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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Now, after a summer

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Speaker 1: that was dominated by trade talks with the United States,

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Speaker 1: the European economy is facing new challenges from Chinese export

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Speaker 1: curbs on critical raw materials, as well as a continuing

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Speaker 1: debate of our best to support Ukraine. Joining us now

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Speaker 1: to discuss is Valdestanbraskos, the EU's Economy and Productivity Commissioner.

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Speaker 1: Great to have you with us. Good morning our Brussels studio.

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Speaker 1: Starting with the issue that dominated the last of you

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Speaker 1: leaders meeting here in Brussels, a failure to agree on

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Speaker 1: a way of tapping frozen Russian assets for Ukraine. Has

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Speaker 1: any progress been made on the Commission's legal proposals since then?

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Speaker 2: So European Consul talks the Commission now to work on

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Speaker 2: a funding options and so that's why we're currently preparing.

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Speaker 2: But also we held made clear that we sees this

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Speaker 2: reparation loan steel as a main and most feasible options.

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Speaker 2: So we continue also of chnical work on preparation on

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Speaker 2: reparations loan, also engagement with Belgian authorities concerning the guarantees

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Speaker 2: which they need in a sense to agree to this

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Speaker 2: reparation loan. But in a sense this is a proposal

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Speaker 2: which addresses many issues. First of all, they are very

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Speaker 2: sizeable funding needs Ukraine is facing, so IMF is putting

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Speaker 2: it at sixty billion dollars for the next two years,

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Speaker 2: and that's without military support, which comes in a similar

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Speaker 2: order of magnitude. And also a memphi is a concern

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Speaker 2: about depth sustainability in Ukraine, so we cannot just continue

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Speaker 2: with giving loans. Obviously, grants is an option, but a

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Speaker 2: question whether member states would agree to provide grants on

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Speaker 2: that scale. So therefore this reparation loan, which Ukraine would

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Speaker 2: only need to repay once Russia pays, is a good

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Speaker 2: option because it addresses Ukraine's funding needs, it does not

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Speaker 2: create problems with depth sustainability in Ukraine, and it falls

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Speaker 2: short of confiscation of Russian assets, which as we know,

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Speaker 2: is say a step too far for a number of

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Speaker 2: member states.

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Speaker 1: What sort of engagements have you had with Belgium since

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Speaker 1: that meeting and have you had any indication that they

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Speaker 1: are being reassured by the proposals that the Commission is developing.

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Speaker 2: Well, we continue working on this. In a sense, it's

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Speaker 2: clear understunderstanding. Is there also on the Commission said that

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Speaker 2: we need to be serious about those concerns and we

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Speaker 2: need to find a good way to adism.

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Speaker 1: Let's turn to some of the other major challenges facing

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Speaker 1: the EU economy as well. That you've been negotiating with

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Speaker 1: China over access to rareer It's after deal that we

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Speaker 1: saw signed between the US and Beijing to lift export curves.

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Speaker 1: You said you've seen positive signals from China coming on

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Speaker 1: those measures. What more can you tell us about those signals.

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Speaker 2: Well, China basically agreed now to suspend those expert controls

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Speaker 2: or postpone those xpont controls by one year, so that

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Speaker 2: obviously give us more time for engagement and addressing this

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Speaker 2: issue in a forward looking way. So there is in

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Speaker 2: sense positive short term developments. But obviously we must keep

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Speaker 2: in mind that we need to work on diversification of

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Speaker 2: our supply chains because currently, as concerns rareres, critical minerals,

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Speaker 2: many of those supply chains are eighty ninety more than

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Speaker 2: ninety percent dominated by China. Therefore, we must work on

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Speaker 2: diversification because that's how we achieve resilience of supplies. That's

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Speaker 2: why we're accelerating work on our materials strategy. So that's

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Speaker 2: why I've been engaging in raw materials partnership with a

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Speaker 2: number of countries around the world, and also coordinating this

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Speaker 2: approach with like minded partners, including in a framework of

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Speaker 2: G seven.

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Speaker 1: So are you satisfied that the supply chain for now

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Speaker 1: is stable while that exemption has been granted. I'm just

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Speaker 1: wondering about the broader risk to the European economy from this.

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Speaker 1: We've had warnings and the likes of Volkswagen for example,

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Speaker 1: about the impact I could have on their supplies upcoming too.

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Speaker 2: Well, in a sense it addresses a short term concerns,

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Speaker 2: but it also shows vulnerability which we are facing in

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Speaker 2: terms of the supplies, and therefore we also must work

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Speaker 2: towards diversification of those supplies.

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Speaker 1: Where do you look for that?

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Speaker 2: Well, actually, well, I would say to put simple around

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Speaker 2: the world. We have already engaged in a raw material

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Speaker 2: partnerships with various countries as diversed from Canada to Bakistan

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Speaker 2: and many many others. But the issue right now is

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Speaker 2: also to get more practical and more tangible to start

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Speaker 2: actually developing actual projects on the ground. Where As a

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Speaker 2: model of partnership we are offering researchache countries is that

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Speaker 2: the EU is ready to provide technology, know how, financing

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Speaker 2: and also help those countries to increase value added they

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Speaker 2: are getting from their raw materials. So it's not only

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Speaker 2: about extraction but also also developing processing capacities in those countries.

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Speaker 2: So looking for mutually beneficial solutions to.

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Speaker 1: The other issues that are in your portfolio as well.

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Speaker 1: European governments are submitting their budgets now for the next year.

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Speaker 1: I just wonder how worried the Commission is about the

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Speaker 1: debate that's ongoing in France. It looks like it's going

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Speaker 1: to be bigger in the O regional draft budget. We're

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Speaker 1: looking at about five percent of what level would you

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Speaker 1: see that as being a particular concern for the European Commission.

