- 11 months ago
This edition of our weekly talk show focuses on the growing challenges facing the European economy: declining competitiveness, increasing potential for conflict in trade with China and diminishing scope for the public sector.
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00:00Hello there, welcome to Brussels My Love, Euronews's weekly politics programme with
00:17me Maeve MacMahon. Thank you so much for joining us. Coming up on the show, EU leaders flocked
00:24to Brussels this week to discuss all the major challenges of today. Darkening the mood, the
00:29European economy in survival mode at almost zero growth, with Germany bracing for a recession and
00:36star European companies like Nokia and Volkswagen letting staff go, we ask how will we get through
00:42this very difficult time? And in a major move, the EU has imposed duties on Chinese electric
00:49vehicles for five years. The thinking is that it will encourage Europeans to buy cars that are made
00:55in Europe and not China. In response, the Chinese government has gone after European brandy and
01:01luxury cognac. We ask how will this trade war impact us? And will Brussels decision end up doing
01:07more harm than good? Let's bring in our panel. David Rinaldi, Director of Studies and Policies
01:12at FEPPS. Pleasure being with you. Good to have you. Almut Muller, Director of EU and Global Affairs
01:18at the European Policy Centre. And Nicholas Poitier, Research Fellow at the economic think tank
01:23Bruegel. Welcome to you all. First, let's just hear why the state of the European economy is causing
01:30night sweats here in Brussels. With low growth and rising global protectionism, the EU economy is in
01:40survival mode. Europe's powerhouse Germany is set to shrink for the second time in a row, and France
01:48is cutting spending and increasing taxes in what looks like a return to austerity.
01:55Meanwhile, US elections are around the corner and some are warning a Donald Trump win could damage
02:00our economy further. With groceries and rents rising from Athens to Madrid, Europeans are
02:10feeling the pinch. But governments don't have much bear cash and bell tightening by a fiscal policy
02:15could stifle growth even more over the next few years.
02:22So David and Nicholas, you both have PhDs in economics. So help us out here. How bad is the
02:28situation? So first of all, thank you very much for having me. I think in the short run, the
02:34situation is, is kind of manageable. But the problem is really the medium term. So we are now at a very
02:41kind of close to recession in Germany, we might have zero growth in the US as a whole. But we also
02:47come out of a very bad cycle where we had first the pandemic, then we had the Russian war of
02:51aggression against Ukraine and the energy crisis. And then we basically had the ECB having to raise
02:56interest rates really strongly to fight inflation. And all of these things suppressed the economy and
03:01the government had to do quite a lot to prevent the economy from tanking. So bad, but manageable
03:06in your view. And what's your take, David, on the situation? And should we now be saving or should
03:10we be spending? We should both at the same time. There has been quite a discussion in
03:17Brussels on how to revive the possibility of having investment in Europe that is more or less
03:26at the level of the one that we can see in the US and China, for instance. So the situation is looming.
03:32And I agree, it's not only a fear for the current moment and the recession now, but we are at a
03:38moment in which we need to redress our economy and power our industry, transform it in a way in
03:45which it can serve prosperity in Europe for decades, for decades to come. So that can hardly
03:51be done without investment. And just on that investment, let's just remind our viewers that
03:56a couple of weeks ago, we had that Mario Draghi report, of course, calling for 800 billion euros
04:01per year, wasn't it? Investment. Amit, you're the political scientist here with us. So break down
04:06what the political impact really is of this. Well, I think it's pretty simple in the end. If
04:12Europeans don't feel that they can have a good life and they have fear about their future, then
04:17this is something that will inevitably short the ballot boxes. And we see that already. So it is
04:23one of the key missions of the European Union to help create growth and prosperity in a time of
04:27transition, as colleague pointed out here. And so this is a serious situation which the Commission
04:33President and the team have understood, placing competitiveness at the very core.
04:38But one thing is understanding the problem, right? The other thing is getting the report from Mario
04:43Draghi, the hundreds and hundreds of pages. Because the EU is seriously lagging behind here,
04:48as you said, where will that investment come from, that money? We need to invest in almost a lot of
04:55different sectors. And the analysis of Draghi is good because it looks sector by sector as well.
