WEBVTT - European Commission Executive Vice President Valdis Dombrovskis Talks Geopolitical Tensions

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Valdu Stanbrovski's is joining us now here in our Washington,

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<v Speaker 2>DC studio on Bloomberg Television and Radio. He is the

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<v Speaker 2>European Commission Executive Vice President for an Economy that Works

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<v Speaker 2>for people. Sir, thank you so much for being here

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<v Speaker 2>with us today. If we could first begin, given the

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<v Speaker 2>developments overnight in the Middle East, knowing that you primarily

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<v Speaker 2>look at the economy, how concerned are you about possible

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<v Speaker 2>escalation from here and the impact that that could have

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<v Speaker 2>on energy prices, which we know has been highly problematic

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<v Speaker 2>for the European economy in years past.

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<v Speaker 3>Well, first of all, we see that the world economy

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<v Speaker 3>is proving to be resilient despite a difficult situation and

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<v Speaker 3>a different geopolitical tensions and conflicts we are currently experiencing.

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<v Speaker 3>And also the impact on energy prices so far has

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<v Speaker 3>been quite limited. Obviously, we need to monitor closely all

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<v Speaker 3>of those developments, but the assessment is that the risks

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<v Speaker 3>to the economic outlook are now broadly balanced.

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<v Speaker 1>You've been in Washington here meeting with lawmakers about the

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<v Speaker 1>big story that we've been talking about here for months.

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<v Speaker 1>Mister Executive Vice President, and just today we saw an

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<v Speaker 1>important procedural vote pass for funding for Ukraine, Israel and

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<v Speaker 1>the Indo Pack region. You're obviously very concerned about funding

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<v Speaker 1>for Ukraine. What did you tell lawmakers when you met

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<v Speaker 1>with him.

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<v Speaker 3>Well, indeed, that was my main message in the meetings

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<v Speaker 3>on the hill, and basically I was emphasizing that from

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<v Speaker 3>the EU side, we are doing a lot to provide

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<v Speaker 3>financial but also military and other kind of support to Ukraine.

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<v Speaker 3>So far, we have provided support of around one hundred

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<v Speaker 3>billion euros. We know how fifty billion euro Ukraine facility

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<v Speaker 3>for the four years twenty twenty four to twenty twenty seven.

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<v Speaker 3>We're already disbursing from this facility. So it's important that

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<v Speaker 3>also other international donors and first and foremost US come

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<v Speaker 3>also with their contribution. And therefore I very much look

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<v Speaker 3>forward for tomorrow's votes and hopefully this Ukraine support is

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<v Speaker 3>being approved because of what we see that in the

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<v Speaker 3>last months, actually the situation in Ukraine is deteriorating for

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<v Speaker 3>the lack, especially of military support. We see it both

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<v Speaker 3>at the front line and we see it with the

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<v Speaker 3>daily shellings of Ukrainian city's residential areas, critical infrastructure so

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<v Speaker 3>this support is very much needed. I would say the

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<v Speaker 3>collective West has all the necessary resources to stop Russian

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<v Speaker 3>not to allow this showing to take a place. And

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<v Speaker 3>so hopefully this is a period of on decision and

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<v Speaker 3>dittering is coming to the end and we will be

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<v Speaker 3>able to come with a strong and firm response to

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<v Speaker 3>to Russia and also to other autocrats around the world,

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<v Speaker 3>because it's also not only about Ukraine, it's about our

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<v Speaker 3>collective security.

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<v Speaker 2>Well, sir, as you outline there the amount that Europe

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<v Speaker 2>already has contributed to the Ukrainian cause, it's worth pointing

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<v Speaker 2>out that there is at least a faction of thought

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<v Speaker 2>here in the United States that thinks Europe is not

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<v Speaker 2>caring as much weight as it should be. One of

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<v Speaker 2>them is the presumptive Republican nominee. Former President Donald Trump,

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<v Speaker 2>posted on social media yesterday effectively to summarize his words,

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<v Speaker 2>saying that Ukrainian survival is more important to Europe than

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<v Speaker 2>it is to the US. So why is Europe not

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<v Speaker 2>giving more money to help Ukraine? Why can't it equalize

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<v Speaker 2>or match the money? This is a quote put in

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<v Speaker 2>by the United States of America. Is there more that

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<v Speaker 2>Europe could be doing, sir. I wonder what your response

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<v Speaker 2>would be to Donald Trump.

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<v Speaker 3>Well, first of all, acts has never been the strong

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<v Speaker 3>side of Donald Trump, and it's also, unfortunately this time

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<v Speaker 3>the case. So that's why I'm emphasizing so much. The

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<v Speaker 3>financial aid EU has already provided, which is one hundred

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<v Speaker 3>billion euros in all kinds of support, the Ukraine facility

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<v Speaker 3>which is already in place of fifty billion euros. So

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<v Speaker 3>the fact is that EU is the largest donor to Ukraine,

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<v Speaker 3>and we are willing to continue this way because after all,

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<v Speaker 3>indeed it's a war on Ukrainian, on European continent. But

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<v Speaker 3>of course it also requires solidarity from the broader democratic world,

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<v Speaker 3>and with EU and US being strategic allies, US support

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<v Speaker 3>is not only financially very important, but also as a

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<v Speaker 3>signal of a West being united against this Russian aggression.

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<v Speaker 1>Crystnald Trump's view reflects the view of some Republican members

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<v Speaker 1>in the House were voting against this package. I wonder

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<v Speaker 1>when you met with lawmakers this week, what was your reception.

