Speaker 1: The latest inflation data for the Euro Area. The final
Speaker 1: reading for April expected to confirm a slow down in
Speaker 1: core CPI to two point seven percent. The inflation outlook
Speaker 1: is improving ahead of the European Parliament elections in three
Speaker 1: weeks time, but concerns remain over the path for future growth,
Speaker 1: debt and competitiveness. Joining us now to discuss is the
Speaker 1: President of the Eurogroup, the Forum of euro Area, Finance
Speaker 1: Minister Finance Ministers, and Irelands Minister of Public Expenditure, Pascal
Speaker 1: dona Who. Pascal dona Who, Good morning, Good morning, Stephen,
Speaker 1: how are you. I'm good, thank you, Great to see
Speaker 1: you in the Bloomberg Radio studio. So let's talk about
Speaker 1: the growth outlook. Then we have the update from the
Speaker 1: European Commission this week. First quarter better than expected, path
Speaker 1: ahead not looking great. How much of a concern is that?
Speaker 2: Well, actually, the path ahead shows growth. The path ahead
Speaker 2: shows growth accelerating next year to around one and a
Speaker 2: half percent. And for much of the last two years
Speaker 2: to commentary and analysis has been about the European Union
Speaker 2: and the euro Area moving into recession. That did not happen.
Speaker 2: We managed to keep our economies growing despite the war
Speaker 2: or in inflation. That being said, I think the debate
Speaker 2: that we're having within Europe at the moment is as
Speaker 2: we've been successful in getting inflation down and avoiding recession,
Speaker 2: the challenging the medium term is to look at how
Speaker 2: Europe can grow faster than it has grown for some years,
Speaker 2: and that is a debate now that is underway, and
Speaker 2: I'd anticipate decisions will be taken about that on a
Speaker 2: range of economic policy areas later on in this year,
Speaker 2: in early twenty twenty five.
Speaker 3: And when it comes to concerns about inflation, I wonder
Speaker 3: what you think are the biggest risks to the outlook.
Speaker 2: I think the risks to the outlook are ones that
Speaker 2: are supplied driven mother than demand driven. I think within
Speaker 2: the euro Area, for reasons of design and choice, I
Speaker 2: think we've been reasonably successful in a complex environment in
Speaker 2: avoiding budget policy contributing to demand and being a contributory
Speaker 2: factor to inflation stayin high. I think the risk that
Speaker 2: we're all aware of, particularly in open economies such as Ireland,
Speaker 2: is we get another supply side shock, particularly with regard
Speaker 2: to energy, and that affects that we're making not happening
Speaker 2: to a high level at the moment, but it's a
Speaker 2: risk that we're acutely aware of now.
Speaker 1: When the French president of Maanuel Macron spoke to Bloomberg
Speaker 1: earlier this week, he again pointed to the lack of
Speaker 1: the capital markets union as being one of the issues
Speaker 1: that's holding back growth in the euro Area. This is
Speaker 1: something that you've been working on for a long time
Speaker 1: at the Eurogroup. How far away does capital markets look now?
Speaker 2: So we have a capital markets a degree of union
Speaker 2: that we've had within the Single markers. But I think
Speaker 2: the critique is a fair one. We have not made
Speaker 2: the kind of progress that we should have made over
Speaker 2: the last number of years. And if I go back
Speaker 2: to the very first question you button me around growth,
Speaker 2: what we have to do is look at how European
Speaker 2: savings can be a contributory factor to European growth. The
Speaker 2: Eurogroup has reached a political agreement on the action steps
Speaker 2: that we believe can be taken and should be taken
Speaker 2: in the year ahead to deliver that progress, and I
Speaker 2: believe we can make fast progress in this area. And
Speaker 2: on Monday night, all finance ministers within the European Union
Speaker 2: met again in a meeting which I shared to recommit
Speaker 2: ourselves to that and to look at how we will
Speaker 2: deliver those action steps.
Speaker 1: We are heading into the European Parliament elections, we're going
Speaker 1: to have a new commission elected after that. That essentially
Speaker 1: puts a lot of work at a Brussels level on
Speaker 1: hold for several months. Now, what is the timescale when
Speaker 1: do you think we might see perhaps a full draft
Speaker 1: of what the capital market inn would look at.
