Bernard Cazeneuve - Minister delegate for European Affairs, France HARDtalk

Now on BBC News it's time for HardTalk. We are in Paris when

there's an assumption that France will play a key role in defining

the European future. How does that fit with current reality? The

French economy is in a mess and the public seems disillusioned with the

EU and the new Socialist government has yet to define its vision for

Europe. My guest today is the new Minister for Europe, Bernard

Cazeneuve. Is France capable of leading at the EU out of this

current crisis? Welcome to the show. On the eve of another European

summit, evilly that the EU has decided once and for all that it

cannot afford their great exit from the risen? A hopes so. At the last

conference in June, we decided to say we wanted to find a way to go

back to growth and to create jobs. What we decided in June together,

was first of all, to rebalance the fiscal compact with the growth

Compact. 20 billion euros of investment for the future. We also

decided to lower seat all the banks in Europe with a new mechanism. A

mechanism of surveillance of all of the banks in Europe. We also

decided to have more solidarity between the countries in Europe in

order to overcome that. Those three decisions would have a good

consequence for the future and for the future in Greece. The specially

for Greece, but with respect, the growth Compaq, money for

development projects around the EU because of that, also the banking

reforms that were discussed, they will not change the situation in

Greece in the short-term. Greece is still buried under a mountain of

debt. How many times will be European leaders kick this problem

down the road and expect somehow, that Greece will escape from the

economic catastrophe that it is currently experiencing. In the

short-term we wait for the Twigger report. It's absolutely necessary

for the Greek government to make more efforts in order to decrease

the level of debt and offset the deficit and also to organise their

administration. It's very important to have more efficiency with the

Government of that country. We're a waiting for the Twitter report. We

wait for that report next month. We will take big debt issue up after

that report. With respect, we know what will be in that report, they

would do plant more austerity measures. This is what I know, the

figures from Greece are appalling. The economy has shrunk 25% side.

The debt has not been reduced. To quote the Swedish finance minister

the other day, he said in the long run, whatever we decide short-term,

in the long-term, it's probable that the Greeks will leave the

eurozone. We don't want that to happen. We're fighting to get that

in order to avoid that issue. Why? Because if we don't succeed in

maintaining the eurozone with Greece, the people will suffer more

and more. We're completely aware of that situation and it's difficult

in Greece. We also know that the Government there, the new

government is making an effort to organise the administration and to

decrease the level of debt and the deficit. I don't know what is the

match report. If there are efforts in Greece in order to overcome that,

we shall speak about that and help Greece in order to go further with

them in the eurozone. We will make a decision. I am intrigued to hear

your thoughts on that right now. For us here, it's our first

opportunity to speak to a minister in the Socialist government here in

Paris. You, as a socialist, are you inclined to believe that the policy

adopted by the new leadership, the European Central Bank and the IMF

over the last few years, been too tough, too focused on austerity

measures around the sovereign periphery in Europe. As a socialist,

look at all his workers protesting. They're conservative in Great

Britain. This too much austerity in Europe. It's not a question of

Socialists, as a socialist by there is too much austerity in Europe.

It's impossible to overcome that crisis without strong initiatives

of growth. This is important. Does the German driven policy that has

been imposed upon Greece, Spain, Portugal, as been counter-

productive? I do not say that. I stay at it's absolutely necessary

to rebalance the European Policy in order to have in Europe,

disciplined with an initiative for growth. That's what we wanted to do

when we arrived at the Government. That was back in May. That's what

we tried to do jury the conference in June with an hour partners from

the EU. All of those decisions were very important. During the summer

we were not confronted to speculation. It's a very important

decision. That was back in June. We were able to implement all of those

decisions before the end of this year. In strikes me as you, in the

Socialist Party, you are deeply divided about austerity within

yourselves and with the neurone country. You, before you were a

minister, for years, you opposed what you call me economic

liberalism from other parts of Europe. At one reason why you

supported that vote No to the proposed European Constitution. Now

you're a socialist in power who has put your own party to accept a

fiscal compact which demands complete budgetary discipline and

it basically, that you wipe out the budget deficit and never, by law,

allow that to come back. It's a very strange kind of U-turn that

you have made. Can I ask you to questions. In 2005, wasn't it the

same text, and the second question, the same context. It was not. Here

in terms of the overall issue it was the same kind of issue

confronting the Socialist Party right now and you remain divided.

But the exclamation is very important. In 2005, we were

confronted with a situation not to have a fiscal compact and we wanted

to fight against problems in Europe with less public service and more

budgetary disciplines without growth and without solidarity.

That's why I decided in 2005 two- boat know. Now I am in government.

We want to have a new deal in Europe. We want more growth and

more solidarity. It's impossible to have more solidarity and growth and

have a banking union without budgetary discipline. We have to

increase the level of debt and deficit everywhere in Europe. It's

absolutely impossible to decrease will have that without growth. It's

impossible to have growth if we're unable to decrease the debt. If you

don't decrease the level of debt and deficit you will be confronted

with a high level of stress. But why we have to fight against debt

and deficit and to fight in order for growth and that our policy

hearing France. What do you say to the senior figures in your own

party who are deeply unhappy that you and the Government has now tied

into this 3% target for the deficit this year and another commitment to

eradicate the deficit altogether. Some say it's President Sarkozy's

legacy from the National Assembly and some say it's absurd and

untenable to meet that target at the moment. These are your own

people. We're confronted with this text which was not written by us,

the fiscal impact. If we want more solidarity and competitiveness in

Europe, we need to decrease the level of debt and deficit. We were

elected for that. That's why we are trying to succeed to reach that aim.

