WEBVTT - EU 'More Assertive' on China, Ukraine Test, HS2's Shaky Future

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<v Speaker 1>Good morning.

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<v Speaker 2>It's Monday, the twenty fifth of September here in London.

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<v Speaker 2>This is the Bloomberg Day Recurate podcast.

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<v Speaker 1>I'm Caroline Hepkin.

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<v Speaker 3>And I'm Stephen Carroll. Coming up today, the EU's top

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<v Speaker 3>trade negotiator, warrens China it will be more assertive.

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<v Speaker 2>Anga grows as Rishi Sunat considers scrapping part of HS.

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<v Speaker 3>Two, And why Europe's unity on sending weapons to Ukraine

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<v Speaker 3>may be in for another big test.

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<v Speaker 1>Let's start with a found up of our top stories.

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<v Speaker 3>The European Union's chief trade negotiator is Warren China that

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<v Speaker 3>the EU will be more forceful and upholding fair competition

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<v Speaker 3>and defending its interests. Valdas Dombrovskis says the lack of

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<v Speaker 3>a level playing field and wider geopolitical shifts have forced

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<v Speaker 3>the BLOCK to become more assertive.

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<v Speaker 4>Broadening access to China's market for foreign companies and maintaining

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<v Speaker 4>a stable business environment is necessary to ensure fair and

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<v Speaker 4>mutually beneficient trade relationships.

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<v Speaker 3>Don Brovski has made the comments on a trip to China,

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<v Speaker 3>where he's meeting officials including Vice Premier Hurley Fang. The

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<v Speaker 3>visit comes just days after the European Commission announced an

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<v Speaker 3>anti subsidy investigation into Chinese electric vehicles.

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<v Speaker 2>Europe's main auto lobby group is urging policymakers to delay

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<v Speaker 2>post Brexit tariffs on electric vehicles. From next year, eves

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<v Speaker 2>traded between the UK and the EU will attract a

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<v Speaker 2>ten percent tariff if less than forty five percent of

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<v Speaker 2>their value comes from the block. The European Automobile Manufacturers

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<v Speaker 2>Association wants the EU Commission to push back the charge.

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<v Speaker 2>Failure to do so could reduce production by close to

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<v Speaker 2>half a million cars over three years.

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<v Speaker 3>Bloomberg goodistounds that Italian banks will be able to avoid

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<v Speaker 3>paying a controversial windfall tax introduced last month if they

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<v Speaker 3>set aside additional capital reserves. The proposed amendment also changes

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<v Speaker 3>the basis for calculating the levee to a percentage of

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<v Speaker 3>the lender's risk weighted assets on an individual basis, instead

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<v Speaker 3>of their total assets. The new draft represents a compromise

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<v Speaker 3>by Jo Maloni's government following a slump in Italian bank

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<v Speaker 3>stocks and criticism from the ECB since the measure was

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<v Speaker 3>first announced in August.

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<v Speaker 2>Former Conservative Prime Minister's business and university leaders are warning

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<v Speaker 2>Rishi Sunac against derailing HS two, the one hundred billion

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<v Speaker 2>pound rail project. Cabinet Minister Grant Shapp says that it

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<v Speaker 2>would be irresponsible to plow money into the infrastructure scheme

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<v Speaker 2>as costs saw.

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<v Speaker 5>We saw not just with HS two, but with our

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<v Speaker 5>pace of change with net zero. That just because the

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<v Speaker 5>media says this must be done, just because some people

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<v Speaker 5>will say, you know, these are the popular things to do,

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<v Speaker 5>He's prepared to do difficult things.

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<v Speaker 2>Shapps's refusal to deny the plans added to speculation that

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<v Speaker 2>the government would ditch its own flagship infrastructure project. It

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<v Speaker 2>comes as Prime Minister as she Sunac seeks to radically

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<v Speaker 2>research his premiership as his popularity polls at an all

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<v Speaker 2>time low.

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<v Speaker 3>In the United States, Republican hirdliner Matt Gates says he's

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<v Speaker 3>ready to shut down the US government over budget took.

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<v Speaker 3>The party are at odds internally on a government funding plan.

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<v Speaker 3>In the House of Representatives, Representative Garrett Graves, as Gates

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<v Speaker 3>has pushed to tie border policies into funding is counterproductive.

