1 00:00:02,960 --> 00:00:13,920 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:16,880 --> 00:00:19,840 Speaker 2: You finance ministers are meeting in Brussels today to conclude 3 00:00:19,880 --> 00:00:22,640 Speaker 2: plans towards a Capital markets union. Well, I'm very pleased 4 00:00:22,640 --> 00:00:26,160 Speaker 2: to be joined now for an exclusive conversation by Pascal Donahoe, 5 00:00:26,440 --> 00:00:28,960 Speaker 2: the president of your group, the body of course that 6 00:00:29,120 --> 00:00:32,360 Speaker 2: brings together the finance ministers of your zone member state. 7 00:00:32,479 --> 00:00:35,120 Speaker 2: So mister Donahoe, thanks so much for joining us at 8 00:00:35,120 --> 00:00:37,519 Speaker 2: the Capital Markets Union. I know it's always a bit 9 00:00:37,560 --> 00:00:40,199 Speaker 2: of a question on whether we'll see something concrete in 10 00:00:40,200 --> 00:00:42,400 Speaker 2: our lifetime, but this is a key issue for you 11 00:00:42,440 --> 00:00:44,880 Speaker 2: and your colleagues of course, meeting later today, how much 12 00:00:44,920 --> 00:00:47,120 Speaker 2: support do you have for your plans. 13 00:00:50,440 --> 00:00:53,560 Speaker 3: Good morning, Francine. I'm very confident today that we will 14 00:00:53,560 --> 00:00:56,240 Speaker 3: get a plan agreed. We will get a plan agreed 15 00:00:56,760 --> 00:00:59,240 Speaker 3: because we all know we need to make more progress 16 00:00:59,280 --> 00:01:02,720 Speaker 3: on capital mad markets, and that exactly also at the 17 00:01:02,760 --> 00:01:06,440 Speaker 3: time that finance ministers need to reduce their borrowing over time, 18 00:01:06,920 --> 00:01:11,320 Speaker 3: we also need to increase investment, investment in better jobs 19 00:01:11,360 --> 00:01:14,440 Speaker 3: and greener jobs in a more digital future. So for 20 00:01:14,520 --> 00:01:17,320 Speaker 3: all of those reasons, I'm confident that by the end 21 00:01:17,360 --> 00:01:20,800 Speaker 3: of today, the finance ministers of the European Union will 22 00:01:20,840 --> 00:01:24,760 Speaker 3: have endorsed a plan regarding how we can make progress 23 00:01:25,080 --> 00:01:28,319 Speaker 3: on capital markets in the next Commission in the next 24 00:01:28,360 --> 00:01:29,920 Speaker 3: five years of the European Union. 25 00:01:31,520 --> 00:01:35,360 Speaker 2: So, PRESIDENTI, how quickly do you think it's realistic to 26 00:01:35,400 --> 00:01:38,440 Speaker 2: start implementing some of the changes and what happens if 27 00:01:38,480 --> 00:01:39,839 Speaker 2: you fail to agree on it today? 28 00:01:43,000 --> 00:01:46,640 Speaker 3: I think it's very possible that we can make progress soon. 29 00:01:47,520 --> 00:01:51,680 Speaker 3: There are many initiatives that are already being implemented, but 30 00:01:51,840 --> 00:01:54,000 Speaker 3: what we have done is taking a step back at 31 00:01:54,000 --> 00:01:57,560 Speaker 3: the bigger projects that we need to deliver, and we 32 00:01:57,640 --> 00:02:01,680 Speaker 3: have invited the next Commission to bring forward initiatives in 33 00:02:01,720 --> 00:02:05,360 Speaker 3: these areas. So I will be very positive and very 34 00:02:05,400 --> 00:02:09,120 Speaker 3: hopeful that across twenty twenty five, many of the different 35 00:02:09,200 --> 00:02:12,799 Speaker 3: ideas and initiatives that we are focusing on today, that 36 00:02:12,840 --> 00:02:15,480 Speaker 3: you will see progress on them, because we need to 37 00:02:15,520 --> 00:02:18,440 Speaker 3: make progress faster than we have made in recent years. 