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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Hello, Stephen Carroll here in Brussels. In addition to our

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Speaker 2: Daybreak euro podcast today, we wanted to bring you an

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Speaker 2: important conversation from our radio show this morning. European leaders

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Speaker 2: are here in Brussels for a crucial summit for Ukraine's future.

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Speaker 2: The EU's foreign policy chief, Kayak Kallas join me in

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Speaker 2: our studio to talk about the key issue up for

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Speaker 2: discussion at that meeting around how to support Keev financially,

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Speaker 2: but also her view of the ongoing attempts driven by

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Speaker 2: Washington to end Russia's war in Ukraine. And we also

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Speaker 2: talked about some of the criticism of the EU that's

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Speaker 2: come from the Trump administration recently. This is a critical

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Speaker 2: moment for the European Union, for Ukraine and for the

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Speaker 2: Transatlantic relationship, and Kayakllas is one of the most important

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Speaker 2: voices in these discussions. Our conversation started by talking about

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Speaker 2: the proposal being decided on today whether to use frozen

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Speaker 2: Russian Central Bank assets to back a ninety billion euro

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Speaker 2: loan for Ukraine. I asked Kaya Kallas what she saw

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Speaker 2: as the chances for a deal.

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Speaker 1: As President Koshta has said that we are not going

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Speaker 1: to leave the meeting unless so we have the agreement.

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Speaker 1: So we definitely have to have the agreement by the

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Speaker 1: end of this day or tomorrow, but it's going to

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Speaker 1: be the discussions are going to be long, but hopefully

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Speaker 1: we'll get there.

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Speaker 2: How much progress has been made since the last European Council, when,

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Speaker 2: of course it emerged that this was going to be

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Speaker 2: a particularly difficult issue to win Belgian support over.

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Speaker 1: It has been very difficult and there has been a

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Speaker 1: lot of work done, but still not all finalized. So

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Speaker 1: let's see how it goes today. I think I agree

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Speaker 1: with the Chancellor Mertz who said that it's fifty to

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Speaker 1: fifty that we get it done. The reparations loan is

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Speaker 1: the most viable option for the financing, and it's also

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Speaker 1: the right thing to do because it's based on the

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Speaker 1: reparations that Russia owes to Ukraine.

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Speaker 2: What happens if there isn't a deal? Is there a

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Speaker 2: Plan B?

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Speaker 1: Well, right now we are focusing on Plan A, because

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Speaker 1: if you start to think about Plan B, then Plan

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Speaker 1: B happens. So right now the work is on Plan A.

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Speaker 2: How important is this financing for ukraine presence? Lanski's coming

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Speaker 2: to today's meeting. I'm sure he's going to be wanting

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Speaker 2: to put as much pressure as possible on European leaders.

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Speaker 2: How crucial is it.

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Speaker 1: It is crucial. Putin is banking on us to fail

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Speaker 1: and we shouldn't give them that. Really, I mean, Putin

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Speaker 1: wants to make the picture like you know, they can

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Speaker 1: go on forever and he can outlast us, which is

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Speaker 1: not true if you look how the Russian economy is

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Speaker 1: doing and the sanctions are really biting. So so I

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Speaker 1: think this is a very important moment to show. I

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Speaker 1: mean three messages really, One message to Ukraine that we

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Speaker 1: are supporting them in their heart struggles. A second message

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Speaker 1: to Russia that he you know, they can't outlast us.

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Speaker 1: And third message to also United States of America that

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Speaker 1: we are you know, doing and taking these very strong steps.

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Speaker 2: But just in the alternative, I mean, there's been so

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Speaker 2: much criticism of the EU, particularly coming from the US

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Speaker 2: on this front. If a deal isn't done, what sort

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Speaker 2: of signal does that sound about the EU and it's

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Speaker 2: support for Ukraine.

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Speaker 1: Well, clearly, like I said, I mean, put In is

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Speaker 1: banking on us to fail. Let's not give him that

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Speaker 1: and it is definitely standing wrong signal. But as I said,

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Speaker 1: we are working on Plan A. We are working on

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Speaker 1: getting this over the final finishing line, so hopefully we'll

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Speaker 1: get it done.