05:00And that is a lot of data, a lot of data there. The political aspect of it is more difficult on
05:06how to get it. Because if we look at what we have been able to do at the European Union level,
05:13the first very big idea and decisions that the European Union leaders had to take on basically
05:19how to respond to the United States Inflation Reduction Act was something that allowed more
05:26state aid at national level, which is not really a European response. So we failed to deliver on a
05:34European fund for technology and sovereignty fund. And meanwhile, when it comes to tech,
05:40of course, the US are leading when it comes to manufacturing, the Chinese are leading.
05:44Where are we leading? So we're still very good in many tech sectors, pharmaceuticals, machinery.
05:50We're also good in when it comes to economic outcomes that are not just money when it comes
05:54to welfare outcomes like health. But we see that our economy is not as dynamic as the American one.
05:59And we're really lagging behind in digital products. And I think this is where we really
06:02have to invest to get better markets to make our economy more dynamic.
06:07And when it comes to the business sector, they're obviously worried. We see that a lot, that mood
06:11around Brussels and beyond. We've seen as well this week as well the insurance company
06:15Allianz Trade putting out new data warning of a severe increase in global business insolvencies,
06:22arguing that over 1.6 million jobs in Europe and North America could be at risk next year.
06:27For solutions, we checked in with one of the authors of the report
06:31in Paris to find out what his message as well was for policymakers. Here's Maxime Lemaire.
06:36Well, there's no magic solution. It's an addition of individual cases we need to trust.
06:41I mean, first, the all the CEO of companies, financial directors of company to do whatever
06:46is necessary to keep their business alive for sure. But the competition is hard, especially
06:51in some sectors. And what else can do? I mean, the the I mean, institutions is just to do whatever
07:00is necessary to make the environmental and the regulatory context as transparent, efficient as
07:07possible without, I mean, big changes in the last minute mode that would definitely not help
07:15business owners to to to anticipate and to do what they have to do to run their business.
07:20That's Maxime Lemaire there from Alliance Trade in Paris with clear messages for CEOs,
07:25firstly, and also then for policymakers. Quite unsettling time for companies as well.
07:30Well, interesting. Interestingly, the Draghi report also talks about the overall picture,
07:36talking about things you would not anticipate security and defence investment, these kinds
07:40of things. This is an indication of where we're at as a European continent globally.
07:44There is a war raging in Ukraine. There is a situation globally where we feel that our
07:49model of going multilateral, relying on strong institutions for dispute settlement is is
07:55crumbling. There are a lot of questions out there that create a great deal of insecurity.
07:59And that people's daily lives. Yes, we will see people losing their jobs. It's already happening.
08:04We have actually in Europe at the moment more than 13 million of unemployed people. It's
08:09if you look at the figure, it's like having the entire population of Belgium
08:13completely unemployed. Can we accept that we have, you know, one entire country that is
08:19left unemployed? Plus, even if you look at the people that have a job, at least about one out
08:25of 10 in Europe, they have a job, but they're still poor. Well, it's funny because I want to
08:29actually bring in some good news today so that it's not super gloomy and actually recall that
08:34the employment figures are much better than they were before. And we're actually down at 6% here
08:40in the EU. A couple of years ago, obviously, it was really bad. We all remember the Greek debt
08:44crisis. So we've seen a drop in the unemployment. Obviously, if you look there, at the graph 2020,
08:50it was a bumpy time. That's, of course, COVID. So the figures there look a bit better. What should
08:55we take away from that, Nicholas? Because of course, before, these indicators were almost
08:59like a barometer for how kind of economic excellence was. But what should we take away
09:03from these figures? So I think the problem in unemployment in the EU was very different than
09:08when we were in the debt crisis, where we really had very high unemployment rates
09:13in Southern Europe. They have come down, but we still have a really big issue with demographic
09:18change and the structural transformation of the economy. Many of the jobs people have now will
09:22not exist in 20 years, but also many employees leave the labour force and employers really
09:27searching very hard for skills and they don't find them often. I was at a conference recently
09:30and the sister of Mark Zuckerberg was in the room telling everyone, those jobs that you have now,
09:35you won't have them in 10 years, they'll be gone. That's another factor we have to think about. AI
09:39will be replacing a lot of our jobs. I think you can feel that in every sector. I think there's
09:45some good thinking out there, how we can get new jobs. And on the other hand, it's a huge
09:51transition also of our societies in the way we're thinking about, you know, how our economies can
09:55work and including the very fundamental question to make sure that at a point when there is a
10:00great deal of insecurity and national politicians will first and foremost react to domestic audiences
10:06understandably, because that's where they're being elected, how is it possible then to keep the union
10:11together? This will be very challenging for Commission von der Leyen too. Could one idea be
10:15fixing the single market, getting the single market right? Because it's so fragmented now.
