WEBVTT - Ireland's Donohoe Talks Fiscal Rules, Defense, G-20

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The EU is looking to potentially loosen fiscal rules to

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<v Speaker 2>reallocate funds to defense. What is your take on that?

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<v Speaker 2>How far should it go?

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<v Speaker 1>So the European Union is already a very significant contributor

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<v Speaker 1>to the defense of Ukraine and to the security of

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<v Speaker 1>their economy, but you're right, there's now an intense discussion

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<v Speaker 1>under way regarding how we confer the contribute to that

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<v Speaker 1>defense and security, and the first phase of that is

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<v Speaker 1>within our existing budget rules, what flexibility can be used

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<v Speaker 1>to allow countries to increase their national defense expenditure. The

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<v Speaker 1>Commission President flagged this as an option there around a

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<v Speaker 1>week ago, and the Commission and ministers are now working

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<v Speaker 1>together to understand precisely how we would make this happen.

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<v Speaker 1>But it appears to me to be a very reasonable

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<v Speaker 1>and sensible way of addressing the need of how we

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<v Speaker 1>can better fund Europe's security.

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<v Speaker 2>Do you think this escape claus though, should be part

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<v Speaker 2>of the discussion or are you concerned potentially about this.

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<v Speaker 1>While we're talking about flexibility inside the existing rules, and

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<v Speaker 1>the reason this flexibility with Buddin was to deal with risks,

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<v Speaker 1>was to deal with difficulties that could grow in scale.

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<v Speaker 1>So I do think it is appropriate that while maintaining

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<v Speaker 1>our budget rules we look at how they can be

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<v Speaker 1>used to deal with an issue that is, after all

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<v Speaker 1>existential our security and the future of Ukraine.

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<v Speaker 2>So you don't think it's unreasonable, then I wonder how

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<v Speaker 2>you feel about the US and asking europe to rethink

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<v Speaker 2>their own contribution to defense as.

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<v Speaker 1>Part of you, well, we're already aware of the needs

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<v Speaker 1>to increase our own defense expenditure. In Ireland, for example,

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<v Speaker 1>we've now been significantly increasing our expenditure and defense and security.

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<v Speaker 1>We're in neutral country, but we know we need to

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<v Speaker 1>invest in our own security and we are planning to

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<v Speaker 1>further increase that spending in the years ahead. And many

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<v Speaker 1>of my colleagues within the European Union are on the

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<v Speaker 1>same path. And even though the US point is obviously

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<v Speaker 1>very important given their gigantic contribution to NATO, we're aware

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<v Speaker 1>of the need to do this anyway because of the

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<v Speaker 1>way in which the world is changing.

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<v Speaker 2>You said further increase over the next few years. What

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<v Speaker 2>are you look in that potential?

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<v Speaker 1>So in Ireland, for example, we've a plan to get

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<v Speaker 1>our defense expenditure up to one point five billion euro.

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<v Speaker 1>It is increased by thirty percent since twenty twenty.

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<v Speaker 3>And if I look at.

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<v Speaker 1>Other colleagues across the European Union, they're now looking at

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<v Speaker 1>what the further increases are that they need to put

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<v Speaker 1>in place.

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<v Speaker 3>The level of that increase does.

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<v Speaker 1>Very country by country, but I'm certain in the very

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<v Speaker 1>near future you'll see those spending plans go up reflecting

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<v Speaker 1>the challenge we now have to confirmed.

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<v Speaker 2>Do you think there should be a certain type of

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<v Speaker 2>financial instrument that should be decided on when thinking about this,

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<v Speaker 2>we've heard a few different countries maybe potentially tinkering with

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<v Speaker 2>different ideas.

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<v Speaker 1>Do you have an ideal mechan So I think it's

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<v Speaker 1>inevitable that different options will be looked at, But I

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<v Speaker 1>think our first portal call should be what we can

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<v Speaker 1>do at a national level while maintaining financial stability and

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<v Speaker 1>maintaining the integrity of the budget rules. And the main

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<v Speaker 1>reason why I would make that point to you is

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<v Speaker 1>that's the thing we'll be able to do the quickest.

