46. Arancha González Laya: The World’s Most Powerful Organisations

0:28Thanks for listening to The Rest is Politics. Sign up to The Rest is Politics.

0:38The spirit of innovation is deeply ingrained in America, and Google is helping Americans innovate in ways both big and small. From improving emergency response times to protecting against cyber attacks, local, state, and federal governments are innovating with Google AI. This is a new era of American innovation. Find out more at g.co slash American Innovation. At New Balance, we believe if you run, you're a runner.

1:11However you choose to do it. Because when you're not worried about doing things the right way, you're free to discover your way. And that's what running is all about. Run your way at newbalance.com slash running.

1:38Welcome to The Rest of This Politics, leading with me, Rory Stewart. And me, Alistair Campbell. And today we are very, very lucky to have with us Arantxa Gonzalez-Laya, who was Spain's foreign minister, but has also done an extraordinary variety of other jobs. She was very senior at the World Trade Organization. She was a senior official at the European Commission. And she is now the head of Sciences Po, which is the most famous probably school of international affairs anywhere in the world, based in Paris. And she's also, I think, I mean, we met first in a monastery in Segovia, a monastery associated with a sort of rather sinister man called Torquemada.

2:18This was his great home monastery. But she's also the only person I know who seems to speak more languages than Alistair. So welcome very much to the show, Aradja. Thank you. A pleasure to be with you. And why were you two in a monastery? What were you doing in this monastery together? Well, we were debating transatlantic relations. You know, the world is a bit complex today and there is a bit of soul searching on both sides of the Atlantic, on the US and on Europe, about how we can work together, how we can advance our interests and values together. because let's say that in the last period we've tried, but we've had a bit of hiccups.

2:55Remember, there was Trump on the US. There was a lot of preoccupation on the European side about internal domestic politics. We need to get this relationship right because there are clouds gathering in the horizon. Tell us a little bit about your childhood. Who were your parents? Would they expect you to have become the foreign minister of Spain? What's the story that brought you here? Certainly not. I mean, I guess my story is the story of so many Spaniards that had incredible opportunities when we go back to democracy and the country and when we had access to an incredible education system and when we became members of the European Union.

3:34This process of modernizing Spain post Franco meant many new opportunities for people like me. My parents were average Spanish citizens. My father was a teacher. I was born in San Sebastian, but my father was a teacher in a very rural area in a little village in the middle of the Basque Country. And my story is that of the opportunities that Spain gave to citizens that were educated and adolescent in the post-Franco times. Where do you think Spain fits in the, if you like, the European Power League? How powerful do you think Spain is? I think Spain suffers from a complex of inferiority. I think Spain has a lot to say and a lot to bring to the European Union.

4:24It's a country where a lot of the values of the European Union are very present. People feel there is a lot of solidarity between people. We welcome migrants. We are the biggest donor of organs in the world. We care about our environment. We are determined to fight against climate change. And yet sometimes I have the impression that Spain punches below its weight. And I think this is this inferiority complex of having arrived at the European Union after the others, not having shared the dreams of the founders of the European Union because we did not participate in the Second World War. So we were not part of that reconciliation, although we had massive reconciliation to do in the country post-Civil War.

5:07So always a bit behind, but I've seen this with my own eyes. When Spain is there and Spain deploys all its force on all its contribution, the others are ready for a more active Spain. And Arantxa, just to take us back again, one second to earlier life, you presumably have very faint childhood memories of Franco. Tell us a little bit about what that journey was like, what the politics was like through the lens of your own relatives and family. How did all this form you? Because eventually you joined a socialist government, is that right? That's right. That's right. I guess I was born at the tail end of a dictatorship and dictatorship was not a nice place to be.

