Ramón Jáuregui: "The reconstruction plan is an extraordinary step towards a Europe of solidarity"

Ramón Jáuregui, president of the Euroamerica Foundation, was interviewed on the sixth program of Atalayar in Capital Radio, broadcasted this Monday from 22:05 to 23:00. The former Spanish Minister of the Presidency from 2010 to 2011, during the government of José Luis Rodríguez Zapatero, discussed the European reconstruction project, the impact of the coronavirus in Latin America, the epicenter of the pandemic at this time, and racial tension in the United States, three issues that mark the international agenda today.

How do you see Europe, in this state of reconstruction into which we are already plunged? 

I am very hopeful, honestly. At the beginning of the pandemic crisis, Europe reacted badly, we must admit. There was a very pronounced lack of coordination in closing borders, a lack of solidarity with Italy and no coordination in purchasing necessary health supplies. Europe was non-existent. During the initial days, in March and April, there were tremendous, almost catastrophic, comments about the future of Europe, announcing that a Europe that was unable to react to the crisis was a Europe at risk of bankruptcy. 

Fortunately, this has led to increasing awareness and concern in all areas, in all chancelleries and, of course, in the European Commission and Parliament, to such an extent that the response today is a formidable one. I believe that the reconstruction plan - to be approved by the European Council on June 18 and 19 when the Heads of State and Government meet in Brussels - is an extraordinary step in what we would call the federalisation of Europe, the mutual Europe, the Europe of solidarity. Firstly, because it is an anti-cyclical plan, unlike the one adopted in 2010 with the Euro crisis, which was pro-cyclical and forced the countries of the South into an austerity that increased our own economic recessions. The one we have now is clearly counter-cyclical. Second, it is forceful. The EUR 750 billion must incorporate everything already planned by the European Commission, the European Investment Bank, the ESM and the Central Bank. Thirdly, it is an asymmetrical plan, as it benefits those who have suffered most, demonstrating solidarity. And solidarity is a sign of unity.  

I believe that, for the first time, Europe has drawn up a plan that is going to have the support of the European sovereign, because it is mutualising the issue of bonds and debentures in the markets in order to provide itself with that enormous amount of money, but in the name of the whole of Europe. Moreover, it supports it in its own taxation with new tax figures. All of this changes the nature of the European Union and provides it with an integrating dimension, of Europe as a country, that we have never had before.

Europe was taking a risk because the citizens needed an answer, in a scenario marked by Brexit, the inaction in the economic crisis of 2007-2008... So, we have to take into account that it will be necessary to justify how the money we receive is being spent, especially in view of the more reluctant position of the northern countries. 

No one can think that states will not be held accountable. This money, which is very important - in Spain it can reach up to 140 billion euros, 13-14% of GDP - is conditioned to projects that respond to the so-called "new European generation" and, therefore, leading on climate change, on digital change and on strengthening public services, fundamentally health services. But in addition to that, it is not going to prevent each country from having to make its own effort, because it is going to respond to a logic of monetary stability. The countries will have to keep to a strict, serious and controlled budget. I believe that the question is very important because it reflects something that is not sufficiently internalised in Spain: beyond European aid, national contributions will be required and we will have to maintain a path of collective effort as a country. This will also mean that the Government will have to convince citizens that a collective effort is necessary, because, firstly, Spain will need it and, secondly, Europe will demand it.

The focus of the pandemic is now hitting Latin America... What will this region need from Europe in order to be rebuilt?

Latin America has no supranational element that can help it. All of the things that Europe is going to give us in counter-cyclical and asymmetric terms are possible because the European institutions exist: a Central Bank, a European Commission... In Latin America there is nothing of the sort and, furthermore, the fiscal capacity of the States is very limited. They are fiscally very weak countries: they are going to spend what little they have on the most urgent restructuring. What economic capacity do the countries that cannot resort to the markets have, because they do not have credibility? Latin America needs the international community, financially speaking, to create a response in terms of special aid, for poor and middle-income countries, which also have the need to invest, to carry out a Keynesian policy, to prevent companies from closing and the unemployed from being paid.  

All this will probably require the International Monetary Fund to issue special drawing rights, or something similar, in order to be able to lend around USD 1 000 billion to the countries of Latin America. But, unfortunately, it is the United States that is driving the IMF and is not showing any sensitivity to being able to provide this aid. That is why Europe must move, with Spain at the forefront. I am very demanding in this respect: if we are friends of Latin America, which is a fundamental region for European foreign policy, as has been claimed here, we must help at this difficult time. It is essential. 

In addition, IMF aid could be accompanied by the possibility that the multilateral development banks, such as the CAF, the IDB or the European Investment Bank, could set up an aid fund dedicated to the construction of certain infrastructure works essential for Latin American connectivity. Thinking about the moral need for development of these peoples for the future is reason enough, but if we also think in geopolitical terms, and discover that we Europeans are not up to it, as China is going to dislodge our presence in Latin America, this is one more reason to add to that of moral justice.

The CAF has made available more than $2.5 billion to deal with the pandemic... Today the World Bank warned that the coronavirus will lead the world into the worst crisis since World War II, with a 5.2% collapse. Could this give the Trump Administration any reason to reflect on returning to cooperation and multilateralism? 

I don't think that's going to raise their awareness. Furthermore, and unfortunately, we know that it is insensitive to a very powerful argument: Latin American countries are going to suffer even more because two of their most important sectors are tourism and remittances. Let us not forget that for some of them remittances account for up to 25% of their tax revenue, as it is the case in El Salvador. Therefore, for those countries, where there is no margin to be able to face the coming period, the Trump Administration has not been sensitive to mobilize the IMF to issue, as several former Latin American presidents and former governors of international banks have requested, aid packages. If these countries do not spend the next two years with Keynesian aid of this nature, they will collapse.  

I have no confidence whatsoever that the Trump Administration will change its position, but I do hope that we Europeans will be able to knock on that door and demand, both from the IMF and from the G20 and the World Bank, much more powerful action for Latin America because the stakes are high.  

What is your view on the outbreak of the protests in the United States? 

In the first place, there is a very healthy reaction. I think that society in general and North American society in particular need morally to overcome this racist feeling against the black population that has flooded American history. The second interesting element to bear in mind is that a collective feeling is emerging all over the world against racism, and this, moreover, could have a positive influence on the American electoral process. Let's not forget that the entire world is watching what happens in November [presidential elections], because of everything that is being examined: the trade and technology war with China, the future of Latin America, the future of NATO, relations with Europe and so on. And what seemed to be a clear victory for Donald Trump may not be, due to the pandemic and this outbreak of protest against a president who has had a disastrous management of the American anti-racism movement. 

The fact that Trump has responded with an authoritarian tic to the social outburst is the reason that has aroused outrage in the world... 

Of course, and it is not only the authoritarian tic, which certainly exists, but also the reassertion of his electorate, of his world. The repeated appeal to law and order, basically without condemning racism against blacks, is basically a cry for survival from his own electorate, which is more reactionary, white and angry, anti-establishment. No one really knows what effects it will have, but he has most likely already lost the vote of the black electorate and has also accentuated anti-instrumentalism in the United States. Today it can be said, without a doubt, that Joe Biden has a better chance of winning the election than he did a month ago.