10:19I think this will be one of the mantra of the current condition, you know, deepening
10:24the internal market. You know, it's in the letter report, in the drug report. I think it's also
10:30very much in several of the mission letters. The how is the problem.
10:36I mean, this is something your Bruegel, the think tank you work for since 2019 is working on
10:41constantly. What are your solutions? So the first thing we really have to get straight is actually
10:46our capital market. Letter called the Saving Investment Union. Right now, companies primarily
10:50finance themselves through banks. And that is to some extent inefficient. And also it doesn't allow
10:54the kind of venture capital we see in the US that creates all these kind of startups. So this is the
10:59should be the first priority, really getting the capital markets right. We see some progress on
11:03that, but we still see some resistance, especially from smaller member states that won't protect
11:07their own advantage of having a low regulated market. And we don't have any unicorns,
11:11really hardly any of these unicorns. So startups with an excess of one billion.
11:15The lack of financing and the lack of real single market is making that difficult for Europe. But
11:21what we see actually is that the smart and advanced businesses, they are relatively in favor
11:27of European regulation because they see that that is not hampering the development, but it's
11:33actually providing a common framework where they can do investment in a way in which they know
11:38they might have a return over time. So the opposite of not having European regulating,
11:45for instance, on artificial intelligence that we have mentioned, is that we have 27 different
11:51regulations with countries moving in different ways. That is something that definitely is not
11:56going to help the European economy. No, and it means if you're a young entrepreneur with a
12:00brilliant idea, you're going to head to the United States, where as well there's a culture of it's
12:05okay to fail. We don't have this culture, Amit, here in the EU. It's not cool to try a business
12:10idea and then to fail. We just don't have that confidence. Well, I think I work in the business
12:15of creating good ideas, and I have to accept that every day there will be failure on this one. But
12:19I think, I mean, you're completely right on an honest note. Of course, you know, we need to be
12:22bold. This is a time for being bold because this world out there has gotten quite cold. And this is
12:27for the first time that we see the Union has to be able to form at a time of real global uncertainty,
12:31of vulnerability, of war. And, you know, we have to be able to protect our people during bad times
12:37as we were during good times. And this is a real test. And to be bold, we need the vision. We need
12:41the leaders. Go on. Yeah, if I may add on that, if you're a US startup, you have immediately access
12:45to 300 million customers. In Europe, the biggest market is Germany, maybe 80 million customers.
12:50But basically, every single market, especially in digital services, is regulated at a national
12:54level. And that means a lot of complexity for a US business that makes it close to impossible to
12:58scale and compete with US businesses. And we always talk about this single market and the
13:02over 400,000 people. But is it really a single market? Or is it just an abstract illusion,
13:07something that we're trying to get to? No, there is a single market, and it's a big
13:11treasure of this Union. And I think it's very difficult for the European citizens to see the
13:16value of it in their daily life. But actually, it is something that should deliver better prices,
13:23better services and possibilities for businesses. I think small and medium enterprises, they start
13:29now after many years to, you know, to take the benefits of a real common market. And there's
13:34much more. And there's still much more to do that. But there is still, to me, one point that
13:41of course, we have to improve on pushing for startup, but the model is still very much US.
