>>Stephanie Flanders: Mr. Aznar, in response
to -- I think Minister Timmermans has raised
a lot of the fundamental issues for Europe
coming out of the crisis.
Maybe we have talked too much about the technical
issues that need to be done in response to
the crisis in the currency without, as he
says, engaging the emotions and the basic
problems of getting support for integration.
How do you see things from a -- from a more
southern European, from a Spanish perspective?
It seems like everywhere we need closer integration
to make the system work and yet the people
are less happy to integrate now than they
have been in a long time.
>>Jose Maria Aznar: First of all, good morning.
Thank you very much for inviting me.
And second, I believe that we in Europe, we
need good decisions, good politics, not more
or less integration.
Because more integration with bad policies,
there is no sense.
The problem is, if we have a vision applied
for Europe and we take the decision in the
right track, it will obtain good results.
Maybe historically, the history of the European
Union is a great success.
Peace and prosperity.
The problem is we can -- you must adapt the
position of the European Union and Europe
and the new situation in the world, and transform
domestically the institution of the European
Union, make a lot of reforms, and to obtain
political answers to challenges today for
Europeans.
This is the question for me.
It's not more or less integration, in general.
>>Stephanie Flanders: Do you think during
the crisis, and especially given the economic
impact that it has had in Spain, people often
-- often the British journalists go to Spain
and say, "Well, surely now you regret going
into the single currency," and then we are
surprised to hear that people say, "No, we
still think it was very important for our
future."
How has the attitude to the European project
changed in Spain as a result of all of the
pain you've been through now?
>>Jose Maria Aznar: Well, I lead my country
to the single currency, you know, because
I'm sure of the idea of the single currency.
But the single currency are based in two things
in my view.
On one hand is stability and discipline, and
on the other hand is flexibility, more competitiveness.
If you lose the stability or discipline, you
have a problem.
If you if you lose both, you have a problem.
This is the question.
I'm back to my prior position, is necessary
good or bad politics.
10 years ago, 4 years ago, Spain touched the
sky, the heavens, with their fingers because
it was a history of very great success.
More than 50 jobs -- more than 50% of jobs
that were created in Europe are created in
Spain.
The growth in the country was spectacular.
Millions and millions of immigrants back to
Spain -- go to Spain to live in.
Very spectacular and an example of discipline.
Bad policies destroyed this process.
Destroyed this position.
And to recover confidence, recover trust,
this is one of the problems of Europe today,
to recover trust.
It is very complicated and very difficult
in this moment now.
But we needed to recover this.
I recall perfectly that in 2003, 2004, France
and Germans don't respect the levels of deficit
and the stability impact on growth.
3%.
>>Stephanie Flanders: While you had been told
you were well underneath, you had been told
--
>>Jose Maria Aznar: No, no.
We are perfect at the time.
We are perfect.
We are masters at the time.
But the two most important countries in Europe
decide, taking a very bad decision, "We can
not respect the rules, we change the rules."
This is unacceptable because the message that
you can send in other countries with the business.
We must recover the seriousness of our crisis
in Europe and build a Europe more flexible,
more with -- with more openness, with more
competitiveness, with a new socioimpact that
offers to the new generations a more integrated
and new revision of the Atlantic policies
and if it is possible with the U.K. inside
the European Union.
>>Stephanie Flanders: But you have said yourself,
Minister, that we need to rewrite the social
contract in Europe.
When people hear that, they think of their
wallets.
They think this is only going to go one direction
and it's going to be bad for me.
How do you present it -- I mean, the way that
Aznar has presented it as a positive social
impact, but people don't see it as a positive
thing.
>>Frans Timmermans: I think the most convincing
argument I can use in the Netherlands is to
take us outside of Europe and to look what
is happening in the rest of the world.
And there is this enormous surge in Asia which
will continue, which people sometimes see
as threatening, which could be a huge opportunity
for Europe if we get our act together.
And I think if you remain stuck within the
European arguments in Europe and especially
if you boil Europe down to the Brussels bubble,
you will always lose the argument because
Brussels is doing everything wrong that they
could possibly do wrong in terms of creating
public support.
National politicians will have to create that
public support.
It will be our responsibility, but I believe
the strongest argument is to look at the outside
world to see what is happening in Asia, how
strong Asia is becoming, and how many opportunities
this would offer for Europe that is prepared
to join action on the economy and on other
issues.
There is a -- especially my country and probably
in many other countries, people who can't
-- you have this huge distinction between
people who can move and people who can't move.
If many of the people here, if they see an
opportunity elsewhere, they simply move elsewhere.
Many of the people we depend on as fabric
of our society, they depend on the place they
are for their future, on the jobs they have
there, on the industries there, et cetera,
et cetera.
And as long as we cannot prove that what we're
doing is leading to more stability in their
region, more opportunity for them, more opportunity
for their children, they will not support
us in going international with things.
And I'm quite worried about this because it
is not just a problem of stating your case.