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<v Speaker 1>We are going to, no doubt look at new instruments,

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<v Speaker 1>look at at debate regarding how we can fund our

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<v Speaker 1>future better, but all of that will take a little

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<v Speaker 1>bit of time, whereas we know at national level we

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<v Speaker 1>can do more, and how that can be coordinated better

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<v Speaker 1>at an EU level is also an important debate we

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<v Speaker 1>need to.

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<v Speaker 2>Have and Minister I imagine as part of the discussions

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<v Speaker 2>here there's a lot of talk about tariffs and the

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<v Speaker 2>potential effect on your own individual economies, but also as

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<v Speaker 2>a block, what have those discussions been at this point

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<v Speaker 2>between you and your.

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<v Speaker 1>So the vast majority of countries who've been participating in

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<v Speaker 1>these discussions have some very clear messages trade. While of

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<v Speaker 1>course it brings with many different challenges, trade in inside

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<v Speaker 1>a rules based order remains the see good best way

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<v Speaker 1>in which we can lift national economic performance and global

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<v Speaker 1>economic performance while also strengthening our safety nets looking after citizens.

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<v Speaker 1>Are times of big change and therefore any attempts or

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<v Speaker 1>any moves that can bring in tariffs really do have

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<v Speaker 1>the potential to harm trade, harm jobs, bring up prices,

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<v Speaker 1>decrease investment. And while we very much understand why this

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<v Speaker 1>has been done on the table by our colleagues and

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<v Speaker 1>friends in the US, of course we want to negotiate

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<v Speaker 1>with them to see our their internative ways in which

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<v Speaker 1>we can deal with the issues they're raising.

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<v Speaker 2>Do you worry about individually as a country, Ireland potentially

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<v Speaker 2>getting caught in the crossfire of this, especially if you

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<v Speaker 2>consider the trade situation between the US and.

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<v Speaker 1>So any small, open trade intensive economy, the Irish economy,

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<v Speaker 1>and many other ones that are here. Of course, we

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<v Speaker 1>are concerned about the effect that a change in global

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<v Speaker 1>trade and the broad application of tariffs could have our

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<v Speaker 1>national economy, and many other ministers will feel the same.

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<v Speaker 2>Have you expressed that to your US counterparts here? I

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<v Speaker 2>mean the US counterpart is not here, but.

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<v Speaker 1>The official Oh, there are US officials who are here

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<v Speaker 1>who are hearing those different messages from many, many different countries.

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<v Speaker 1>We are in a fortunate position where we have a

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<v Speaker 1>current high level of strength within our national economy. Our

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<v Speaker 1>economy is growing, we have a record number of people

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<v Speaker 1>at work, we have many different engines of national economic growth.

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<v Speaker 3>But our concern is a global one.

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<v Speaker 1>Anything that really begins to change how global trade happens

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<v Speaker 1>that we believe will be mutually harmful, and we would

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<v Speaker 1>prefer to work together to get the agenda towards something

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<v Speaker 1>that can be mutually beneficial. Recognizing the serious issues that

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<v Speaker 1>many countries are raised in on behalf of the people

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<v Speaker 1>they serve.

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<v Speaker 2>Are you optimistic though, considering a lot of the confluence

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<v Speaker 2>of challenges that are going on right now we're talking

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<v Speaker 2>about some of what you've heard this morning.

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<v Speaker 1>Well, I always make the case for optimism. I always

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<v Speaker 1>believe we can make progress. Of course, I have to

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<v Speaker 1>acknowledge that we are facing many, many demands and difficulties

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<v Speaker 1>at the moment. We're all aware of what they are,

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<v Speaker 1>the debates of regarding global trade, what could happen with tariff's,

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<v Speaker 1>the effects of wars. But I really believe that our

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<v Speaker 1>South African friends and hosts here today have reminded us

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<v Speaker 1>of the value of the G twenty and how collaboration

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<v Speaker 1>and dialogue can still.

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<v Speaker 3>Play a vital role.

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<v Speaker 1>And many of us, including Ireland and Europe, are all

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<v Speaker 1>in on us and want to play our part in

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<v Speaker 1>finding the opportunities and dealing with the really severe challenges

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<v Speaker 1>we know exist