:13:44. > :13:49.proud that in all these areas, we have agreements. But all of the
:13:49. > :13:57.specific binding targets have been taken out. I would not say that our
:13:57. > :14:04.energy efficiency is a meaningless agreement. He wanted a 20% target
:14:04. > :14:09.set and George Osborne said we would not do what. He said, we will
:14:09. > :14:13.not save the planet by putting our country out of business. There must
:14:13. > :14:18.be a reason some countries decided to vote against this energy-
:14:18. > :14:24.efficiency directive. This was a hard negotiation. I am proud that
:14:24. > :14:30.we finalised the Danish presidency with an agreement on the -- on
:14:30. > :14:35.Energy efficiency. It will make us more energy secured in the EU, but
:14:35. > :14:42.commissioners also estimated that it would create 400,000 new jobs in
:14:42. > :14:46.Europe. This is one of the bigger achievement. Is it watered down
:14:47. > :14:55.from the first proposal? Yes. But do we have a proposal which will
:14:55. > :14:59.work? We do. Despite your words on the green agenda, you have made
:14:59. > :15:04.some major concessions. Enduro own country, you said you would impose
:15:04. > :15:12.a congestion charge to change the way Danes use public transport.
:15:12. > :15:22.Have you abandon that? Yes. Why? People were not interested in a
:15:22. > :15:22.
:15:22. > :15:29.congestion charge. In terms of the green agenda, if we stick to that
:15:29. > :15:33.nationally and in the EU, there is no doubt that we will be pushing it
:15:33. > :15:38.forward. One of the things I am most proud of is the energy
:15:38. > :15:42.efficiency directive. That will make a difference. In terms of the
:15:42. > :15:50.National green agenda, we have adopted a climate and energy plan
:15:50. > :15:55.for Denmark. One that goes to 2050 with a specific target to get to
:15:55. > :16:00.2050. This is perhaps the most energy -- ambitious energy and
:16:00. > :16:03.climate plan in the world. It took about the Danish economy and the
:16:03. > :16:08.economic and social model your country has operated under four
:16:08. > :16:12.years. Can Denmark continue to afford the scale of social and
:16:12. > :16:18.welfare provision it has offered its people for the last seven
:16:18. > :16:24.decades? Yes. I think we can. It will mean that we have to be very
:16:24. > :16:31.serious about reforming certain parts of our economy. It does not
:16:31. > :16:37.come easily and we have to really work hard to maintain a social
:16:37. > :16:41.model like this. This is why my government has embarked on a very
:16:41. > :16:45.tough reform programme from the outset. We need the Danes to work
:16:45. > :16:50.harder, we need to tackle the Democratic charges we have because
:16:50. > :16:59.we will not be able to preserve the welfare state that we all want
:16:59. > :17:03.without reforming our economy. It is up to us to be part of creating
:17:03. > :17:13.that welfare state and to be part of reforming it and so we can keep
:17:13. > :17:14.
:17:14. > :17:19.it for our children. Do you need to slim it down, to make it very
:17:19. > :17:25.specifically a safety net for those who are the poorest rather than
:17:25. > :17:28.something people can live within the long-term? No, that is the
:17:28. > :17:32.opposite of the way that I see the welfare state. I have had always
:17:32. > :17:39.had the view that if you only have welfare for the poor, it becomes
:17:39. > :17:46.Paul Welker. We help young people to get free education, free access
:17:47. > :17:53.to healthcare, a benefits system for the unemployed and a mechanism
:17:53. > :17:59.that is a safety net for if you meet a situation in your life that
:17:59. > :18:03.is difficult. The dangerous, you make people dependent. To quote the
:18:03. > :18:07.welfare minister in the UK, he said, there is no compassion in saying to
:18:07. > :18:13.someone, we do not care what you were gone not. We don't care how
:18:13. > :18:18.many children you have. Make yourself unavailable for work. A
:18:18. > :18:23.system that sends those messengers -- messages is not compassionate.