5:48We had a bit of a gray country at that time. Remember also that I was born in the past country that had decided to take terrorism as a form of resistance to dictatorship. It then degenerated as every terrorist movement does. It degenerated into coercion, corruption, and violence without much reason. But at that time, let's say beginning of the 70s, this was a form of resistance to dictatorship. What I can tell you of my childhood is that I didn't know what I wanted to become, but I was very clear that for me, Europe was this big light that guided me, that I thought should guide my country. I was an avid reader of Europe and European affairs since I was a child, because I thought Europe represented this freedom, this democracy, this community we needed to be part of, which is why I decided to, very early on, that I wanted to be part of that adventure.

6:51You mentioned growing up in the Basque region, and we do hear a lot about Basque separatism and about Catalonia. Just give us your sense of what the basic issues are that drive the separatists. Beyond the obvious, what is it that they want and what makes them feel that they're not Spanish in the way that you feel you're Spanish? Well, I think what we have is a country that is very diverse, where our feelings of belonging to Spain are diverse, depending on the part of Spain you're at. The European Union is diversity, right? So I've always felt that this diversity was something that you could manage to be Spanish and yet feel very strongly about your specific region, that you could speak your regional language, Basque language in my case, the literature, the gastronomy, the traditions, that you could cry with the music of the country.

7:40that region and still feel Spanish. And I think this is perfectly possible because this is what the European Union is also. It's unity and this diversity. Now, this diversity has different manifestations. We've got in Spain citizens, a small part, but we need to be respectful of their beliefs that don't want to be part of Spain. They want to break away. A majority in those regions that want to have degrees of autonomy for their regions. They want to have a say in how they organize their affairs, including in the bus country, fiscal autonomy. And then there is another big chunk of citizens in those regions that feel very strongly that that region has to be part of Spain.

8:24So in a way, we have to learn to marriage the specificities with this belonging to Spain firmly anchored in the European Union. And that recipe is not always easy, because sometimes, and this is what we've experienced in the recent past, those that want to break away decide to take steps that are dramatic, including organizing a referendum of independence, although this is not unilaterally, although this is not accepted in our constitution. I think what we have is a constitution that gives us the possibility to express their diversity, while being part of Spain. And we always have to be trying to accept these differences.

9:07Not everyone accepts this. We've also seen, in a way, the rebirth of Spanish nationalism. And this is our constant quest for diversity within unity. And Arantxa, just help us on that one, because both Alistair and I are of Scottish heritage, but obviously live in the United Kingdom. And I was very upset actually when Scottish referendum happened that so many people in England seem not to care. The prime minister just said, oh, I have a referendum, no problem. If you get 50 plus 1 % of the vote, you can have independence. The whole thing was done in a very sort of laid back way. Why do you think in Spain there's a more passionate commitment to trying to hold the country together than maybe felt to be the case with David Cameron's United Kingdom?

9:48Well, first, because we've gone through a lot of trouble in our history. The history of Spain is not an easy history. And we've always had to juggle with fitting all different parts of the country together. Sometimes it was the fight between the liberals and the conservatives. Sometimes it was between Republicans and Francoists sometimes. So these kaleidoscopic differences that make the country have been a constant in our history. And I think what we After very difficult years of dictatorship that lasted very long, almost 40 years, we gave ourselves a constitution. And it was all of us giving all of us a constitution, a constitution that represents this desire to overcome the past and build a more modern Spain where the regions have their place, where they've got areas which they manage, where they lead on, where the self-government is a very, let's say, expansive, where it's not independence, it's not a confederation like in Switzerland, it's one country with autonomies in the form of regions.

10:57And I guess what we have to preserve above all is the ability to change the constitution that we have, but to do this together. Rory mentioned there David Cameron's referendum in Scotland. There was, as you may know another referendum that David Cameron called on June the 23rd 2016. I've noticed in every single one of your answers you've mentioned the European Union which clearly kind of matters to you an awful lot. I'd just be interested in what what your thinking is seven years on about what the UK did in deciding to leave the European Union and what you think people in Spain think of that and whether there's any desire for Spaniards to leave the European Union?