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<v Speaker 6>If you want to empower Senator Schumer, if you want

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<v Speaker 6>to empower Joe Biden, then what you do is you

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<v Speaker 6>let government shut down. You don't pursue a continue resolution,

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<v Speaker 6>you don't pass the appropriations bills. That is the liberal solution.

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<v Speaker 3>Graves is an ally of the Republican Leader of the House,

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<v Speaker 3>Kevin McCarthy, who struggle to control his party that holds

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<v Speaker 3>a single digit majority in the lower House. McCarthy has

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<v Speaker 3>until the end of the week to find a solution

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<v Speaker 3>or the government will have no funding.

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<v Speaker 2>Meanwhile, Hollywood studios and screenwriters have reached a tentative deal

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<v Speaker 2>to end a month's long strike. The Writers Guild of America,

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<v Speaker 2>which represents Hollywood movie and TV script writers, walked out

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<v Speaker 2>in May over pay and protections from the use of

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<v Speaker 2>artificial intelligence. The industry has been at a virtual standstill

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<v Speaker 2>in recent months, with actors also on strikes since July

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<v Speaker 2>citing many of the same demands.

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<v Speaker 3>A NASA capsule containing chunks of an asteroid that may

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<v Speaker 3>hold clues to the development of our solar system has

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<v Speaker 3>landed in the Utah Desert after a seven year space mission.

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<v Speaker 3>The Osiris REX mission was launched in twenty sixteen and

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<v Speaker 3>scooped up a large sample of rocks from a near

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<v Speaker 3>Earth asteroid. Three years ago, cosmochemist doctor Natalie Starky says

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<v Speaker 3>it marks the first mission of its kind.

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<v Speaker 7>We don't have any other samples that can tell us

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<v Speaker 7>about those times.

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<v Speaker 8>And the important thing is is.

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<v Speaker 7>They're pristine because they haven't been through atmosphere entry. They're

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<v Speaker 7>going to be looked after in this capsule that's come

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<v Speaker 7>back from the spacecraft, and they're just the perfect samples

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<v Speaker 7>that we could hope for.

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<v Speaker 3>Doctor Natalie Starky and others believe the rocks could also

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<v Speaker 3>help inform future missions to asteroids. The samples have been

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<v Speaker 3>taken to NASA's Johnson's Space Center and could be opened tomorrow.

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<v Speaker 3>Carl and Alexi user systems.

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<v Speaker 1>I must have been, I am. Yeah, so we've got

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<v Speaker 1>at least two in the house.

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<v Speaker 3>I don't consider myself a luddie, but it's one of

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<v Speaker 3>the things, one of the technologies that I have not adapted.

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<v Speaker 3>I don't use voice assistance anyway.

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<v Speaker 9>Yeah.

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<v Speaker 3>I don't know whether it's paranoia over what it's being

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<v Speaker 3>listened to, or that I just don't see a use

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<v Speaker 3>you necessarily.

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<v Speaker 1>No, I can understand that. No, and I do.

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<v Speaker 2>And I also see really, given the leaps in artificial intelligence,

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<v Speaker 2>why Bloomberg opiniconmist Dave Lee has written a story about

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<v Speaker 2>what the point of Alexa actually is. I mean, I

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<v Speaker 2>must admit I use it for very basic things like

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<v Speaker 2>a timer. And Dave Lee is talking to the boss

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<v Speaker 2>of Amazon's Alexa unit about actually what more this device

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<v Speaker 2>is meant to deliver. I thought it was interesting that

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<v Speaker 2>talking about maybe it becoming a subscription service.

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<v Speaker 3>Yeah, exactly. So Dave Limp is actually leaving Amazon at

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<v Speaker 3>the end of the year. So this is sort of

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<v Speaker 3>an interview about where the technology is going next. Very

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<v Speaker 3>much worth reading from our Bloomberg opinion columns. Davely this morning.

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<v Speaker 2>Okay, let's turn our attention then to the big picture.

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<v Speaker 2>To the eused chief Trade Negotiation says that the Block

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<v Speaker 2>will become more assertive when it comes to trade with China.

