WEBVTT - Poland Finance Minister Andrzej Domanski Talks EU Defense Spending

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. So I'm very pleased

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<v Speaker 1>to be joined by one of the sort of really

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<v Speaker 1>true leaders on European defense here is the Polish finance minister.

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<v Speaker 1>They have got their NATO spending the highest as a

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<v Speaker 1>proportion of GDP of all of the NATO countries. They're

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<v Speaker 1>at four point one two percent, and I just heard

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<v Speaker 1>from the finance minister that they're going to get a

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<v Speaker 1>four point seven percent next year. So I really have

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<v Speaker 1>to start the conversation there with you about sort of

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<v Speaker 1>how do you get sort of a European concept. Where

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<v Speaker 1>are these discussions across the sort of finance ministers over

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<v Speaker 1>the last few days.

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<v Speaker 2>Good morning for Poland and for Polish presidency. Defense and

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<v Speaker 2>security is absolutely a top priority. So right now we

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<v Speaker 2>are discussing with ministers of finance of all member states

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<v Speaker 2>the ways to better finance our security in the coming years.

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<v Speaker 2>It's obvious for us that the time to act is now.

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<v Speaker 2>We just cannot eight for five years for another budget.

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<v Speaker 2>We need to take actions now. So this is why

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<v Speaker 2>we will discuss during ecofin council meetings ways to finance

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<v Speaker 2>defense spending. And as you said, we need to have

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<v Speaker 2>way stronger defense industry here in Europe?

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<v Speaker 1>And is there do you think there's a concept that's

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<v Speaker 1>emerging or at least ideas that are being discussed at

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<v Speaker 1>your ministerial level about how exactly to do that right,

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<v Speaker 1>because we've we've heard about maybe a five hundred billion

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<v Speaker 1>euro of fund or maybe you know, countries coming together

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<v Speaker 1>and saying, listen, we're going to form a sort of

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<v Speaker 1>financial defense alliance. We might issue some bonds. Is there

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<v Speaker 1>something that's sort of coming out clearly because some of

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<v Speaker 1>the resistance that we've heard from, say the German finance

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<v Speaker 1>minister has been well this we're not justly going to

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<v Speaker 1>issue bonds for their own sake. We needed an idea

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<v Speaker 1>to get behind and that is sort of an absent.

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<v Speaker 2>It's a bit premature to say which of the prosions

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<v Speaker 2>that are on the table will be best, but with

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<v Speaker 2>no doubt there is a need for discussion, and our

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<v Speaker 2>partners are also fully aware of fully aware of that.

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<v Speaker 2>So my thinking is that first we need to know

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<v Speaker 2>what precisely we need to buy, where are our weaknesses,

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<v Speaker 2>and therefore, after having such a buying least, we need

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<v Speaker 2>to address it.

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<v Speaker 1>With financing right and also trying to also I think

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<v Speaker 1>source some of the material within Europe. There was an

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<v Speaker 1>also you're also quoted, I'm saying that you may also

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<v Speaker 1>Poland may also issue dedicated defense bonds. Is that something

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<v Speaker 1>that you're looking at? Sort of how big are you

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<v Speaker 1>looking in terms of issue and how would that work?

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<v Speaker 2>It's one of the it's one of the option. We

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<v Speaker 2>have no problem with financing our defense spendings. It will be,

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<v Speaker 2>as you said, four point seven percent of GDP next year.

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<v Speaker 2>But right now we are really comfortable with financing.

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<v Speaker 1>And then the sort of question of sort of the

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<v Speaker 1>future of also support of Ukraine. Poland has been very

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<v Speaker 1>sort of supportive of Ukraine, been one of the great

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<v Speaker 1>sort of champions for the cause. You have the Trump

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<v Speaker 1>administration coming in, is there something that more needs to

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<v Speaker 1>be done? I mean, I understand that we've also now

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<v Speaker 1>sort of got the forty billion or fifty billion from

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<v Speaker 1>the Russian backed assets. Are you looking at doing more

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<v Speaker 1>with the uncertainty of what a Trump administration could bring.

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<v Speaker 2>The position of Polish government is clear. Our support for

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<v Speaker 2>Ukraine must be stable and firm and it will be

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<v Speaker 2>like that. And of course I'm really happy that there

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<v Speaker 2>is this decision of US of passing this twenty billion

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<v Speaker 2>dollars it will help Ukraine. Now we need to secure

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<v Speaker 2>transferring of those funds to Ukraine as the country really

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<v Speaker 2>needs it. And Poland will always advocate the interest of

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<v Speaker 2>Ukraine as we do know that this is the place

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<v Speaker 2>where we right now are fighting against Ukraine and one

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<v Speaker 2>of the other against Russia.

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<v Speaker 1>So yeah, yeah, of course. And one of the other

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<v Speaker 1>issues that brings with sort of uncertainty the Trump administration

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<v Speaker 1>is tariffs and trade. But I want to talk to

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<v Speaker 1>about another product sector of trade, which is mercosur vunderline.

