European Commission President Jean-Claude Juncker, who travels to Spain on Wednesday, is moderately optimistic about Europe, with some caveats. He praises Spain for its reforms, but warns that the crisis will not go away until the unemployment rate declines. And while admitting that new political parties such as Syriza in Greece and Podemos in Spain are correct in their diagnosis, Juncker believes that their programs, if implemented, would completely block the European project. The following are excerpts from an interview he gave to EL PAÍS ahead of his visit that deal directly with Spain.
Question. What is Europe’s greatest problem?
Answer. People’s disenchantment with European institutions represents a challenge, but the greatest problem is unemployment. With those high joblessness and youth unemployment figures in Spain, even though things are getting better, we cannot tell people, or indeed ourselves, that the crisis is over. The honest thing to say is that we will continue to have serious difficulties as long as unemployment does not drop to normal levels. We’re in the middle of the crisis; this is not over.
Q. Such realism is surprising: Spain has undertaken three labor reforms in five years, and the Commission that you preside holds them up as an example on a daily basis, even though Spain’s unemployment rate is 23 percent and youth unemployment is upwards of 50 percent.
A. My impression is that the Spanish government has reformed the economy. It has made complicated decisions. It has approved tough structural reforms, although their scope and ambition are debatable. It solved the banking crisis. And the recovery is there, but perhaps it has not yet sufficiently reached employment, and that might give Spaniards the wrong impression that things are not moving in the right direction.
Q. Nobody questions the statistics, but you go explain them to 5.5 million unemployed people.
A. Structural reforms take time to yield results. I understand the impatience; citizens demand immediate results. But you need to give them time.
Q. [Greek PM Alexis] Tsipras was elected on an anti-austerity and anti-Troika platform, and on the promise of restructuring Greek debt. Do you fear that other parties like Podemos in Spain might pick up the same baton?
A. This new type of party often analyzes the situation in a realistic manner, and sharply underscores the enormous social challenges. But if they win the elections, they become unable to deliver on their promises or transform their programs into realities. The proposals made by some of those parties are not compatible with European rules: they would lead to a situation of complete gridlock.
Q. Why do we in the south get the feeling that the rules are getting more flexible just as the problems are reaching France, mirroring what happened a decade ago with Germany?
I understand the impatience; citizens demand immediate results. But you need to give them time”
A. You are getting your dates confused. Germany did not follow the letter of the pact in 2003, and the reform took place in 2005. Regarding the decision to give France two more years to reduce its deficit, several countries, including those in the south, have criticized that measure. Yet I don’t see great enthusiasm in France, which is now forced to change its budget and meet its obligations. One might get the impression that France has received a gift, but it is a poisoned gift.
Q. But how do you explain to a Spaniard that after three labor reforms and one pension reform, Spain got a two-year deferral in 2013 to meet its deficit targets, yet France has gotten four years without a single reform of a similar caliber?
A. France did not make sufficient reforms, but it did set the process in motion. It reformed its regional structure and approved the Macron law, although it is not sufficiently ambitious. Paris has sent in a 47-page document detailing how it is going to address the reforms. It knows it has to do better. And it will.