Good afternoon, everybody. I’m delighted to welcome Prime Minister Fillon for his first [indistinct] and it’s a great pleasure welcoming him here in Downing Street today.
I think the relationship between Britain and France is at a very, very strong point. Last year, I think we took some very bold steps with the defence relationship and, as we were discussing in our meeting, that defence relationship is not just about words; it’s actually about trying to make sure that two countries with similar size forces with a similar outlook can work together when it’s in our interests to work together and, therefore, maximise our influence and our impact in the world. It actually enhances our own individual sovereign capability when we do so in that way. I think our relationship is getting more important as we go towards the French G8 and G20 this year and we want to work very closely on that.
Above all, the issue which we discussed this morning and where we must work as closely as possible is to make sure that 2011 is a year of economic growth, a year of economic growth in Britain, in France and right across Europe. We want this to be Europe’s priority this year. We want to see deregulation, we want to see a fresh approach in Europe, favouring growth, favouring business, favouring investment. We want to be promoting research and innovation, making sure there’s access to finance, reducing regulatory burdens and these are all areas where Britain and France will work together. We will also work together on the internal market and also promoting Doha and trade.
On the EU budget, you’ve seen very close relations between Britain and France and Britain and France and Germany and many of the other nations in Europe, where at European Council after European Council we’ve been coming together and saying how important it is that at a time when we are cutting spending in our own countries we should be doing the same thing in terms of European budgets. We are arguing for real restraint both over the next two years and also as we go into the European financial perspective.
I’d like to say very clearly that the condolences of the British government and the British people are sent to the French government and the French people in respect of the French nationals killed in the Niger. It reinforces our determination to tackle terrorism in all its forms.
Let me just say one word about the Eurozone and the importance of the Eurozone to Britain. About half of our trade goes to the European Union and about 44 per cent of it is with countries of the Eurozone. Let me be absolutely clear: Britain is not a member of the Euro, we are not going to join the Euro. As long as I’m Prime Minister there’s absolutely no chance of that happening. I believe we’re better off with our own currency and being able to have our own economic policy. But let me be clear about something else: a strong and successful Eurozone is in Britain’s interests. We want the countries of the Eurozone to sort out the difficulties and the problems that they have and we won’t stand in the way as they do that. Indeed, we will be a helpful partner in making sure that happens. But let me again be clear: that does not mean that Britain should be drawn into new mechanisms or new procedures or have to give up new powers. That is absolutely not what we see as necessary as happening and throughout the European Councils last year we made that point and secured that point on many, many occasions. We want a strong Eurozone. We want it to sort out its problems. We won’t stand in its way, but we are neither joining the Euro nor are we going to be drawn into fresh and new mechanisms within the Eurozone.
Prime Minister Francois Fillon
Prime Minister, first of all, thank you for the meeting we just had and for your reception here. This is my first trip to the UK, but I want to tell the British press that this is not exactly an historic event because I’ve already come to Great Britain accompanying the Prime Minister that was Jean-Pierre Raffarin in 2003 and 2004 and then when Prime Minister Dominique de Villepin came to Great Britain in 2005. I told David Cameron a while ago that we should intensify the rhythm and frequency of meetings between our governments, particularly because the quality of our relations has reached an unprecedented level, in particular thanks to the France-UK agreement and our defence co-operation agreements which, as I already said, can only happen between two sister nations; in other words, two nations that have such high trust between themselves that they can pool essential things as their own safety.
I already met David Cameron in Paris in 2008 when he led the opposition and at the time I was impressed with his sense of responsibility and now that I meet him today I feel that this quality is certainly there, to which I would add a sense of courage and leadership in that. In fact, it was the first thing that I told David Cameron a while ago. I told him that the French government admires enormously the economic and financial policies of Great Britain that are being conducted right now and the courage with which the British government has embarked upon this effort to restore a sound budget. I’m sure that it’s going to deliver for the UK, of course, and it will also be a great thing for the whole of Europe and I’m sure that it’s very reassuring to be able to compare policies on either side of the Channel and to observe that they’re actually very close. I must say that both the French and the British are very keen to preserve their independence and national sovereignty. Well, that means reducing deficits and that means having sound national budgets.