13:48It's not something that we will ever achieve, you know, parity on this ability, because also,
13:53you know, the capitalisation they can have there, we will never be able to provide that one.
13:59You know, Emmanuel Macron has been trying, hasn't he, in France, this has been a big thing for him,
14:03trying to create a little tech hub in France. But that is good. And we should multiply this.
14:08I think, you know, in Portugal, that has been something done fantastic in Berlin and a few
14:12other cities. Estonia is one of our countries that is leading on everything, everything digital,
14:18including a lot of big tech corporations. But at the same time, I would like to see our model,
14:27the European model, very much somehow based on different principles rather than, you know,
14:34you have to win big only. That is one way in which you can do the economy. But there are many other
14:40ways in which, you know, still you can rely on small and medium enterprises, you can rely on
14:45partly state-owned companies, which in the US are almost no go, but here they generate technology,
14:52innovation, and employment. So it's good to push on something that we are missing,
14:57but it's also recognising the strength of the model.
15:00So I agree with that we need to somehow protect our social model. I think that is core to identity,
15:07is core to what we want, and we see really good outcomes for that when you compare also to the
15:12United States in terms of health and well-being. But at the same time, I think there is a trade-off
15:16between protecting old industries and promoting new ones. And I'm really worried that right now
15:20the trend is to protect incumbent industries and not invest into the future. And the US has done
15:25that very well in a way that we haven't. Quick reaction to that? Well, I think it really goes
15:31down to fundamental differences over, you know, what should we be doing in this day and age. The
15:36single market, the way it was set up, was set up for a different world. And, you know, what the
15:40union has tried to develop over the past years was also more teeth and trying to fence off.
15:45And, you know, so the question is how much more of that, how much more of protecting we need,
15:51and, you know, to what extent there is a trade-off then with regard to the openness that we need as
15:56a single market as well that wants to have still a global outreach. This is battles that need to
16:00be fought at political level. They are ongoing and they're going to get fierce, I believe.
16:05And watching them very closely is, of course, the millennial generation and GED-Z,
16:09very worried amidst all this talk of a very stagnant EU. For their take,
16:13I caught up with Andrea Girosa. He's the founder of Think Young. Take a listen.
16:18Obviously, you have inflation pressing down. That has a pressure on, you know, wages, salary,
16:24purchasing power, but also, you know, the possibility to afford housing, which is a big
16:29problem now for young people. And the second one, which is growing more and more, and we do a lot
16:34of research, we see it a lot, it's mental health. That is a huge issue for young people, especially
16:39in Europe. And it's growing. Growth means, you know, reduce all the red tape, the single market,
16:45many messages we know, but should be pushed a lot because things are accelerating in the
16:51rest of the world. And then Europe is slacking behind. So, if we look at the next 10 years,
16:55we need really to step up. So, Andrea Girosa there, speaking to me from Geneva, packing in
17:01as well a lot of points, but also stressing this anxiety and mental health crisis as well among
17:06youth today. This is also very concerning. The European Union actually has already launched
17:12a mental health strategy. We have somehow an ongoing discussion on the European Health Union
17:19that kicked off after, of course, the COVID pandemic. It's still a struggle to find the EU
17:25competences or the way in which you can deliver. But it is rather clear that that is a priority
17:33for the Union. Especially when we think about how we can become more productive. How can we have
17:38better output when you're dealing as well with such a serious mental health crisis?
17:44Yeah, we see that in member states and numbers are very clear about that. And they give reason
17:49for concern. But I also I want to come back to the competence question. And I know, you know,
17:53that the treaties are the treaties and the competencies are the competencies. But I think
17:56this commission will have to be engaging a lot more politically, because expectations are so high.
18:02And I think whatever it takes in negotiations between member states and the EU level
18:08in performing in these areas, you know, we would need that. Often you have sort of discussions
18:14over treaties, and you know, what is possible. This is not the time to do that. There is real
18:18urgency. And you know, you give an example of how we make sure that our people in Europe,
18:22you know, have the ability to live lives where they can have productive lives and happy lives.
