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
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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.