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[music] >> Hello and welcome to The Ring, Euronews' weekly debate show. This week broadcasting [music] from the European Parliament in Strasbourg. I'm Stefan Grobe. On The Ring, debaters go face-to-face [music] on some of the biggest political issues facing Europe. Today, we want to talk about the global economic [music] challenges that lie ahead and that impact all of us in Europe. Luis Albertos breaks it down for us. >> The EU likes to see itself as an economic superpower. [music] A market of 450 million consumers and the largest trading block on the planet. Yet, growth remains sluggish. Entire industries are under pressure and businesses complain about high energy costs, excessive regulation, [music] and a lack of investment. And global competition is getting tougher and tougher. For Europe, it's crunch time. From artificial intelligence and clean technology to defense production and critical raw materials, Europe is lagging behind. So, can the EU reinvent its economy for a new era? Is deeper integration the answer? Or does Europe need more risk-taking? And will the framework for a peace deal to stop the Iran war bring down energy costs quickly?
>> Well, a lot to unpack here for our contenders. And here they are. >> Jürgen Warbon, a Swedish MEP from [music] the center-right European People's Party. He serves in the Committee on International Trade, where he's [music] played a prominent role in shaping the European Parliament's trade policy agenda. He says, "Europe will only remain a global heavyweight [music] if we reinvent our economy by cutting the regulatory burden that holds our companies back, securing affordable and reliable energy, including nuclear power, opening new markets through more [music] free trade, and putting competitiveness at the heart of every decision we make. Lina Gálvez, [music] a Spanish MEP from the Socialists and Democrats Group, she chairs the Committee on Women's Rights and Gender Equality and is a member of the delegation [music] for relations with the United States as well as the Committee on Industry, Research, and Energy. "If [music] Europe wants to compete with the US or China, we need to advance in the integration of the Union," she said. "The answer is not to deregulate, [music] it's to integrate. That is how Europe competes without sacrificing the social model or the climate goals."
>> So, let me welcome to the ring Jörgen Warborn and Lina Gálvez. Great to have you here. Good to see you both. The aim of the ring is to offer our viewers a glimpse at European Parliament debates. So, you should feel right at home. Are you ready? >> Yes. >> Yes. >> All right.
>> Now, I want to start with a look back. At the beginning of the century, Europe accounted for 1/4 of global GDP. Today, it's down to 15%. Now, where, when, and why did we lose ground here? Lina, I want to start with you.
>> Well, first of all, thank you for having me here and um I think um probably we should start with what happened in the financial crisis and the answer we we gave to that crisis that was not the the optimal one. We answered with austerity that really slowed down our economies and it took a while to recover. When we were recovering, it came COVID. >> Mhm. >> We managed to go out from COVID better than expected, probably with next generation EU funds. But then, later on, came just Ukraine that affect us more than probably other of our main competitors, let's call China or US. so we are lying behind, especially since that moment. And obviously there are other structural issues that we probably we will be discussing, but I think if you want me to say just one moment where everything like started, it is probably the financial crisis and the answer we gave to you.
>> she mentioned the global financial crisis, so it affected everybody. Yet Europe lost 10 points in terms of global GDP. >> Your take. >> Yeah, exactly. No, I agree with Lina. This is the story is true, but what is more problematic is that the rest of the world continued to grow. And Europe, we didn't. Well, we still grow, but we grow much slower than the rest of the world. At the time that you mentioned, US and Europe were approximately same size in GDP. And now the US is skyrocketing. Not speaking about China and India and Indonesia and Brazil. All economies around the world is growing faster than Europe. And that's why yes, we need to deregulate. That's why we need to invest a lot more in in energy, not least nuclear. We need more financing. We need more free trade agreements and we need to integrate the internal market. If we do that, we can come back to growth. But we let competitiveness we we dropped the ball. And now we have to take the ball back.
>> the ball. Lina, before your answer, historically Europe invented many of the stuff that changed the world. But failed to create companies on the scale of Google, Apple, or Nvidia. Why is that so?
>> Well, historically the sectors that are leading the global economy are changing. So, sometimes you are in the right place, sometimes you are not. So, obviously Europe was a leader, a global leader in technology for for a long time, but uh um uh we were also we we did not have the size uh of other of our competitors. The US market obviously um allows them to have a scale and a scope that we didn't. And we invented the European Union in order to to to be so. And we have advanced quite much on our integration, but more is needed for the common for the current moment. So, we need to finally integrate the global market the Union market. We need more Europe at the end because that will be the only way the only way no single country in the sectors that are leading now the economy.
>> I'm glad you mentioned that Jorgen and I play the ball over to you. When companies look at Europe, do they see opportunities or do they see bureaucracy?
