WEBVTT - Bonus Interview: EU's Kallas Warns 'Putin Is Banking on Us To Fail'

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>Hello, Stephen Carroll here in Brussels. In addition to our

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<v Speaker 2>Daybreak euro podcast today, we wanted to bring you an

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<v Speaker 2>important conversation from our radio show this morning. European leaders

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<v Speaker 2>are here in Brussels for a crucial summit for Ukraine's future.

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<v Speaker 2>The EU's foreign policy chief, Kayak Kallas join me in

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<v Speaker 2>our studio to talk about the key issue up for

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<v Speaker 2>discussion at that meeting around how to support Keev financially,

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<v Speaker 2>but also her view of the ongoing attempts driven by

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<v Speaker 2>Washington to end Russia's war in Ukraine. And we also

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<v Speaker 2>talked about some of the criticism of the EU that's

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<v Speaker 2>come from the Trump administration recently. This is a critical

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<v Speaker 2>moment for the European Union, for Ukraine and for the

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<v Speaker 2>Transatlantic relationship, and Kayakllas is one of the most important

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<v Speaker 2>voices in these discussions. Our conversation started by talking about

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<v Speaker 2>the proposal being decided on today whether to use frozen

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<v Speaker 2>Russian Central Bank assets to back a ninety billion euro

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<v Speaker 2>loan for Ukraine. I asked Kaya Kallas what she saw

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<v Speaker 2>as the chances for a deal.

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<v Speaker 1>As President Koshta has said that we are not going

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<v Speaker 1>to leave the meeting unless so we have the agreement.

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<v Speaker 1>So we definitely have to have the agreement by the

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<v Speaker 1>end of this day or tomorrow, but it's going to

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<v Speaker 1>be the discussions are going to be long, but hopefully

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<v Speaker 1>we'll get there.

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<v Speaker 2>How much progress has been made since the last European Council, when,

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<v Speaker 2>of course it emerged that this was going to be

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<v Speaker 2>a particularly difficult issue to win Belgian support over.

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<v Speaker 1>It has been very difficult and there has been a

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<v Speaker 1>lot of work done, but still not all finalized. So

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<v Speaker 1>let's see how it goes today. I think I agree

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<v Speaker 1>with the Chancellor Mertz who said that it's fifty to

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<v Speaker 1>fifty that we get it done. The reparations loan is

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<v Speaker 1>the most viable option for the financing, and it's also

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<v Speaker 1>the right thing to do because it's based on the

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<v Speaker 1>reparations that Russia owes to Ukraine.

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<v Speaker 2>What happens if there isn't a deal? Is there a

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<v Speaker 2>Plan B?

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<v Speaker 1>Well, right now we are focusing on Plan A, because

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<v Speaker 1>if you start to think about Plan B, then Plan

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<v Speaker 1>B happens. So right now the work is on Plan A.

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<v Speaker 2>How important is this financing for ukraine presence? Lanski's coming

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<v Speaker 2>to today's meeting. I'm sure he's going to be wanting

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<v Speaker 2>to put as much pressure as possible on European leaders.

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<v Speaker 2>How crucial is it.

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<v Speaker 1>It is crucial. Putin is banking on us to fail

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

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<v Speaker 1>wants to make the picture like you know, they can

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<v Speaker 1>go on forever and he can outlast us, which is

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<v Speaker 1>not true if you look how the Russian economy is

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<v Speaker 1>doing and the sanctions are really biting. So so I

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<v Speaker 1>think this is a very important moment to show. I

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<v Speaker 1>mean three messages really, One message to Ukraine that we

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<v Speaker 1>are supporting them in their heart struggles. A second message

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

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<v Speaker 1>And third message to also United States of America that

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<v Speaker 1>we are you know, doing and taking these very strong steps.

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<v Speaker 2>But just in the alternative, I mean, there's been so

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<v Speaker 2>much criticism of the EU, particularly coming from the US

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

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<v Speaker 2>of signal does that sound about the EU and it's

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<v Speaker 2>support for Ukraine.