It is also a problem of finding new ways of
communication with your constituency, with
the people, because the way politicians operate
in general is just by sending, sending messages.
It gives people the impression that we are
good at talking but not good at listening.
>>Stephanie Flanders: As an economist, what
worries me most is you can say all of these
things and there is a political process around
the future of Europe.
But I don't see the ingredients for growth
in the next few years.
The amount of adjustment that's taking place,
the way the adjustment is taking place, many,
many people are worried it will mean maybe
at the end of it, you have adjustment but
it is five years, another five years of very
slow growth, more recession in Spain, maybe
more than another year of recession.
>>Jose Maria Aznar: The problem for me continues
to remain politics.
And the two pillars of the European Union
are really single market and the euro, the
more important pillars.
The single market working with some difficulties
but working.
Now we must take a very important decision,
very strategic decision, existential decision
for Europe that is to define a free-trade
area with the U.S., open the rest of the world.
This decision, in my view, is politically
existential for Europe because this is the
base for a new revision of the Atlantic policy.
That means the base to redefine the strategic
situation in the world.
And as European, I want to be influential
in this moment.
And second we must take in the next two years
in Europe, in my view, two -- one important
decision: We want to finish the Eurozone or
no?
Because the Eurozone is building -- is establishing
a new building.
But you can't live inside the building without
finishing the building.
It is absurd.
It is absurd that exists a single currency
that's working that before 1999 -- you have
to create the single currency, an area of
monetary stability to organize one financial
market, unifinancial market.
You have today 17 financial markets with the
euro.
17 financial markets with the euro.
There is no sense.
It doesn't work.
This is one of the problems -- that being
said, if you live in Berlin, in The Hague,
the value of the currency is different than
in Paris or in Madrid or in another country.
This is impossible.
In the next two years, we must finish this
idea.
This means establish the condition to the
union banking and must face (indiscernible).
But for me, the basic is finish the logical
inside the Eurozone.
And, politically, if the Eurozone rests and
finishes, say, today, two years, the risk
for the European Union will be total.
The fall of the euro will be the total fall
of the European Union.
And I don't like this scenario because this
is a very, very, very bad scenario.
This is a question for me.
>>Frans Timmermans: I think part of rethinking
is to accept that given the high level of
our developments, given also demographic developments,
slow growth will be part of Europe for probably
a generation.
So it's one thing to always think in terms
of how do we get high growth rates.
It is another thing to be honest and say,
how do we -- how do we create stronger fabric
in society accepting the fact that our average
annual growth rate will be 1, 2, perhaps if
we are lucky 3% over the next generation.
I think that is rethinking.
That is being honest about where we stand
as Europeans.
And another point, why are people not prepared
to do what is absolutely necessary and logical
as President Aznar has explained?
That is the because the issue of moral hazards
in political terms has not been addressed.
I can't take this argument to the Dutch people
that we need more economic governance in Europe
as long as the Dutch people have the impression
that we are reforming, that is, reducing,
our social welfare system because we need
to pay for irresponsible bankers who are,
again, getting their bonuses, getting higher
paychecks.
But we're still paying for the mistakes they
made in the past.
Likewise, on an European level, the stereotypes
we have back and forth, you know, why do we
as Dutch have to pay for Greeks who retire
at 50 to drink ouzo on the beach and do nothing,
which is an idiotic -- an idiotic stereotype
but it sticks in the minds of people.
And, likewise, why -- Greeks would argue,
why do we have to have this idiotic austerity
program just to satisfy some Nazis in the
Netherlands and Germany who still dream of
creating of a Fourth Reich?
I mean, these stereotypes back and forth are
a reality in Europe and do determine political
action because you see -- you can talk about
UKIP in the U.K., about Milders (phonetic)
in the Netherlands and all these other parties,
but you see other parties adapting to them.
You know, as Churchill said -- as I quoted
Churchill before on this, The only thing you
get out of feeding this crocodile is that
the crocodile will eat you last, but you will
be eaten if you play into the hands of this
euro skeptical nonsense.
>>Stephanie Flanders: We were agreeing that
maybe David Cameron needed to remember that
quotation as well in his approach to Europe.
[ Laughter ]
But doesn't some of this come down to something
which you do see in the U.K. debate as well,
that also has come out of the crisis.
I mean, Senor Aznar talks about we need to
put the walls in place.
We need to finish the system.
It has been presented as a technical project.
The single market is presented as a question
of getting rid of technical things, trade
barriers.
And it is only maybe in response to this crisis
that people are realizing even the things
that are not to do with the crisis, even just
continuing, you know, the free movement of
people -- the fundamental pillars: Single
market, free movement of people, goods and
services, or free movement of people has caused
enormous -- has caused very much the creation
of the U.K. Independence Party, the immigration
into the U.K.
The free movement of services, people don't
want to compete in Germany and other countries.
They don't want to have free open competition,
not just of goods but also of consultants
and plumbers and goodness knows what else.
These are things that are not -- they're not
just technical, they are raising fundamental
political issues.