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<v Speaker 2>Veldus Dobrovskis says that China's lack of reciprocity means that

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<v Speaker 2>the twenty seven nation Block wants to reset the relationship. This,

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<v Speaker 2>of course after the EU launched an anti subsidy probe

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<v Speaker 2>into Chinese electric vehicles. Joining US now to discuss this,

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<v Speaker 2>but in both China and government Editor Jill de Sis

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<v Speaker 2>Good morning, Jill Dombroskis is in China. Then for these

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<v Speaker 2>high level trade negotiations and talks, including with the Vice

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<v Speaker 2>Premier who her live Fung, the EU is clearly concerned

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<v Speaker 2>about trade with China.

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<v Speaker 10>Hey, Carolin, Yes, I think that's very easy to say that.

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<v Speaker 10>I mean, look, this is an incredibly important trading relationship.

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<v Speaker 10>I think the EU is a block is one of

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<v Speaker 10>the largest trading partners for China. This is a relationship

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<v Speaker 10>that involves some nine hundred billion dollars more in bilateral commerce.

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<v Speaker 10>So yes, I think there's there's quite a lot of

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<v Speaker 10>concerns here, especially if you look at the trend over

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<v Speaker 10>the last couple of years. The China is exporting more

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<v Speaker 10>to the to the EU, but imports aren't really keeping

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<v Speaker 10>pace there. So I think that there's a lot of

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<v Speaker 10>concern within the EU just kind of about how the

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<v Speaker 10>dependency looks, what they can do to kind of de

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<v Speaker 10>risk and ring fence some of their operations, and that's

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<v Speaker 10>what we saw spill over into for example, this whole

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<v Speaker 10>Chinese EV probe here. I think that that's you know,

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<v Speaker 10>sort of a this this consequence of the push that

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<v Speaker 10>Chinese electric vehicle makers have made into the European market,

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<v Speaker 10>and then what that actually means for a lot of

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<v Speaker 10>EU companies as well. And so all of this is

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<v Speaker 10>kind of the backdrop to Brovkas visiting China over the

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<v Speaker 10>last couple of days and kind of working through some

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<v Speaker 10>of these high level talks.

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<v Speaker 3>What sort of sense do we have of their reception

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<v Speaker 3>these remarks might get given what China has said previously

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<v Speaker 3>about some of the actions like that ev investigation that

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<v Speaker 3>the EU has launched.

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<v Speaker 10>Yes, well, I think that at this point, you know,

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<v Speaker 10>easy to see that that China has obviously not been

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<v Speaker 10>very happy with a lot of the eaves regressive remarks,

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<v Speaker 10>this idea of them taking a stance, and we haven't

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<v Speaker 10>actually had official reaction to this most recent speech Dombrovskis

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<v Speaker 10>gave this morning. This was a speech, according to prepared remarks,

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<v Speaker 10>that he give to Shanghai University in Beijing. But we

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<v Speaker 10>know that he's been meeting a lot with Chinese officials

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<v Speaker 10>over the past couple of days. He's actually supposed to

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<v Speaker 10>be in this meeting with Holy Fung Vice premiere at

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<v Speaker 10>this moment. So I mean, you know, this is a

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<v Speaker 10>very careful and considered relationship. I'm sure we'll get something

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<v Speaker 10>more public out of China right now. But yes, they

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<v Speaker 10>have not been happy about that EV probe. There's a

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<v Speaker 10>lot of sense within China that this is sort of

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<v Speaker 10>unfairly targeting Beijing rather than being something that's a little

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<v Speaker 10>bit more you know, sensible and maybe not as politically charged.

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<v Speaker 10>But yes, you can you can see just from those

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<v Speaker 10>types of remarks in the past over the CV probe,

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<v Speaker 10>how how charged this really has become.

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<v Speaker 2>Yeah, absolutely so, then what about the next step, the

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<v Speaker 2>idea of somewhat between Presidents Jimping and the EU's at

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<v Speaker 2>Stavondale later this year.

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<v Speaker 10>I think that we're still waiting to see what form

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<v Speaker 10>that might ultimately take and when exactly they would meet.