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Speaker 2: Well, indeed, so France has now submitted it's strap budgetary

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Speaker 2: plan to European Commission, but we note that the discussions

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Speaker 2: in French Parliament are ongoing, so we have to see

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Speaker 2: in acentse what comes out of those discussions. So at

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Speaker 2: this stage is difficult to speculate. Obviously, keeping a budget

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Speaker 2: deficit as close as possible to four point seven percent

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Speaker 2: would be preferable. We know there are also discussions on

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Speaker 2: a suspension on a pensions reform, but also the Prime

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Speaker 2: Minister has acknowledged the importance of pension reform and also

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Speaker 2: the need to compensate for physical effects on this while

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Speaker 2: in a sense this reform is being rediscussed, so there

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Speaker 2: are many important developments to follow.

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Speaker 1: Well, they have to find those savings elsewhere if the

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Speaker 1: pension reform is suspended, because it changes the fiscal trajectory

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Speaker 1: over the longer term as well well.

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Speaker 2: Indeed, it probably does not imply massive fiscal consequences immediately,

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Speaker 2: but it adds ups quite quickly over the time. So

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Speaker 2: it's important that also those discussions in France at the

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Speaker 2: end of the day addresses a question on long term

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Speaker 2: sustainability and adequacy of the pension system.

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Speaker 1: You're also overseeing the effort to simplify EU rules. That's

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Speaker 1: not a part of your portfolio now. The moves that

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Speaker 1: we've seen so far have seen certain climate rules implementation

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Speaker 1: pushed back issues where and sustainability reported change as well.

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Speaker 1: I'm wondering why the next target for simplification is.

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Speaker 2: Well, we will continue to work very intensively on simplification.

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Speaker 2: So the proposals which we have put forward so far

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Speaker 2: would generate annual savings around eight point six billion euros

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Speaker 2: in terms of reduction of administer costs. OUR overall aim

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Speaker 2: is a reduction of thirty seven point five billion euros.

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Speaker 2: So we have been for a strong start, but there

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Speaker 2: is still a way to go to reach our target,

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Speaker 2: which is twenty five percent reduction of administ burden for

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Speaker 2: all companies and thirty five percent reduction for semes. So

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Speaker 2: this is why there is this number of simplification proposals

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Speaker 2: and omnibuses still this year, including on a digital on automotive, environmental,

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Speaker 2: food and feed, some other areas, and also the next

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Speaker 2: year's European Commission's work program has a strong simplification dimension,

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Speaker 2: with more than half of all proposals having a strong

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Speaker 2: simplication potential, meanings that they are expected to be net

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Speaker 2: reducing in terms of administer burden.

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Speaker 1: On the question of the corporates due diligence regulations that

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Speaker 1: the S triplet, which is something there's a debate on

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Speaker 1: going about with the European Parliament, there's been a warning

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Speaker 1: from Katar's Energy Manager minister that if Europe doesn't look

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Speaker 1: at how they can water down or cancel this regulation,

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Speaker 1: they'll stop delivering ler G to Europe. How worried are

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Speaker 1: you about risks like that and the pressure that's being

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Speaker 1: put on these sort of regulations.

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Speaker 2: Well as regards sister pul D. Indeed, there are many

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Speaker 2: businesses BOSS in the EU voicing serious concerns, but also

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Speaker 2: many partners outside the EU, and Qatar is just one example.

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Speaker 2: We have heard from many other countries and businesses on

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Speaker 2: those countries on the concerns.

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Speaker 1: But that's why into accounts.

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Speaker 2: But that's why sistypul D was part of our first omnibus,

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Speaker 2: where we are actually simplifying it quite substantially in including

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Speaker 2: the question on reducing the scope so which companies will

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Speaker 2: be covered by CISTPLD, making requirements more proportionate, like obligation

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Speaker 2: to follow only direct business partners, not all the value

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Speaker 2: change up and down, obligation to do it once per

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Speaker 2: five years, not every year, and and and so on.

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Speaker 2: So there are many tangible improvements and simplifications. What would

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Speaker 2: be now important that the legislative process moves forward and

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Speaker 2: so simplifications actually become a reality.

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Speaker 1: But is it a worry that you know, L and

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Speaker 1: G supplies could be affected by these changes.

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Speaker 2: In essence, there are two elements. So one, obviously, as

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Speaker 2: your opinionion, we retain our regulatory autonomy and our regulate

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Speaker 2: businesses which are doing business and are active in Europe.

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Speaker 2: On other hand, of course, we also need to listen

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Speaker 2: and acknowledged concerns which various partners around the world are

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Speaker 2: having and reflect on the implications.

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Speaker 1: I mean, the US has also made it clear it's

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Speaker 1: very unhappy with the extra territoriality of these sustainable reporting

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Speaker 1: and due diligence regulations. Is there any way that you

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Speaker 1: can accommodate these concerns?

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Speaker 2: Well? I think the simplification proposal we have already put

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Speaker 2: on table both regarding due diligence and sustainability reporting addresses

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Speaker 2: already to large extends of concerns. What would be important

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Speaker 2: is to finalize a legislatile process.

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Speaker 1: Okay, So no further changes planned to accommodate those concerns.

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Speaker 2: Well. In any case, it's clear that the file is

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Speaker 2: now in legislative process, and legislative process for sure will

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Speaker 2: bring some changes.

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Speaker 1: Okay. Pasta proskos these Economy and Product he Commissioner, thank

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Speaker 1: you very much for joining us.

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Speaker 2: Thank you