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<v Speaker 1>Well, clearly, like I said, I mean, put In is

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<v Speaker 1>banking on us to fail. Let's not give him that

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<v Speaker 1>and it is definitely standing wrong signal. But as I said,

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<v Speaker 1>we are working on Plan A. We are working on

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<v Speaker 1>getting this over the final finishing line, so hopefully we'll

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<v Speaker 1>get it done.

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<v Speaker 2>Does that mean moving without Belgium if we can't win

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<v Speaker 2>their support?

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<v Speaker 1>A lot, a lot of Member states have said that,

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<v Speaker 1>you know, Belgium is crucial, so they have to be

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<v Speaker 1>on board with this. So though otherwise it is a

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<v Speaker 1>qualified majority vote, so it doesn't mean that everybody has

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<v Speaker 1>to agree. But considering that Belgium has the majority of

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<v Speaker 1>the assets, I think it's important that they feel comfortable

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<v Speaker 1>with the solution.

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<v Speaker 2>More broadly, when we're thinking about where the peace talks

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<v Speaker 2>are now over trying to end the war in Ukraine,

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<v Speaker 2>what's your understanding of where the progress is now, how

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<v Speaker 2>close there could we could be to a piece deal.

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<v Speaker 1>Well, there is a strong push for peace, but it's

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<v Speaker 1>a bit one sided because we haven't seen any concessions

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<v Speaker 1>on Russian side or any movement on their side to

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<v Speaker 1>agree to anything, even you know, the ceasefire for Christmas

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<v Speaker 1>so that people wouldn't be living under the fear of

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<v Speaker 1>bombing also Christmas Eve. But Russia is not accepting this,

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<v Speaker 1>so they are still presenting their maximized maximalist codes, so

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<v Speaker 1>we don't see any development there.

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<v Speaker 2>Are you confident that they can be actually brought to

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<v Speaker 2>an agreement? Do you see any interest from Russia in

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<v Speaker 2>actually ending this war?

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<v Speaker 1>Not right now? And that's why we need to put

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<v Speaker 1>the pressure on them, because we need to go from

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<v Speaker 1>the place where they are pretending to negotiate to them

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<v Speaker 1>actually to be in the need to negotiate. And we

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<v Speaker 1>are out there.

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<v Speaker 2>Where is the EU in this process? It seems like

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<v Speaker 2>a lot of the discussions are happening between Moscow and Washington.

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<v Speaker 2>Is are European views being listened to and the plans

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<v Speaker 2>that are being drawn up?

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<v Speaker 1>For any deal to work, it has to have the

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<v Speaker 1>Europeans on board because there are a lot of elements

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<v Speaker 1>that are European really, I mean, it concerns European security.

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<v Speaker 1>So for any deal to work, you need to have

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<v Speaker 1>the consent and the understanding of the Europeans.

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<v Speaker 2>We've had another week where the Trump administration has been

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<v Speaker 2>very critical of the EU. How would you describe the

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<v Speaker 2>transatlantic relationship now?

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

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<v Speaker 1>you know, we have seen the criticism read the criticism,

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<v Speaker 1>but you know, for me, it is just totally false.

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<v Speaker 1>I mean, I come from a country where we didn't

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<v Speaker 1>have freedoms, and I know that we have them now.

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<v Speaker 1>And for example, the country that I come from is

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<v Speaker 1>ranking second in the Press Freedom Index, whereas America is

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<v Speaker 1>fifty eight or something like this. So you know, I

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<v Speaker 1>think we shouldn't really read into those criticisms because they

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<v Speaker 1>are not true. At the same time, of course, it

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<v Speaker 1>sends a very strong signal. So from the Americans, I

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<v Speaker 1>think what we should take from it is that we

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<v Speaker 1>should have more self confidence regarding our relations with Russia,

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<v Speaker 1>but also our relations with China and our allies.

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<v Speaker 2>And regulation as well. Does the europe need to stand

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<v Speaker 2>firm over the regulations that's come in for such criticism.

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<v Speaker 1>Well, certain regulations are for the benefits of the people.

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<v Speaker 1>Let's take the food security for example. I mean, the

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<v Speaker 1>food that we are eating here is so much more

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<v Speaker 1>pure than the food that the Americans are eating, and

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<v Speaker 1>that is for the health of the people.

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<v Speaker 2>This is Bloomberg Daybreak Europe, your morning brief on the

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