Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

Royal decree on low-cut tops

Read more

DEBATE

Ukraine, The Escalation: No Stopping Putin? (part 2)

Read more

DEBATE

Ukraine, The Escalation: No Stopping Putin?

Read more

FOCUS

Bangladesh: Textile workers' lives still at risk?

Read more

TALKING EUROPE

José Bové, Candidate for the EU Commission presidency, Group of the Greens

Read more

WEB NEWS

NYPD's online campaign backfires

Read more

ENCORE!

Celebrating the Bard's birthday in Britain

Read more

THE INTERVIEW

Yuki Tatsumi, Senior Associate of the East Asia Program, Stimson Center

Read more

INSIDE THE AMERICAS

USA: Executions halted over drugs secrecy

Read more

  • Ferry disaster, nuclear test fears cloud Obama’s South Korea trip

    Read more

  • US warns Russia against making ‘expensive mistake’ in Ukraine

    Read more

  • Israel halts Middle East peace talks over Hamas deal

    Read more

  • French policemen accused of raping Canadian woman

    Read more

  • Internet should stay free of government intervention, conference says

    Read more

  • A radio station defends peace and tolerance in CAR

    Read more

  • Echoes of 2pac and Biggie? French rap feud turns violent

    Read more

  • Fresh clashes in Rio over dancer's death

    Read more

  • US would defend Japan in islands dispute, Obama says

    Read more

  • Platini: PSG in danger over Financial Fair Play rules

    Read more

  • Afghan guard kills US doctors in Kabul hospital attack

    Read more

  • Ségolène Royal denies banning cleavage at French ministry

    Read more

  • Video: Mayor in east Ukraine ready ‘to turn Slaviansk into battlefield’

    Read more

  • New far-right mayor moves to quash Paris region mosque

    Read more

  • Millions of Syrians desperately need aid, says UN

    Read more

  • Muslims in CAR pray for an escape route

    Read more

  • Madrid beat Bayern 1-0 in first leg of Champions League semis

    Read more

  • Britain's ex-PM Blair warns against spread of radical Islam

    Read more

  • Turkish PM offers condolences to descendants of Armenians killed in 1915

    Read more

Europe

Sarkozy warns of 'unprecedented crisis' on visit to Spain

©

Video by Luke SHRAGO

Text by News Wires

Latest update : 2012-01-16

French President Nicolas Sarkozy warned Monday that Europe was facing an "unprecedented crisis" in a joint press conference in Madrid with new Spanish Prime Minister Mariano Rajoy. Sarkozy was in Spain to be made a Knight of the Golden Fleece.

AFP - French President Nicolas Sarkozy warned Monday that Europe faces an "unprecedented crisis" but urged calm in the face of Standard & Poor's multiple eurozone credit rating downgrades.

Sarkozy issued the warning in Madrid where he was the first foreign leader to meet with Spain's new conservative prime minister, Mariano Rajoy, since his swearing-in December 21.

"We are confronted by an unprecedented crisis that forces us to cut spending, lower our deficits but also to find the path to new growth by resolving our competitiveness problems," Sarkozy said.

Standard & Poor's cut the credit rating of nine debt-laden European countries Friday, including stripping France of its top-notch AAA rating and slashing Spain's rating by two notches.

Moody's Investors Service soothed some of the pain Monday, confirming France's AAA rating while continuing to review whether it will maintain its "stable" outlook.

"Fundamentally it changes nothing," said Sarkozy, who is facing an uphill battle for re-election in April.

"We have to reduce our deficits, cut spending, improve our countries' competitiveness to rediscover growth," he said, calling on people "not to panic" and to "react to these decisions by keeping our cool".

"I don't plan to take into account what this or that person says," the French leader said, nevertheless describing the agencies' ratings as "interesting elements".

Spain's leader, holding his first news conference since he took power, agreed.

"In the end, the most decisive thing is that each country follow its own path," Rajoy said.

The new right-leaning Spanish government has announced 8.9 billion euros ($11 billion) in budget cuts, tax increases to bring in 6.28 billion euros and an anti-tax fraud battle to recoup another 8.17 billion euros.

Rajoy said at the weekend that Spain, which declared a towering 21.5-percent unemployment rate in the third quarter of 2011, now had an "astronomical" figure of 5.4 million jobless.

The Spanish leader gave his support to a French-backed scheme to impose a tax on financial transactions.

Sarkozy has said that France should not wait for other European countries to support the tax on financial market deals, a scheme dubbed a "Robin Hood tax" or "Tobin tax," after Nobel Prize-winning economist James Tobin.

"Spain will support this tax," Rajoy said, describing it as Sarkozy's "war horse" to help beat the crisis.

Sarkozy was in Spain to be honoured for helping to battle the armed Basque separatist group ETA.

King Juan Carlos made Sarkozy a Knight of the Golden Fleece in recognition of his cooperation, saying he had been a constant ally in a ceremony in the Royal Palace.

"In your relations with Spain, you have always contributed in a constant, effective and generous manner to the fight against terrorism, always making the victims the aim and end of your solidarity," the king said.

Spain credits Sarkozy with giving crucial aid in the fight against ETA, both as president and previously when he was French interior minister from 2002-2004 and 2005-2007.

Only on Saturday, French police arrested three suspected ETA members near Auxerre in eastern France.

ETA announced on October 20 last year the end of more than 40 years of shootings and bombings that killed 829 people. Its operations have been hammered by Spanish police working closely with France.

Spain's highest chivalric honour, the Order of the Golden Fleece was created in 1430 by Philip III, Duke of Burgundy.

 

 

Date created : 2012-01-16

  • DIPLOMACY

    Sarkozy heads to Spain for talks following downgrade

    Read more

  • FINANCE

    How S&P’s downgrade will impact France

    Read more

  • EUROZONE

    Standard and Poor's downgrades French credit rating

    Read more

Comments

COMMENT(S)