Transcript of the press conference given by Prime Minister, Mr Gordon Brown, and the President of the European Commission, Mr Jose Manuel Barroso, in London on Monday 17 November 2008.
Prime Minister:
Good Morning. Can I say how pleased I am to welcome my friend, President Barroso, a world leader, someone who is renowned and recognised for his great work in every part of the world, to Downing Street this morning.
Our discussions, as you might expect, mainly focused on the economy and the action we must take together in Europe to help our families and businesses through difficult periods.
Japan has announced this morning that they are now in recession, the Euro area has confirmed the issue last week. It is clear that this is a global problem that requires global solutions and the outlines of a global route map for recovery were agreed last weekend.
We discussed this morning how in Europe we will take forward the four main issues agreed at the weekend. First, we have a timetable that we have agreed for reform of our financial systems; secondly, we are discussing the renewal of the whole international financial architecture and we will help the International Monetary Fund as they deal with the problems of distressed economies, and I welcome the additional hundred billions of support offered by Japan at the weekend; thirdly, we talked about the urgent need, where President Barroso has always shared the same position, to reach a conclusion on the world trade talks, we must reject protectionism in all its forms and we have instructed our trade negotiators, and that includes the European Union trade negotiator, Kathy Ashton, to conclude a deal by the end of the year; and then fourthly, we discussed the need for a coordinated approach to economic policy, in particular the need for a global fiscal stimulus.
And I have seen the comments of the IMF Managing Director over the weekend who made clear his very strongly held view that an urgent global fiscal stimulus is necessary and this should be undertaken, he said, everywhere it is possible. The Managing Director said that if there has ever been a time in modern economic policy when fiscal policy and fiscal stimulus should be used, it is now.
And Britain, like many other countries in Europe, is prepared to make its contribution for a temporary and affordable fiscal stimulus. It is now clear that the need for an urgent fiscal stimulus, within a medium term framework of fiscal sustainability, is overwhelmingly accepted across the world.
I would like to praise President Barroso for his leadership on the economy at this extraordinary time for the European economy and I will be having further discussions with other European leaders over the next few days and I look forward to us agreeing, as a world economy, a global position that will ensure that we will take the economy into recovery as soon as possible.
President Barroso:
Thank you, thank you very much. Indeed it was a pleasure to meet again my good friend Gordon Brown, the British Prime Minister.
In fact we are coming both from Washington and it was a very important meeting, the one in Washington. This weekend we have shown that we can shape the global response to the financial crisis and I think we can also have an economic response to this financial crisis.
We have a long way still to go but it is clear that we are heading in the right direction in terms of the action that is being taken. We have agreed principles to underpin a new global financial order that helps avoid future crises and increases protection for consumers, savers, investors. We need new global regulatory architectures so all financial markets, products and participants are regulated or subject to oversight, to boost transparency and to rein in excessive risk-taking and conflicts of interest.
All of this would not have been possible without the leadership and commitment of Gordon Brown. He gave a great contribution, I have to say, not only to shape the European position in the meetings we had at a European level, also when he came to the Eurogroup meeting, but in the European Council, but also I want to pay tribute to the key role that Gordon Brown has played, and is playing, in helping to develop a global crisis response and recovery plan.
I am very much looking forward to the chairmanship of the G20 by Gordon Brown and by Britain in January next year. So it is indeed very important that we work together for this global response.
The priority now is to move from crisis, financial crisis, to the road to recovery. We need an integrated approach, we also need some measures to deal with the impact on the real economy in the European Union. The Commission is preparing a European Union Action Plan from crisis to recovery. I will present it on the 26th of this month. We are actively in consultations and of course the meeting today with Prime Minister Brown was very important for these ideas that we are developing.
Above all, we need a coordinated response. It is quite obvious now that either we swim together or we sink together in Europe and in the rest of the world and this is indeed the great lesson from this financial crisis. This is the first financial crisis of the globalisation age. I was really impressed by the way we had the meeting in Washington. Now there is a real sense that we are all in the same boat and that we need this.
So I see this, and this is not just political talk, I tell you very frankly, I see there is a great opportunity in this crisis for a new global approach to global problems, something that the European Commission, and I may say of Britain, we have been for a long time insisting. As we are in the age of globalisation we need global responses to global problems and Britain has been a very important partner in all this.
So an important conclusion also of the meeting in Washington was that we should reject protectionism and there is now a real danger of what I call ugly protectionism, ugly economic nationalism. We have to fight it now because the alternative to a new agreement on the … is not just a status quo, there is a real danger of countries introducing more protectionist measures. So I think it is more urgent than ever to conclude these Doha trade and development talks.
Regarding development, I want also to praise the Prime Minister’s exceptional leadership on the Millennium Development Goals. Development and integration is very important as well. We should not forget the poorest of the world. We are discussing this financial crisis, we are discussing the situation in some of the developed countries like in Europe, but there are people around the world that cannot have enough to eat, or clean water to drink.
That is why I said to the Prime Minister this morning we will see agreement to do a 1 billion euro food facility to boost agricultural production in developing countries that I have proposed. This is an important initiative to help the poorest help themselves, and I am very pleased that the United Kingdom is supporting this idea of going ahead with helping the developing countries also in agriculture. As Prime Minister Brown said in New York during his very important speech to the General Assembly, the question is not how to help Africa but to help Africa feed the world as well. And I think it is possible and that is why I insist on this proposal I have made of a one billion food facility for developing agricultural production in developing countries.
So I think we have this great opportunity also for climate change, the climate change agenda. Sometime ago the climate change agenda was presented as against growth, and now I think we are in the moment where we are able to design programmes for energy efficiency, environmentally friendly policies, and that will be one of the sectors to boost demand also in Europe and in the rest of the world.