We also broached the issue of the Euro. I want to say that, first of all, the Euro does not need to be saved. The Euro needs to be defended and in order to defend the Euro within the Eurozone what we need is to strengthen our co-operation. The Eurozone governments need to put in place an economic steering mechanism for the zone. What we need is over the long term to harmonise our fiscal procedures, the way we work, the way we organise our economies. Over the long term you can’t have a Eurozone that would maintain such huge gaps in terms of working hours and retirement ages and in terms of economic organisation and taxes, so that if we want the Eurozone to be consolidated it is imperative to harmonise our legislations in these areas. And what I told Prime Minister David Cameron is that the UK should look at those efforts with enthusiasm, because it is in the UK’s own interest to have a strong Eurozone. Of course, I have not come here to ask David Cameron for help or to ask the UK to change its policies vis-a-vis the Euro. I’ve just asked the UK to look at this effort for harmonisation and consistency in a favourable light.
We also mentioned the EU budget and realise that we’re totally in line as to the need not to increase the EU’s budget and also the need to channel part of the EU’s resources to more efficient actions in terms of supporting growth. In particular, I mentioned three ideas that France will defend in 2011: a European patent fund, a venture capital fund for innovative small businesses, and the need for European institutions to have impact studies carried out before they take any decisions to make sure what the exact effects of those European standards and regulations will be for our businesses.
Then we talked about our bilateral relations and, in particular, the possibility of bringing our industrial strategies closer together, in particular in the field of nuclear energy, because that is now possible with our very tight co-operation.
And we also mentioned the fight against terrorism and I would like to thank David Cameron for his words of sympathy and solidarity which he has expressed to the President of the French Republic and which he has just reiterated after two French citizens were killed in Niger. This just reminds us of how important it is for governments to stick together, because when those things happen it’s not just one country that is attacked; it’s our whole set of values.
Thank you, Prime Minister. I think we have a question from TF1 first.
You’ve just, in fact, talked about the level of terrorism in France and in the UK, the level of alert is very high. So, today, how could you actually describe co-operation between the two countries, which today is possibly widening, according to, in fact, the situation in the Sahel worsening? And also, how do you interpret the events that are taking place in North Africa? Do you both have the same analysis as far as these matters are concerned?
Prime Minister Francois Fillon
Co-operation between France and the UK with regard to the fight against terrorism is very close and it’s existed for a long time and has carried on being reinforced and we talked together about the fact that we have to reinforce it even more, especially with regard to the Sahel and the aim in the Sahel zone is to avoid at all costs that the terrorist movements will stretch their influence to the detriment of the existing states and to the detriment of the public structures, which are already very fragile in that particular region of the world. We see very well that, in fact, it’s a key moment where these states actually need to be encouraged, they need to be reinforced, they need to be helped in the fight against terrorism, and we hope to be able to work very closely together with the UK.
With regard to the situation in Tunisia, because after all, that’s the question that you’re raising, I would say that we are particularly worried by this situation, by the violence that actually has taken place over the past few days, and we instantly ask for all the parties to restrain themselves, to choose a path of dialogue, because we cannot continue by using violence in a disproportionate fashion, and the French government is doing its best in order to be able to convince the Tunisian government that they should actually commit themselves in that direction. I would also like to note, with interest, that certain measures have already been announced, especially the freeing of the people that actually had been arrested at the beginning of the riots, and they have to progress on that particular path.
I would also like to add that over and above the internal political problems in those countries that have to be resolved, through the most democratic fashion, there is also a problem relating to economic development and those problems are also linked to it, and there we, in fact, are able to work together, the European Union as European Union, in order to be able to give aid to development, aid in a more efficient fashion to that Maghreb region with which we have got historical links, and everybody is well aware of them.
