00:00Minister, thank you so much. Today you're presenting a mega proposal. You are pitching joint Borent to the tune of
00:05850 billion euros. Obviously the numbers speak for themselves. Why do this now?
00:09Well, we think there's a good window of opportunity to put that proposal forward now. We've been having discussions on
00:15the international role of the euro over the past few months with very good contributions on the fact that we
00:19need a safe asset.
00:21We've heard from the ECB, from a few national governors, from the academia, and we thought it was about time
00:27that there was a specific proposal that we're pushing for.
00:30And Spain is actually making a pitch or a proposal to centralize part of the national issuances within the commission,
00:38within a specific facility that can help without increasing the total level of debt,
00:43to reduce fragmentation and therefore reduce costs and integrate further our national markets, our national financial and capital markets.
00:52And that would, at the same time, as I said, reduce also costs for our firms. So it's a win
00:57-win situation, which we hope to discuss with our colleagues right now.
01:00And Mario Draghi pitched a very similar number, but he could not get this proposal to take off. What makes
01:05you think you can do it?
01:06Well, we think it's actually, as I said before, a good political window of opportunity. We're also discussing the medium
01:13-term financial framework, that is the European budget.
01:16So it's a good also timing in terms of the big political discussions here in Brussels. And again, we think
01:23that this is time that there is a specific proposal, technically valid,
01:26and that also, in a sense, we think is practically possible and realistically possible, and that we hope to, again,
01:34convince our peers that we've overcome the discussion around mutualization of debt,
01:39which is not the case here. It's about efficiency, reducing barriers, which I think is something that we could all
01:44gather behind.
01:46So you say it's not the end, it's the start of a debate, but it needs to happen, this debate.
01:50Who are your allies? I'm sure you consulted before pitching this proposal. The numbers are very big.
01:54Well, let's see how the discussion goes today. But I hope that we can rally many of our colleagues behind
02:02this concept of reducing barriers
02:03and reaping the benefits of not having a liquidity premium, which is what we have right now. This is why
02:09we need to increase the volume, the liquidity.
02:11Our proposal is to have $5 trillion in issuances over five years. And we think that this would apply or
02:17imply savings up to $25 billion on a yearly basis,
02:21which is very similar to the repayments of NGU debt on an annual basis as well. So to give a
02:27sense of the magnitude of the savings.
02:28Of the interest rate. I wonder, however, the Germans, the Dutch, they've said many times, you know, we've said it
02:33clearly, this was a one-off.
02:35It was legally a one-off. The message is very clear and we do not approve this. So what makes
02:40you believe you can get them to change things?
02:42Well, again, I think the context now is very different and the discussion is different. We're not talking about increasing
02:48the level.
02:49Because you triple Germany in growth. Is that what's changed the context?
02:53It's not only that. I think, again, as I said, Next Generation EU was a one-off, which in the
02:59end turned out to be a very successful case and story for the European Union
03:05and in particular for Spain as well. But in this context, what we have is the need to keep on
03:11pushing with, for example, our investment agenda.
03:14And to be able to free up fiscal space, we need to be efficient in how we manage, of course,
03:19the fiscal budgets and our fiscal responsibilities.
03:22So we need to be, again, efficient in issuing debt, reducing barriers and centralizing our debt issuance to the extent
03:29that this will improve our financial conditions.
03:32So this has changed. This is the new context, again, in which we can have this discussion and hopefully everyone
03:38will see the benefits.
03:39Just think of, for example, SAFE, the SAFE instrument. We issued together 150 billion.
03:45That is joint debt. That is joint debt. And had we had then a safe asset with enough liquidity, we
03:53would have saved 8 billion in interest.
03:56So those 8 billion would correspond to taxpayers' money around all European Union, including German taxpayers.
04:03So, again, there is a clear case for us having this safe asset without increasing the level of debt, but
04:10reaping the benefits of lower fragmentation.
04:11Some would say mutualization does not make up for what you save on the interest rates, but you make your
04:16point very clear.
04:16Just as a last question, final question. Yesterday, something really extraordinary happened.
04:21Frankly, I've never seen a person change his mind so quickly.
04:23The President of the U.S. came out in the morning and said, Spain is a totally wasted cause, they're
04:28a terrible ally, and we will do a full trade embargo.
04:31Ten hours later, the President of the U.S. came out and said, this is a very, quote, generous country.
04:35What changed?
04:37Well, as we've made very clear for the past year, I would say, Spain is a reliable ally within NATO,
04:45of course.
04:46We said that we would comply with our commitments in terms of investing in security and defense, and that's what
04:52was very clear at the last summit.
04:54You showed the numbers?
04:55We showed the numbers, and we showed that Spain was the number seven contributor in absolute terms to NATO, seven
05:04out of 32.
05:05We showed that Spain is contributing not only with investing in security and defense, but with more than 3,000
05:11troops in all the different missions that are out there.
05:14So Spain is making its part in being a reliable partner, and we're happy that others are also realizing it.
05:19But just to clear this, as far as you're concerned as the economy minister, the deputy prime minister, the idea
05:25of a trade embargo, this is done.
05:27It ends here.
05:28By the way, you have a trade deficit with the U.S.
05:29Is this over?
05:30Well, as we've said even other times, in other occasions, when there were also statements around potential additional tariffs or
05:41other measures, the Spanish, the bilateral trade relation is dealt with at the European level.
05:48So Spanish firms do face the same, of course, circumstances and barriers than the French or the German ones, and
05:54that's where this has to be decided.
05:56What we want is to go ahead, give predictability to our firms, and implement the agreement that was already taken
06:04last year, almost a year ago.
06:07The European Union has done its part.
06:09We expect the U.S. also to do its part, and we expect trade, if possible, to keep on increasing,
06:14because that's what firms want, and that's what is a win-win situation.
06:17Well, Minister, thank you so much. Appreciate it.
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