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<v Speaker 10>I will say that what's happening right now, and so

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<v Speaker 10>the entire reason why Broskis is currently in China is

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<v Speaker 10>it's part of this this high level economic and trade dialogue. So,

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<v Speaker 10>I mean, this is one of the most important EU

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<v Speaker 10>China related summits it's happening this year. So I think

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<v Speaker 10>that what that does is even if you've got these

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<v Speaker 10>you know, quite strong comments that are coming from the

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<v Speaker 10>EU's trade chief at this speech, you know, I mean,

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<v Speaker 10>there's a certain element of this that of course is

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<v Speaker 10>strategic and calculated, and I think the fact that he's

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<v Speaker 10>having some of these closed door meetings with really really

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<v Speaker 10>high level officials kind of indicates that there is still

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<v Speaker 10>a desire to figure out this relationship, what things ultimately

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<v Speaker 10>look like. I mean, look, just over the past couple

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<v Speaker 10>of years, we've moved away from really strong language on decoupling,

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<v Speaker 10>for example, to now de risking and sort of working

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<v Speaker 10>through this relationship. So sure, I think that once we

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<v Speaker 10>get away from this, we've got a press conference from

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<v Speaker 10>them broskis expected tomorrow, maybe we'll get a sense of

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<v Speaker 10>what there's even higher level meetings between Banderly and she

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<v Speaker 10>Jinping ultimately look like.

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<v Speaker 3>Okay, Jill Lisas, our China Government editor, thank you very

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<v Speaker 3>much for joining us with the latest on that story.

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<v Speaker 3>As Valderston Broxfast continues his visit to China.

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<v Speaker 2>Now we want to bring you a story from Slovakia next.

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<v Speaker 2>The former Prime Minister Robert Fico could seal an unlikely

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<v Speaker 2>comeback in elections this weekend, but he wants to end

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<v Speaker 2>military aid to Ukraine, which could further test European unity

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<v Speaker 2>on the issue. Our Eastern Europe Economy editor, Andrea Juditch

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<v Speaker 2>is joining us now for more on this. Good morning, Andrea,

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<v Speaker 2>thanks for your time. What does the victory potentially mean

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<v Speaker 2>then for Europe's political landscape?

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<v Speaker 8>Good morning.

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<v Speaker 9>His possible victory will be a huge test for Europe

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<v Speaker 9>and exter United State, for Ukraine and against Russia when

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<v Speaker 9>it comes to sanctions and weapons deliveries.

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<v Speaker 3>How could a return to power change the broader stance

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<v Speaker 3>that Europe has towards Ukraine and overall help for the.

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<v Speaker 9>Robert Fitzal has many times said that when he takes power,

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<v Speaker 9>he will stop all deliveries of weapons to Ukraine from Slovakia,

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<v Speaker 9>which is a NATO and EU member. He also said

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<v Speaker 9>that sanctions in Russia are meaningless and useless, and they

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<v Speaker 9>not only heard Russia, but also EU members such as Slovakia.

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<v Speaker 9>So what we could see is him teaming up with

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<v Speaker 9>Victor Orban of Hungary when it comes to crucial votes

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<v Speaker 9>inside the EU.

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<v Speaker 2>Who's his main ally main allies within the European Union?

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<v Speaker 2>I mean, you mentioned Hungary is a key ally, but

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<v Speaker 2>who else is the ally to Robert Fitza.

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<v Speaker 8>During his previous terms, he was a very pro Western.

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<v Speaker 9>Politician who stood at the core of the EU. He

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<v Speaker 9>oversaw the country's euro membership, but lately he has become

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<v Speaker 9>very close to Hungary's Victor Orban and also to the

0:11:53.720 --> 0:11:56.880
<v Speaker 9>leadership in Poland. So you could see a strength and

0:11:57.280 --> 0:12:00.440
<v Speaker 9>block of countries that have been at our with the

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<v Speaker 9>EU over the last few years when it comes to

0:12:03.000 --> 0:12:05.240
<v Speaker 9>rule of law and corruption.

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<v Speaker 3>Fight and Jet tell us a bit more about Robert Fico.

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<v Speaker 3>He's someone that has been around on the political scene

0:12:11.920 --> 0:12:15.400
<v Speaker 3>in Slovakia for a long time, but notably has been

0:12:15.440 --> 0:12:17.160
<v Speaker 3>out of office for several years.

0:12:17.559 --> 0:12:22.120
<v Speaker 8>Yes, he has been in power for the last time.

0:12:22.200 --> 0:12:26.160
<v Speaker 9>He was ousted several years ago and since then he

0:12:26.320 --> 0:12:28.880
<v Speaker 9>has turned very.

0:12:28.720 --> 0:12:30.640
<v Speaker 8>Much anti against everything.