Thank you. I would say that our co-operation in terms of terrorism and security is extremely good. I mean, obviously in Afghanistan we are very close partners. I admire the way that the French government under [President] Nicolas [Sarkozy] and François have put so much effort into Afghanistan and the extra troops and trainers, and we stand and fight that important battle together, because we are denying Afghanistan to the terrorists and the terrorist training camps that were there before. A second front, if you like, is the very good security co-operation, where our security services work extremely closely. Everyone knows that before Christmas in Europe and even today in Europe there is a very big security threat, and we work hand in glove together with the French, on security with the Germans, with the Swedes, Danes and others, and it is very important that we do.
We were discussing before this press conference that I would like to see us open a third front, if you like, which is to tackle radical and violent extremism and the radicalisation of young Muslims in our two countries. I think we have to learn from each other and to explore the best ways of making sure this happens. I am becoming increasingly convinced it is not enough just to target violent extremism; we have to target extremism itself. We have to drain the water from the swamp in which the violent extremism grows, and I am sure that Britain and France can work together on this and learn from each other.
One last point: I think we also need, in this world in which we live, to be smarter in how we tackle terrorism and Al Qaeda. We see now Al Qaeda in the Arabian peninsula in Yemen, we see them in North Africa, we see them in Somalia. We have problems in parts of Asia. Clearly, we have taken one approach in Afghanistan. We have to work in all the different ways we can to tackle and defeat this terrorist threat in all those different parts of the world, and I know that Britain and France will be standing together as we do that.
Thank you very much, Prime Minister. There is a lot of concern in the country about the sharp rises in fuel prices, and before the election you did at least hint, if not promise, that you would introduce a fair fuel stabiliser. I wonder at what point you will introduce that stabiliser? For example, if Brent Crude reaches $100 a barrel, would you introduce a fuel stabiliser? And Monsieur Fillon, if I may: you know the British; you have a British wife. Do you understand the horrified reaction in Britain when we hear you talk - when people hear you talking about the harmonisation of economic, fiscal and social policy?
I will answer my one first, if that’s all right. First of all, on fuel, I understand that people who are filling up the family car, or filling up the car on the way to work, and many people have to drive to work - they don’t have a choice - you know, when it hits £1.30 and more a litre, that is incredibly painful. When it is £60 or £70 to fill up a family car, not a flash car, I understand how painful and difficult that is. That is coming straight out of people’s post-tax earnings. You know, most people live on a very tight budget, and if there’s a movement in food prices or in fuel prices, that has a very big effect on their family, on their livelihood, and on their life, so I completely understand that.
There are two points I want to make. The first is that, you know, we inherited four fuel duty increases from the last government. We also inherited from the last government the biggest budget deficit anywhere in Europe. People sometimes forget that last year, when this government came in, our budget deficit was actually bigger than Greece’s. It was bigger than Ireland’s. It was not possible to cancel a lot of tax rises that the last government put into the pipeline. We cancelled the tax on every job in the country at a time when we need to get Britain working again, but we could not cancel all of those fuel-duty increases.
Second point: can we have a fairer system in the future? I do think there’s a very attractive idea of saying that as oil prices rise and as the Treasury potentially benefits from some revenue from those oil-price rises, both through North Sea and at the petrol pump, is there a way of sharing the pain of increased petrol prices between the motorist on the one hand and the Treasury on the other? Is there a way of sharing, if you like, the benefit of the higher prices, because that means some more revenue for the Treasury? Now, we have to look very carefully at exactly how much more revenue that does mean for the Treasury, and what the effect is of a higher oil price.
But should we look at this? Should we try and find a way of helping people? That is exactly what the Chancellor and what the Treasury are doing. That is what they are looking at, and obviously there’s a Budget in March when those sorts of decisions can be looked at. I’m not pretending this is easy. It is difficult. A rising oil price also has some bad effects on the economy, which can reduce revenue. But should we look at ways of trying to share that pain, to share that burden? Yes, that’s absolutely what we’re doing.
Does this rule out a fuel stabiliser?
