European Commissioner Viviane Reding: “We’ll fight for our social welfare state”

She is the most experienced member of the European Commission and it shows. In her third term at the European institution, Viviane Reding does not shy away from discussing almost any subject, not even the poor economic situation of Spain, which she addressed in detail during an exclusive interview with Cinco Días. Reding is travelling on Thursday to Madrid, to meet with several members

The official thesis in Brussels finds no contradiction between austerity and growth, but economic developments in the euro area seems to prove otherwise, and many analysts blame the recession on the Commission, the ECB and the IMF. What is your position in that debate? I think it is wrong to oppose these two concepts against each other. And besides, I do not like the term austerity because it evokes the austerity of the 1930s, which has nothing to do with the current situation. Back then, people had no savings and no job or social security. It was terrible. Today, we have a safety net. And we’ll work to maintain this net for future generations. And that is something that is relevant not only to Spain, but to all of us. Because it is irresponsible to live beyond our means and borrow to consume and send the bill to the next generations. So I applaud that Spain has adopted the goal of zero deficit. It is a declaration of independence from Spain in relation to the markets that will allow the country to make decisions on behalf of its citizens. I admire the courage of the Spanish government to do so.

But it seems that the markets are not rewarding that cut-back policy. So what? We do not govern for the markets, but for the people. As responsible politicians, we must end the lack of freedom of action that we suffer at this time. Besides, you can not expect that the government approves a reform in the morning and it produces results in the afternoon. We must give it time and let the Spanish government work.

Do we not risk destroying the Spanish economy in the quest to calm the markets? Not at all, it’s opportunities that are being built for the future. Spain is a very rich country, with very solid foundations, with a shapely young generation. The exceptional situation we suffer now will recede and Spain will return to normal. The right thing to do is what is being done: a labour reform, financial sector restructuring and fiscal consolidation.

Now that you mention the financial sector, some analysts suggest that Spain should complete its recapitalisation with resources from the euro fund for bailouts. Almost all European banks have to recapitalise, not just the Spanish.

But should Spain use the European fund for that process? It is a question that Spain has to decide by itself. But clearly, Spain is not one of the countries that need help. It has enough strength to sort it ou by itself and I think that is the opinion of the Spanish government, too.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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