Murnaghan Interview with Jyrki Katainen, Vice President European Commission

ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS 

DERMOT MURNAGHAN: Let’s talk to one of the incoming gang, joining me from Brussels is Jyrki Katainen, he is the former Prime Minister of Finland of course and he is now Vice President of the European Commission with responsibility for jobs and growth, a very good morning to you Mr Katainen.  Tell me this about the UK first of all, how high up the agenda for all of Europe is the issues that the UK has with it?   

JYRKI KATAINEN:  Of course we all need the UK in the European Union and I could say from a personal point of view I need the UK on board because my work is to promote investments, the single market, trade agreements and things like that which could create Europe more competitive so there we have a common agenda with Britain.   

DM: But aren’t you going to say on that very point there, talking about the all-important issue of investment, jobs and growth, aren’t you going to say to the UK that a very important factor within all that is that people’s within the European Union are free to move across borders?

JYRKI KATAINEN:  The free movement of people is one of the fundamental values of the European Union as well as the free movement of goods and knowledge and capital, so it is possible that this system could function better and if there are something that can be done in order to avoid abuses of social security systems but in principle the free movement of people is very essential for the single market, yes.  

DM: Would it be legal for instance to limit the number of National Insurance numbers in our country which give you the right to work in this country, would it be legal within European Union rules to limit them for certain countries?

JYRKI KATAINEN:  Well as I already said, the free movement of people and goods and services and capital is a basic value of the EU but Commissioner Thyssen who is in charge of labour mobility for instance has said in her hearings she is ready to look if there is anything which must be changed in order to avoid abuses of social security systems but I cannot tell you now what the changes will be but we are to assess the situation but taking any further steps.  

DM: And on this issue of the £1.7 billion or so or €2 billion that is being demanded from the UK by the EU, is the European Commission prepared to listen to Mr Cameron when he says look, I’m not going to pay that by December 1st?  

JYRKI KATAINEN:  Of course we have to be ready to listen to all the Prime Ministers of our member states but this figure depends on, it comes from TNI so all the member states must be treated equally.  Some adjustment means lowering costs and some adjustment means sometimes that the member state must pay more so the UK is not the only question that has to pay more this year but next year the situation may be different.   

DM: Looking at the EU as a whole, as we say you are responsible for jobs and growth, how worried are you that you have taken on the job just when the EU is going into a period of deflation, low growth and high unemployment?  

JYRKI KATAINEN:  Well first of all I don’t see the serious risk of deflation in Europe in the sense that people would postpones spending because they think that prices will fall but of course we are well aware of the risk of long periods of very low inflation to economic growth and also with rebalancing European economies but what we have to do now is that we need to boost demand and supply, both measures, both sides are needed.  It means that member states should focus on structural reforms in order for strength and competitiveness and also we need accents on the inter-European level which means that from Monday on we start preparing 300 billion investment package for the next three years.  It consists of more lending capacity, it means more efficient use of the European partnership but also it means measures to deal with the single market.

DM: Are you particularly concerned that that message you are saying there about continued reforms needing to take place, that they are not being carried through, there is no political will to carry them through in particular in France and also in Italy?  

JYRKI KATAINEN:  I mean the biggest reason for low growth in some member states is that the structures of the society are not functioning that well that it would boost economic growth and economic activity so when comparing some countries to the countries that have pursued lots of structural reforms, you can easily see that those countries are growing faster than those which haven’t reformed their society that much so there is no reason for complacency, we have to reform our societies in order to make Europe more competitive and that is in the hands of governments.  And then another part of the story comes from European effort so that’s why we need both national effort and European effort.

DM: And to link that to the UK, is your message then saying that for those countries that are difficulties, very big countries within the European Union that are in difficulties, those that are doing well – and it’s back to this issue of payments, those that are doing well like the UK with it’s by European standards stratospheric growth, you have to pay more.  

JYRKI KATAINEN: Well it’s part of the story that everybody contributes to the European budget according to their economy but I have to say also that those countries whose economies are doing badly, it is not a good situation either for them so that’s why this little look at the competitiveness of the whole European Union, we have to encourage member steps to take both steps when reforming their pension system or labour market or doing other measures which will increase their competitiveness, it’s crucial for them but it is also crucial for the competitiveness of Europe and I really want to encourage UK and the British authorities to join in our common European effort when deepening the single market, for instance in the digital world or in energy markets or in capital markets and we also need the UKs help when pushing forward an ambitious trade agenda.  

DM: Well Vice President, it is fascinating talking to you, thank you very much indeed, that’s Jyrki Katainen, Vice President of the European Commission.