>> Uh both I think. Uh there are obviously a lot of opportunities in Europe, but >> It's a big market, yeah. >> It's a big market 450 million consumers a huge economy um strong purchasing power from the consumers. So, yes, they look at opportunities and we have them. But we need to improve and you mentioned bureaucracy. That is one of the part of course and I think what happens is a lot of the issues is the digital market. US took off we didn't to the same extent. We have to fix that and that of course means changing our rules because they have different rules in the US. They have different rules around the world and we have to make sure that businesses sees more opportunities and less bureaucracy and that means not least changing and modernizing the GDPR to make data more accessible for companies. It means changing the AI Act so more of these companies would allocate here, and then it's also about financing, of course.
>> Lena, is that I I I agree. >> I I agree partially uh because I don't think regulation is the main problem. Obviously, um we need to simplify our process and everything. That will be great for everyone. So, that's for for sure. But, I think what we need is more digital sovereignty because our data is flowing there, and our money is our savings are uh uh flying there as well. Um because we don't have a uh united capital market. And that means our savings are investing there or are financing their innovations and their deployment, especially with because we are good in research, we are good in innovation, but we are not good in deployment, in in bringing it to market. And it's not only a question of regulation because, for instance, the Artificial Intelligence Act was blamed even before being implemented. So, we are not competitive in digital because we have the Artificial Intelligence Act, and it was not even implemented. So, we really need to challenge that rhetoric that the regulation is the uh is the only evil. I think more integration is what we need, and we need uh uh a a unified capital market in order our savings could also invest here.
>> I I I disagree. I think, of course, the AI Act was a problem before before it was implemented because companies know that this will come, and that means less investment in Europe, more in the US. So, we need deregulation, not least on the on the digital side. We need uh to change the GDPR, so it gets easier to get access to data for companies because this is the new oil. This is the raw material for businesses, and that's why US is taking off, and Europe is not. And if we change it, I'm sure we can come back. I'm sure we can compete with every parts of the world. We have a lot of talents and brains and entrepreneurs that could do fantastic services that might solve a lot of the big society societal issues and challenges like the climate challenge for example. We need artificial intelligence for that. So, let's start to build in Europe. Let's get back to it and then you have to deregulate. You have to create more energy, more nuclear. You have to make sure that we have more investments here. And why don't you want to change the rules? Why don't you want to simplify? And if you say yes, what do you want to change? What do you want to change?
>> but the thing is that we differentiate on simplification and deregulation because the regulation is also protecting our business, our consumers, our economies. I think what we need is more more digital sovereignty. We need also that the this philosophy we are putting on the industrial accelerator act will go also to the digital package as well. I know we can't be completely sovereign. We are both in international trade and I'm just substituted in this committee. You are the coordinator for EPP there. And obviously we are for an open Europe and an open market and everything we have we are to for establishing really a good relationship. This soft diplomacy on trade and research and innovation as we are doing with the Horizon Europe with our like-minded partners, but we need really to work on our sovereignty.
>> Yeah. Alas, at the end of our data because they are the first consumers. >> So, you can call it direct you can call it simplification. You can call it simplification. I don't mind or deregulation or cutting red tape or less bureaucracy. It doesn't matter as long as we cut the costs for businesses. That's what counts. So, what cut for businesses would you like to do to facilitate for entrepreneurs in the digital sectors?
>> So, a cut for business will have a better access to finance. So, a unified the financial market will be to have better energy cost. >> I agree. >> So, we really need to go for renewable energies. You say nuclear, this is not obviously my proposal, but really to increase the the green the green deal. And we need to build more Europe. The budget we have is ridiculous for all the things we have to do today.
>> I think we've we've touched upon the right issues here. I'm very glad about that, but I need to stop here as we're just getting warmed up. It's now time for gloves off. Now, we want viewers to get a real flavor of the European Parliament where members ask each other questions. That means we want our debaters here today to challenge each other directly just as you do in the hemicycle behind us. So, let's get started. Jurgen, I want to begin with you. Your first question to Lina.
>> We just We just We just talked about the energy situation, and and I'd like to understand this from from your perspective. Because Europe, we have much higher energy prices than our competitive competitors. And it's it's really important for the energy intensive industry, for the digital sector, AI not least. In Spain, your government is phasing out nuclear, fully functioning nuclear. How could we How could we do that and still, you know, do the change to to more electrification, to more competitiveness, to less to less prices, lower prices for businesses if we face face out the nuclear?
>> Well, we are growing >> more nuclear. >> Well, Spain is is growing double than many other countries, and really above the the European Union average. So, something we are doing well because if we take a GDP, we we are growing better faster. And we have invested a lot in renewable energies and within and also we are also investing in hydrogen and in new sources that we think are clean and safe. Not only clean because you can say well, nuclear is clean but safe I don't think we can say it is it is clean. So, we are very respectful about the energy mix of each country. So, if you want nuclear, you well, you have to pay for your nuclear and it is it is your I mean each country responsible for the energy mix they want. What they need to to do is to work on this unified market. Now with the gas for instance, we need to to to cooperate and and coordinate.
