CNN INTERVIEW WITH UK PRIME MINISTER, DAVID CAMERON
After his speech to the World Economic Forum in Davos, David Cameron met with CNN’s Richard Quest.
***PLEASE CREDIT CNN/QUEST MEANS BUSINESS***
FULL INTERVIEW WILL AIR IN QUEST MEANS BUSINESS 1900 GMT, 2000 CET
TRANSCRIPT:
CNN Anchor, Richard Quest: Prime Minister, listening to your speech today you were visibly frustrated, fizzing with frustration about what is happening in the eurozone and the inability to solve this crisis. Is this fair?
UK Prime Minister, David Cameron: Well of course it matters, not just to the countries of the Euro zone, but also to their neighbours, that the crisis is resolved, but I am not saying it is easy, I am not saying there are simple switches to flick, these are difficult decisions, they are sometimes expensive decisions. And it involves politicians having to give up powers as well, these are very difficult things we need to do. But, for the single currency to work there are some short-term things that have to be done and longer-term issues that have to be grappled with.
Quest: Chancellor Merkel and yourself are essentially saying the same message in a different way, “Get on with it!”
Cameron: Well, you could put it like that, but I prefer to say is short-term, you have to ease the economic crisis, you have got to resolve the Greek crisis, you have to strengthen the banks and the firewall has got to be big enough to deal with any contagion in the system. We have been saying this – you could almost put it to music because politicians have been saying it for so long – but we have to deliver it at the beginning of this year and that is only the start.
Quest: Right, you have taken bold measures and the austerity measures that you have implemented, but if the Euro zone crisis continues or worsens, as some predict, I am not going to ask whether you are going to backtrack on austerity, but what I am going to ask you is whether you would be prepared to countenance taking your foot off the pedal?
Cameron: Well, the IMF I think gave us some clear advice – when asked whether Britain is a country with the fiscal space to take its foot of the pedal – Christine Lagarde said very clearly, ‘no it isn’t’. We have a big budget deficit we have a big stock of debt, we need to show the world that we are paying down that deficit, dealing with that debt and that is one of the keys to recovery. And it’s a good thing in itself, it has given us, because we have a plan, some of the lowest interest rates – just over 2%. Now, if you took your foot off the pedal and eased up, spent some more money, borrowed more money in a discretionary sense you could lose all the benefit of that as interest rates go up. 1% of interest rate is a £1000 of a family’s mortgage.
Quest: Now, toBritain’s relationship with Euro zone partners and your EU partners. Following December, is there any movement that you can see that would allow you to rejoin the full debate now? Because you are going toBrussels on Monday, there is going to be a European summit, so are you still on the outside?
Cameron: We are on the inside. AtBrussels on Monday we are going to be talking about what really matters – the single market, competitiveness, and how we help our economies to grow. Britain is at the heart of that debate. But in terms of the new treaty, outside the European Union, for the Euro zone members that treaty is going to be about the fiscal union they want to bring about as members of the Euro zone. We are not going to be at a disadvantage by not being party, we are not a part of the Euro zone and we are not going to join the Euro zone. I think we should focus on what really matters forBritain, which is actually getting the single market moving. The reason we didn’t join the treaty is the same reason we don’t join the treaty today, which is that we asked for safeguards, we asked for conditions, particularly around the single market and financial services, we haven’t got those safeguards so we cannot have a treaty inside the European Union.
Quest: The dynamics have changed within the 27, once they all have their fiscal pact which may come in March, or sometime this year, the dynamic has changed and you have to play a different role…
Cameron: The dynamic changed when part of the European Union decided to have a single currency, the Euro. That was the moment the dynamic changed. And from then on, frankly, countries likeBritain, which are in the single market, but not in the single currency, have been basically engaging inEurope in a slightly different way. Absolutely committed to the single market but frankly out of the realm when the Euro zone issues are being discussed because we are not in this currency, and we don’t have to be in this currency, and I think we should take a relaxed view of that – Britain gets a lot out of Europe through the single market – through our engagement in foreign affairs and other issues, but we don’t want to be in the Euro zone, we would rather set our own interest rates set our own economic policy for the benefit of our own people.
Quest: Coming back to the idea of a treaty – which of courseBritain could sign up to even without signing the part of the fiscal pact – can you see movement that would enable you sign up to the treaty even though you wouldn’t be a part of the fiscal pact?
Cameron: I haven’t seen that movement because the conditions we set out are the conditions we set out and they haven’t been moved towards, so I don’t see that development.
Quest: So there is no movement on that…
Cameron: There hasn’t been. The members who want the fiscal union are going ahead with that treaty outside the EU. It’s obviously in our interest that it is fixed to the fiscal union and doesn’t fall into matters covered by the European Union treaties and I think that will be the case.
I think you can look at individual countries and say are you are you ahead of the curve or how do you plan to deal with the deficit, I think in the UK we are ahead of that. On that issue, I think there have been good developments in recent months showing that the politicians and leaders in the Euro zone recognise what needs to be done and are willing to do it. They care about their currency, they know they need to take steps for it to be a success, it is in their interests and the rest of the world’s interests
CONTACt:
Rachael Booth De Perea Press CNN International Tel: +44 (0) 20 7693 0945 Mob: +44 (0) 7984 071574 www.cnn.com/international