18:27This is no small thing. You know, we can't look at it, you didn't mean it, but competencies are
18:31not at the core of the issue here. And also give hope to people, especially young people in
18:35countries like Spain, in Greece, if you look at the graphs, they're still very high up when it
18:40comes to unemployment rates, a lot of people still living with their parents, even though they're
18:45right into their 30s. That's, of course, a big issue that will have to be addressed. I think
18:49housing is also something we've heard that could be sort of addressed, even though, of course,
18:52it's not up to Ursula von der Leyen. It's not to Ursula, but we will have a dedicated commissioner.
18:58And actually, if we go out of one second on the out from the economics and we go the political
19:04aspect here, it is true that we have several commissioners in charge of, I would say,
19:09economic related portfolio from competitiveness and transition and investment. We are partly
19:18compromising the part on jobs and employment. At the moment, you know, there's not a specific
19:22competency that is in the mission letter, but a little less in the naming of the title of the
19:29commissioner. But we will have a commissioner for intergenerational fairness and youth.
19:34So that is at least one we expect. So on paper, things look interesting. Let's see how they
19:40actually develop. One other thing, obviously, we're keeping an eye on here is the US elections
19:45taking place in just over two and a half weeks. There's, of course, a feeling of nervousness
19:51everywhere and even as well on the financial markets. And we saw the president of the German
19:54Bundesbank, Joachim Nagel. He's already said how he feels that he reckons Trump's victory could be
19:59accompanied by drastic increases in tariffs and expansionary fiscal policy, leading to noticeable
20:06losses in growth in the Euro area and Germany. Niklas? Yeah, I think this is really the big
20:13unknown for the year. I think there were two at the beginning of the year, two things that could
20:16have changed the trajectory. And I think one was the Chinese economy, which is not looking great.
20:20So that is something that really changes you in external trade. But the other one is really,
20:25does Trump win? And then if he wins, he has been very clear that he wants to impose a lot of
20:30tariffs. He said this week just, he said that tariff is his favourite word in the dictionary.
20:34He says every second word in his speeches are nowadays tariffs. And deregulation. Yeah. And
20:38cutting taxes. So obviously, it's good for American business, but not for us here. The debate over,
20:44you know, what's happening in the US for a long time has been more looking over the pond rather
20:49than focusing on what we need to do here at home. And regardless who makes the race, I think it's
20:52very important to strengthen the European Union and Europe, because we need to learn, no least
20:58because of a war of aggression on our doorstep, to continue standing up for our own prosperity
21:03and security and beef up on that and become better. And of course, it matters who sits in
21:09the White House. I'm not, you know, playing that down at all. But I think the work really seriously
21:13needs to start at home, because we can no longer rely on others so engaging on European affairs,
21:19that these times are gone. And of course, the times as well are gone of just relying on Germany,
21:23because of course, we look at the instability there. But on that point, we can conclude this
21:28conversation. Thank you so much to our panel for your analysis and for sharing your views.
21:32Stay with us though here on Euronews, because after the break, we'll be telling you why the EU
21:37and China are having it out in the boxing ring. See you soon.
21:48Welcome back to Brussels, my love. I'm Maeve McMahon. And this week on the show,
21:53we're taking a little look at the reasons why the European economy is in decline.
21:57But we also want to zoom in onto the EU-China trade war that's been brewing on the sidelines.
22:02In case you missed it, back on the 4th of October, the EU announced it would slap duties
22:07on Chinese electric vehicles for five years. In response, Beijing said it would introduce
22:13provisional measures against imports of European brandy. So Niklas, I'm turning to you first,
22:18because here we are in what looks like a trade war. It looks pretty nasty. Was this the right
22:23move of the EU? I think it was the right move. It is very controversial also among economists,
22:29because there are real costs, not just in terms of a trade war, but more importantly,
22:32in terms of the green transition. We want cheap EVs. But on the other hand,
22:37we cannot longer turn the other cheek to Chinese industrial policy. And we are in a moment where
22:42to deal with this domestic economic malaise, the Chinese government is doubling down on
22:46industrial policy. So here the Commission really chose to kind of set a foot down,
22:50even against member states. And when you say we want cheap EVs, we've been getting them
22:54from China, with China being the biggest importer of EVs for the last couple of years,
22:59and also this week, we saw the Paris Motor Show take place, which naturally was full of Chinese
23:04car manufacturers. And David, have you been following this at all? And what's your take?
