Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Let's get to the
Speaker 1: G seven. Oliver Krook is on location in Stressa in Isley.
Speaker 1: The EU Economy Commission of Paolo Gentiloni is alongside him. Oliver,
Speaker 1: good morning, that's right, manness, thank you very much.
Speaker 2: And we heard Bruno Lameira talking about China and trade
Speaker 2: and sort of equal playing field. That's one of the
Speaker 2: big topics here. The other big topic will be how
Speaker 2: to get that financing for Ukraine's defense on stable footing
Speaker 2: for the years to come. A very place to be
Speaker 2: joined by Paolo Genteloni to talk about some of the
Speaker 2: main themes, monny things we've been discussing here at the
Speaker 2: G seven. So let's deal first with this the Russian
Speaker 2: frozen assets. How to go about dealing with them? Are
Speaker 2: we close to a deal and a compromise on how
Speaker 2: to use those assets?
Speaker 3: I would say we are working on this in a
Speaker 3: very good atmosphere from outside the U side. As you know,
Speaker 3: we a few days ago we finalized our proposal to
Speaker 3: dedicate these the windful profits from the trees and we
Speaker 3: will start to disburse to Ukraine. The first runch of
Speaker 3: this decision now in July. Then here we're working to
Speaker 3: try to maximize this and to find the best way
Speaker 3: to do this as fast as possible, again using the
Speaker 3: windfall profits of the assets. I think having seen the
Speaker 3: discussion in the G seven in the last months, I
Speaker 3: think we are narrowing the differences and we are addressing
Speaker 3: mostly the details of these decisions. So I'm confident that
Speaker 3: in the coming weeks, so.
Speaker 2: You think we'll have an agreement by the G seven
Speaker 2: leaders meeting, I think.
Speaker 3: At least a political agreement before the leaders G seven
Speaker 3: is possible.
Speaker 2: And I will also get your take on sort of
Speaker 2: how China, what sort of space that occupies in the
Speaker 2: conversations here. We heard Jenny Allen speaking about it yesterday,
Speaker 2: we heard Brunova Mayer today. Is the G seven unified
Speaker 2: on how to sort of address the question of Chinese
Speaker 2: over capacity?
Speaker 3: But for sure the G seven needs to be unified.
Speaker 3: To have a unified approach in the EU view, we
Speaker 3: need to strengthen also our mutual exchange of information, our monitoring,
Speaker 3: because to have a common approach, we also need to
Speaker 3: share information on measure to be taken. And this is
Speaker 3: I think what everyone around the table of the G
Speaker 3: seven is agreeing. Of course, we are especially us, the
Speaker 3: European Union Economy, we are very interested in a balance.
Speaker 3: From one side, we have to face Chinese over capacity
Speaker 3: and industrial expansion. From the other side, we don't want
Speaker 3: that this the risking compromise the advantages of global trades
Speaker 3: which are very important for the European UNICH. So how
Speaker 3: to find this balance is very important that I see
Speaker 3: unity in the G seven table and you think.
Speaker 2: That you can get concretely because the problem is that
Speaker 2: the US can move a little bit faster, it throws
Speaker 2: up trade barriers and a lot of that overcapacity comes
Speaker 2: over to Europe. So how do you deal with that
Speaker 2: problem as the European Economy Commissioner.
Speaker 3: But of course we are not in the condition to
Speaker 3: know if there is a redirection of Chinese.
Speaker 2: For example, in the solar industry.
Speaker 3: At the same time, the amount of electric vehicles that
Speaker 3: China is now exporting to US, it is not so
Speaker 3: huge to make us have a threat that these are
Speaker 3: diverted to Europe. So the problem is not the immediate
Speaker 3: impact of this decision, but it is the principle that
Speaker 3: to have the United approach we need to share information
Speaker 3: in the decision that we take.
Speaker 2: And debt is the other sort of elephant in the room.
Speaker 2: It's something that obviously you're thinking about within the European Union.
Speaker 2: You're beginning sort of your infringement proceedings. How do you
Speaker 2: expect that to go within the EU? How do you
Speaker 2: get debt under control within Europe?
Speaker 3: Well, we are not the one with the highest level
Speaker 3: of debt in the room, as you know, in the
Speaker 3: EU have fifty three percent of debt. But of course
Speaker 3: we have our fiscal rules that are back there, renewed, reformed,
Speaker 3: and they will address the high level of debt in
Speaker 3: some countries without i think, creating problems to growth. The
Speaker 3: positive note is that finally the European economy is moderately
Speaker 3: slowly again in the growth path. This is very.
Speaker 2: Important, but growing a lot slower than, for example, the
Speaker 2: United States, which is really causing some issues, particularly on
Speaker 2: the rate path divergence. What do you think the risk
Speaker 2: is the European economy the divergence between the Fed and
Speaker 2: the ECB.
Speaker 3: Well, I think that the path of inflation decline could
Speaker 3: be different. I'm sure that the ECB will decide their
Speaker 3: monetary policy independently from what the FED decide at least
Speaker 3: I don't see any risk of a different orientation from
Speaker 3: the CB in the short term. Then, as always, the
Speaker 3: ECB will decide on the basis of the data. But
Speaker 3: what the markets are expecting. I think it's realistic that
Speaker 3: in the coming months we will have a reorientation of
Speaker 3: monetary policy towards the declining of interest rates.
Speaker 2: And a very quick question, there's been an election called
Speaker 2: in the United Kingdom, create different government, perhaps less hostile
Speaker 2: to the European You didn't mean closer ties between Europe
Speaker 2: and the UK.
Speaker 3: Well, closer are what we expect. I have to say
Speaker 3: that we reached a very good agreement with the existing government,
Speaker 3: but if closer relation are possible with a new government,
Speaker 3: we are very happy.
Speaker 2: So some optimism from Paolo Janceloni. He is the EO
Speaker 2: Commissioner on the Economy, joining us here at the G
Speaker 2: seven meeting of finance ministers in Stressa, Italy.