>> Yeah, we got your point. Well, developed and now your question to Jorgen.
>> So, your group constantly call for cutting red tape on rolling back the the green deal as a route to competitiveness. Yet the Draghi letter reports and also the European Central Bank and the IMF point to fragmentation. So, I was already saying not regulation the biggest break on European growth. Why does the EPP keep pushing the regulation as a cure when the real bottleneck is uh uh single market that we still haven't completed?
>> I'm really happy for this question because it also shows the difference here. Yes, I'd like to continue to cut red tape. I'd like to cut the costs for businesses and that is one it's not the only one but that is one of the most important things we need to do in Europe. And that's why we need to change. We took a lot of decision on the green deal last mandate. And honestly, we did some huge mistakes. I'm still very committed to the climate targets, and we have to build to neutrality by 2050. But that there are different path there, and that's why we need to continue to cut red tape. We need more investment in clean energy, nuclear was mentioned. Uh we need a better internal market, as you said, more investment for businesses, and more free trade agreements. If we can do all those five things, I'm sure we can come back to competitiveness, and I'm sure there is a lot of business opportunities in the green sector, in the climate sector, in the clean energy sector. And that's what I think we can do if we if we sort out all those five things I mentioned.
>> All right. Well, we've heard the views from our guest. Now, it's time to hear from a new voice. >> [music] >> For our quote of the week, I would like to bring in Spanish Prime Minister Pedro Sanchez, who has emerged as Europe's sharpest critic of Donald Trump and his war in Iran and of the global economic consequences. This week, he said this. More than 7,400 people have been killed, most of them civilians, hundreds of homes, schools, and hospitals have been destroyed, prices have surged across the board, and the economic damage has run into the billions of euros, including in Europe. This is the toll the conflict in Iran has taken. Lena, your comments on this.
>> Completely right, absolutely right. And at the end, this cost increase is business paying this cost increase. Uh consider >> paying, right? >> And also public and no, we are not all paying, because if you look to the Oxford Intermon report that was just published and you see the benefits, the windfall profits that the energy business are having, they are multiplying in a way that it is really amazing. And even that is going up prices even more in US than than that here. But you have Donald Trump saying, "Oh, I love inflation. It is now 4.2%." I don't know if that much. But probably the people who do not love that much are US citizens, but he is probably not speaking to them, but speaking to the powers that brought him to power.
>> Right. So when I said everybody's paying, I mean, you know, consumers, citizens in Europe. >> but also public public >> At the pump for instance, and now we have um a uh an agreed framework of an agreement. We don't know all the details yet, but markets have already reacted. Oil prices eased after the announcement of that framework agreement. But some experts warn that it can take much longer than we all hope for oil prices to come down. What is your your take here? Do we have to be prepared for higher energy prices at least for the rest of the year?
>> Yes, unfortunately, I think we have to do that. I think there will be volatility in the market and we don't know how secure this deal is and what will happen. You know, when it comes to Trump, Trump is not my favorite US president of all times, I have to I have to admit. But I think sometimes in European politics, like the driving force have has been like you have to be against Trump. And that's not my driving force. My driving force, what can we do to be pro Europe instead? And if you have that as a motivation, you end up with other measures, other analysis. And for example, of course, we just voted yesterday on the Turnberry deal, the US and EU trade deal. Not the best deal in the world, but I have been pushing for this because that is the best for European businesses. That is what gives more predictability and more stability. And and I'm really happy that at the end also socialist voted for it. It took some time. I think we could have done it faster, and that would have been better for business and for investment and for our citizens.
>> in a minute, but let's take a break right now here on The Ring. We'll be back with more after this. Stay with us. >> [music] >> Welcome back to The Ring, Euronews' weekly debate show. I'm Stefan Grobe, and I'm joined by Lina Gálvez from the S&D [music] from Spain, and Jörgen Warborn from the European People's Party from Sweden. Today, we're talking about Europe's economic challenges. And when we're having that conversation, we hear a lot about dependence on China. But what about dependence on the United States? And here, Europe has produced only three major AI [music] foundation models compared with 40 in the United States. US companies account for roughly 70% of Europe's cloud infrastructure market. And the US also supplied roughly 45% of EU LNG imports in 2024, making it Europe's largest liquefied natural gas supplier. Lina, what would you like to underline here?