38 00:02:20,639 --> 00:02:24,120 Speaker 2: So what again, what could be the landing zone for supervision? 39 00:02:24,240 --> 00:02:27,120 Speaker 2: Maybe one of the things where we could see the 40 00:02:27,160 --> 00:02:27,760 Speaker 2: most tension. 41 00:02:31,440 --> 00:02:35,080 Speaker 3: So I think as we work through that particular area 42 00:02:35,240 --> 00:02:39,680 Speaker 3: across the afternoon with finance ministers, my judgment is that 43 00:02:39,720 --> 00:02:43,920 Speaker 3: you will see focus on how we can converge our 44 00:02:44,520 --> 00:02:49,200 Speaker 3: supervisory efforts within the European Union focus on a common 45 00:02:49,280 --> 00:02:53,919 Speaker 3: rule book, but also a focus on looking at the 46 00:02:54,120 --> 00:02:59,280 Speaker 3: trade offs between regulation and competitiveness. So my expectation is 47 00:02:59,320 --> 00:03:01,720 Speaker 3: that by the Sea evening we will have reached agreement 48 00:03:01,760 --> 00:03:05,280 Speaker 3: on this with the focus on convergence and also a 49 00:03:05,360 --> 00:03:09,720 Speaker 3: consideration of how supervision, what impact it has on the 50 00:03:09,720 --> 00:03:12,680 Speaker 3: competitiveness of the European Union and the growth of our 51 00:03:12,680 --> 00:03:13,600 Speaker 3: capital markets. 52 00:03:15,240 --> 00:03:18,120 Speaker 2: What do you think of France's suggestion to actually advance 53 00:03:18,120 --> 00:03:21,280 Speaker 2: as a smaller group to make more meaningful progress with 54 00:03:21,280 --> 00:03:22,440 Speaker 2: the Capital markets Union. 55 00:03:25,520 --> 00:03:29,920 Speaker 3: So it's up to each country to suggest ideas regarding 56 00:03:30,000 --> 00:03:33,960 Speaker 3: further cooperation with other members of the European Union. Our 57 00:03:34,040 --> 00:03:37,320 Speaker 3: Minister lemayor in France have advocated a number of ideas 58 00:03:37,320 --> 00:03:40,280 Speaker 3: that they think they can make faster progress on in 59 00:03:40,320 --> 00:03:43,840 Speaker 3: a smaller group. As President of the Eurogroup, it's my 60 00:03:43,960 --> 00:03:48,680 Speaker 3: ambition and indeed my duty to find agreement amongst all ministers, 61 00:03:48,920 --> 00:03:51,600 Speaker 3: and that's what we will do today. And I would 62 00:03:51,640 --> 00:03:55,200 Speaker 3: see the suggestions that I've been advocated by Minister Lemayer 63 00:03:55,800 --> 00:03:58,720 Speaker 3: being a complementary to our work as supposed to being 64 00:03:58,720 --> 00:04:02,680 Speaker 3: in conflict with our works. Later today, we'll reach agreement 65 00:04:02,760 --> 00:04:06,640 Speaker 3: on an overall direction with regard to capital markets, and 66 00:04:06,680 --> 00:04:08,960 Speaker 3: if other countries want to do more to be more 67 00:04:09,000 --> 00:04:13,080 Speaker 3: ambitious based on that foundation, that is up to them, 68 00:04:13,320 --> 00:04:16,279 Speaker 3: and we will hear from them, I'm sure in due 69 00:04:16,279 --> 00:04:18,279 Speaker 3: course regarding how they want to make that happen. 