WEBVTT - Paolo Gentiloni Talks Relationship with UK

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Let's get to the

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<v Speaker 1>G seven. Oliver Krook is on location in Stressa in Isley.

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<v Speaker 1>The EU Economy Commission of Paolo Gentiloni is alongside him. Oliver,

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<v Speaker 1>good morning, that's right, manness, thank you very much.

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<v Speaker 2>And we heard Bruno Lameira talking about China and trade

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<v Speaker 2>and sort of equal playing field. That's one of the

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<v Speaker 2>big topics here. The other big topic will be how

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<v Speaker 2>to get that financing for Ukraine's defense on stable footing

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<v Speaker 2>for the years to come. A very place to be

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<v Speaker 2>joined by Paolo Genteloni to talk about some of the

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<v Speaker 2>main themes, monny things we've been discussing here at the

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<v Speaker 2>G seven. So let's deal first with this the Russian

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<v Speaker 2>frozen assets. How to go about dealing with them? Are

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<v Speaker 2>we close to a deal and a compromise on how

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<v Speaker 2>to use those assets?

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<v Speaker 3>I would say we are working on this in a

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<v Speaker 3>very good atmosphere from outside the U side. As you know,

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<v Speaker 3>we a few days ago we finalized our proposal to

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<v Speaker 3>dedicate these the windful profits from the trees and we

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<v Speaker 3>will start to disburse to Ukraine. The first runch of

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<v Speaker 3>this decision now in July. Then here we're working to

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<v Speaker 3>try to maximize this and to find the best way

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<v Speaker 3>to do this as fast as possible, again using the

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<v Speaker 3>windfall profits of the assets. I think having seen the

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<v Speaker 3>discussion in the G seven in the last months, I

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<v Speaker 3>think we are narrowing the differences and we are addressing

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<v Speaker 3>mostly the details of these decisions. So I'm confident that

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<v Speaker 3>in the coming weeks, so.

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<v Speaker 2>You think we'll have an agreement by the G seven

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<v Speaker 2>leaders meeting, I think.

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<v Speaker 3>At least a political agreement before the leaders G seven

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<v Speaker 3>is possible.

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<v Speaker 2>And I will also get your take on sort of

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<v Speaker 2>how China, what sort of space that occupies in the

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<v Speaker 2>conversations here. We heard Jenny Allen speaking about it yesterday,

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<v Speaker 2>we heard Brunova Mayer today. Is the G seven unified

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<v Speaker 2>on how to sort of address the question of Chinese

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<v Speaker 2>over capacity?

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<v Speaker 3>But for sure the G seven needs to be unified.

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<v Speaker 3>To have a unified approach in the EU view, we

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<v Speaker 3>need to strengthen also our mutual exchange of information, our monitoring,

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<v Speaker 3>because to have a common approach, we also need to

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<v Speaker 3>share information on measure to be taken. And this is

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<v Speaker 3>I think what everyone around the table of the G

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<v Speaker 3>seven is agreeing. Of course, we are especially us, the

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<v Speaker 3>European Union Economy, we are very interested in a balance.

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<v Speaker 3>From one side, we have to face Chinese over capacity

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<v Speaker 3>and industrial expansion. From the other side, we don't want

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<v Speaker 3>that this the risking compromise the advantages of global trades

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<v Speaker 3>which are very important for the European UNICH. So how

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<v Speaker 3>to find this balance is very important that I see

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<v Speaker 3>unity in the G seven table and you think.

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<v Speaker 2>That you can get concretely because the problem is that

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<v Speaker 2>the US can move a little bit faster, it throws

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<v Speaker 2>up trade barriers and a lot of that overcapacity comes

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<v Speaker 2>over to Europe. So how do you deal with that

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<v Speaker 2>problem as the European Economy Commissioner.

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<v Speaker 3>But of course we are not in the condition to

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<v Speaker 3>know if there is a redirection of Chinese.

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<v Speaker 2>For example, in the solar industry.

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<v Speaker 3>At the same time, the amount of electric vehicles that

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<v Speaker 3>China is now exporting to US, it is not so

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<v Speaker 3>huge to make us have a threat that these are

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<v Speaker 3>diverted to Europe. So the problem is not the immediate

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<v Speaker 3>impact of this decision, but it is the principle that

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<v Speaker 3>to have the United approach we need to share information

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<v Speaker 3>in the decision that we take.

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<v Speaker 2>And debt is the other sort of elephant in the room.

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<v Speaker 2>It's something that obviously you're thinking about within the European Union.

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<v Speaker 2>You're beginning sort of your infringement proceedings. How do you

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<v Speaker 2>expect that to go within the EU? How do you

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<v Speaker 2>get debt under control within Europe?

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<v Speaker 3>Well, we are not the one with the highest level

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<v Speaker 3>of debt in the room, as you know, in the

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<v Speaker 3>EU have fifty three percent of debt. But of course

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<v Speaker 3>we have our fiscal rules that are back there, renewed, reformed,

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<v Speaker 3>and they will address the high level of debt in

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<v Speaker 3>some countries without i think, creating problems to growth. The

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<v Speaker 3>positive note is that finally the European economy is moderately

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<v Speaker 3>slowly again in the growth path. This is very.

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<v Speaker 2>Important, but growing a lot slower than, for example, the

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<v Speaker 2>United States, which is really causing some issues, particularly on

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<v Speaker 2>the rate path divergence. What do you think the risk

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<v Speaker 2>is the European economy the divergence between the Fed and

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<v Speaker 2>the ECB.

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<v Speaker 3>Well, I think that the path of inflation decline could

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<v Speaker 3>be different. I'm sure that the ECB will decide their

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<v Speaker 3>monetary policy independently from what the FED decide at least

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<v Speaker 3>I don't see any risk of a different orientation from

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<v Speaker 3>the CB in the short term. Then, as always, the

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<v Speaker 3>ECB will decide on the basis of the data. But

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<v Speaker 3>what the markets are expecting. I think it's realistic that

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<v Speaker 3>in the coming months we will have a reorientation of

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<v Speaker 3>monetary policy towards the declining of interest rates.

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<v Speaker 2>And a very quick question, there's been an election called

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<v Speaker 2>in the United Kingdom, create different government, perhaps less hostile

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<v Speaker 2>to the European You didn't mean closer ties between Europe

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<v Speaker 2>and the UK.

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<v Speaker 3>Well, closer are what we expect. I have to say

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<v Speaker 3>that we reached a very good agreement with the existing government,

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<v Speaker 3>but if closer relation are possible with a new government,

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<v Speaker 3>we are very happy.

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<v Speaker 2>So some optimism from Paolo Janceloni. He is the EO

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<v Speaker 2>Commissioner on the Economy, joining us here at the G

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<v Speaker 2>seven meeting of finance ministers in Stressa, Italy.