:00:12. > :00:17.legislation. Now on BBC, its time for HARDtalk. Three EU officials in
:00:18. > :00:24.Brussels insist the worst of the eurozone crisis is over. Is the
:00:24. > :00:27.relief premature. The debt mountain still casts a long shadow, rising
:00:27. > :00:33.unemployment is fuelling anger on the streets and Europe's because
:00:33. > :00:38.nations are divided on the biggest questions, where next for the EU.
:00:38. > :00:45.Amid the uncertainty, practical challenges remain. Not least for my
:00:45. > :00:55.guest today, Joaquin Almunia. Short-term or long-term, is there a
:00:55. > :01:05.
:01:05. > :01:10.reason to be confident about the -- EU. Joaquin Almunia will come.
:01:10. > :01:14.Let me begin with some words from your colleague at the beginning of
:01:14. > :01:21.this year. The president of the EU Commission said the perception of
:01:21. > :01:31.risk at the has disappeared. The threat to the survival of the euro
:01:31. > :01:32.
:01:32. > :01:38.has been overcome. Are you as confident as ham? The fact of the
:01:38. > :01:43.matter is that since June last year when the important decisions were
:01:43. > :01:48.reached at the European Council level, and the most and challengers
:01:48. > :01:55.in Greece was solved with important decisions to continue to support to
:01:55. > :02:02.the Greek public finances, I think the big uncertainties regarding the
:02:02. > :02:07.euro security are disappearing. Many economies have important
:02:07. > :02:15.problems but the general insecurity be up the existence of the euro,
:02:15. > :02:22.I'm convinced is disappearing. is over? Haute fully. Nobody can
:02:23. > :02:28.tell this will not emerge again at any time. The problems we had since
:02:28. > :02:33.2010, regarding the existence of the euro is a group of 17 states
:02:33. > :02:40.sharing the same currency has disappeared. Signals are important
:02:40. > :02:44.and I get mixed signals. You're in the present state it is over for
:02:44. > :02:51.the existential crisis but Angela Merkel says 20 getting will be a
:02:51. > :02:56.more difficult year then 2012. The crisis is far from over. And Mario
:02:56. > :03:02.trucky, the boss of the European Central Bank is contradictory. He
:03:02. > :03:09.says he sees positives but the downside risks far outside --
:03:09. > :03:13.outweigh the positives. Very next signals from Brussels. Let us
:03:13. > :03:18.distinguish the existential crisis which has been overcome thanks to
:03:18. > :03:23.important decisions. Then the economic problems of a number of
:03:23. > :03:28.European economies, even Germany was waiting for the figures
:03:28. > :03:34.regarding the fourth quarter of 2012, maybe their GDP will not be
:03:34. > :03:37.positive. But one thing is to have a recession, and this creates a lot
:03:38. > :03:45.of challenges for our economic policy decisions. The other thing
:03:45. > :03:49.is to have doubts regarding the existence of the EU. But they are
:03:50. > :03:56.connected? If you are to have a contraction, especially in your own
:03:56. > :04:00.country Spain which will be 1.4%. But Greece it is worse. We are
:04:00. > :04:04.talking about economies that cannot get out of the whole they have. Why
:04:04. > :04:13.should we believe that the sovereign debt crisis is over.
:04:13. > :04:19.will give you a example of my own country, Spain. We have to pay a
:04:19. > :04:24.spread of the ten-year bonds of 1,500 basis points. Yesterday in
:04:24. > :04:30.the markets it was 350. The spread has been reduced by half. Thanks to
:04:30. > :04:40.the elimination of the uncertainties. It could be lost
:04:40. > :04:40.
:04:40. > :04:43.very quickly? The Spanish economic problems remain but for the public
:04:43. > :04:52.sector and the private companies they wanted to go to the market to
:04:52. > :04:57.borrow money, it is easier to tackle. For Greece, this is a most
:04:57. > :05:02.difficult situation, if you look at the spreads of the public debt for
:05:02. > :05:07.Greece it has been reduced by half. But you can look at other figures
:05:07. > :05:12.which tell us the Greek economy is still is on the economy. Look at
:05:12. > :05:15.the unemployment rates. It is not just Greece. You are Spanish, you
:05:15. > :05:22.been a minister for successive Spanish governments which oversaw
:05:22. > :05:28.of prosperity. Hardy feel about a country in which 56% of your young
:05:28. > :05:34.people under 25 are out of work? It is disastrous. Of course I feel
:05:34. > :05:43.that. During Christmas I talk with many people that share with me
:05:43. > :05:47.their anger and Constanze and uncertainties. Let us look at the
:05:47. > :05:53.other side of the coin. Thanks to the reforms and the adjustments
:05:53. > :06:00.that Spain launched three years ago, now the current account for Spain
:06:00. > :06:06.is completely different than three years ago. The financial needs of
:06:06. > :06:12.the Spanish economy are close to zero. This means an important step
:06:12. > :06:16.forward towards a solution. Not all problems will be solved early.