11:40Well, I think for all of us in Spain, it was a very sad day. We've got a very special relationship with the UK. The UK has a big presence in terms of citizens in our country, and we have a big presence of Spaniards in the UK. And I myself, an example of that, I've had very close association with the UK, going to the UK to learn English since I was a very small kid. And I feel very close to the country. And this is why when the British citizens, with a very thin result decided to leave the European Union, I was very, very sad. Not only because I thought this was bad for the European Union, you know, it's the first time in our history where we see a member leave the family, but also because I thought this was not a good decision for the UK.

12:29This was not a good decision for the UK citizens. Now, I'm very respectful of the decisions that the citizens have made. But let's say that seven years later, I feel that the UK citizens are looking back at what some voted that day with a bit of regret. And Arantxa, one of the things that Alistair and I have noticed is that we feel that the UK's significance, their presence in international affairs is diminishing. I've been very sad, for example, at the big cuts to the international aid budget. I feel that when people are discussing Africa, the UK seems less relevant, it seems less relevant at UNGA.

13:06Do you feel that by leaving the European Union, Britain, paradoxically, instead of what the Brexiteers hoped that its international influence would increase, in fact, its international influence has decreased? Of course, because we're living in a world of giants, where in order to be able to shape internationally, to have an influence, to have a say on international trade, or to be active in mediating in conflict. You've got to have a size. Now, the UK has an incredible history and lots of relationships with many countries around the world. But in today's world, the UK has become a small country from all points of view.

13:48And this is not me belittling the UK. It's just a factual description of the situation. The UK had an enormous ability to influence internationally through the European Union. I mean, I've lived in the world of international trade for many years, as you know, and I can tell you that the trade policy of the European Union had a lot to do with the British shaping it. Now, can we say that Great Britain has more influence in shaping international trade today that it's on its own than as part of the European Union? I think we have to be lucid. It's not the case. It's basically that the attractiveness of a market that is 700 million people is not the same as a very small market that the UK represents in the biggest scheme of things.

14:36It's paradoxical, but this is what happens with populists. They give you very simple recipes of taking control when in reality they are taking control, but the country is not. The country is losing it. You mentioned international trade there. And of course, in a sense, your professional life was set by the work that you did, particularly with Pascal Lamy as his chief of staff at the WTO. And you wrote a very interesting piece in the Financial Times about 18 months ago now. and I'm just going to read you the first paragraph. The emerging narrative from the war in Ukraine is that the surge in geopolitical risk will compound existing dissatisfaction with the global trade system and lead to fragmentation.

15:22Security will trump efficiency. Integration with like-minded partners will replace multilateralism. This narrative is neither right nor desirable. There is no doubt that the ongoing conflict is reinforcing anti-trade prejudice, but is this a global trend? The short answer is no. Do you still believe that? Do you still feel that that anti-trade prejudice, as you call it, is being successfully resisted and that globalization, as we understand it, still has a future? You know, I've always thought that trade is an incredible tool. It has helped many countries around the world transform from agrarian economies to industrial and now services economies.

16:06It has helped in improving competitiveness, innovation and growth. But it is also fair to say that trade and globalization has created incredible competition forces where they've been losers and winners. And in some parts of the world, we've taken care of the losers. In some other parts of the world, we have not. And in the parts of the world where we have not taken care of the losers, there is a big resentment against trade. There is a big resentment about globalization. So I think what history tells us is that if we want to keep markets open, if we want to keep international trade generating growth, competitiveness and innovation, we have to do more than simply trade policies.

16:57We have to look at social safety nets. We have to look at education, retraining. We've got to look at investments in healthcare. We've got to look at research and development. We've got to look at infrastructures, housing. All of this has to be part of a serious economic policy of open markets. I worry in particular about the US because I think the US is an incredibly competitive economy. It's incredibly innovative. I mean, technologically, digitally, you name it. And yet, the capacity of the US to remain a market open to its own companies is a risk by the lack of investments in social safety nets, by the absence of a very serious domestic consensus between the two big parties, Republicans and Democrats, that you have to invest in those social safety nets too.