70 00:04:20,000 --> 00:04:22,719 Speaker 2: There's a lot of discussion around you join dead and 71 00:04:22,839 --> 00:04:25,800 Speaker 2: how to ramp up to pay for ramping up actually 72 00:04:26,080 --> 00:04:28,640 Speaker 2: funding for European defense. How do you think we should 73 00:04:28,640 --> 00:04:29,359 Speaker 2: go around this? 74 00:04:32,440 --> 00:04:34,600 Speaker 3: I think the first step in any of that, Francine, 75 00:04:35,040 --> 00:04:39,599 Speaker 3: is being able to show that the current European Union 76 00:04:39,720 --> 00:04:42,640 Speaker 3: commitment to the issuing of new death, which is next 77 00:04:42,680 --> 00:04:46,000 Speaker 3: generation EU, be able to prove to each other that 78 00:04:46,000 --> 00:04:48,320 Speaker 3: that is working and that it is having the effect 79 00:04:48,320 --> 00:04:51,600 Speaker 3: that we want your correct to say. There are many 80 00:04:51,640 --> 00:04:56,080 Speaker 3: different views in relation to how defense expenditure can be funded. 81 00:04:56,600 --> 00:04:59,040 Speaker 3: My own judgment is that at least in the short 82 00:04:59,160 --> 00:05:03,120 Speaker 3: term will come out of national decisions that ministers take 83 00:05:03,720 --> 00:05:08,160 Speaker 3: and the new economic governance framework that the new budget 84 00:05:08,240 --> 00:05:12,120 Speaker 3: rules for the European Union do give a particular recognition 85 00:05:12,279 --> 00:05:16,760 Speaker 3: to defense expenditure, So overall, in the short term it 86 00:05:16,800 --> 00:05:19,960 Speaker 3: would be national decisions that ministers take and in the 87 00:05:20,040 --> 00:05:22,039 Speaker 3: medium to long term, if we are to get to 88 00:05:22,080 --> 00:05:24,880 Speaker 3: the point of new instruments, we have to be able 89 00:05:24,920 --> 00:05:27,800 Speaker 3: to show that our current agreement in relation to next 90 00:05:27,880 --> 00:05:31,599 Speaker 3: Generation EU, the new death in relation to that, is 91 00:05:31,680 --> 00:05:34,640 Speaker 3: working in the way that was intended. I'm optimistic we'll 92 00:05:34,680 --> 00:05:36,200 Speaker 3: be able to show that that is the case. 93 00:05:38,000 --> 00:05:39,760 Speaker 2: How high do you put the risk of a recession 94 00:05:39,880 --> 00:05:43,560 Speaker 2: in Europe and how are you about Germany given the 95 00:05:43,640 --> 00:05:44,600 Speaker 2: latest set of data. 96 00:05:48,000 --> 00:05:53,360 Speaker 3: I'm confident francying that if a political and security factors 97 00:05:53,400 --> 00:05:55,919 Speaker 3: stay the same as they are at the moment, and 98 00:05:56,000 --> 00:05:59,839 Speaker 3: those particular conditions do not change, that Europe will be 99 00:05:59,839 --> 00:06:02,760 Speaker 3: able to avoid a recession across this year and next. 100 00:06:03,560 --> 00:06:07,400 Speaker 3: Our efforts to contain inflation are working, and we are 101 00:06:07,440 --> 00:06:11,119 Speaker 3: containing inflation while keeping employment at a very high rate 102 00:06:11,640 --> 00:06:14,479 Speaker 3: and still seeing growth, albeit at the low level of 103 00:06:14,480 --> 00:06:18,320 Speaker 3: growth in the majority of economies. So my expectation for 104 00:06:18,400 --> 00:06:21,200 Speaker 3: this year is that we will have economic growth this 105 00:06:21,279 --> 00:06:24,200 Speaker 3: year of probably between zero point five and no point 106 00:06:24,200 --> 00:06:27,920 Speaker 3: eight percent across the euro Area, and for next year 107 00:06:27,960 --> 00:06:30,880 Speaker 3: I see that growth accelerating to around one and a 108 00:06:30,920 --> 00:06:34,720 Speaker 3: half percent, So I believe we will avoid that recessionary risk, 109 00:06:35,279 --> 00:06:38,599 Speaker 3: but those low rates of economic growth are still not 110 00:06:38,720 --> 00:06:40,880 Speaker 3: what I would want them to be. And that is 111 00:06:40,880 --> 00:06:43,880 Speaker 3: why our work and capital markets today is so important. 