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Speaker 2: Does that mean moving without Belgium if we can't win

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Speaker 2: their support?

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Speaker 1: A lot, a lot of Member states have said that,

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Speaker 1: you know, Belgium is crucial, so they have to be

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Speaker 1: on board with this. So though otherwise it is a

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Speaker 1: qualified majority vote, so it doesn't mean that everybody has

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Speaker 1: to agree. But considering that Belgium has the majority of

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Speaker 1: the assets, I think it's important that they feel comfortable

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Speaker 1: with the solution.

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Speaker 2: More broadly, when we're thinking about where the peace talks

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Speaker 2: are now over trying to end the war in Ukraine,

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Speaker 2: what's your understanding of where the progress is now, how

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Speaker 2: close there could we could be to a piece deal.

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Speaker 1: Well, there is a strong push for peace, but it's

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Speaker 1: a bit one sided because we haven't seen any concessions

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Speaker 1: on Russian side or any movement on their side to

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Speaker 1: agree to anything, even you know, the ceasefire for Christmas

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Speaker 1: so that people wouldn't be living under the fear of

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Speaker 1: bombing also Christmas Eve. But Russia is not accepting this,

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Speaker 1: so they are still presenting their maximized maximalist codes, so

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Speaker 1: we don't see any development there.

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Speaker 2: Are you confident that they can be actually brought to

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Speaker 2: an agreement? Do you see any interest from Russia in

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Speaker 2: actually ending this war?

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Speaker 1: Not right now? And that's why we need to put

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Speaker 1: the pressure on them, because we need to go from

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Speaker 1: the place where they are pretending to negotiate to them

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Speaker 1: actually to be in the need to negotiate. And we

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Speaker 1: are out there.

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Speaker 2: Where is the EU in this process? It seems like

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Speaker 2: a lot of the discussions are happening between Moscow and Washington.

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Speaker 2: Is are European views being listened to and the plans

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Speaker 2: that are being drawn up?

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Speaker 1: For any deal to work, it has to have the

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Speaker 1: Europeans on board because there are a lot of elements

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Speaker 1: that are European really, I mean, it concerns European security.

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Speaker 1: So for any deal to work, you need to have

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Speaker 1: the consent and the understanding of the Europeans.

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Speaker 2: We've had another week where the Trump administration has been

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Speaker 2: very critical of the EU. How would you describe the

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Speaker 2: transatlantic relationship now?

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Speaker 1: Well, it's definitely different than it was before. And of course,

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Speaker 1: you know, we have seen the criticism read the criticism,

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Speaker 1: but you know, for me, it is just totally false.

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Speaker 1: I mean, I come from a country where we didn't

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Speaker 1: have freedoms, and I know that we have them now.

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Speaker 1: And for example, the country that I come from is

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Speaker 1: ranking second in the Press Freedom Index, whereas America is

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Speaker 1: fifty eight or something like this. So you know, I

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Speaker 1: think we shouldn't really read into those criticisms because they

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Speaker 1: are not true. At the same time, of course, it

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Speaker 1: sends a very strong signal. So from the Americans, I

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Speaker 1: think what we should take from it is that we

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Speaker 1: should have more self confidence regarding our relations with Russia,

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Speaker 1: but also our relations with China and our allies.

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Speaker 2: And regulation as well. Does the europe need to stand

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Speaker 2: firm over the regulations that's come in for such criticism.

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Speaker 1: Well, certain regulations are for the benefits of the people.

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Speaker 1: Let's take the food security for example. I mean, the

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Speaker 1: food that we are eating here is so much more

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Speaker 1: pure than the food that the Americans are eating, and

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Speaker 1: that is for the health of the people.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 2: stories making news from London to Wall Street and beyond.

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Speaker 3: I'm Caroline Hepka.

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Speaker 2: And I'm Stephen Carroll. Join us again tomorrow morning for

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Speaker 2: all the news you need to start your day right

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Speaker 2: here on Bloomberg day Break Europe