1 00:00:00,040 --> 00:00:02,599 Speaker 1: The latest inflation data for the Euro Area. The final 2 00:00:02,640 --> 00:00:05,240 Speaker 1: reading for April expected to confirm a slow down in 3 00:00:05,280 --> 00:00:09,040 Speaker 1: core CPI to two point seven percent. The inflation outlook 4 00:00:09,160 --> 00:00:11,479 Speaker 1: is improving ahead of the European Parliament elections in three 5 00:00:11,480 --> 00:00:14,680 Speaker 1: weeks time, but concerns remain over the path for future growth, 6 00:00:14,960 --> 00:00:18,119 Speaker 1: debt and competitiveness. Joining us now to discuss is the 7 00:00:18,120 --> 00:00:20,759 Speaker 1: President of the Eurogroup, the Forum of euro Area, Finance 8 00:00:20,800 --> 00:00:24,120 Speaker 1: Minister Finance Ministers, and Irelands Minister of Public Expenditure, Pascal 9 00:00:24,160 --> 00:00:26,200 Speaker 1: dona Who. Pascal dona Who, Good morning, Good morning, Stephen, 10 00:00:26,200 --> 00:00:28,040 Speaker 1: how are you. I'm good, thank you, Great to see 11 00:00:28,080 --> 00:00:31,040 Speaker 1: you in the Bloomberg Radio studio. So let's talk about 12 00:00:31,040 --> 00:00:33,080 Speaker 1: the growth outlook. Then we have the update from the 13 00:00:33,120 --> 00:00:37,080 Speaker 1: European Commission this week. First quarter better than expected, path 14 00:00:37,080 --> 00:00:40,000 Speaker 1: ahead not looking great. How much of a concern is that? 15 00:00:40,200 --> 00:00:43,280 Speaker 2: Well, actually, the path ahead shows growth. The path ahead 16 00:00:43,320 --> 00:00:45,920 Speaker 2: shows growth accelerating next year to around one and a 17 00:00:45,960 --> 00:00:50,000 Speaker 2: half percent. And for much of the last two years 18 00:00:50,040 --> 00:00:52,920 Speaker 2: to commentary and analysis has been about the European Union 19 00:00:52,960 --> 00:00:56,200 Speaker 2: and the euro Area moving into recession. That did not happen. 20 00:00:56,880 --> 00:00:59,840 Speaker 2: We managed to keep our economies growing despite the war 21 00:01:00,200 --> 00:01:03,400 Speaker 2: or in inflation. That being said, I think the debate 22 00:01:03,440 --> 00:01:05,640 Speaker 2: that we're having within Europe at the moment is as 23 00:01:05,680 --> 00:01:09,520 Speaker 2: we've been successful in getting inflation down and avoiding recession, 24 00:01:09,880 --> 00:01:12,120 Speaker 2: the challenging the medium term is to look at how 25 00:01:12,120 --> 00:01:15,200 Speaker 2: Europe can grow faster than it has grown for some years, 26 00:01:15,600 --> 00:01:18,280 Speaker 2: and that is a debate now that is underway, and 27 00:01:18,319 --> 00:01:21,360 Speaker 2: I'd anticipate decisions will be taken about that on a 28 00:01:21,440 --> 00:01:24,640 Speaker 2: range of economic policy areas later on in this year, 29 00:01:24,680 --> 00:01:25,880 Speaker 2: in early twenty twenty five. 30 00:01:26,080 --> 00:01:28,360 Speaker 3: And when it comes to concerns about inflation, I wonder 31 00:01:28,400 --> 00:01:30,759 Speaker 3: what you think are the biggest risks to the outlook. 32 00:01:31,560 --> 00:01:33,520 Speaker 2: I think the risks to the outlook are ones that 33 00:01:33,560 --> 00:01:36,759 Speaker 2: are supplied driven mother than demand driven. I think within 34 00:01:36,800 --> 00:01:39,880 Speaker 2: the euro Area, for reasons of design and choice, I 35 00:01:39,920 --> 00:01:43,600 Speaker 2: think we've been reasonably successful in a complex environment in 36 00:01:43,680 --> 00:01:48,200 Speaker 2: avoiding budget policy contributing to demand and being a contributory 37 00:01:48,240 --> 00:01:51,240 Speaker 2: factor to inflation stayin high. I think the risk that 38 00:01:51,280 --> 00:01:54,720 Speaker 2: we're all aware of, particularly in open economies