23:09My take is that the Union has moved, but we have moved in a much kinder way than the US or Canada,
23:16for instance, that they have imposed a 100% tariff on electric vehicles. So basically,
23:22our declaration is not a declaration of war, but it's a declaration of half friendship. So
23:27compared to the global trade, we are still a great partner for China. And particularly,
23:34not only on the tariff that is there, and now Chinese government, of course, they didn't want
23:38it. But at the same time, we are very participatory in the way in we include Chinese authorities in
23:46the discussion. So there is an ongoing talk that I think it will prevent a real big war.
23:52Okay. And of course, you said the Chinese government were not happy. That's why they
23:54went after the French because they feel that the French were one of the countries that was most
23:58supportive of the move. Of course, this is all as well element taking place in a constant context of
24:04geopolitical tensions. Well, I think we already had the right direction of this debate saying,
24:12well, on the other hand, we have as Europeans to show that our single market has teeth,
24:16that we have our own interests, and that we are also willing to pursue our interests,
24:20even though that might be controversial amongst member states, because we need to be taken
24:25seriously in this world, the single market we are. But this message also came with a message
24:30of willingness to negotiate. And this is very important as well, because both China and the EU
24:35share significant interests in each other in this field. And the global environment,
24:41a colleague pointed out to the United States and North America at large, Europeans are in a
24:47different position here, we have different interests. And so it will be important to
24:51navigate that as well. This is not an easy thing to do in the years to come. I believe we will see
24:56more controversy in this area. But Europeans need to stay calm and cool headed in order to be able
25:05to navigate that pull their weight, but also show willingness to negotiate. Cool heads. I think
25:09that's also what some of the countries who didn't opt in favour of this move want, like the German
25:14Minister for the Economy, Robert Habeck, he spoke to the press and expressed his concern.
25:25I think Europe's proven position is credible. I believe there is indeed evidence that China
25:29is artificially ramping up capacity with subsidies in order to take them over aggressively.
25:39Nevertheless, I am not a fan of tariffs of countervailing duties,
25:43because this will probably lead to countermeasures and perhaps involve us in a
25:47tariff dispute with China. So I urge a political solution.
25:52That was Robert Habeck there. So also looking for some sort of cool heads on a political solution.
25:57So I'm not sure what the political solution would look like. It's going to be really difficult for
26:01China to make concessions here. So I think the big question is Europe willing to pay the price
26:05and the majority of the EU institutions thought it's worth the price. And it's also the question
26:10of basically how do you want to interact with China in the future? Right now, the retaliation
26:14is very symbolic. And of course, farmers matter quite a lot politically, but economically,
26:20brandy is not the most important export of the EU or cognac, which is affected here.
26:24So I think the economic effect will be rather limited. And in the end of the day, to avoid any
26:29conflict in the interest of the European economy because of fear of retaliation also sends a very
26:34difficult signal. I wanted to mention that, okay, cognac is good to mention the brandy industry,
26:39but also the dairy at the moment is quite impacting, particularly in France and Spain.
26:46My feeling is that we might have targeted the retaliation here and there because the Chinese,
26:51they have to show that there is somehow a response, but it's not in the interest of China
26:58as well to enter into a trade war. So my feeling is that they will respond, but not engage into a
27:04war. And we live in these fascinating times in which basically you see the US,
27:09the champion of neoliberalism, that is actually putting up, you know, closing on trade and putting
27:17up some protectionistic measures. China, that is instead, you know, the communist block,
27:22that is instead for free trade and, you know, and openness. And Europe in the middle,
27:28we have this way in which we started with the open strategic autonomy, now economic security.
