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NEWSMAKER: JACQUES SANTERMay 5, 1998The NewsHour with Jim Lehrer Transcript |
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At an historic summit meeting in Brussels, eleven nations of the European Union agreed to participate in Europe's single currency, the euro. Following a background report, Elizabeth Farnsworth speaks with Jacques Santer, President of the European Commission, about the political and economic significance of the agreement.
ELIZABETH FARNSWORTH: And with us now is Jacques Santer, president of the European Commission, the executive body of the European Union. A former prime minister of Luxembourg, President Santer has held his present position since 1995. Thank you very much for being with us, Mr. President.
A RealAudio version of this segment is available.
NEWSHOUR LINKS:
May 5, 1998
A background report the euro .
May 1, 1998
A discussion on the euro .
February 24, 1997
What's the cultural, political and economic significance of the euro?
December 17, 1997
David Gergen interviews John Newhouse, author of Europe Adrift.
Browse the NewsHour's coverage of Europe and economic affairs.
OUTSIDE LINKS:
The European Union.
JACQUES SANTER, President, European Commission: Good evening.
ELIZABETH FARNSWORTH: A political compromise solved the squabble, or resolved the squabble this weekend. Does that mean the Central Bank will be politicized from now on, as some have charged?
JACQUES SANTER: Not at all. We established the European Central Bank, which would be independent and the quarrel of the personalities between Mr. Duisenberg or Mr. Trichet--there was not a difference in the policies. They are two outstanding personalities, two governors of banks. And they are all together in favor of an independent European Central Bank. So there is no risk that European Central Bank would give up their independence--the contrary.
ELIZABETH FARNSWORTH: And yet the president of Germany's powerful Central Bank criticized the compromise and said that it had compromised the Euro's birth.
JACQUES SANTER: We have to say that Wim Duisenberg is now appointed for a term of eight years. And it's up to him to take his decision if he would resign after the transition period, let's say 2002. There is no indication of that yet, and after that there would be Mr. Trichet as president of the bank. So we are in the very good situation, in the happy situation that we would have two outstanding presidents of the European Central Bank.
ELIZABETH FARNSWORTH: Mr. President, how big of a challenge will it be in the future--for countries to give up their sovereign monetary policies? I mean, they pledged to do this, and yet, France has its own ideas for how its monetary policy should be. Germany does too. How will they resolve these problems?
"It's an historic event, and the most important one since the signature of the Treaty of Rome...."
JACQUES SANTER: Of course. That's a very important moment. It's an historic event, and the most important one since the signature of the Treaty of Rome, since the 25th of March of 1957. So we have to be aware of this very important date of European unification and integration. And as 11 countries put together their money in a single currency, that's to say that they are--that they have the faith that we need further economic integration, economic integration because we created a single market of 370 million inhabitants. But it did not function as an integrated economic market like the American market, for instance, because it's very difficult to have a proper function of a single market with 15 different currencies without creating any distortions. So this is a step forward in the economic integration and the single markets. It gives also our economy the possibility to valorize all these potentialities as a single market. And that is the reason why the 11 countries and I think also some other countries who would join the 11 afterwards, they created this historic moment in the history of Europe.
ELIZABETH FARNSWORTH: So, for example, let's just look at a couple of examples--if France, for example, needs a more expansive monetary policy to fight unemployment, how would it do that, what instruments would it use through the Central Bank to get that?
JACQUES SANTER: We have to be clear. The European Central Bank has to guarantee price stability and therefore, it's only the Central Bank, in the competence of the Central Bank, that's a monetary policy. On the other hand, we have as a counsel of the euro, which--where the 11 member states have to reach members of the monetary union, have to coordinate their economic and budgetary policy--in relation of--of the monetary policy. So I think we have to make a separation between one hand the monetary policy, and the other hand the coordination as a political policy. But all the parties, all the members have to respect--as we call it--criteria of the Maastricht Treaty, as they are now enshrined in the--as we call it--the Pact of Stability and Growth, and therefore they are all the members states are committed to a fiscal discipline, and that is why it's so important to link all the member states together.
ELIZABETH FARNSWORTH: Do you think, Mr. President, that the euro will eventually replace the dollar as the world's number one currency?
JACQUES SANTER: No, that's not our aim. That's not our first aim. Of course, as--there is an important monetary zone with some 300 million inhabitants--20 percent of the GDP and of international trade--that would be a very effective currency, and it would play let's say a role as a stabilization--as a stabilizator factor in the international relations, in the monetary and the economic international relations alongside with the dollar and the yen. It's not up to--it's not our intention to replace the dollar but, nevertheless, I think the United States and the Europeans, they have an interest that we would have on both sides, strong, stable, and credible currencies.
ELIZABETH FARNSWORTH: The treaty establishing the European Monetary Union explicitly called for moving towards political union too. Do you think that is what is coming for Europe and including more unified policies on defense, for example, on foreign policy?
A step toward political integration.
JACQUES SANTER: Of course. I think also the euro is something which is helpful in this direction because--and the history showing for the United States but also for other countries in the past that the currency is very important factor of political integration. The currency gives also an identity to a nation and--I hope so--that also the euro gives some more identity, a political identity to the European Union. But, nevertheless, we have to work, we have to deepen our political integration for the further, that we have to create the common foreign and security policy, so that Europe has to take all the--let's say the political consequences for this economic weight and the economic dimension. So that is--so that Europe can also play a major political role in the international environment.
ELIZABETH FARNSWORTH: Do you see any signs that the economic union and the negotiations that have led to it are already leading to any more unity in foreign affairs, for example, in Kosovo, where ethnic differences between Serbs and Albanians has led to such fighting?
JACQUES SANTER: Of course. We are very committed with our American friends and with our allies, how we can intervene in this--in Kosovo and ex-Yugoslavia--also in other parts of the world. I think we have to play this political role. We are in some cases a paymaster, and we want also not only to be the contributor but also to play a political role, and, therefore, I think what would be very important is to have deepening, a political deepening of our integration, and, therefore, the decisions taken this weekend would play also a major role in the evolution, the political evolution of Europe in the future.
ELIZABETH FARNSWORTH: Mr. President, you and the leaders of Germany and France and other European countries right now lived through World War II. I recognize you were very young. But did that experience propel you and compel you to work hard on this--this unity and this unification of Europe?
A "unique chance to unite our continent in peace and freedom."
JACQUES SANTER: Of course. I think euro is a political project. We have to have a political vision of Europe. It's not only a market. It's not only a single currency. But it's also a political project on the project of peace, of peace and freedom. And we are living now in Europe our longest period of peace we ever witnessed and sent a great as a great achievement of Europe, and, therefore, we have to stick to this political project and therefore, we have also now to enlarge our union to the Eastern countries, to the new democracies, because we have now for the first time since more than 500 years, since the 14th century the unique chance to unite our continent in peace and freedom. And we have to succeed in it. So it's a marvelous chance we have, and, therefore it's also for us a moral obligation that also these countries, these new democracies, former Communist countries, could have also--can become full members of the European Union to--precisely to share with us our coming vision--a vision of peace and freedom.
ELIZABETH FARNSWORTH: Well, President Santer, thank you very much for being with us.
JACQUES SANTER: Thank you.
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