:18:23. > :18:29.don't know what he has said in this number of issues where I do not
:18:29. > :18:33.agree with him. But I do think that in order to have a system like we
:18:34. > :18:38.have, a benefits system which is widely spread, you also need to ask
:18:38. > :18:45.people to do things. You should never accept that people do not
:18:45. > :18:48.work because they do not want to work. Everyone should look for work
:18:48. > :18:58.and be pushed into the labour market with different tools. This
:18:58. > :19:01.
:19:01. > :19:05.is what we have done for a number of years. Opinion polls show that
:19:05. > :19:12.the Danish people are not happy with the way this government is
:19:12. > :19:22.conducting its business. I think your party is down 16% in the polls.
:19:22. > :19:26.
:19:26. > :19:31.Why do you think that is? I think there are a number of reasons. One
:19:31. > :19:35.reason is that we have tried to take difficult decisions to tackle
:19:35. > :19:42.demographic challenge us. We have been talking about how will we want
:19:42. > :19:47.to adjust and reform the economy so that it will be sustainable for the
:19:47. > :19:52.next many years. We have this 2020 plan and it has been hard to take
:19:52. > :19:58.these decisions. I have asked the Danish state to work harder, to pay
:19:58. > :20:03.more tax, we have asked for them some pretty tough things. It is a
:20:03. > :20:07.lot to last. Particularly when many people find themselves in a
:20:07. > :20:11.situation where they can't find a job. In that situation, I'm
:20:11. > :20:16.basically asking them to work harder and I think this is a
:20:16. > :20:20.difficult message. I think people are reacting to that. It is
:20:20. > :20:25.interesting you point to the rising jobless numbers. I see the number
:20:25. > :20:35.of young Danes who were unemployed has risen almost 100% in the past
:20:35. > :20:39.five years. It is terrible. It is. Yet, you message to Danes is that
:20:39. > :20:44.there should be a relaxation of the immigration rules to make it easier
:20:44. > :20:50.for family unification to take place. To allow people to get
:20:50. > :20:54.permanent residency more easily. That is a difficult self. It is a
:20:54. > :20:59.slight change to immigration laws. We had a situation where the last
:20:59. > :21:08.two years with a former government, immigration laws were tightened
:21:08. > :21:14.quite a lot. That was the price the former government had to pay to get
:21:14. > :21:20.the budget through. We are adjusting the immigration policy
:21:20. > :21:25.back to how it was. But it is a difficult sale when you see across
:21:25. > :21:29.Europe a rising tide of concern about levels of immigration. Never
:21:29. > :21:36.wear from France to Greece. It is not a big issue here because most
:21:36. > :21:43.people know we still have very tight immigration rules. The
:21:43. > :21:50.countries that have the tightest immigration rules in Europe. I
:21:50. > :22:00.think we need to have these. We have relax them because they got
:22:00. > :22:01.
:22:01. > :22:11.too tight a bit. Finally, what to do you think is the right balance
:22:11. > :22:12.
:22:12. > :22:16.for Denmark in terms of population? I understand that about 90% until
:22:16. > :22:20.population are of long-term Danish descent and about 10% is in the
:22:20. > :22:25.current. Do you think it would be wrong for that balance to change?
:22:25. > :22:31.do not see it like that at all. We have a country where we have
:22:31. > :22:35.diversity, which is great, sexual diversity, ethnic diversity,
:22:35. > :22:41.religious diversity. This is something we are proud of and
:22:41. > :22:46.something we are capable of having in this country. We do not have a
:22:46. > :22:51.lot of immigration to Denmark and we still have quite clear rules
:22:51. > :22:55.that they will not be a lot of immigration. This has nothing to do
:22:55. > :22:59.with ethnicity or religion. We just do not have a lot of immigration
:22:59. > :23:05.into this country. Many other European countries have chosen not
:23:05. > :23:12.to have a lot of immigration. you worried when you look across
:23:12. > :23:18.Europe and you see the rise of far right political agendas, many using
:23:18. > :23:24.the immigration issue as part of their platform? I think the most
:23:24. > :23:28.important thing is to keep politics on the middle ground. It is the
:23:28. > :23:37.healthiest. That is why I am healthy when we're capable of
:23:37. > :23:44.adopting big plans for Denmark. A big economic plans or green plants