×

CNBC Transcript: Interview with Jeroen Dijsselbloem, President of the Eurogroup.

Following are excerpts from a CNBC interview with Julia Chatterley and Jeroen Dijssebloem, President of the Eurogroup.

JC: How concerned should we be by Greece?

JD: Not really, the economy has stabilized, they've had some growth now for a couple of quarters. But the process needs to pick up speed again, it's lost speed in the last couple of month. Towards the end of the year, as you know, we need to get to get the IMF on board and that means we have to finish a lot of work before then.

JC: You've got the finance minister coming here saying: 'Look OK, we've got the majority of reforms still to do, we will do them,' but then you've got the Prime Minister back home holding a conference rallying against austerity - there is an irony there somewhere.

JD: Yeah well, everyone is allowed to dream about the future, to plea for changes to the rules or the way we work, but as we haven't found agreement on any changes yet, let's stick to what we have agreed. My assumption is the Prime Minister is fully committed to the program, and that we will continue to work and get it done. If not, of course, it will come to an end, but don't think that is even an option

JC: Define end?

JD: No I won't, it is not an option.

JC: He also said that Europe is sleep walking off a cliff, now the Brexit dust has settled do you see other countries with issues? Whether it is Greece struggling with reform, concerns about Portugal's reforms efforts, Ireland -- I have just been there -- a minority government, Spain does not have a government – there's quite a few issues.

JD: Yeah, but isn't there always‎? I mean, I would rather approach it in a different way. The economy is growing in almost all of our countries and stronger every year -- some are over 2 percent, which for an ageing continent is quite a high growth rate, unemployment is going down everywhere, are deficits are well below the famous '-3', so I think things are moving economically in the right direction. It is going slow but we knew it would be slow because we are coming out of a balace sheet crisis - it always takes time to clean up balance sheets. Politically it is most difficult of course, there is a lot of criticism on the EU, is it managing migration, is it managing security, is it managing the economy well? So let's progress on these three areas, let's not pretend the problems of Greece are the average of Europe, because Greece is a very different case to the average of the euro zone.

JC: He (Tsipras) did make a point, though, it can't work, convergence can't work if you've got countries in the north with high surpluses, and with countries in the south with high deficits and yet Wolfgang Schäuble came here yesterday and said actually QE, the ECB is responsible for significantly increasing their surplus, and if ECB is not going to change its policy Germany won't either. It's kind of OK to be flippant in his position, in Germany's position?

JD: Yeah, but I think the ECB needs to do its work in indepence, so let's not link what we, the national ministers do, to what the ECB does, because then the ECB will lose its independence. I think Germany has many reasons to invest more in education and infrastructure, they could lower taxes -- in other words, the surplus that the Germans in their Budget has ‎could be put to use for the European economy and I agree with those people who have said that. Germany is the only one with this kind of large surplus, more and more countries are heading in that direction but don't have that much fiscal space yet, so in the end, a lot of national ministers will have to really get to work, fix their own problems. Still too many of us are waiting for the answer to come from the centre, from Brussels, you know, give us some extra money, some extra space. I think they need to accept that most of the efforts will have to be done at national level, however difficult that is.

JC: It is interesting‎, now that we've got perhaps a more aggressive Competition Commission, I have just been in Ireland and Enda Kenny made the point that as far as he is concerned this is encroachment of the European Commission on the policies that should be done at the national level. Are you surprised he didn't get more support from other countries given the sentiment right now?

JD: I think the debate should not be about whether the Commission has a mandate to step in, look at tax files from a state aid perspective, because they have that mandate. We may not always like it, we have a conflict also which will take them to court over, and that's fine if you don't agree with their ruling, their opinion, on these tax rulings. But let's not have the fight about is the Commission outside its mandate. I don't think that is true, they are allowed to look at state aid, as a matter of fact that is their responsibility to make sure we keep a level playing field in Europe. Whether they apply the rules in the right way, and they are right, or whether the Irish are right we will find out later. But that is a different debate.

JC: Do you think Ireland could find itself in the situation where they are not only battling the Commission here, but they are battling other countries who go: 'Actually, some of that money is mine, and I would like it.' France, Italy?

JD: It is not for me to say. I have heard what the Commission said about that, whose is the money, but let's see how that develops.

JC: One other point that I think is quite interesting in this is that Ireland are adament there was no special treatment in the Apple case. So if they didn't give special treatment to Apple then you could have the likes of Microsoft and Facebook, who had similar deals. Do you think investors should be concerned that actually this kind of size -- which is so significantly bigger than anything we have seen before -- tax claim charge could happen with other big corporates?

JD: Well you know it reminds me a little of the very high fines that the Americans ‎have put on banks, also on European banks, very large sums, and also that was hard for the Europeans to accept. This is the new reality, we want banks everywhere to comply also to American standards. So here we have a tax issue, American companies will have to pay their taxes, actually I would prefer that they would have a good arrangement at home in the US to pay their taxes, but that I cannot sort out from Europe. The Americans need to make sure their companies pay a fair share at home, and that would actually solve a large part of this whole issue.

JC: Do you think part of their concern on this, the fact that they're suggesting this will be bad for European investment, is actually that they believe it's their cash?

JD: I think part of that is the case, and probably maybe it even is, but they are not paying it at home. The bottom line is, and the big companies have to realise this, times are changing and new times will ask them, make them, pay taxes in a fair way, where they make their profits they must pay their taxes to a fair amount and a fair share. And I think for too long they have been able to get out of that and it has to stop. That is a political opinion, that's my political opinion, I think to my citizens I cannot explain why they should pay their fair share if the large companies do not.

JC: And do you think it makes Europe a less attractive place to invest?

JD: The internal market is still the largest market, consumer market I think, and large companies need to be here, they cannot afford not to be here, so let's find the right arrangements, make sure they pay their taxes in a fair way, here and in the US, and I am sure they will still be active in Europe.