No U-Turn on Chinese car tariffs, Spain’s finance minister says

euronews (in English)

In an interview with Euronews’ Europe Conversation, Carlos Cuerpo spoke of the economic impact of recent devastating floods, and how Europe should respond to US President Donald Trump

Transcript

00:00We spoke to Carlos Cuerpo, Spain's economy minister, who was in Brussels to ask the EU

00:14for help concerning the devastating floods that happened in Spain on October 29th.

00:20Cuerpo said Spain would do whatever it takes to rebuild the damage.

00:25And he also said that responsibilities for the management of the floods would need to

00:29be determined.

00:33Carlos Cuerpo, you are Spain's minister of economy, trade and business.

00:37Thank you so much for joining us.

00:40So you met with European commissioners in Brussels to negotiate EU funds to help Spain

00:46recover from the devastating floods that happened last month.

00:51So Carlos Cuerpo, what are these funds?

00:56And what did you obtain from the EU?

00:59Well, thanks.

01:00Thanks for inviting me.

01:01It's a pleasure being here.

01:02Of course, we are here to meet with several commissioners, including Commissioner Ferreira,

01:07Commissioner Hahn, also Vice President Dombrovskis.

01:10So the idea is to really get an extent of all the different solidarity tools that are

01:17available for Spain to face, as you said, the consequences of these huge natural disasters

01:24that we suffered on the 29th of October in Valencia with the floodings.

01:29So I think there are four main channels that we are exploring.

01:32One is, of course, the Solidarity Fund, which is there actually for specific, for this purpose

01:37specifically.

01:38Then, of course, there is the Agricultural Reserve.

01:42There is flexibility concerning the use of structural funds, cohesion funds as well.

01:47And there is also the reprogramming of next generation EU funds of our recovery plan.

01:51So we are trying to explore all those possibilities to really tap into EU solidarity.

01:57And the feedback that we get from the commissioners so far is very good feedback, of course, in

02:02terms of really having the Commission on our side to help as much as possible.

02:07So what is the amount of money that you obtain?

02:09Well, it's a bit early to say, to have a fully-fledged envelope of all the money that will be used

02:16from EU funds.

02:18So we're still now at the early stage, trying to first get an extent of the impact, because

02:24that will, of course, determine how much money we have access to in the end as well.

02:31But I think these early stages are good for us to prepare, to get ready, to really be

02:38quick in asking for those funds, as quick as possible.

02:42How much time do you think will be needed to overcome the effects of those floods?

02:47Well, we need to rebuild.

02:49We need to reconstruct.

02:50So we're now at the early phase of the critical response, of early response, trying to get

02:56people back on their feet.

02:59But then we will need to reconstruct.

03:01So this will take long.

03:03So we are planning on actually getting side by side and getting to help citizens that

03:10were affected by this disaster as long as necessary.

03:14You know, there's this sentence by Mario Draghi, it is whatever it takes.

03:18So that's what the government is trying to instill into the minds of those affected now,

03:22to give them a bit of hope that we will be with them as long as it takes and with as

03:28many resources as are needed.

03:30And do you think those have already an impact on Spain's GDP, or will have an impact?

03:35How do you see the consequences on Spain's economy?

03:392024, GDP growth is almost closed now.

03:44We are almost at the end of the year.

03:45So I wouldn't expect a big impact in terms of 2024 GDP growth rate.

03:50We will see the full extent as we go along over the course of the next few weeks, how

03:55many businesses do actually have to put their daily operations on hold to rebuild, to reconstruct.

04:03We will see.

04:04In any case, so for you to have an idea, the area that was affected might represent around

04:101% of Spanish GDP.

04:13So let's see what the actual impact on this 1% of Spanish GDP is and for how long.

04:20And then we will have a final estimate.

04:22Minister, as you know, the population in the region has protested against the lack of warning,

04:30but also the insufficient support from the regional government and from the central government.

04:37This has led to violence, I would say protest and violence.

04:43What in your views went wrong?

04:45Well, as I just said, we are now very focused on responding to the current needs of the

04:52population.

04:53So there will be a time once we actually get out of this initial immediate response phase

04:59to look at political responsibilities and to draw lessons from them.

05:04But I think people would not understand us really fighting over each other at this point

05:09while they're still in huge need of response and of help.

05:15Yeah, but the anger was very strong in Spain.

05:18We have seen these protests.

05:20Even outside Spain, people were very shocked by the magnitude of what happened and the

05:26anger.

05:27So what do you respond to that?

05:29Well, the anger first is understandable.

05:31Actually, you go there, you see the extent.

05:34I was there last week, the extent of the disaster.

05:37And you know that what you have to do is try to appease, try to lift them up again.

05:43And that's actually the whole political action now is concentrated, focused on putting together

05:50the resources that are necessary for them to go back to a normal life.

05:54But the wound, as you said, was also an anger towards the lack of responsibility of the

06:01regional government.