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<v Speaker 1>Did you hear pushback, did you hear criticism or were

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<v Speaker 1>you well received with the lawmakers you met?

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<v Speaker 3>Well, I would say you were definitely worrying or on

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<v Speaker 3>this topic. But my point was really to make the

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<v Speaker 3>case why it's important not only for Ukraine but for

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<v Speaker 3>entire global security architecture because what we are seeing that

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<v Speaker 3>also other autocrats are seeing if the West is not

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<v Speaker 3>even able to contain Russia, so they're also having ideas,

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<v Speaker 3>and the recent Iran attack against Israel is just another

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<v Speaker 3>manifestation of this point of few it's important to stay

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<v Speaker 3>firm and determined. Another one, indeed, to make this point

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<v Speaker 3>on the EU's contribution so far, to really show that

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<v Speaker 3>EU is doing a lot. EU is actually doing more

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<v Speaker 3>than the United States. We're happy to continue to do so,

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<v Speaker 3>but everyone has to contribute well.

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<v Speaker 2>Of course, your conversations here in Washington have not just

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<v Speaker 2>been limited to lawmakers. You are also here while the

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<v Speaker 2>IMF World Bank meetings are underway, and I wonder from

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<v Speaker 2>an economic lens, what you are hearing in the messaging

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<v Speaker 2>and what message you are providing about the state of

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<v Speaker 2>the European economy right now, Knowing that for now policy

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<v Speaker 2>is still tight, there's questions around when it will ease

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<v Speaker 2>and where the economy will be depending on when that

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<v Speaker 2>easing actually happens. How are you thinking about the outlook

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<v Speaker 2>for Europe. As the IMF essentially said, there could be

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<v Speaker 2>a soft landing, but there are risks here.

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<v Speaker 3>Well. Indeed, as I was saying before, actually is the

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<v Speaker 3>global economy is proving resilient to BOSS current geopolitical tensions

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<v Speaker 3>and also to the process of this inflation, which we

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<v Speaker 3>know how to go through. So the expectations for a

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<v Speaker 3>global gross is of three point two percent of BOSS

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<v Speaker 3>this year and next. That's a IMFs world economic outlook.

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<v Speaker 3>And as a reguards the EU, we are expecting zero

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<v Speaker 3>point nine percent growth this year one point seven percent

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<v Speaker 3>growth next year. It's somewhat subdued growth right now, one

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<v Speaker 3>could say. But at the same time, despite a war

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<v Speaker 3>on Zeroean continent, despite as a need to tame high inflation,

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<v Speaker 3>different disruptions we are facing, EU's economy is nevertheless growing.

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<v Speaker 1>I want to ask you about another foreign policy matter

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<v Speaker 1>that you've been concerned with, and that's China supplying components

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<v Speaker 1>to Russia and potentially evading sanctions. There's an economic element

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<v Speaker 1>to this, there's obviously a geopolitical element to it. How

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<v Speaker 1>big of a problem is this becoming?

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<v Speaker 3>Well, that's certainly a cause of concern and the two

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<v Speaker 3>elements one is circumvention of sanctions, but also another is

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<v Speaker 3>innocence backfilling of the sanctions, and we are engaged with

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<v Speaker 3>China on both of those elements. So in a sense,

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<v Speaker 3>what we are doing we how what we call a

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<v Speaker 3>high priority Battlefield items list, meaning items which we are

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<v Speaker 3>finding in Ukrainian battlefields in Russian military equipment. We are

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<v Speaker 3>tracing the origin of these different kind of components. It's

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<v Speaker 3>a lethal weaponry, well yes, it's Russian military weaponry which

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<v Speaker 3>is being found on Ukrainian battlefields. And because it's not

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<v Speaker 3>only about weapons deliveries, there's also many dual use components

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<v Speaker 3>if we talk about semiconductors, all kind of other components.

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<v Speaker 3>So we're tracing it back were it actually origins. Because

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<v Speaker 3>we must face there's also still quite a few of

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<v Speaker 3>those components of Western origin which are reaching Russia. So

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<v Speaker 3>we also need to work with our own companies, both

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<v Speaker 3>in the U and US, making sure that they are

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<v Speaker 3>not engaged in those sanction circumventions. And in the U

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<v Speaker 3>we also have a possibility actually to go after the

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<v Speaker 3>companies which are knowingly in engaging in these kind of activities.

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<v Speaker 3>We are putting also requirements on no result to Russia

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<v Speaker 3>on exports of use items UH, and we're actually coordinating

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<v Speaker 3>this work quite a lot with US. We recently also

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<v Speaker 3>put certain measures against Chinese and Hong Kong companies which

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<v Speaker 3>are involved in sanctions circumvention by prohibiting EU companies to

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<v Speaker 3>do any business with them. So there are things which

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<v Speaker 3>we can do, and it's clear as we are now

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<v Speaker 3>putting strict sanctions against Russia, EU, US other players, Russia

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<v Speaker 3>is looking at a ways to still convince them. So

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<v Speaker 3>we need to stay alert, follow follow the patterns and

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<v Speaker 3>to the extent possible closes, circumvention and possible Loopholese.

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<v Speaker 1>Faldest Tom Bravs guests with a view from the European Commission.

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<v Speaker 1>We appreciate you making us part of your week here

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<v Speaker 1>in Washington, and I hope the spring meetings of the

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<v Speaker 1>IMF continue well for you. Thanks for talking with us

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<v Speaker 1>on Bloomberg