No, I think if you listen to that answer carefully, you don’t need to break it up into too many parts. I think you can find a pretty clear explanation. I don’t want to answer the French Prime Minister’s question, but I just want to make one point on harmonisation and all the things that François has spoken about. Britain isn’t in the Euro. We are not going to join the Euro. We understand that if you are in a single currency, you do need to take steps to better co-ordinate and harmonise, sometimes, some of the things you do together. Indeed, that was one of the reasons why I never wanted to join the Euro in the first place, because I didn’t want that to happen. I don’t think you can have, for a very long time, a single currency without having a more co-ordinated fiscal policy. In America, if Texas has a good year, it pays more in taxes and it gets less in public spending. They have a fiscal union to go with their single currency, the dollar. This was a reason, for me, for not joining the Euro. So, when we talk of harmonisation and these sorts of changes, they don’t have to apply to Britain, because we are not in the Euro.
Prime Minister Francois Fillon
Well, it is a policy of assimilation - can it always work with an English wife? No. And secondly, we mustn’t exaggerate the differences between our two countries. Earlier on I said that we were very coquettish when we talked about our differences, but the truth is that for a number of years, we have progressed towards each other as far as organisation is concerned, and also from an ideological point of view. I believe that the UK recognises today that it’s essential sometimes to give a certain encouragement in order to be able to set up certain industrial areas, and France has made a great deal of effort to open up its market. Today, it’s one of the most open countries in the world - at least the most open in Europe, and in fact, I talked about it this morning when I talked to the City.
Thirdly, as David has just said an instant ago, we are not asking the UK to join the Eurozone. The effort of coherence that is necessary within the Eurozone does not involve the UK. However, all we are asking is that the UK shouldn’t be offended by this effort, and doesn’t consider it as being dangerous for itself, and doesn’t consider it as being a kind of difference that could actually establish itself between the Eurozone and countries that don’t belong to it. We’ve made two different choices - at the time, in fact, in my country, I was one of those actually who was a Eurosceptic, and when we opposed that particular choice with a number of other politicians, we said precisely what is taking place today - that we can have a joint currency as long as we have an economic policy which is harmonised, as long as there is more fiscal and social convergence.
Today we have achieved this and we are faced with the historical commitment which is that of consolidating that Eurozone and we have to go towards that convergence, but we entirely understand that the British want to remain British, and once again, even if we weren’t to understand and we won’t be able to convince you to the contrary.
You talked a lot about European culture, about Europe, about its history, about its identity, and this is after a period in France where we talked a great deal about national identity, but with regard to that question and other questions there are a number of electors and citizens and conservatives from your camp, in other words, who decide to go towards nationalists and, for example, go towards Marie Le Pen. What does that make you feel? And after all, possibly that’s not a French feeling; maybe the British Prime Minister could also talk to us about the rise in extremism or extreme parties.
Prime Minister Francois Fillon
Well, it’s a concern. It’s a concern for all European governments and it’s a concern for all democrats within our countries that are unable to really see the rise of intolerance and to sort of fall back on themselves, as it were, or become really insular and that always has led, in the past, to very bad results. So we actually have to fight against these extremists and the best way of fighting against them is to express the truth, is to have the policies that we have and to face reality, and that’s why, at the head of the French government, I have constantly defended a policy of rigour to clean up the public finances, because it’s absolutely essential to defend national sovereignty, national defence, and that’s the reason why I’ve always supported a policy which would defend our national identity within the whole of the European group, and I also talked about convergence of political, fiscal and social policies, but none of these will actually destabilise the cultural differences that exist between our countries, which must continue to exist.
And we talked about the fight against terrorism and the rise in this of radical Islamism, which certainly does give a very bad light on whole regions of the world. Our co-operation, in order to be able to fight against this radical Islamism, in order to be able to try to find solutions to the conflicts that are actually at the origin of this radical Islamism, in fact we’ll also find answers to the increase in extremist movements.
This is really more a question, I think, for François but, I mean, in Britain there’s an extremist party which won seats in the European Parliament at the last election. In my opinion, the way to fight extremists in politics is to challenge them, to confront them, to make sure you fight every seat that they are contesting, to get onto the doorstep and have the arguments with people, whether it’s about housing or immigration or other social issues, to have those arguments on the doorstep with people so no one can say that there has been a void left for the extremists to go into. They thrive when the established politicians stand back and don’t actually get out there and represent people and represent their interests.