0:12:30.760 --> 0:12:34.680
<v Speaker 9>He was very vocal about the coronavirus, how people should

0:12:35.520 --> 0:12:39.680
<v Speaker 9>not buy into the government stance. He was very much

0:12:39.720 --> 0:12:44.320
<v Speaker 9>against Slovakia's help for Ukraine and has repeatedly said that

0:12:44.360 --> 0:12:47.440
<v Speaker 9>sanctions are not the way to go when it comes

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<v Speaker 9>to dealing with Russia. He also has seen his popularity

0:12:52.280 --> 0:12:53.400
<v Speaker 9>fall to record law.

0:12:53.880 --> 0:12:56.000
<v Speaker 8>But because he has been able to.

0:12:56.360 --> 0:13:00.880
<v Speaker 9>Embrace this anti stance and everything he has really written.

0:13:00.760 --> 0:13:04.400
<v Speaker 8>In pouls in the country that is very pro Russian.

0:13:04.800 --> 0:13:08.280
<v Speaker 2>Yeah, five and a half million people in the country.

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<v Speaker 2>Do you think that he's going to embrace the far

0:13:11.160 --> 0:13:13.960
<v Speaker 2>right in his ruling coalition. Again, this is very much

0:13:14.559 --> 0:13:17.880
<v Speaker 2>a theme across continental Europe. You know, what would the

0:13:17.920 --> 0:13:21.840
<v Speaker 2>government look like potentially, what's the polling like, Well, it's

0:13:21.920 --> 0:13:22.559
<v Speaker 2>to be seen.

0:13:22.600 --> 0:13:26.000
<v Speaker 9>Really depends on the election result and how many parties

0:13:26.200 --> 0:13:28.880
<v Speaker 9>across the threshold to get into parliament. But what we

0:13:28.960 --> 0:13:33.040
<v Speaker 9>could see is him teaming up with his former Ali

0:13:33.320 --> 0:13:34.800
<v Speaker 9>who set up his own.

0:13:34.600 --> 0:13:36.560
<v Speaker 8>Party which mirrors the party of.

0:13:36.600 --> 0:13:40.280
<v Speaker 9>Robert Fitzal and possibly he could embrace the Farid in

0:13:40.320 --> 0:13:44.079
<v Speaker 9>the ruling coalition. The Firerid in Slovakia has very extreme

0:13:44.200 --> 0:13:49.520
<v Speaker 9>views on Ukraine's possible membership in NATO and overall help

0:13:49.559 --> 0:13:54.520
<v Speaker 9>for Ukraine. So if that happens, that could really strengthen

0:13:55.040 --> 0:13:57.960
<v Speaker 9>Robert Fitzos and a Ukrainian stance.

0:13:58.600 --> 0:14:01.520
<v Speaker 3>Who are his opposition in the selection. What are their

0:14:02.320 --> 0:14:05.960
<v Speaker 3>strengths or their arguments given the position to the evautline

0:14:05.960 --> 0:14:07.079
<v Speaker 3>that Robert Vico has.

0:14:07.160 --> 0:14:08.439
<v Speaker 8>Well, it's mainly there's.

0:14:08.280 --> 0:14:11.080
<v Speaker 9>The Progressive Party which is second in polls and the

0:14:11.160 --> 0:14:15.440
<v Speaker 9>gap between them and Robert Fish's party has narrowed significantly

0:14:15.520 --> 0:14:19.120
<v Speaker 9>in the last few months. There's a very liberal party

0:14:19.240 --> 0:14:23.120
<v Speaker 9>that wants is the key player in the EU and

0:14:23.200 --> 0:14:26.080
<v Speaker 9>in the country's back.

0:14:25.880 --> 0:14:30.040
<v Speaker 8>And forth Ukraine. What we just need to see.

0:14:29.720 --> 0:14:32.920
<v Speaker 9>Whether that party will be able to mobilize more voters.

0:14:33.680 --> 0:14:37.120
<v Speaker 9>Whoever wins the election is the first party that gets

0:14:37.120 --> 0:14:40.040
<v Speaker 9>to try to form a rule in coalition. So the victory,

0:14:40.160 --> 0:14:42.520
<v Speaker 9>even if it's by a couple thousand goals, will be

0:14:42.800 --> 0:14:43.440
<v Speaker 9>very important.

0:14:44.960 --> 0:14:47.680
<v Speaker 3>This is Bloomberg Daybreak Europe, your morning brief on the

0:14:47.760 --> 0:14:50.800
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