:06:16. > :06:23.There are such a disconnect from the message from people like you
:06:23. > :06:28.and the one on the streets of Madrid or Athens or Lisbon. In 2013,
:06:28. > :06:33.the Disconnect will become untenable? The citizens are clever
:06:33. > :06:37.enough. They know a huge problems accumulated before the crisis and
:06:37. > :06:42.accelerated because of the crisis will not disappear from Monday to
:06:42. > :06:47.another. On one hand, the ask the governments and the authorities
:06:47. > :06:52.they have good reasons to do this. They ask for more decisions and
:06:52. > :06:58.quicker results. But they understand the policies that should
:06:58. > :07:02.be decided and implemented to overcome these typical situations
:07:02. > :07:09.will not produce the results from one day to another. We have talked
:07:09. > :07:12.about the Mediterranean states but not the mood in Germany. The reason
:07:12. > :07:18.why you appear to me and your colleagues to be more confident at
:07:18. > :07:22.the beginning of this year's because the German government has
:07:22. > :07:28.bought into the notion that it will use the CBD and its own money to
:07:28. > :07:33.keep buying debt. It is prepared to prop up the system. How long will
:07:33. > :07:41.creditor nations like Germany regard that as sustainable? Through
:07:41. > :07:50.the course of this year you do not know answer? Two reasons. Firstly,
:07:50. > :07:54.the German economy is also having problems. At the beginning of the
:07:54. > :07:58.public debt crisis, their way out of these kinds of problems. Now
:07:58. > :08:02.they are having problems with growth and they realise how strong
:08:02. > :08:07.week there is interdependence with our economies. And they realise
:08:07. > :08:12.since June last year that it is very important for them, not only
:08:12. > :08:17.for the partners but for the German people to contribute to the
:08:17. > :08:21.solution of the common problems provided those who have the more
:08:21. > :08:28.serious problems will take responsibility to decide what
:08:28. > :08:32.should be done. Took quite a phrase from an analyst of the European
:08:33. > :08:37.economy the question is how long the German public in particular is
:08:37. > :08:42.prepared to put life into a corpse? That was as memorable phrase. If
:08:42. > :08:46.Germans begin to think that way about the European economy and
:08:46. > :08:53.especially the southern periphery, you have all got a problem in
:08:53. > :09:01.Brussels? The Germans have to take into account their own interests
:09:01. > :09:07.and priorities and needs. But they are fully aware, that for the
:09:07. > :09:14.future of German citizens it is important the strength of the euro
:09:14. > :09:20.and the strength of the European Union. Jim money has a very good
:09:20. > :09:25.memory of the past. They know how important it is for Germany and the
:09:25. > :09:31.German people, the strength of the euro. That is where we get to in
:09:31. > :09:36.many of these discussions. This is about the political future of
:09:36. > :09:46.Europe, the project requires this economic fix be maintained and
:09:46. > :09:52.sustained. I said many times that if this political awareness about
:09:53. > :09:58.the need to become more integrated as Europeans would not be on the
:09:58. > :10:02.table of the founders of the economic and monetary union, the
:10:02. > :10:07.decision about debt at the end of the 80s and 90s would have been
:10:07. > :10:14.different. You agree with your colleague and maybe even your boss
:10:14. > :10:20.when he said last year, the only long-term sustainable solution to
:10:20. > :10:28.the mess Europe has is a federation of nation states. Political union
:10:28. > :10:36.he said is now a necessity. Your new? Political integration, yes.
:10:36. > :10:42.Not only because of the existence of the EU because of how the world
:10:42. > :10:51.is in this century. With globalisation, every European
:10:51. > :10:57.country will be better off acting fire itself without co-operation.
:10:57. > :11:04.If there has to be new movement to a federation, that means another
:11:04. > :11:08.round of exhaust of treaty negotiations. I do not talk about
:11:08. > :11:16.treaty changes. But about decisions and a clear vision on what is the
:11:16. > :11:25.direction of the world. Bake in only be turned into reality, it
:11:25. > :11:32.will words with a new treaty. decisions would have been
:11:32. > :11:40.impossible a few years ago. Many diff sessions going forward, the
:11:40. > :11:48.main elements of the banking unit. I'm looking be on the organisation
:11:48. > :11:55.of the European banks. A European ministry with fiscal policy across
:11:55. > :11:59.the being run from Brussels. Many of these decisions and advances
:11:59. > :12:06.towards further integration and better co-ordination and more
:12:06. > :12:14.capacity to obtain results can be achieved without discussing legal
:12:14. > :12:18.changes. Perhaps you are not on the same stage as your boss. He talked
:12:18. > :12:27.up proposals about a new European treaty before the European
:12:27. > :12:33.elections. France and Germany have been arguing for. They will not be
:12:33. > :12:43.a treaty change. But they will be the beginnings of the discussion.