>>Frans Timmermans: Because -- this is linked
with a moral issue.
If free markets means CEOs get richer and
I lose my job because my job has been exported
to Romania, then you will not get the support
by your public for this project.
"Free markets" mean that I have a new job
that we can trade better, that we can create
more value in our society, then you will get
the support of the people.
But you need to state that case in a broader
context than we're doing today.
We're just trying to easily react to populist
movements and that will not work in the way
we're doing it today in Europe.
But the fundamental point made by President
Aznar is still true, especially in the Netherlands.
We make rules on the European level.
But if the big countries don't like the rules,
we simply skip the rules.
If smaller countries don't like the rules,
they get punished by the big countries.
And this is sort of the feeling that was created
because France and Germany did not want to
abide by the stability pact ten years ago,
and it has never left the system.
It is still there today.
>>Stephanie Flanders: Do you worry about -- I
mean, as you said, you took your country into
the Eurozone.
You were part of making them such a success
within the European Union.
Do you worry -- do you see this kind of disturbing
politics and you wonder where it might lead,
the fact that people are now making these
comparisons?
>>Jose Maria Aznar: One is not for the people
-- is not the right answer for the problems
of challenges.
We can seek other answers.
And all the populist movements are dangerous
in our societies.
I don't like the expression of the lack of
correct politics in Europe.
We must establish a very serious project.
This is a responsibility of the leadership
in the euro.
How happen with Eurozone?
How happen if you decide to integrate the
Eurozone finally with the rest of the European
institutions?
How happen with the separation of the countries?
How happen with the decision of the U.K.?
How happen with the relation of the U.S.?
This is for me the key questions for the euro,
more than organize a huge mess about the populist
movements, no?
And maybe some lack of leadership in Europe
exists today and is necessary -- politics
today is very hopeful everywhere, especially
in Europe.
But we need politics and good politicians
more than ever to establish some projects.
In 2000, we put on the table in Europe a very
serious program to convert Europe in the most
important, influential, economic area in the
world.
This is the Lisbon process, national states,
economic reform, Atlantic policies.
We abandoned this problem.
(indiscernible).
We must recover the project -- serious project
for Europeans.
It is possible.
I think it is possible.
It is necessary, and it is responsible.
It is the responsibility of the current leaders
today in the Eurozone.
>>Frans Timmermans: I think the fundamental
point, if I can make this final point from
my point of view, on a national level and
on an European level, the social contract
is failing because those people we're asking
to pay for the social contract don't get an
answer when they ask: What is in it for me?
They believe they are asked to contribute
to a system that will not come to their aid
when they need it.
And that in society is very dangerous.
We need to recreate the feeling that the way
we have organized society on a national level
and a European level benefits all of society,
especially the middle class, not just the
weaker parts of society, because the middle
classes will have to provide the fabric for
our political and European project.
If they don't, because they there don't think
there is anything in it for them, then it
will fail.
>>Jose Maria Aznar: This is a key question.
Middle class, if we continue our countries
destroying middle class, the consequences
politically for Europe will be very dangerous.
>>Frans Timmermans: Yes, I agree.
>>Jose Maria Aznar: Middle classes, certainly
those classes with less taxes, more reforms,
and explain that they are the pillar of the
stability of the society, for me, are fundamental.
>>Stephanie Flanders: Very final thing.
We are going to talk in a minute, we will
broaden it out and take a step back from Europe
in a minute.
So I'm interested -- And I as interested in
what President Aznar said about the European-U.S.
free trade agreement.
Do you think -- there is clearly a risk that
the rest of the world just looks at Europe
and says, This is all navel gazing.
Whatever happens, Europe is going to talking
about itself for the next five years and not
getting anything done.
Do you see it as significant as President
Aznar?
Do you think this trade deal can help with
that?
>>Frans Timmermans: I think it is fundamental.
I think the trade deal is fundamental because
it will not just create an example for the
rest of the world, I'm sure if we get this
free trade agreement with the United States,
the rest of the world will want to join and
it will trade fundamentally trade patents
across the world, which is certainly on a
national capacity of great interest to the
Netherlands.
Secondly, it will drive home the point that
reform within Europe is needed if we want
to take opportunity in the future.
We cannot close off our markets and hope to
avoid reform internally.
We will need to reform our societies and our
economic systems.
>>Stephanie Flanders: Thank you very much
to both of you.
You will see that maybe one of the themes
of this session was that we didn't necessarily
want to spend all our time thinking about
Europe because it wouldn't necessarily put
a smile on our face.
You have certainly raised --
>>Jose Maria Aznar: Can I say three words?
Europe was possible thanks to Europe -- to
the Atlantic link impact.
It is possible thanks to the Atlantic link.
And will be possible thanks to the Atlantic
link.
Don't forget this.
>>Stephanie Flanders: Don't forget that.
Thank you very much.
>>Jose Maria Aznar: Thank you very much.
>>Frans Timmermans: Thank you.