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<v Speaker 1>Having signed this agreement on Friday with Latin America, Poland

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<v Speaker 1>has been very outspoken about this. What is your position?

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<v Speaker 1>Do you intend to join a blocking minority to block

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<v Speaker 1>the mercos or deal as it.

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<v Speaker 2>Is, our position is very clear. Our Prime Minister said

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<v Speaker 2>it very openly that we do not support this deal

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<v Speaker 2>in this form, and it's obvious because we believe that

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<v Speaker 2>the interest of farmers in Poland, but not only in

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<v Speaker 2>Polant also in other European countries is not secured enough.

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<v Speaker 2>And what is more, we have also doubts regarding the

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<v Speaker 2>food safety and therefore our position is that we do

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<v Speaker 2>not support this deal in its current form, and.

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<v Speaker 1>Do you think you have enough sort of support to

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<v Speaker 1>block it? I mean, have you spoken to the Italians

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<v Speaker 1>and the French for example.

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<v Speaker 2>I'm not the Minister of Trade, but from what I hear,

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<v Speaker 2>both both France and Italy are not really one hundred

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<v Speaker 2>percent convinced of this deal.

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<v Speaker 1>And then the other sort of concern around France has

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<v Speaker 1>been a potential spill over effect from what we've seen,

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<v Speaker 1>the sort of instability. How much of that has been

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<v Speaker 1>a conversation with ministers over the last few days and

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<v Speaker 1>how concerned are you regarding the French instability we saw yields.

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<v Speaker 2>Yes, of course we are discussing that. But even tomorrow

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<v Speaker 2>we will have a wymor Trangle meeting with Minister of

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<v Speaker 2>Finance of Germany and of France in Warsaw. We will

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<v Speaker 2>discuss the economic situation of European Union, but also for

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<v Speaker 2>sure we'll discuss politics and.

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<v Speaker 1>When sort of. Bowland has also been one of the

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<v Speaker 1>great sort of bright spots within the European economy. You

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<v Speaker 1>have an estimate for growth next year of about four

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<v Speaker 1>percent three point nine percent. There are some concerns that

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<v Speaker 1>there are some risks to that, how confident are you

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<v Speaker 1>in that forecast and what do you think could pose

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<v Speaker 1>a risk to that growth forecast next year.

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<v Speaker 2>I mean forecast is on a forecast, and what we

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<v Speaker 2>see is a bit of the slowdown in the retail

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<v Speaker 2>sales in Poland. Having said that, we are still one

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<v Speaker 2>of the fastest growing economy in Europe and I do

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<v Speaker 2>believe it will be like that in next year. We

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<v Speaker 2>are still confident in the forecast of close to four

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<v Speaker 2>percent GDP growth next year. For me, it's very important

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<v Speaker 2>that we need a more balanced GDP growth. We need

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<v Speaker 2>more investments. This is why our government is investing in infrastructure,

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<v Speaker 2>in the first Polish nuclear plant, we have secured money

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<v Speaker 2>for many infrastructure projects. But for me, it's also important

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<v Speaker 2>to encourage private investments and this is why we are

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<v Speaker 2>working hard on some capital markets changes.

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<v Speaker 1>And I think potentially one of the risks to your

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<v Speaker 1>growth forecast, and this is something that some of your

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<v Speaker 1>colleagues have been very critical of the Central Bank governor,

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<v Speaker 1>who has been accused of politicizing his rate decisions because

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<v Speaker 1>favoring the other party, basically refusing to lower interest rates

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<v Speaker 1>until after the election next year. Do you feel that

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<v Speaker 1>the Central Bank is politicized.

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<v Speaker 2>Well, I'm not giving comments about central bank policy and

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<v Speaker 2>Monetary Policy Council neither, as I believe that we do

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<v Speaker 2>need an independent central bank. So as a Minister of Finance,

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<v Speaker 2>I have to refrain from Sacher comments.

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<v Speaker 1>Let me let me repose that in a slightly different way.

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<v Speaker 1>Do you feel you have a clear because there needs

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<v Speaker 1>to be communication between these two institutions, do you feel

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<v Speaker 1>you have a clear understanding of what is guiding the

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<v Speaker 1>central banker's decision.

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<v Speaker 2>That's a that's a bit tricky question, and we have.

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<v Speaker 2>Of course, there are some problems with the communication with

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<v Speaker 2>the with the central central Bank. But it's not my

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<v Speaker 2>job to to say negatively about about what central bank

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<v Speaker 2>is doing right now. What I'm really interested is of

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<v Speaker 2>course full of inflation, full of CPI. But at the

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<v Speaker 2>same time we need a positive environment for investments and

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<v Speaker 2>of course lower rates would be supportive

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<v Speaker 1>Andreds of Madelansk you take