:12:43. > :12:44.
:12:44. > :12:47.Some people think this treaty change will be needed in 2015. Some
:12:47. > :12:52.others think the most important thing is to have a clear sense of
:12:52. > :12:57.the direction and to adopt decisions, together political will
:12:57. > :13:01.to support these decisions and if needed, you can change in article
:13:01. > :13:06.or a few of the treaty. But the most important thing is where we
:13:06. > :13:13.want to go. There are big decisions about where different leaders and
:13:13. > :13:19.nations think the union wants to go. David Cameron has different views.
:13:19. > :13:23.He thinks they will be a lot of discussion about a new direction,
:13:23. > :13:30.especially for the core eurozone countries. He thinks there will be
:13:30. > :13:33.discussion about a new treaty. He says Britain must have the right to
:13:33. > :13:37.renegotiate its relationship with the European Union to loosen its
:13:37. > :13:41.ties. He wants a mandate from the British people to loosen and
:13:41. > :13:46.changed its relation between Britain and the European Union. You
:13:46. > :13:56.believe he should be allowed to change that relationship. To modify
:13:56. > :14:07.
:14:07. > :14:13.the treaty Britain has signed up Euro area will overcome their
:14:13. > :14:17.problems. It will be efficient. This would be good not only for
:14:17. > :14:22.those who belong to the euro but also those who have strong links
:14:22. > :14:32.with the euro area or as is the case of the UK or the non euro
:14:32. > :14:34.
:14:34. > :14:37.economies. The US as well. The further integration and the
:14:37. > :14:43.deepening of European integration had to solve the problems of the
:14:43. > :14:48.euro. The point is that I want your view as the vice-president of the
:14:48. > :14:58.commission as to whether it is viable for Britain to expect to
:14:58. > :15:01.
:15:01. > :15:05.renegotiate it's relationship... It is difficult. When you belong to
:15:06. > :15:10.a club, you cannot be an implement -- you cannot be an influential
:15:10. > :15:14.member and say that you do not want to accept this or that proposition
:15:14. > :15:22.all this constraint. If you belong to a club and you want to be an
:15:22. > :15:27.important member of the club, as I think the UK should be, you cannot
:15:27. > :15:32.beat influential or relevant and say that you do not want this or
:15:32. > :15:38.that. You can't Modify, you're saying that it is a binary choice.
:15:38. > :15:44.You must accept what you already have or you must calypsos I would
:15:44. > :15:48.like to listen to the UK authorities to their
:15:48. > :15:51.representatives when they go to the European Council. I would like them
:15:51. > :15:57.to be changed in this or that direction but not I do not want to
:15:57. > :16:01.participate in European policy. were a form a monetary affairs
:16:01. > :16:10.commissioner. You have an experienced insight into the way
:16:10. > :16:14.the European economy works. There are people who say that for Britain,
:16:14. > :16:19.leaving the European Union would be a disaster. We heard the American
:16:19. > :16:23.saying those words. It was in Britain's interest to stay in the
:16:23. > :16:28.end if they were to leave, it would be a disaster. Is that your view?
:16:28. > :16:36.Yes. I think for the members of the EU, it would be very bad for the UK
:16:36. > :16:42.it would be a disaster. Wider use a disaster. There are nations in
:16:42. > :16:51.Europe who thrive without the members of the EU. I'm not British-
:16:51. > :16:57.born Sydow know of the word is precise enough. -- so I do not know.
:16:57. > :17:05.The priority for the future of British citizens would be better
:17:05. > :17:13.satisfied our side then we be in. I like when the EU receives a
:17:13. > :17:16.positive influence of Britain or UK visitors. Final question on Britain.
:17:16. > :17:25.It seems that around Europe there's a lot of discussion about what will
:17:25. > :17:29.happen. (CROSSTALK). How frustrating is it as an EU official
:17:29. > :17:33.defined there is so much attention in this country and that the US is
:17:33. > :17:39.talking about it, how frustrating is it that this sucks up so much
:17:39. > :17:46.time and attention? It is worrying. We have so many problems on our
:17:46. > :17:51.agenda. So many important things on the table. We discuss in every
:17:51. > :17:57.meeting. To discuss the first and foremost, these kind of issue. How
:17:57. > :18:03.to renegotiate the participation of the UK in one particular policy.
:18:03. > :18:07.This is not a priority. Neither in Brussels nor in London. You make a
:18:07. > :18:12.point that the US official who was pronouncing on America's view of
:18:12. > :18:16.Britain and Europe. His point the other day was that the more the EU
:18:16. > :18:19.reflects on the internal debate, the less it is able to be unified.
