Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Valdu Stanbrovski's is joining us now here in our Washington,
Speaker 2: DC studio on Bloomberg Television and Radio. He is the
Speaker 2: European Commission Executive Vice President for an Economy that Works
Speaker 2: for people. Sir, thank you so much for being here
Speaker 2: with us today. If we could first begin, given the
Speaker 2: developments overnight in the Middle East, knowing that you primarily
Speaker 2: look at the economy, how concerned are you about possible
Speaker 2: escalation from here and the impact that that could have
Speaker 2: on energy prices, which we know has been highly problematic
Speaker 2: for the European economy in years past.
Speaker 3: Well, first of all, we see that the world economy
Speaker 3: is proving to be resilient despite a difficult situation and
Speaker 3: a different geopolitical tensions and conflicts we are currently experiencing.
Speaker 3: And also the impact on energy prices so far has
Speaker 3: been quite limited. Obviously, we need to monitor closely all
Speaker 3: of those developments, but the assessment is that the risks
Speaker 3: to the economic outlook are now broadly balanced.
Speaker 1: You've been in Washington here meeting with lawmakers about the
Speaker 1: big story that we've been talking about here for months.
Speaker 1: Mister Executive Vice President, and just today we saw an
Speaker 1: important procedural vote pass for funding for Ukraine, Israel and
Speaker 1: the Indo Pack region. You're obviously very concerned about funding
Speaker 1: for Ukraine. What did you tell lawmakers when you met
Speaker 1: with him.
Speaker 3: Well, indeed, that was my main message in the meetings
Speaker 3: on the hill, and basically I was emphasizing that from
Speaker 3: the EU side, we are doing a lot to provide
Speaker 3: financial but also military and other kind of support to Ukraine.
Speaker 3: So far, we have provided support of around one hundred
Speaker 3: billion euros. We know how fifty billion euro Ukraine facility
Speaker 3: for the four years twenty twenty four to twenty twenty seven.
Speaker 3: We're already disbursing from this facility. So it's important that
Speaker 3: also other international donors and first and foremost US come
Speaker 3: also with their contribution. And therefore I very much look
Speaker 3: forward for tomorrow's votes and hopefully this Ukraine support is
Speaker 3: being approved because of what we see that in the
Speaker 3: last months, actually the situation in Ukraine is deteriorating for
Speaker 3: the lack, especially of military support. We see it both
Speaker 3: at the front line and we see it with the
Speaker 3: daily shellings of Ukrainian city's residential areas, critical infrastructure so
Speaker 3: this support is very much needed. I would say the
Speaker 3: collective West has all the necessary resources to stop Russian
Speaker 3: not to allow this showing to take a place. And
Speaker 3: so hopefully this is a period of on decision and
Speaker 3: dittering is coming to the end and we will be
Speaker 3: able to come with a strong and firm response to
Speaker 3: to Russia and also to other autocrats around the world,
Speaker 3: because it's also not only about Ukraine, it's about our
Speaker 3: collective security.
Speaker 2: Well, sir, as you outline there the amount that Europe
Speaker 2: already has contributed to the Ukrainian cause, it's worth pointing
Speaker 2: out that there is at least a faction of thought
Speaker 2: here in the United States that thinks Europe is not
Speaker 2: caring as much weight as it should be. One of
Speaker 2: them is the presumptive Republican nominee. Former President Donald Trump,
Speaker 2: posted on social media yesterday effectively to summarize his words,
Speaker 2: saying that Ukrainian survival is more important to Europe than
Speaker 2: it is to the US. So why is Europe not
Speaker 2: giving more money to help Ukraine? Why can't it equalize
Speaker 2: or match the money? This is a quote put in
Speaker 2: by the United States of America. Is there more that
Speaker 2: Europe could be doing, sir. I wonder what your response
Speaker 2: would be to Donald Trump.
Speaker 3: Well, first of all, acts has never been the strong
Speaker 3: side of Donald Trump, and it's also, unfortunately this time
Speaker 3: the case. So that's why I'm emphasizing so much. The
Speaker 3: financial aid EU has already provided, which is one hundred
Speaker 3: billion euros in all kinds of support, the Ukraine facility
Speaker 3: which is already in place of fifty billion euros. So
Speaker 3: the fact is that EU is the largest donor to Ukraine,
Speaker 3: and we are willing to continue this way because after all,
Speaker 3: indeed it's a war on Ukrainian, on European continent. But
Speaker 3: of course it also requires solidarity from the broader democratic world,
Speaker 3: and with EU and US being strategic allies, US support
Speaker 3: is not only financially very important, but also as a
Speaker 3: signal of a West being united against this Russian aggression.
Speaker 1: Crystnald Trump's view reflects the view of some Republican members
Speaker 1: in the House were voting against this package. I wonder
Speaker 1: when you met with lawmakers this week, what was your reception.