>> Well, I would like to underline that indeed we have a lot of dependency with the US. So, why we needed a trade agreement. Uh Um, we needed to uh the best trade agreement possible, not ideal. That is the reality we have because we have too many dependencies. So, we are not enough strong. So, while I go back to um uh this previous idea, it's not that we have to to do this against Trump or against China, not only against Trump. We need to reinforce what we have. And for that, I think to go uh for uh clean energy for me, not nuclear. But, uh and for digital sovereignty, this is very important. Advance also in defense and on innovation and preserving also our social model. And for that, we need a soft uh diplomacy. But, I think digital sovereignty it is essential and for that, we need more Europe and more budget because with the common budget, it will be absolutely impossible.
>> With Trump, you know, the German Chancellor gave him a a Germany jersey uh at the the G7. Maybe that works. Um, but it it is quite a serious situation. >> Uh Trump is pursuing his anti-European rhetoric, at least. So, what should we do then?
>> We should do three things, mainly. And that is beefing up our defense industry ourselves, and more more money has to go to the defense sector in the European uh countries, of course. We need more free trade agreements so that we facilitate for our European businesses to do trade elsewhere, both to source, both to buy products from these countries, but of course also to find new markets. That's the diversity diversification strategy. But then, maybe the most important part, of course, is to develop European businesses here. And that, if if if politicians can take a step way back and make sure that the market functions, and that means less regulation in Europe, that means more investment possibilities to change how we can create a better capital market here. Uh the internal market, I would say, is our strong weapon here. And energy, I mentioned energy, and we we disagree on nuclear. I'm absolutely certain in order to create some independence of other nations. We were very dependent on Russian gas. There are two problems with Russian gas. >> dependent on uh uh uh >> and it's gas. >> US gas. >> Exactly. So, let's build more nuclear. Let's build more renewable, more and then then we can cut the cost of of energy.
>> to say here in your reaction. >> Well, I I think that but we agree but we disagree because for all that, we need more Europe. We need to advance on energy market, on on capital markets, and on digital sovereignty, preserving our social rights, our democracy, of course. But for that, we need to do some more things or at least coordinate some more things together. And for that, the common budget is essential. So, >> I agree. Yes. Yeah, we absolutely need Yeah, we need we need a long-term budget, of course. But the honestly, the the financial resources will come from the private market. When I meet SMEs, small- and medium-sized enterprises, no one asked for more money. They asked for less less less regulation, lower energy prices, uh better functioning of the internal market. That's where the focus should be. And when we use the European money, taxpayers' money, they could be used to I mean, they they are the catalyst for starting something. They are not the engine. >> Okay. >> Taxpayers' money is not the engine. Okay. >> of money in the current moment. Thank you very much. Now, it's time to move on to our fifth and final round. As always, we're doing something different now. I'm going to ask you a set of questions, and you can only answer with yes or no. All right? Lena, I start with you. Would Europe's economy be stronger today if Brussels had less power? >> No. >> No. >> Interesting. Should the EU suspend or scrap parts of its regulatory agenda to boost competitiveness? >> Yes, less bureaucracy. >> Less bureaucracy? >> Simplification but not deregulation. Yeah. >> Okay. No, probably. >> Should Europe prioritize saving industrial jobs over climate targets? >> Uh Yes. In short term, yes. >> I don't think there's a dilemma there. So, I think we can make both to go at the same time. >> I agree. >> Okay. Should Canada become a member of the European Union? >> Please. >> It's up to Canada. >> Up to Canada? I don't see it in the near term, but it's up to Canada, of course. >> Okay. One more. Should Europe strongly regulate artificial intelligence? >> No, quite the opposite. Less regulation, more market, more solutions for businesses. >> Yes, but good regulation and with other things because if we only fix our attention on regulation, that will not work. We need also more Europe and so forth. >> Okay. And finally, was there anything over the past half hour that your opponent said that you agree with? >> Many things. I mean, on this soft power and trade and diplomacy and many things. We disagree on a couple of things, but the rest I think we agree. >> Okay. >> There are important things that we disagree with. >> I I I fire off now. >> No, no, no. I I I agree and I would like to single out one issue where I think we can make a lot of of change and that's the internal market. Let's make it truly work for European consumers, for workers and for business. >> we need a better budget. So, you really need to convince your country and your group of people >> It's not a budget thing. It's [laughter] not a budget thing. It's It's It's reducing It's reducing the barriers for services >> I believe in this entrepreneurial state idea and now it is more needed because US is doing even if they think they are not doing the industrial reduction act. It went in this direction. Don't talk about China. >> Okay, we can see. >> You guys can continue over coffee >> [laughter] >> All right, and that final answer brings us to the end of this edition of The Ring. Thanks again to Lina Gálvez [music] and Ramón for a lively conversation here from the European Parliament. Thanks to our audience at home. If you like, you can continue the conversation by sending us your comments to thering@euronews.com. [music] That's it for today. I'm Stefan Grobe. Take care and see you soon on euronews.