Speaker 2: So I'm very much aware of that as a challenge,
Speaker 2: and that is why what we decided within the Eurogroup
Speaker 2: is we wanted to reach agreement on political priorities that
Speaker 2: would influence and guide to the decisions that a new
Speaker 2: Commission would take. Commissioner Marine McGinnis I think has done
Speaker 2: great work on developing capital markets during her term, but
Speaker 2: we want to use the opportunity of a new Commission
Speaker 2: being formed as an opportunity to say to that, then,
Speaker 2: new Commission, these are the areas that we want to
Speaker 2: act on. And this has been informed by many things
Speaker 2: a national level. You'll be aware of the debate that's
Speaker 2: happening in France led by Christianie who's made a very
Speaker 2: interesting contribution to that discussion. That's now happening in Germany,
Speaker 2: happening in economies such as Slovenia, it's happening in an Ireland.
Speaker 2: There's real momentum now underway.
Speaker 3: But if you can't get the full capital markets union,
Speaker 3: and do you think it's a better idea to aim
Speaker 3: for a smaller group of EU countries going ahead with
Speaker 3: more cooperation if you can't get it at the EU level.
Speaker 3: This is, of course the idea of the EU Economy
Speaker 3: Commissioner is that one you support.
Speaker 2: So I think if you look at the European Union,
Speaker 2: you never reach a full union in any area of policy.
Speaker 2: A full and complete union is always up there in
Speaker 2: the distant horizon. The question is can you deepen the
Speaker 2: union that you have? The European Union is a political project.
Speaker 2: It never ever reaches a final destination. It's all about
Speaker 2: how you can deepen what we have and I believe
Speaker 2: we can do that. And to deal therefore with your question,
Speaker 2: my very strong preference would be that we make progress
Speaker 2: at the EU twenty seven level rather than in smaller groups,
Speaker 2: because you know, one group of countries deeper integration is
Speaker 2: another group of countries fragmentation, and I believe we can
Speaker 2: do it. An EU twenty seven level. But for example,
Speaker 2: the calls that are Minister Bruno la Mayer, my French
Speaker 2: friend and colleague, has made in this area I think
Speaker 2: have been a really helpful catalyst in this debate to
Speaker 2: look at how we accelerate progress at EU twenty seven level.
Speaker 3: So actually a smaller grouping would be a hindrance.
Speaker 2: I wouldn't go that far. It's very much open to
Speaker 2: countries if they wish to cooperate further. But if you
Speaker 2: look at the EU overall, pockets of enhanced cooperation between
Speaker 2: smaller group of countries are relatively rare, and I think
Speaker 2: what is far more likely and achievable is how we
Speaker 2: do more together and by doing that perhaps therefore less
Speaker 2: in the incentive for group points of countries to come together.
Speaker 1: In three weeks time, voters will be going to the
Speaker 1: polls and the European Parliament elections. A lot of the
Speaker 1: focus of that is on the rise of the far
Speaker 1: right groups. Would a stronger a right in the European
Speaker 1: Parliament derail these plans because it's set it back further.
Speaker 2: Absolutely not, and we'll be making the case vigorously in Ireland,
Speaker 2: and my colleagues are making it across Europe for the
Speaker 2: dangers of the Far Ice and even if their parliamentary
Speaker 2: representation does rise, and I don't take that as a given,
Speaker 2: I'm very confident that political colleagues in a variety of
Speaker 2: parties will be able to come together and form a
Speaker 2: stable majority within the European Parliament.
Speaker 3: And with your hat on as a minister in the
Speaker 3: Irish government, immigrations really become a contentious issue in Ireland
Speaker 3: because of well it's causing all these tensions in relations
Speaker 3: with the UK over the return of asylum seekers who've
Speaker 3: come through Northern Ireland. Do you have concerns that could
Speaker 3: destabilize the windsor Framework.
Speaker 2: Absolutely, I'm absolutely confident in our ability to maintain and
Speaker 2: build under Windsor frameworks. So to the very contrary, Only
Speaker 2: this week I had two ministers, one from Chinfein one
Speaker 2: from the up in Dublin meeting me and I'll be
Speaker 2: going back up to meet them to look at the
Speaker 2: cooperation that's now on the way that's enabled by the
Speaker 2: wins of framework agreements. So I'm really optimistic actually about
Speaker 2: our ability to make that work. We've a new Northern
Speaker 2: Ireland Executive from place which is full of optimism and
Speaker 2: determination now to make this framework achieve agreement work, and
Speaker 2: I believe it will. Really The big driver of the
Speaker 2: challenges that we face now with regard to migration in
Speaker 2: Ireland is we have the largest movement of human beings
Speaker 2: across Europe since World War Two and we're no different
Speaker 2: to any other country in grappling with that at the moment.
Speaker 2: But I believe we will be able to deal with
Speaker 2: it in Ireland and maintain strong support for an open
Speaker 2: economy and society which arsh people are committed to.
Speaker 1: Okay, Pascal Donna, who, Ireland's Minister of Public Expenditure and
Speaker 1: President of the Eurogroup, thank you very much for joining us.