112 00:06:44,240 --> 00:06:46,640 Speaker 3: How we need to grow faster in the medium term, 113 00:06:46,960 --> 00:06:51,040 Speaker 3: particularly as we're successful with inflation, and that is why 114 00:06:51,160 --> 00:06:54,479 Speaker 3: capital markets can make a bigger contribution to that growth. 115 00:06:56,920 --> 00:06:59,440 Speaker 2: Presidentna Who when you look at you know the question 116 00:06:59,480 --> 00:07:02,000 Speaker 2: of joint if there is more joint debt. We were 117 00:07:02,000 --> 00:07:04,600 Speaker 2: talking about defense, it could be for other issues. Does 118 00:07:04,640 --> 00:07:07,320 Speaker 2: it strengthen the international role of the Euro. 119 00:07:10,840 --> 00:07:15,720 Speaker 3: Well, any developments in relations to common issuance of death 120 00:07:16,160 --> 00:07:20,120 Speaker 3: that are Euro denominated, if we can prove that there 121 00:07:20,200 --> 00:07:23,200 Speaker 3: is a strong market demand for that death, it does 122 00:07:23,240 --> 00:07:25,840 Speaker 3: have a positive impact on the international role of the 123 00:07:25,840 --> 00:07:29,000 Speaker 3: Euro and that in many ways has been the story 124 00:07:29,040 --> 00:07:32,960 Speaker 3: of next generation EU. We have seen the death that 125 00:07:33,120 --> 00:07:35,600 Speaker 3: is backed up by all of the Euro Area, by 126 00:07:35,640 --> 00:07:39,160 Speaker 3: all of the European Union, is something that there is 127 00:07:39,200 --> 00:07:42,200 Speaker 3: a high level of market demand in and it is 128 00:07:42,240 --> 00:07:45,200 Speaker 3: one of a number of projects that we need to 129 00:07:45,240 --> 00:07:49,200 Speaker 3: deliver to strengthen the international role of the Euro, whether 130 00:07:49,280 --> 00:07:51,720 Speaker 3: it's the digital future of the Euro, our work on 131 00:07:51,880 --> 00:07:55,400 Speaker 3: banking union and capital markets union, and then proving that 132 00:07:55,480 --> 00:07:59,440 Speaker 3: next Generation EU is the success that I believe it 133 00:07:59,480 --> 00:08:01,480 Speaker 3: is and that I believe it will be in the 134 00:08:01,560 --> 00:08:05,840 Speaker 3: years ahead. They're all really important ingredients in strengthening the 135 00:08:05,920 --> 00:08:08,240 Speaker 3: role of the Euro It's why we were a delighted 136 00:08:08,240 --> 00:08:11,480 Speaker 3: to welcome Croatia into the euro Area, and it's also 137 00:08:11,520 --> 00:08:14,160 Speaker 3: why I look forward to welcome in Bulgaria into the 138 00:08:14,200 --> 00:08:17,800 Speaker 3: Euro Area next year as they continue with their efforts 139 00:08:17,840 --> 00:08:19,680 Speaker 3: to meet the entry criteria. 140 00:08:21,280 --> 00:08:23,320 Speaker 2: Best call, Donna, who thank you so much for joining us. 141 00:08:23,320 --> 00:08:26,000 Speaker 2: That was, of course a President of the Eurogroup ahead 142 00:08:26,440 --> 00:08:29,920 Speaker 2: of the Eurogroup meeting to talk about capital markets, union 143 00:08:30,000 --> 00:08:30,680 Speaker 2: and much more.