17:49Because if not, what we will see is a big backlash against open markets, a desire to retreat behind domestic borders, isolationist pulsions that we already see appearing. So I think it is important to also make the case for open markets, but a strong social safety nets. The two need to be clearly on the table, especially now that we've got this new disruptor called technology, called artificial intelligence, that's going to be an even bigger game changer, which we have to learn also to respond to. We cannot just simply tell our citizens, you know, technology is great, get on with it. No, we need a serious discussion about social safety nets, a new social contract.

18:38Arantxa, your life sometimes feels like a kind of parable of the world's period of optimism and then the period of pessimism. I mean, you seem in many ways a kind of symbol of what was extraordinary about the 80s and 90s, the emergence from dictatorship to democracy in Spain, joining the European Union. You were very much there. You were in the commission as the trade spokesman at the age of the great liberal optimism of the early 2000s. So you really saw the kind of positive, optimistic story of open trade, liberal global order, Western values, the spread of democracy around the world. And then by the time you became foreign minister, you were into a much more difficult age.

19:21You became foreign minister into the age of populism. Poland had gone, India had been taken over by a populist, Britain had had a Brexit referendum, Bolsonaro was in in Brazil, Donald Trump was in the United States. What happened in your lifetime? How is this possible that the world went from the passionate optimism of the late 80s, the 90s, early 2000s, your early working life into this much grimmer world that you inherited as a foreign minister. He's not blaming you, by the way, Aranjian. He's just asking you to observe. No, no. And I've been observing this. First, there has been a massive redistribution of power in the world.

19:56And this redistribution of power in the world, I mean, when I joined the labor market at the beginning of the 90s, China represented 2 % of the world economy. Today, it represents 20 % of the world economy. By the way, a world economy that has massively increased. I'm saying this about China, but I could say the same about Indonesia, about India, about Turkey, about Mexico, about South Africa. The distribution of power in the world has changed. And we've not been too successful in reorganizing the institutions, the mechanisms and the rules that we've given ourselves to govern this international sphere, whether it's the IMA for the World Bank, whether it's the World Trade Organization, whether it's the United Nations that still has a security council that looks very much like 20th century, in the 21st century where the balance of power has changed.

20:50But I think we also have to acknowledge that there's been a big questioning of liberal democracies within liberal democracies. We've seen also the attempts to hollow out liberal democracies from within, maybe because of the huge changes that our countries have also gone through and are going through, whether it's the changes related to technology, which has changed labor markets fundamentally, whether it's climate change that is obliging all of us to reform the manner in which our economies work and the manner in which we consume. These are all big transformations. And then also probably because in many places, illiberal forces within our democracies have used citizen fatigue with the slow pace of response that democracies sometimes have had to the ordinary challenges of citizens to basically offer magic recipes in the form of direct relationships between leaders and people without institutions, without constitutions, without judges, without media, which we know is the favorite of illiberal forces.

22:04So we've got to deal with these two things, the international reorganization, redistribution of power, and the internal forces push back against the pushback on populists. Arantxa, in the context of the European Union, if you think so, the UK has left, and at this stage, hard to see how it gets back. France could easily elect Marine Le Pen. Italy now has Maloney. Hungary has Orban. Poland has moved. Slovakia has moved. You now have these very right-wing parties that are part of coalitions in Scandinavia, which we always used to think were kind of beacons of liberal democracy. You have the AFD now in Germany doing way better than they've ever done before.

22:51Do you worry that these forces are so powerful that they might rip apart the entire European Union? I worry about more than worrying. I'm trying to present a different alternative, which is what we have to do. At the end of the day in Europe, citizens decide. And we will have a very interesting moment next year with European elections. And this is when citizens will tell us. And we have to be ready for that battle. Last time in 2019, when we had the last European elections, we had an increase in participation. And this participation was driven by young people in Europe, in the EU. And these young people were basically fighting on one topic that they thought was existential to them, climate change.