06:03What do you say about that?

06:04Well, again, I think there will be time for us to assign responsibilities.

06:10And in my personal opinion, that time has not come yet.

06:13So now it's a time for a quick response.

06:15That's what I'm focused on.

06:17And that's what the government is also concentrating on.

06:20So speaking of Spanish economy, we know the Spanish economy has shown very robust growth.

06:26You've said it many times on other TV channels, more than the eurozone average.

06:33But we also know that the country is heavily reliant on tourism.

06:38And there were a lot of protests recently against mass tourism and the dire effects

06:44of tourism on prices, on a lot of different issues.

06:49So how would you strike a balance between the economical needs and the increase of tourism,

06:56which is a good thing for Spain, but also a balance with the Spanish purchasing power?

07:03How do you make people, how do you reassure people?

07:07So Spain has been outgrowing, outperforming, as you said, the euro area.

07:10In 2023, we grew six times above the euro area average.

07:14And when you look at 2024, it's around four times above the euro area average.

07:18And you look at Commission, IMF, OECD outlook for 2025, it is also foreseen that Spain will

07:25be above its peers.

07:28What we're witnessing now is that the record numbers in tourists are coming together with

07:35novel trends.

07:36One of them is that there is a diversification outside of summer months, what we call shorter

07:42months, so just before or just after summer.

07:45Those are the periods of time where there is a higher or larger increase in the number

07:50of tourists.

07:51And this, of course, is associated with more tourists inside Spain.

07:55Also, it's the rural tourism associated with our gastronomy, something else than just sun

08:00and beach in the Spanish coast.

08:03So these are, I would say, good elements looking forward towards the sustainability of the

08:08current trend.

08:09Of course, we are aware that in some places, this is creating tensions.

08:13And there is a need there, as you said, to find the proper balance so that these tensions

08:16in terms of the rental market, these tensions in terms of access to public services are

08:21actually well met and also local citizens.

08:23Spain has a real housing crisis.

08:26How do you respond to that?

08:29Yes, we are, but that's overall in Spain and it's also an EU threat or EU challenge.

08:36And I think, of course, Spain is not an exception on this.

08:39And we are, what we are doing on this specific issue is dealing with one or trying to deal

08:46with all the specific causes of the housing affordability issue, which have to do with

08:52supply.

08:53So we are rebuilding the public stock of housing, which was actually completely depleted after

09:00years of underinvestment.

09:02So that's one area.

09:04And then, aside other measures, coming back to the tourism one, we're trying to also,

09:10to the extent possible, realign incentives for that supply of housing to go towards not

09:15only the tourism or the short-term market, but to longer-term rentals so that that can

09:20actually also affect and dampen the prices for these longer-term rentals and therefore

09:27improve the affordability, not only for youngsters, which is an issue, but for the overall middle

09:31class.

09:33And let me ask you a question that is a matter of concern here in the EU and it's linked

09:38to the EU's decision to impose tariffs on Chinese electric vehicles.

09:43Spain made a sort of U-turn, let's say, it was in favour of tariffs and then it lined

09:50up with Germany to call on the EU to reconsider these tariffs.

09:53We've seen Prime Minister Pedro Sanchez in China.

09:57Why this U-turn and do you think these tariffs could be dangerous in the long term?

10:03Well, I would go against your initial statement, there was no U-turn, and let me just explain

10:08why.

10:09So, initially, of course, in Europe we need to be open.

10:14We are an open economy and multilateralism, but that does not mean that we have to be

10:19naïve in the way that we face international trade.

10:22Today is 2024, it's not 2004, and we have to reconsider or we have to consider this

10:29openness to the rest of the world in light of the strategic autonomy of the EU.

10:33That has to do with strategic sectors such as the electric vehicle as well.

10:37So, our companies need to compete under equal conditions, under a level playing field with

10:42respect to other competitors, for example, Chinese cars that want to operate and sell

10:48in the EU.

10:49So, the first step was to actually see, analyze, this was done by the Commission, to what extent

10:56there was actually a level playing field or not.

10:59And we supported that first step, and this is actually where we were before the summer.

11:03And after that, then, once there was a conclusion from the Commission that some tariffs would

11:10be needed to level out the playing field again with respect to Chinese cars, then we enter

11:15into a negotiating period where we have to negotiate from the EU with Chinese producers

11:21and with Chinese authorities to actually find a good compromise for everyone.

11:25And that's what we're saying.

11:26That's what President Sánchez is saying.

11:28That's what Chancellor Schultz was saying also.

11:31We need to keep on negotiating.

11:32We need to exhaust all negotiating avenues, all talks, so that we find this joint solution.

11:40Because we know that the worst-case scenario is a tit-for-tat scenario, where there is

11:46an element of escalating protectionist measures that would be to the detriment of everyone.

11:51Carlos Cuerpo, thank you so much.

11:53My pleasure.

11:54Thank you very much.

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