27:33Europe in the middle, trying to find itself. But David, you mentioned there dairy. That's one way
27:37that consumers could eventually be impacted. And we wanted to hear how else consumers could
27:42be impacted. So we had a quick chat with AgustĂn Genia, the Director General of BEUC. Take a listen.
27:48We need to create incentives for car makers to make smaller cars, which are more efficient and
27:54cheaper for consumers. We also need to have a second-hand market of electric vehicles,
27:59which today it doesn't exist. And that requires other type of interventions that are very much
28:04needed in order to develop this market and make it more accessible to consumers. The tariff applied
28:11to electric vehicles coming from China are just one component to protect competition in the
28:17internal market. But certainly much more needs to be done if you want to make cars more accessible
28:22to all consumers. AgustĂn Genia there, the Director of the European Consumer Organization.
28:27And Alma, also last week we saw in the European Parliament a three or four hour debate about this
28:32topic as well, but turning as well on the fact that as of 2035 we'll be rolling out the sale
28:37of the combustion engine. So big change ahead. Big change ahead. And we see already in the run-up
28:42to the European Parliament elections, of course, there was a lot of polarization.
28:46Some parties also wishing to polarize on this and creating fear. This is, I think, something that
28:54Ursula von der Leyen also reflected in the tone that she chose when she talked about the future of
28:59everything that was branded the Green Deal in the past. But I fundamentally believe that really
29:03there is no choice because the future is in a transition. And it is politically important
29:10to create confidence and trust in this process. We've seen too much polarization. This doesn't
29:16help at all. And on that point, we can bring this conversation to an end. Thank you so much
29:20to our panel for being with us and for your impacts. And thank you so much for watching.
29:24Take care and see you soon.
29:34Hello there and welcome to Brussels, my love. I'm Maeve McMahon and along with David Rinaldi,
29:40Almut Muller and Nicolas Poitier, we're just talking through the stories making the news lately.
29:45And one that we wanted to hone in on was the G20 calls for a tax on billionaires across the world.
29:51The French economist, Gabriel Zucman, says a 2% minimum tax on this wealth would raise up to 250
29:58US dollars per year. And the new conservative French government is also trying to tax the
30:02wealthy, the German Social Democrats too. So let's get the view of our panel on this
30:08because the conversation has finally gone mainstream. But has the needle really moved?
30:14The feeling is that there's more and more interest on this and there's more and more openness from
30:20different governments, particularly led from the government of Brazil that was chairing G20. And
30:26as Europeans, we also have our push. It's a moment in which we have been discussing on it. We need
30:32investment to renew our industry, to lead the transition. And of course, this idea of a wealth
30:39tax, it sounds very radical. But at the end, we had wealth tax up to many a few years ago in many
30:45European countries. Norway is there and Switzerland is there and Spain is there. It's not necessarily
30:51detrimental to the economy. It's a little part of the top 1% of the richest that is affected.
30:57Indeed, we're talking about the 3000 most wealthiest people in the world that would be impacted here
31:02because currently, according to the G20 statement, they're only paying about 0.3% of tax. So this
31:08could this really be a game changer? I think maybe not in fiscal terms, because 250 billion for the
31:13world is not a lot. But it really matters for other reasons. So we see how billionaires in some
31:19countries have too much influence. We see this in the United States, where Elon Musk just buy Twitter
31:24and just change it to like a right wing platform overnight. But we also saw the influence that
31:29oligarchs can have in our own countries, where they use European countries to launder their money and
31:34to make their income, their legal incomes that they get from stealing from their own citizens,
31:39legal in the EU. And we saw this really kind of what happened with Russian oligarchs that used
31:43EU countries for this. And that also kind of then gained a lot of influence in the EU and made our
31:47reaction to the Russian invasion of Ukraine very difficult. And you mentioned Elon Musk,
31:51I was reading this week that he could become one of the world's first trillionaires.
31:54So there you go along with Mark Zuckerberg. What's your take on all this?