23:40And they told the politicians, this is what we want Europe to do. But the populists have embraced that issue as their latest cause for populism. And we're seeing the impact even here in the UK recently with Rishi Sunak, the prime minister, pushing back on the environmental agenda. And the reason why, for example, the AFD have just done very well in these elections in Bavaria and Hesse, they say is because they're pushing back, including with young people who say they can't afford the transition. Well, let's wait and see what the young people tell us in the next European elections. I mean, I think for sure the conservatives in Europe are trying to hijack the green agenda under the excuse that it's too complex, that it's too costly.

24:29Well, okay, then let's have a debate about how do we ensure greater fairness. Let's look at what instruments we can deploy to do that. But let's not stop the fight against climate change, because I'm sorry to say, this is an existential fight. And it's not me saying it. We just need to look around us. It's very clear that this is our collective responsibility. Now, let's discuss with the young generation. I want to see what happens in the next European elections. And in the meantime, I think collectively we have to have a serious conversation about how we ensure faster pace with more equity. Just a few days ago here in Sianspo, we had an incredible discussion with our students that are also debating and discussing among themselves how to do that.

25:21But the expectation is not that we do less, Alistair. The expectation is that we do more. Let's wait and see if the electorate in the British election are ready to roll back on the fight against climate change when every citizen in the UK is feeling already the impact of climate change. I want to see that. Okay. I think let's take a short break.

25:48Well, I was down on my last dollar, then I started saving because the bank said fiscal restraint is what you're craving. So I put my earnings in a high yield account, let the savings compound and the interest. amount. I'm optimizing cash flow, putting debt in check. Now time is my friend and not a pain in the neck. And we've got a little cash to rebuild the old deck. Boring money moves make kind of lame songs, but they sound pretty sweet to your wallet. PNC Bank, brilliantly boring since 1865.

26:22One of the things you haven't talked about is immigration. And it's possible to argue that really the reason why right-wing populists have got so much momentum is because of a perception from many voters in Europe that the old ruling establishment did not address their immigration concerns properly. and that unless the moderate politicians come up with a solution to immigration, then the Orban vision of the world, this vision of a world dominated by authoritarian populists, is going to become ever stronger. Totally agree. And I think, again, it's a bit like with climate change. We've got to fight this battle with arguments.

27:05Europe, and the UK is in Europe from this point of view, is demographically in decline. This means that we will need migration in our societies. And this is already a reality. The alternative, therefore, is not between migration yes or migration no, but rather how do we do the migration? How do we manage it? Do we let the mafias control migratory flows into our territories or do we organize this migration working with countries of origin, devising mechanisms to train the people that we would need in our own labor markets in the countries of origin? Will we organize social security, proper contracts, proper salaries?

27:57So what we need to do is manage the migration. And frankly, this can be done. When I was a foreign minister working with my colleague, the minister for migration, we started doing that. We started doing agreements with countries. We did this with Senegal. We did this with a couple of Central American countries. Arantxa, sorry, just to interrupt for a second. So one of the ideas we've been discussing is whether the UK, for example, could say, we will accept a certain percentage of our population in asylum every year. So let's say 0.05, maybe the UK takes 40 ,000 people a year, But it returns the people who cross on boats from France, because France is a safe country.

28:37There's no reason for us to be taking people from France. Instead, we should be negotiating with the European Union to take people who are in genuine need and sharing the burden fairly. Maybe every country should try to agree a percentage of the population they take. What do you make of this? So we were talking about migrants, but there is a category of migrants called refugees, asylum seekers, that have internationally recognized protection. These are the people that are fleeing wars, conflict, persecution, political, sexual, etc. Very soon, we will have in that category too, those that are fleeing the impact of climate change, because we are seeing countries will disappear as a result of climate change.

29:19The rise in the level of the seas will lead to countries disappearing. And we will have to deal with, thus, climate migrants or climate refugees. But refugees and asylum seekers have a special international protection and all our countries have agreed to respect international rules on asylum seekers and refugees. So let's not put all of this into the same bag. We've got one part where we've committed to taking them because it's our humane responsibility. And then there is others. Now, it is true that when they get to the border, sometimes we don't know in which category they are. And it's fair to say that many asylum seekers coming to our borders ask for asylum.