Bloomberg Audio Studios, podcasts, radio news. Now, after a summer that was dominated by trade talks with the United States, the European economy is facing new challenges from Chinese export curbs on critical raw materials, as well as a continuing debate of our best to support Ukraine. Joining us now to discuss is Valdestanbraskos, the EU's Economy and Productivity Commissioner. Great to have you with us. Good morning our Brussels studio.
Starting with the issue that dominated the last of you leaders meeting here in Brussels, a failure to agree on a way of tapping frozen Russian assets for Ukraine. Has any progress been made on the Commission's legal proposals since then?
So European Consul talks the Commission now to work on a funding options and so that's why we're currently preparing. But also we held made clear that we sees this reparation loan steel as a main and most feasible options. So we continue also of chnical work on preparation on reparations loan, also engagement with Belgian authorities concerning the guarantees which they need in a sense to agree to this reparation loan. But in a sense this is a proposal
which addresses many issues. First of all, they are very sizeable funding needs Ukraine is facing, so IMF is putting it at sixty billion dollars for the next two years, and that's without military support, which comes in a similar order of magnitude. And also a memphi is a concern about depth sustainability in Ukraine, so we cannot just continue with giving loans. Obviously, grants is an option, but a question whether member states would agree to provide grants on
that scale. So therefore this reparation loan, which Ukraine would only need to repay once Russia pays, is a good option because it addresses Ukraine's funding needs, it does not create problems with depth sustainability in Ukraine, and it falls short of confiscation of Russian assets, which as we know, is say a step too far for a number of member states.
What sort of engagements have you had with Belgium since that meeting and have you had any indication that they are being reassured by the proposals that the Commission is developing.
Well, we continue working on this. In a sense, it's clear understunderstanding. Is there also on the Commission said that we need to be serious about those concerns and we need to find a good way to adism.
Let's turn to some of the other major challenges facing the EU economy as well. That you've been negotiating with China over access to rareer It's after deal that we saw signed between the US and Beijing to lift export curves. You said you've seen positive signals from China coming on those measures. What more can you tell us about those signals.
Well, China basically agreed now to suspend those expert controls or postpone those xpont controls by one year, so that obviously give us more time for engagement and addressing this issue in a forward looking way. So there is in sense positive short term developments. But obviously we must keep in mind that we need to work on diversification of our supply chains because currently, as concerns rareres, critical minerals, many of those supply chains are eighty ninety more than
ninety percent dominated by China. Therefore, we must work on diversification because that's how we achieve resilience of supplies. That's why we're accelerating work on our materials strategy. So that's why I've been engaging in raw materials partnership with a number of countries around the world, and also coordinating this approach with like minded partners, including in a framework of G seven.
So are you satisfied that the supply chain for now is stable while that exemption has been granted. I'm just wondering about the broader risk to the European economy from this. We've had warnings and the likes of Volkswagen for example, about the impact I could have on their supplies upcoming too.
Well, in a sense it addresses a short term concerns, but it also shows vulnerability which we are facing in terms of the supplies, and therefore we also must work towards diversification of those supplies.
Where do you look for that?
Well, actually, well, I would say to put simple around the world. We have already engaged in a raw material partnerships with various countries as diversed from Canada to Bakistan and many many others. But the issue right now is also to get more practical and more tangible to start
actually developing actual projects on the ground. Where As a model of partnership we are offering researchache countries is that the EU is ready to provide technology, know how, financing and also help those countries to increase value added they are getting from their raw materials. So it's not only about extraction but also also developing processing capacities in those countries. So looking for mutually beneficial solutions to.
The other issues that are in your portfolio as well. European governments are submitting their budgets now for the next year. I just wonder how worried the Commission is about the debate that's ongoing in France. It looks like it's going to be bigger in the O regional draft budget. We're looking at about five percent of what level would you see that as being a particular concern for the European Commission.
Well, indeed, so France has now submitted it's strap budgetary plan to European Commission, but we note that the discussions in French Parliament are ongoing, so we have to see in acentse what comes out of those discussions. So at this stage is difficult to speculate. Obviously, keeping a budget deficit as close as possible to four point seven percent
would be preferable. We know there are also discussions on a suspension on a pensions reform, but also the Prime Minister has acknowledged the importance of pension reform and also the need to compensate for physical effects on this while in a sense this reform is being rediscussed, so there are many important developments to follow.
Well, they have to find those savings elsewhere if the pension reform is suspended, because it changes the fiscal trajectory over the longer term as well well.
Indeed, it probably does not imply massive fiscal consequences immediately, but it adds ups quite quickly over the time. So it's important that also those discussions in France at the end of the day addresses a question on long term sustainability and adequacy of the pension system.
You're also overseeing the effort to simplify EU rules. That's not a part of your portfolio now. The moves that we've seen so far have seen certain climate rules implementation pushed back issues where and sustainability reported change as well. I'm wondering why the next target for simplification is.
Well, we will continue to work very intensively on simplification. So the proposals which we have put forward so far would generate annual savings around eight point six billion euros in terms of reduction of administer costs. OUR overall aim is a reduction of thirty seven point five billion euros. So we have been for a strong start, but there is still a way to go to reach our target, which is twenty five percent reduction of administ burden for
all companies and thirty five percent reduction for semes. So this is why there is this number of simplification proposals and omnibuses still this year, including on a digital on automotive, environmental, food and feed, some other areas, and also the next year's European Commission's work program has a strong simplification dimension, with more than half of all proposals having a strong simplication potential, meanings that they are expected to be net reducing in terms of administer burden.
On the question of the corporates due diligence regulations that the S triplet, which is something there's a debate on going about with the European Parliament, there's been a warning from Katar's Energy Manager minister that if Europe doesn't look at how they can water down or cancel this regulation, they'll stop delivering ler G to Europe. How worried are you about risks like that and the pressure that's being put on these sort of regulations.
Well as regards sister pul D. Indeed, there are many businesses BOSS in the EU voicing serious concerns, but also many partners outside the EU, and Qatar is just one example. We have heard from many other countries and businesses on those countries on the concerns.
But that's why into accounts.
But that's why sistypul D was part of our first omnibus, where we are actually simplifying it quite substantially in including the question on reducing the scope so which companies will be covered by CISTPLD, making requirements more proportionate, like obligation to follow only direct business partners, not all the value change up and down, obligation to do it once per five years, not every year, and and and so on.
So there are many tangible improvements and simplifications. What would be now important that the legislative process moves forward and so simplifications actually become a reality.
But is it a worry that you know, L and G supplies could be affected by these changes.
In essence, there are two elements. So one, obviously, as your opinionion, we retain our regulatory autonomy and our regulate businesses which are doing business and are active in Europe. On other hand, of course, we also need to listen and acknowledged concerns which various partners around the world are having and reflect on the implications.
I mean, the US has also made it clear it's very unhappy with the extra territoriality of these sustainable reporting and due diligence regulations. Is there any way that you can accommodate these concerns?
Well? I think the simplification proposal we have already put on table both regarding due diligence and sustainability reporting addresses already to large extends of concerns. What would be important is to finalize a legislatile process.
Okay, So no further changes planned to accommodate those concerns.
Well. In any case, it's clear that the file is now in legislative process, and legislative process for sure will bring some changes.
Okay. Pasta proskos these Economy and Product he Commissioner, thank you very much for joining us.
Thank you