Let's UN pick a bit about growth. You say you're committed to kick-

starting growth in France and Europe. Do you think that the

Budget, the Socialist budget here in this country focusing on the

deficit reduction and raising taxes and raising taxes for businesses

while maintaining public spending. Is that the best way to deliver an

entrepreneurial growth in France? That is not what we're doing.

That's not what we're doing. What are we doing? We're decrease in the

public spending 10 billion euros. Two-thirds of the deficit reduction

is about raising taxes and one third is about cutting public

expenditure. One third is about cutting the public spending. One

third is about taxes for the people, rich people, not all of the people,

because some people in France who are suffering. We are completely

aware that very difficult for us to pay more. Particularly we are in

difficulties and asking the people who have the means to pay more than

the others. The last point is for the bigger companies, not the small

companies, not smaller structures who invest in innovation but the

bigger companies. Some people who represent the employers' operation

say it's beyond grave this situation for French businesses

today. As a movement of entrepreneurs in your country

saying that these policies you have introduced, the taxation of

dividends and capital gains, that will kill off the entrepreneurial

spirit in France. We have to reach the aim of the justice. It's

impossible to work from the crisis of calling every day poor people to

pay more and more. During the last government, the rich people were

helped in a way they were never helped before. We're confronted

with a tremendous crisis. It's absolutely abnormal during a very

short period in front of such difficulties and such crisis for

national reasons what we call patriotism to ask the rich people

to pay just a little bit more in order to help their own country to

overcome this crisis. This is absolutely absurd? Is it abnormal?

I do not think so. It's not for eternity. It's just in order to

overcome this crisis because we're in a tragic situation. The Public

Accounts a run of bad situation. We You have the my unofficial New

France say that you have to an 0.5% and employment next year. You have

no growth. Your economy is a terrible mess. Your Own Business

leaders say the climate you are creating in France is going to make

attracting business talents into this country almost impossible. You

have David Cameron, across the English Channel, wanting to roll at

the front bar but for French business leaders and entrepreneur's

because he believes that they will see London as a much more

attractive place to work and invest than France. In France we are

always in favour of from the relationships with our partners in

Europe. Great Britain is a great partner. There are not going to

argue that. And go to answer your question. We can we go -- what can

we do it great, but to City -- competitiveness. It must be a bit

alarming when you look at the opinion polls uneasy at Francois

Hollande is now more unpopular than Nicolas Sarkozy when it comes the

question of who you believe could best run the economy. Francois

Hollande has the lowest approval ratings of any modern French leader.

My friends do not believe in the programming of up land. We are

taking very courageous decisions. We're not afraid to be unpopular if

it is for the good of the country. We want to succeed. We have to be

courageous but it. It is not a problem France. It at the end of

the period, what will be the resorts? We will add to the

conversation about how France would try to find economic growth. They

thought about the wider European picture. What we have seen the last

few months I important signals from the President of the European

Commission, the group has its dip of the European Council, the ECB,

they all say Europe is to find a way to a fiscal union with much

deeper integration of its treasury, budgets, tax system and also a plea,

-- automatically a deeper political union. This France share that

feeling? Yes we share that feeling. If we want are the people in Europe

to agree with us we have to find a solution for the crisis now. We

want to be able to implement all the decisions we have taken. We

want to address emergencies in Greece, Spain, France, everywhere

in Europe. This is what we're trying to do. If we are unable to

address emergencies right now, it would be impossible to have new

treaties and more political union. When the question will be of the

table, the people will say no. They did not want to be in Europe. If we

do not want people to divorce from the project of Europe we have to

prove that we are able to answer to what the questions and all the

emergencies now. If we are in the will of that -- if we are able to

do that, we can do that. How deep de think is the current French

public discontent with the EU? You have spoken of at the French public

losing its love for the European Union. They think in England it is

the same case. If the Franco-German alliance drives Europe forward, the

message you are giving is different to what we hear from Angela Merkel

and the Germans. You're saying that France is in grave danger. The

polls suggested is true. They want to see this integration, not more.

It is not different. It is a question of murdered. It is not a

question of target. We are able, with Germany, to create the

conditions for a new Europe with more political union and more

integration. We will be able to find a good compromise in Europe in

were to go further. Many keep saying we, we must find the right

way to move forward. I just wonder who this week is. You know that

there are certain members of the EU were not interested in moving

towards a fuller, deeper integration. Britain is perhaps the

most significant nation. It does not appear interested in this

philosophy. Do you think there will come a time that Britain does not

want to become part of a planet of tasers interests that make a

financial tack -- financial transaction tax. Do you think they

will be time for the recognition of a two-speed Europe? I agree with

you. Great Britain does not want to adopt the financial transaction tax.

It does not want banking union. Great Britain was absolutely to

stay within the market. We have to fight the institutional solutions

to be able to articulate within the Intel market. If Britain seeks more

and more opt-outs from different parts of the European integration

project, if Britain seems more and more's there is a red carpet for

European citizens in Great Britain if they want to go to France. You

can roll up the red carpet for the British if you want, but my point

is this. If Britain is seeking to go its own way, would you prefer to

have Britain's semi-detached within the European Union or which but for

Britain to make a clean break and leave? Are what Great Britain to be

within the internal market and to be part of Europe. I'm sure that

all the governments in Great Britain do not want to go away.

They have their own approach to European issues. We have to respect

that. We have to find solutions were the right disagreements. I'm

sure that nobody, even in Great Britain Dr Conrad Moreira there are

plenty of people. They would like to have a special position in

Europe. I'm not sure that we will be happy it tomorrow morning they