I think, though, it is very important when we discuss some difficult issues in politics, we do so in a way that is reasonable and balanced and sensible. When we make arguments about the need to control immigration, and we do need to control immigration in Britain, we are making arguments about making sure we can cope with the pressures on public services. This is no longer an argument in Britain about colour or anything like that; this is just an argument about what is sensible and manageable for a modern democracy and the pressures there can be. When we argue about Europe, this is not some romantic, idealised, ‘put the drawbridge up’; we argue for what is effective in Europe. Britain’s better off with its own currency, but must co-operate in Europe in the areas where it benefits us. I think if we speak about these issues in this way and if we fight extremists on the doorstep, then we can make sure they don’t rise.
Prime Minister, you’ve made your views on the Euro absolutely crystal clear, but does that mean there would be absolutely no extra money from the UK to help out if Portugal needs further assistance, which many commentators believe will be necessary and will be vital in terms of the future stability of the Eurozone? And if I could ask Monsieur Fillon whether you would like to see Britain playing a greater role, albeit from outside the Eurozone, in those circumstances.
Well, first of all, I don’t think it is right to speculate about another country, and what I would say is that I admire the leadership of Jose Socrates in Portugal. I think he is taking very effective steps to deal with his own budget deficit, to confront the problems that they have in Portugal in terms of the fiscal challenges they face. Let me just say again, when people ask why are we taking such radical steps here in the UK, our budget deficit is considerably larger than Portugal’s, so I understand the political pressures and difficulties that he faces as he tries to get on top of that borrowing.
The point I would make about support for other European countries is this: the last government signed up to a European financial mechanism before this government came into office, and it signed up to a mechanism which operates under qualified majority voting. We, at the time, advised them not to do that, but that’s a situation that we inherited and that mechanism was used in part to support the Irish government in their time of need. That mechanism still exists. What I managed to achieve at the European Council in December was to make absolutely clear that when the new mechanism is put in place in 2013 that the old mechanism, the one that we never approved of, stops existing, it ceases to be, and that is included both in the language of the conclusions of that European Council and also in the actual instrument that will bring about the new mechanism for Eurozone countries to be supported by themselves. So this mechanism - the old one, which we didn’t approve of, that we didn’t support - still exists. It still has some headroom in it, but we will argue very strongly, we have argued very strongly, that it should be brought to an end and we have won that argument. But it’s one of many areas where we are clearing up the mess that we are left by the previous government that did not think these issues through carefully enough.
Prime Minister Francois Fillon
In my turn, I would like to say that I have total confidence in Mr Socrates’s government and I’d like to say to an extent there’s a kind of irrational character, to a certain extent, in some of the attacks against the Eurozone countries as David has just said a minute ago, because after all the Eurozone is not the most indebted in the world and Portugal today has conducted, conducts, a very rigorous policy to reduce public spending and to reorganise its economy, which perfectly corresponds to the expectations that were those of all the European partners.
Is there a need for supplementary funds today? The answer is no, there’s a fund that was established and there are a whole series of budgetary disciplines that have to be established and surveillance of what the governments are doing and now, of course, they have got to be realised. We have got to go from statements, from agreements in principle to the actual introduction of mechanisms that will allow us to actually survey what the states do and also, if needs be, to obtain corrections to their trajectory. If tomorrow there were to be any kind of supplementary needs, what I say, because the President of the French Republic has said this on a number of occasions and the German Chancellor also repeated this, is that we will do our utmost in order to be able to consolidate the Euro - we’ll do absolutely our utmost.
And as far as the British attitude, the UK’s attitude - I have no comments to make, no comments to make with regard to the UK’s co-operation, which in fact has fully played the role that it was supposed to play, right from the start of this crisis, and I’d also like to remind you that it’s the UK and France who, right at the beginning of the financial crisis, made decisions, took the necessary initiatives in order to be able to ensure that the crisis wouldn’t become far more serious than it did, and today David Cameron’s government has done precisely what was needed in order to ensure that European solidarity be whole, as well as taking into consideration that the UK is not in Eurozone and does not have the same responsibilities because of that.
Thank you all very much indeed for coming. Thank you, François, again for coming and for your questions. Thank you very much.