SPIEGEL: Almost every day there are major protests all over Spain. Are you worried about your home country?
Almunia: I am worried about the extremely high unemployment rate of almost 25 percent. Tough reforms are necessary to solve this problem. The government has taken radical and necessary decisions. But it is also a bitter pill for the people to swallow.
SPIEGEL ONLINE: Spain won't reach the deficit goals for this year which it agreed with the European Commission. Last Thursday the Spanish government agreed to a very tough package of reforms that includes spending cuts and tax increases amounting to 40 billion ($52 billion). Is that the right path in your opinion as vice president of the European Commission?
Almunia: The reforms implemented in Spain since the the beginning of the sovereign debt crisis have been extremely significant. And this is not just about austerity. Last week, structural reforms were announced in 43 areas that are intended to promote growth. The extent of these efforts should be better explained to the public in other European countries.
Almunia: All these needs will not necessarily be fulfilled by state aid. Just how high the necessary share of state aid will be will be determined in the coming months. Then the Commission will approve the restructuring plans of the banks applying the same rules that are applied all across the European Union. Taxpayers should only have to contribute to the level necessary to restore a sound and stable financial system. Restoring a healthy financial sector in Spain is indispensable not just for Spain, but for all of Europe.
SPIEGEL: In Germany, you ensured that the bank WestLB was properly liquidated. Other banks also had to radically change their business models because they had been bailed out with government funds.
Alumnia: As the commissioner in charge of competition policy, I must ensure that competition is conducted fairly in Europe. Institutions that have been bailed out with taxpayers' money should not obtain inappropriate advantages over their healthy competitors.
SPIEGEL: What will happen to the Spanish cajas, or savings banks, that have lost a lot of money in the Spanish property bubble?
Almunia: There are only two remaining savings banks in Spain. The rest of them were turned into normal banks, nationalized or taken over by private shareholders.
SPIEGEL: Will the owners and creditors of banks also participate in the restructuring? Or will they get away without having to pay anything?
Almunia: Ensuring that the banks themselves as well as their shareholders and hybrid capital holders participate to an adequate level to the costs of restructuring is a fundamental principle we apply. So they will have to accept losses before the institutions are rescued with taxpayers' money. Of course, each case has to be reviewed separately. As a start, we're planning to approve by November the restructuring plans of the four banks that have already been nationalized. The second step will be to look at other banks which experts say will fail to increase their core capital ratio to 9 percent and that cannot meet these capital needs on the market.
SPIEGEL: During the financial crisis you suggested a number of times that not all banks should be rescued.
Almunia: If the cost of restructuring a bank in any member state of the EU exceeds the cost of closing it down, that would be the logical conclusion.
SPIEGEL: Are any Spanish banks going to shut down as well?
Almunia: The same rules apply to Spain that apply to the rest of Europe. But I cannot anticipate if this will be the case or not.
SPIEGEL: How will European bailout funds be paid to Spain?
Almunia: The European Financial Stability Facility (EFSF) rescue fund will transfer the money to the Spanish rescue fund FROB so that it can recapitalize the banks. That means that every cent will increase Spain's national debt. In the future, the new ESM rescue fund will be able to transfer money directly to banks. But a single European bank supervisory authority must be established as prerequisite before that can happen.
SPIEGEL: The German finance minister and his colleagues from Finland and the Netherlands are applying the brakes on this. Is the introduction of a pan-European banking supervisory authority by early next year a realistic prospect?
Almunia: In late June the heads of government gave the European Commission clear instructions to work out a plan as soon as possible. These proposals were presented in mid-September. Now a number of finance ministers have said they don't agree with all our proposals. The European Parliament also wants a say. We've started discussions.
SPIEGEL: Do you think we'll be seeing banking union in the foreseable future?
Almunia: It's unrealistic to believe that the euro-zone crisis can be solved without a banking union. We need to move forward quickly.
SPIEGEL: The German government is hesitating because it doesn't want to be held responsible for existing risks at European banks.
Almunia: It's legitimate to pursue national interests. But, at the end of the day, individual nations need to do what is necessary in order to save Europe as a whole. This also means that Germans are right to push for a political union after having achieved the economic and monetary union. On this point I fully agree.
Interview conducted by Christoph Pauly and Helene Zuber
The United Europe was a good idea! It has however been ruined by the greedy and arrogant politicians who seek incomes and powers which have little or nothing to do with democracy. The Euro currency was also a good idea, but it [...] more...
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