31:59It's an important debate for the reasons that Niklas described here. What I do think, though,
32:07is that the issue is much bigger. We need a new understanding in EU countries. If we want
32:15the state to help be in charge of doing good things for our citizens, if we want the EU level
32:20to be able to do that, we need to have the means. There is no such thing as just taking everything
32:25for granted. And this is the bigger discussion I think we need. And here, because you were asking
32:31about the needle, the needle is shifting, because there was a time in which there was the assumption
32:36that, you know, in a kind of ultra mercantile way, things will be falling into place, but they
32:41haven't. And so this will raise a lot of questions, discussions, headlines. I can just imagine what
32:47will be in the papers, you know, when we start moves in this direction. But, you know, the debate
32:54that we need on these questions actually is a bigger one. And this could also be a starting
32:58point for it. And we saw last week in the European Parliament in Strasbourg, a very fiery debate over
33:03this topic. And it was quite interesting to see the far left and the far right were very much on
33:08the same page. Take a look. The cultural battle we've been fighting for years is finally starting
33:15to bear fruit. Even the G20 now wants to tax billionaires. So what are we waiting for, dear
33:19colleagues? Do we want it to take not 10 million years, but 20 million years of minimum wage to
33:24reach Bernard Arnault's wealth? We are on track to impose more substantial taxes on these great
33:33fortunes. However, it is crucial that each state retains controls over the tax revenues it receives.
33:40This approach must not become a pretext for interference in the competences of member states.
33:50There are two French MEPs expressing their joy that this could one day become a reality. But,
33:57of course, it won't be up to the Parliament. Yeah, the problem really in the EU is it's a global
34:02problem because we see tax avoidance globally and billionaires can use this very effectively.
34:07But we have tax havens in the EU. These are member states like Ireland, like Luxembourg,
34:11but also the Netherlands, that fight fiercely against any interference in their low tax
34:16regimes. They not just impose low taxes on corporations in their own countries,
34:20but also they allow companies from other countries to avoid taxes in these countries.
34:24And so there, I think, really there's a strong interest. You can only tax this if you do it
34:29globally, if you do it in corporation, because otherwise it will be avoided. At the same time,
34:33some countries completely block any progress. And, of course, a lot of wealthier stashing
34:37their money as well in tax havens, Cayman Islands. We have to go there and avoid somehow the
34:45tax evasion is so prominent. I think some estimation point out that there is about
34:512,000 euro per European citizen missing out of just of tax avoidance. But one of the big
35:00differences in the debate, you know, it seems that they agree, but there's a big difference
35:04between the left and the right in the idea of how much Europe you should have into a potential new
35:12wealth tax. So we don't have a tax yet, but we are already fighting on how to spend it,
35:18in a sense. And the feeling is that it would really be important if not all the revenues,
35:23but at least part of the revenues, they go to create a real European owned resource,
35:28so that we have some common financial power. Well, of course, politically, this is a huge
35:33topic for the French left. We could even see there Manon Aubry wearing that T-shirt there.
35:37It's went very viral, this move on social media. And also, though, we're seeing the French
35:42government, the conservative French government going after wealthy families, I think of over
35:47250,000 euros earnings a year. They're trying to tax them and companies as well.
35:53Well, we see that, as you mentioned earlier on, that the Social Democrats, the party of
35:59the German Chancellor, has just put forward a manifesto wanting to work on not the super rich,
36:05but the upper segment, which already creates a lot of controversy in the country and political
36:13push from conservative side. But it also shows this is something that people care about deeply,
36:19because it goes to the question of fairness, to the question of respect for work that you do.
36:26And I think it's important to have that debate and to trigger it again, for our societies to
36:32be able to sustain an idea that there's a place for everyone here in Europe to live
36:38of the work that you do. And you have to just address where violations are happening.
36:45Absolutely. But there needs to be probably a recalibration of things as well.
36:49And on that point, we can conclude this very interesting conversation. Thank you so much to
36:53David Rinaldi for joining us. Also to Amit Muller and Nicolas Poitier. Thank you so much for being
36:58our guests this weekend. And thank you so much for watching. If you would like to reach out with
37:03any comments, please do. brusselsmylove.euronews.com is our email address. We're also on social media.
37:08You can DM us there and we will get back to you. Take care and see you soon here on Euro News.
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