:18:19. > :18:26.We think that it is better for leaders in Europe to focus on,
:18:26. > :18:35.challenges and spend their time on internal workings. With that in
:18:35. > :18:39.mind, this is your view that your own portfolio is working
:18:39. > :18:48.effectively? There are question marks about the way you're handling
:18:48. > :18:56.some very high profile cases. listen. It is true that I have on
:18:56. > :19:03.the table very important competition cases. The majority of
:19:03. > :19:06.opinions are quite positive. One in particular. Google. He conducted
:19:06. > :19:11.two years of investigations into the way that the search engine
:19:11. > :19:15.works and whether it is abusive and breaks anti-trust rules. In the
:19:15. > :19:20.very recent past, the Americans looking at the same issue had given
:19:20. > :19:25.Google a clean bill of health. They looked at 9 million documents. They
:19:25. > :19:32.spent 19 months. They gave Google a clean bill of health. Does that not
:19:32. > :19:37.so Jessie had been wasting no time? I'm in close contact with American
:19:37. > :19:45.friends. We have been talking almost every week regarding the
:19:46. > :19:51.case. They made the decision a few weeks ago. We continue to work with
:19:51. > :19:58.Google and the other state halls. We are convinced that there are
:19:58. > :20:05.real issues. -- holders. In particular, we are looking very
:20:05. > :20:12.closely at we call the vertical search. The results of the search
:20:12. > :20:18.engine regarding certain products of a certain... it Essenes there
:20:18. > :20:22.you have already decided that Google unfairly diverts traffic.
:20:22. > :20:29.This is my concern. We are discussing with Google in a co-
:20:29. > :20:33.operative way. They have to present next week's remedies. I fear that
:20:33. > :20:41.this is abuse of their dominant position. You have made your mind
:20:41. > :20:48.up? We try to demonstrate this. Unless Google will put on the table
:20:48. > :20:52.the remedies that we were -- will eliminate this. I had my last
:20:52. > :20:57.meeting with their top respond of Google in December. They have
:20:57. > :21:03.committed it to send us the proposals to overcome our concerns
:21:03. > :21:10.by the end of January. To be clear, you have the power to impose a 10%
:21:10. > :21:17.fine. That would be 10% of their global revenues. That would amount
:21:17. > :21:23.to about $4 billion. (CROSSTALK). We are discussing with a cool to
:21:23. > :21:28.attempt to avoid this sort of a primitive a result. That is the
:21:28. > :21:33.thread that you're saying... it is not the threat. It is the bigger
:21:34. > :21:38.provision. I'm trying to get from Google a solution to eliminate our
:21:38. > :21:43.concerns and to reach commitments that would be legally binding and
:21:43. > :21:48.that will avoid any further conflicts between global, the
:21:48. > :21:53.competitors and the stakeholders. One other key case that a much
:21:53. > :21:58.speed you're about. You are looking at the way that they provided gas
:21:58. > :22:04.to eastern European nations. It has led Putin to respond by saying that
:22:04. > :22:09.is a national asset company. Don't talk to gas from but speak to us.
:22:09. > :22:14.Is that what you're doing? We are speaking to them as a company. In
:22:14. > :22:19.NT trust procedures we are looking at companies. Both private
:22:19. > :22:26.companies or public companies but the company's that operate in the
:22:26. > :22:31.markets. We have serious concerns regarding three points. How does
:22:31. > :22:37.promise relates with that those in the central and the European
:22:37. > :22:42.countries in the gas sector. On the one hand we were looking at the
:22:42. > :22:48.provisions that tried to establish internal fragmentation of the
:22:48. > :22:52.market. Russian gas it cannot compete against a Russian gas.
:22:52. > :22:58.want to be clear. You'll have a showdown with the Russian
:22:58. > :23:04.government. The Russian Prime Minister said that Russia will
:23:04. > :23:09.retaliate if the EU's anti-trust investigation into us lead to sag -
:23:09. > :23:13.- sanctions. Regulatory risks, he said, could cut suppliers and
:23:13. > :23:17.result in higher gas prices across central and eastern Europe.
:23:17. > :23:27.conduct this investigation with the same approach as in other cases. It
:23:27. > :23:30.
:23:30. > :23:35.is an important one. I am doing what I should do. (CROSSTALK). I
:23:35. > :23:40.will tell you something that is sometimes forgotten. In 2003, the
:23:40. > :23:43.Commission adopted anti-trust positions regarding some practices
:23:43. > :23:53.of the gas company. The Russian authorities of the time accepted
:23:53. > :23:54.
:23:54. > :23:58.these as always. These are companies that operate the letters
:23:58. > :24:05.we are not investigating how they investigate -- operate in Russia.
:24:05. > :24:09.We're investigating how they through subsidiaries, is operating