such as Ireland, 39 00:01:55,160 --> 00:01:58,240 Speaker 2: is we get another supply side shock, particularly with regard 40 00:01:58,280 --> 00:02:02,640 Speaker 2: to energy, and that affects that we're making not happening 41 00:02:02,840 --> 00:02:05,240 Speaker 2: to a high level at the moment, but it's a 42 00:02:05,320 --> 00:02:07,200 Speaker 2: risk that we're acutely aware of now. 43 00:02:07,200 --> 00:02:09,359 Speaker 1: When the French president of Maanuel Macron spoke to Bloomberg 44 00:02:09,400 --> 00:02:11,520 Speaker 1: earlier this week, he again pointed to the lack of 45 00:02:11,520 --> 00:02:13,680 Speaker 1: the capital markets union as being one of the issues 46 00:02:13,720 --> 00:02:16,960 Speaker 1: that's holding back growth in the euro Area. This is 47 00:02:16,960 --> 00:02:18,440 Speaker 1: something that you've been working on for a long time 48 00:02:18,480 --> 00:02:22,440 Speaker 1: at the Eurogroup. How far away does capital markets look now? 49 00:02:23,160 --> 00:02:27,120 Speaker 2: So we have a capital markets a degree of union 50 00:02:27,480 --> 00:02:29,920 Speaker 2: that we've had within the Single markers. But I think 51 00:02:29,960 --> 00:02:31,919 Speaker 2: the critique is a fair one. We have not made 52 00:02:31,960 --> 00:02:34,400 Speaker 2: the kind of progress that we should have made over 53 00:02:34,440 --> 00:02:36,960 Speaker 2: the last number of years. And if I go back 54 00:02:36,960 --> 00:02:39,560 Speaker 2: to the very first question you button me around growth, 55 00:02:40,440 --> 00:02:42,680 Speaker 2: what we have to do is look at how European 56 00:02:42,760 --> 00:02:46,240 Speaker 2: savings can be a contributory factor to European growth. The 57 00:02:46,320 --> 00:02:49,720 Speaker 2: Eurogroup has reached a political agreement on the action steps 58 00:02:49,760 --> 00:02:52,360 Speaker 2: that we believe can be taken and should be taken 59 00:02:52,720 --> 00:02:55,440 Speaker 2: in the year ahead to deliver that progress, and I 60 00:02:55,520 --> 00:02:59,040 Speaker 2: believe we can make fast progress in this area. And 61 00:02:59,120 --> 00:03:02,880 Speaker 2: on Monday night, all finance ministers within the European Union 62 00:03:03,240 --> 00:03:06,040 Speaker 2: met again in a meeting which I shared to recommit 63 00:03:06,080 --> 00:03:08,280 Speaker 2: ourselves to that and to look at how we will 64 00:03:08,320 --> 00:03:09,680 Speaker 2: deliver those action steps. 65 00:03:09,720 --> 00:03:11,720 Speaker 1: We are heading into the European Parliament elections, we're going 66 00:03:11,760 --> 00:03:13,960 Speaker 1: to have a new commission elected after that. That essentially 67 00:03:13,960 --> 00:03:16,040 Speaker 1: puts a lot of work at a Brussels level on 68 00:03:16,080 --> 00:03:19,679 Speaker 1: hold for several months. Now, what is the timescale when 69 00:03:19,720 --> 00:03:22,519 Speaker 1: do you think we might see perhaps a full draft 70 00:03:22,560 --> 00:03:24,120 Speaker 1: of what the capital market inn would look at. 71 00:03:24,160 --> 00:03:26,240 Speaker 2: So I'm very much aware of that as a challenge, 72 00:03:26,280 --> 00:03:28,920 Speaker 2: and that is why what we decided within the Eurogroup 73 00:03:29,400 --> 00:03:33,560 Speaker 2: is we wanted to reach agreement on political priorities that 74 00:03:33,639 --> 00:03:37,119 Speaker 2: would influence and guide to the decisions that a new 75 00:03:37,120 --> 00:03:40,520 Speaker 2: Commission would take. Commissioner Marine McGinnis I think has done 76 00:03:40,560 --> 00:03:44,560 Speaker 2: great work on developing capital markets during her term, but 77 00:03:44,640 --> 00:03:47,680 Speaker 2: we want to use the opportunity of a new Commission 78 00:03:47,720 --> 00:03:51,600 Speaker 