Speaker 1: Did you hear pushback, did you hear criticism or were
Speaker 1: you well received with the lawmakers you met?
Speaker 3: Well, I would say you were definitely worrying or on
Speaker 3: this topic. But my point was really to make the
Speaker 3: case why it's important not only for Ukraine but for
Speaker 3: entire global security architecture because what we are seeing that
Speaker 3: also other autocrats are seeing if the West is not
Speaker 3: even able to contain Russia, so they're also having ideas,
Speaker 3: and the recent Iran attack against Israel is just another
Speaker 3: manifestation of this point of few it's important to stay
Speaker 3: firm and determined. Another one, indeed, to make this point
Speaker 3: on the EU's contribution so far, to really show that
Speaker 3: EU is doing a lot. EU is actually doing more
Speaker 3: than the United States. We're happy to continue to do so,
Speaker 3: but everyone has to contribute well.
Speaker 2: Of course, your conversations here in Washington have not just
Speaker 2: been limited to lawmakers. You are also here while the
Speaker 2: IMF World Bank meetings are underway, and I wonder from
Speaker 2: an economic lens, what you are hearing in the messaging
Speaker 2: and what message you are providing about the state of
Speaker 2: the European economy right now, Knowing that for now policy
Speaker 2: is still tight, there's questions around when it will ease
Speaker 2: and where the economy will be depending on when that
Speaker 2: easing actually happens. How are you thinking about the outlook
Speaker 2: for Europe. As the IMF essentially said, there could be
Speaker 2: a soft landing, but there are risks here.
Speaker 3: Well. Indeed, as I was saying before, actually is the
Speaker 3: global economy is proving resilient to BOSS current geopolitical tensions
Speaker 3: and also to the process of this inflation, which we
Speaker 3: know how to go through. So the expectations for a
Speaker 3: global gross is of three point two percent of BOSS
Speaker 3: this year and next. That's a IMFs world economic outlook.
Speaker 3: And as a reguards the EU, we are expecting zero
Speaker 3: point nine percent growth this year one point seven percent
Speaker 3: growth next year. It's somewhat subdued growth right now, one
Speaker 3: could say. But at the same time, despite a war
Speaker 3: on Zeroean continent, despite as a need to tame high inflation,
Speaker 3: different disruptions we are facing, EU's economy is nevertheless growing.
Speaker 1: I want to ask you about another foreign policy matter
Speaker 1: that you've been concerned with, and that's China supplying components
Speaker 1: to Russia and potentially evading sanctions. There's an economic element
Speaker 1: to this, there's obviously a geopolitical element to it. How
Speaker 1: big of a problem is this becoming?
Speaker 3: Well, that's certainly a cause of concern and the two
Speaker 3: elements one is circumvention of sanctions, but also another is
Speaker 3: innocence backfilling of the sanctions, and we are engaged with
Speaker 3: China on both of those elements. So in a sense,
Speaker 3: what we are doing we how what we call a
Speaker 3: high priority Battlefield items list, meaning items which we are
Speaker 3: finding in Ukrainian battlefields in Russian military equipment. We are
Speaker 3: tracing the origin of these different kind of components. It's
Speaker 3: a lethal weaponry, well yes, it's Russian military weaponry which
Speaker 3: is being found on Ukrainian battlefields. And because it's not
Speaker 3: only about weapons deliveries, there's also many dual use components
Speaker 3: if we talk about semiconductors, all kind of other components.
Speaker 3: So we're tracing it back were it actually origins. Because
Speaker 3: we must face there's also still quite a few of
Speaker 3: those components of Western origin which are reaching Russia. So
Speaker 3: we also need to work with our own companies, both
Speaker 3: in the U and US, making sure that they are
Speaker 3: not engaged in those sanction circumventions. And in the U
Speaker 3: we also have a possibility actually to go after the
Speaker 3: companies which are knowingly in engaging in these kind of activities.
Speaker 3: We are putting also requirements on no result to Russia
Speaker 3: on exports of use items UH, and we're actually coordinating
Speaker 3: this work quite a lot with US. We recently also
Speaker 3: put certain measures against Chinese and Hong Kong companies which
Speaker 3: are involved in sanctions circumvention by prohibiting EU companies to
Speaker 3: do any business with them. So there are things which
Speaker 3: we can do, and it's clear as we are now
Speaker 3: putting strict sanctions against Russia, EU, US other players, Russia
Speaker 3: is looking at a ways to still convince them. So
Speaker 3: we need to stay alert, follow follow the patterns and
Speaker 3: to the extent possible closes, circumvention and possible Loopholese.
Speaker 1: Faldest Tom Bravs guests with a view from the European Commission.
Speaker 1: We appreciate you making us part of your week here
Speaker 1: in Washington, and I hope the spring meetings of the
Speaker 1: IMF continue well for you. Thanks for talking with us
Speaker 1: on Bloomberg