00:00And Maeve, to that point indeed, we are now joined by the Commissioner for the Economy, Valdez Dombrowskis, who joins
00:06us here in the studio.
00:07Good morning.
00:08Good morning. Commissioner, just a very simple question. How bad is it going to get for Europe?
00:14Well, the economic impact of current crisis in the Middle East, to a large extent, will depend on how long
00:22the conflict will continue, how wide it will spread.
00:26So, in a sense, if we manage to achieve a quick escalation, the impact may be limited.
00:32If it gets protracted and correspondingly both with disruptions for oil shipping and oil and gas production, that indeed, as
00:43you mentioned, can create a stagflationary shock for the European economy,
00:47where, due to the elevated energy prices, it peaks in a broader inflation and also negatively affects growth through confidence
00:57effects,
00:58through disruptions in supply chains and through tighter financing conditions.
01:03So then what are you going to do as a Commission?
01:05Because we see that capital saying the European industry cannot deal with another energy shock.
01:09We need measures.
01:10And the Commission is going back to the Member States saying cut taxes on things like electricity.
01:14So what's going to happen in the short term, in specific terms?
01:17Well, in the short term, as you already mentioned, it's a question of releasing the oil reserves, which we have,
01:24which can add substantial volumes to the market and which are meant exactly for situations like this, where we are
01:31facing disruptions.
01:33But the market did not take that as a positive. Oil prices still went up.
01:37Well, there, we must see what are the reasons for this.
01:42First, we see that oil prices are very volatile.
01:45Second, Iran was hitting a major oil storage in Oman.
01:49It basically continues to target energy infrastructure in neighboring countries.
01:53So this volatility is certainly linked with this.
01:58And those oil reserves volumes have not reached the market yet.
02:02And do you believe, and you've dealt with the U.S. administration many years now, do they have a plan?
02:08Because I'm confused. Is this a war or just an excursion?
02:11I listen to President Trump. I hear 20 different things a day.
02:14Well, I cannot tell this on behalf of the U.S. administration.
02:19But what's your impression?
02:21Also, there were no prior consultations with the EU before taking those steps.
02:26But what's important right now is to work towards a quick escalation of the conflict.
02:32And from the EU side, we are also engaged with the countries of the region aiming for that.
02:37And let's talk about Ukraine, because obviously you are very supportive of Ukraine.
02:40I think everyone knows this by now.
02:41There's a loan of 90 billion euros that is blocked by Hungary.
02:45There is no indication that the president or the prime minister of Hungary is going to budge.
02:49And at the time in December, we were told that if Ukraine didn't get the money by April, they would
02:54collapse.
02:54April is around the corner. So what's going to happen?
02:56Well, first of all, in between, we have finalized legislative work on a number of things,
03:02of Ukraine support and regulation.
03:04We are also amendments to Ukraine facility.
03:08We are working with Ukrainian authorities on all the documents which are necessary,
03:12like memorandum of understanding, financing, strategy.
03:16The man is Orban, but it comes down to Iran. How do you deal with Orban?
03:18No, no, but basically the missing element is amendments to the multi-annual financial framework,
03:24which would allow the commission actually to go to the market and borrow.
03:30And this indeed we need by April, and we continue this strong engagement.
03:35There was commitment from all 27 member states to do those amendments to our multi-annual financial framework.
03:45But do you have to wait until the Hungarian election?
03:47Is this now ultimately the elephant in the room, whether he gets elected or not?
03:51Well, it has been said before that we will ensure this support one way or another.
03:57With or without Hungary?
03:58We expect, obviously, Hungary to honor its commitments,
04:02which also Prime Minister Orban took in December last year.
04:05And it's worth reminding that Hungary is not even paying for that support.
04:08Okay, well, Commissioner, thank you very much, of course, for joining us on Euronews this morning.
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