2: being formed as an opportunity to say to that, then, 79 00:03:51,680 --> 00:03:54,200 Speaker 2: new Commission, these are the areas that we want to 80 00:03:54,240 --> 00:03:56,960 Speaker 2: act on. And this has been informed by many things 81 00:03:56,960 --> 00:03:59,080 Speaker 2: a national level. You'll be aware of the debate that's 82 00:03:59,080 --> 00:04:02,680 Speaker 2: happening in France led by Christianie who's made a very 83 00:04:02,680 --> 00:04:07,160 Speaker 2: interesting contribution to that discussion. That's now happening in Germany, 84 00:04:07,200 --> 00:04:10,520 Speaker 2: happening in economies such as Slovenia, it's happening in an Ireland. 85 00:04:10,720 --> 00:04:12,320 Speaker 2: There's real momentum now underway. 86 00:04:12,400 --> 00:04:15,080 Speaker 3: But if you can't get the full capital markets union, 87 00:04:15,120 --> 00:04:17,760 Speaker 3: and do you think it's a better idea to aim 88 00:04:17,800 --> 00:04:20,359 Speaker 3: for a smaller group of EU countries going ahead with 89 00:04:20,600 --> 00:04:23,760 Speaker 3: more cooperation if you can't get it at the EU level. 90 00:04:23,800 --> 00:04:25,800 Speaker 3: This is, of course the idea of the EU Economy 91 00:04:25,800 --> 00:04:27,799 Speaker 3: Commissioner is that one you support. 92 00:04:28,160 --> 00:04:30,760 Speaker 2: So I think if you look at the European Union, 93 00:04:30,800 --> 00:04:33,640 Speaker 2: you never reach a full union in any area of policy. 94 00:04:34,440 --> 00:04:37,640 Speaker 2: A full and complete union is always up there in 95 00:04:37,680 --> 00:04:40,400 Speaker 2: the distant horizon. The question is can you deepen the 96 00:04:40,480 --> 00:04:43,760 Speaker 2: union that you have? The European Union is a political project. 97 00:04:43,760 --> 00:04:46,839 Speaker 2: It never ever reaches a final destination. It's all about 98 00:04:46,839 --> 00:04:49,080 Speaker 2: how you can deepen what we have and I believe 99 00:04:49,120 --> 00:04:51,680 Speaker 2: we can do that. And to deal therefore with your question, 100 00:04:52,240 --> 00:04:55,040 Speaker 2: my very strong preference would be that we make progress 101 00:04:55,040 --> 00:04:58,360 Speaker 2: at the EU twenty seven level rather than in smaller groups, 102 00:04:58,440 --> 00:05:02,080 Speaker 2: because you know, one group of countries deeper integration is 103 00:05:02,120 --> 00:05:07,000 Speaker 2: another group of countries fragmentation, and I believe we can 104 00:05:07,040 --> 00:05:10,280 Speaker 2: do it. An EU twenty seven level. But for example, 105 00:05:10,400 --> 00:05:13,559 Speaker 2: the calls that are Minister Bruno la Mayer, my French 106 00:05:13,600 --> 00:05:16,120 Speaker 2: friend and colleague, has made in this area I think 107 00:05:16,160 --> 00:05:19,520 Speaker 2: have been a really helpful catalyst in this debate to 108 00:05:19,560 --> 00:05:22,520 Speaker 2: look at how we accelerate progress at EU twenty seven level. 109 00:05:22,600 --> 00:05:25,440 Speaker 3: So actually a smaller grouping would be a hindrance. 110 00:05:26,000 --> 00:05:28,160 Speaker 2: I wouldn't go that far. It's very much open to 111 00:05:28,200 --> 00:05:31,200 Speaker 2: countries if they wish to cooperate further. But if you 112 00:05:31,200 --> 00:05:36,680 Speaker 2: look at the EU overall, pockets of enhanced cooperation between 113 00:05:36,760 --> 00:05:41,240 Speaker 2: smaller group of countries are relatively rare, and I think 114 00:05:41,279 --> 00:05:45,240 Speaker 2: what is far more likely and achievable is how we 115 00:05:45,279 --> 00:05:48,960 Speaker 2: do more together and by doing that perhaps therefore less 116 00:05:49,000 --> 00:05:52,320 Speaker 2: in the incentive for group points of countries to come together. 