I am confident, and indeed I insist, that we come to an agreement by the December Council on the European Commission proposal regarding climate change. We are I believe closer now than we were some months ago because if we design appropriate programmes at the European level there is a possibility of then also to boost growth and to boost the creation of jobs in Europe so that we can fight the recessionary trends that we are also seeing in Europe and around the world.
Question:
Prime Minister one of other papers today has characterised your fiscal stimulus as being about jam today without worrying about … tomorrow …
Prime Minister:
I think we are in a new world where last year the problem was high inflation, so people were being very badly hurt by rising petrol prices, by rising gas and electricity bills, rising food prices and people’s standards of living were being hit. In the coming year I think you will see prices coming down, the price of petrol has already come down, the prices obviously of gas and electricity should come down soon and prices of food are showing that they are coming down as well. Now in that situation, this new situation, it is right that we support families and businesses through what is a world economic downturn, it is right that we take the necessary action to do so. The Managing Director of the International Monetary Fund has joined many other people today in calling for a fiscal stimulus. A fiscal stimulus means helping families and helping businesses now through this difficult position and as long as you have, as we will have, a medium term framework for fiscal sustainability then this is the right thing to do. Facing the downturn it is right, as almost everybody now accepts across the world and every country is now looking at this, that we help people through these difficult times.
Question:
Mr Barroso I wondered whether you thought that the UK economy, out of all the European economies, is going to find this recession the hardest? And Prime Minister when there is talk of three million job losses, 1 in 12 jobs lost in the south east in the recession, deeper and harder than people have thought, this is going to be devastating for families isn’t it?
Prime Minister:
Maybe I should say first of all that we are better placed than we were ever in the past to deal with these problems. We have low interest rates, interest rates are 3 per cent. Remember in the early 1990s when we faced the last world downturn interest rates were 15 per cent for a year. So interest rates are 3 per cent. We also start from a high level of employment. The corporate balance sheets in our companies outside the financial sector are strong and I believe that as a result of the low debt that we have managed to achieve over the last 10 years, we have reduced the national debt as a share of income, we are better placed to deal with these problems. Now this is a world downturn, it requires global solutions to global problems, as well as what we do nationally. And that is why I am determined in support of families and businesses in our country that I do everything I can, working with President Barroso and other world leaders, so that we can actually take ourselves through this by the cooperation that is necessary. If there is to be help for families and businesses then it should happen in other countries as well, and the effect of it happening in other countries as well as Britain will magnify the benefit to Britain.
President Barroso:
Yes, as I said earlier we are preparing a European Union action plan that I will present on the 26th. But I can tell you already my position. We certainly need a fiscal stimulus plan for Europe, but it cannot be a one size fits all plan because there are different national circumstances. But living in exceptional moments and in exceptional moments we need exceptional measures. Those exceptional measures should be of course timely, targeted and temporary, but we need them and that is going to be one of my proposals to the European Union leaders, that we do it in a coordinated manner so that we can benefit from the positive spill-over effects of one economy to the other, from France, to Germany, to Britain. Of course we are now more interdependent than ever so if you agree on that fiscal stimulus plan in a coordinated manner, if those measures are timely, targeted and temporary, and if they take into consideration that we are living in exceptional circumstances, I believe it possible under the Stability and Growth Pact because the Stability and Growth Pact, after the reform of it, allows for flexibility precisely for these exceptional circumstances.
Question:
Prime Minister may I ask you about another domestic matter, that of organ donations. You have made plain in the past your inclination towards a system of presumed consent. I would assume therefore that you would see this morning’s report as a missed opportunity?
Prime Minister:
Well I am grateful to the Organ Donation Task Force for the work that they have done. What they show is that a large number of people are willing to give their organs to help other people live and they are proposing a plan that would double the number of people in our country who are prepared to donate their organs by volunteering to do so if they died. Now while they are not recommending the introduction of a presumed consent system, as I have done, I am not ruling out a further change in the law. We will revisit this, we will revisit this when we find out how successful the next stage of the campaign has been. 25 per cent of people are prepared to volunteer, 90 per cent of people say that they want to volunteer, the proposal is that we double the number of volunteers to 50 per cent. If we cannot get there quickly then we will return to the proposal that I have put forward which is that you have a presumed consent system.
Question:
After the G20 in Washington what is the prospect for the Doha trade round?
President Barroso:
I think we are now much closer. I think the need for a Doha deal is now clearer than ever, precisely to avoid a global recession. And the calls coming from … are very clear, mainly from the emerging countries. It is a trade and development agenda - Doha - and as I said earlier the alternative not to have Doha is not just a situation that it is, it is this kind of ugly nationalism, or economic nationalism, or ugly protectionism. In fact there are already some indications from the first part of this year that the … cases are coming up, according to the WTO information. So protectionism is already seen in many of the decisions that are being taken or announced by some countries around the world. That is why we have to come to a conclusion as soon as possible and the conclusions were clear, to instruct our trade negotiators to come before the end of the year to a deal on the modalities, the modalities part of trade. I believe it is more important than ever and I think now there is a much greater awareness, including from some that were not sharing this sense of urgency some months ago, now there is a much greater awareness of the need to conclude the Doha trade talks.
Prime Minister:
So I am absolutely clear that protectionism is the road to ruin, as I said on Saturday, and if we do not take action against protectionism then the downturn will last longer. But if we do trade with each other then the benefits of doing so will be magnified in each of the countries that is participating in trade and that is why it is so important to get a world trade agreement as soon as possible and I am grateful to the leadership of President Barroso who has always said that it is to the benefit of the whole world that we can sign a world trade deal as soon as possible.
End of transcript.
delicious
digg
facebook