117 00:05:52,720 --> 00:05:54,360 Speaker 1: In three weeks time, voters will be going to the 118 00:05:54,400 --> 00:05:56,440 Speaker 1: polls and the European Parliament elections. A lot of the 119 00:05:56,440 --> 00:05:58,200 Speaker 1: focus of that is on the rise of the far 120 00:05:58,360 --> 00:06:01,000 Speaker 1: right groups. Would a stronger a right in the European 121 00:06:01,000 --> 00:06:03,400 Speaker 1: Parliament derail these plans because it's set it back further. 122 00:06:03,560 --> 00:06:08,000 Speaker 2: Absolutely not, and we'll be making the case vigorously in Ireland, 123 00:06:08,040 --> 00:06:10,480 Speaker 2: and my colleagues are making it across Europe for the 124 00:06:10,560 --> 00:06:14,080 Speaker 2: dangers of the Far Ice and even if their parliamentary 125 00:06:14,080 --> 00:06:16,960 Speaker 2: representation does rise, and I don't take that as a given, 126 00:06:17,760 --> 00:06:22,360 Speaker 2: I'm very confident that political colleagues in a variety of 127 00:06:22,400 --> 00:06:25,039 Speaker 2: parties will be able to come together and form a 128 00:06:25,040 --> 00:06:27,800 Speaker 2: stable majority within the European Parliament. 129 00:06:28,000 --> 00:06:29,880 Speaker 3: And with your hat on as a minister in the 130 00:06:29,920 --> 00:06:33,640 Speaker 3: Irish government, immigrations really become a contentious issue in Ireland 131 00:06:34,120 --> 00:06:37,000 Speaker 3: because of well it's causing all these tensions in relations 132 00:06:37,000 --> 00:06:39,560 Speaker 3: with the UK over the return of asylum seekers who've 133 00:06:39,600 --> 00:06:42,680 Speaker 3: come through Northern Ireland. Do you have concerns that could 134 00:06:42,880 --> 00:06:44,800 Speaker 3: destabilize the windsor Framework. 135 00:06:44,960 --> 00:06:49,919 Speaker 2: Absolutely, I'm absolutely confident in our ability to maintain and 136 00:06:50,000 --> 00:06:53,560 Speaker 2: build under Windsor frameworks. So to the very contrary, Only 137 00:06:53,640 --> 00:06:58,600 Speaker 2: this week I had two ministers, one from Chinfein one 138 00:06:58,640 --> 00:07:02,560 Speaker 2: from the up in Dublin meeting me and I'll be 139 00:07:02,600 --> 00:07:06,000 Speaker 2: going back up to meet them to look at the 140 00:07:06,320 --> 00:07:09,000 Speaker 2: cooperation that's now on the way that's enabled by the 141 00:07:09,040 --> 00:07:13,000 Speaker 2: wins of framework agreements. So I'm really optimistic actually about 142 00:07:13,040 --> 00:07:15,240 Speaker 2: our ability to make that work. We've a new Northern 143 00:07:15,280 --> 00:07:18,560 Speaker 2: Ireland Executive from place which is full of optimism and 144 00:07:18,640 --> 00:07:22,560 Speaker 2: determination now to make this framework achieve agreement work, and 145 00:07:22,600 --> 00:07:25,400 Speaker 2: I believe it will. Really The big driver of the 146 00:07:25,480 --> 00:07:28,080 Speaker 2: challenges that we face now with regard to migration in 147 00:07:28,120 --> 00:07:30,800 Speaker 2: Ireland is we have the largest movement of human beings 148 00:07:30,800 --> 00:07:33,480 Speaker 2: across Europe since World War Two and we're no different 149 00:07:33,520 --> 00:07:36,120 Speaker 2: to any other country in grappling with that at the moment. 150 00:07:36,720 --> 00:07:39,840 Speaker 2: But I believe we will be able to deal with 151 00:07:39,880 --> 00:07:43,120 Speaker 2: it in Ireland and maintain strong support for an open 152 00:07:43,160 --> 00:07:45,840 Speaker 2: economy and society which arsh people are committed to. 153 00:07:45,960 --> 00:07:48,560 Speaker 1: Okay, Pascal Donna, who, Ireland's Minister of Public Expenditure and 154 00:07:48,640 --> 00:07:50,720 Speaker 1: President of the Eurogroup, thank you very much for joining us.