Well, the economy is struggling. Im not gloomy. Ijust propose to look to what we were expecting exactly one year ago. So, beginning of october 2022, we had a double digit inflation. We were expecting recession. And indeed we were also concerned about Energy Supply blackouts because, of course, leaving the russian fossil fuels was not at all an easy story. So if we want to look to the optimistic side of the moon, i think we would say that, yes, we avoided recession. Yes, we have now inflation at 4. 3 , which is very far from the double digit inflation one year ago. And the economy is still growing. But, of course, you are right, the economy is struggling because very low growth. How long with this slow growth. That is the point, isnt it . Low growth is your problem. The imf has reduced Growth Forecasts across the European Union down to less than 1 , 0. 8 for the year. There are some important countries, no more important country than germany, which are really struggling to deliver any growth at all. Germany may slip into recession and thats a huge drag on the entire eu economy. Youve got to be worried about that. Indeed. Also, our own forecast is. 8 for this year. But, honestly, ithink we should take into account one big thing. The big thing is that the European Economy had a very strong rebound after the pandemic. The eu economy grew more than china and us, which was, in my own lifetime, unpredictable especially in relation to china in 2022. But then we had a second black swan, which was the aggression, the russian aggression. And this, of course, is affecting all the world in geopolitical terms. But in economic terms it is, of course, affecting in particular europe. And we will talk more about ukraine and russia later in this interview. But for right now, ijust want to focus On One Deep Problem youve got, which is institutional and it affects your particular responsibilities. Europe has a stability and growth pact, which is supposed to unite all eu Member States in a collective effort to maintain fiscal responsibility. There are certain rules about how much National Debt a country can run and what kind of deficit year on year it can run. Those rules have been suspended first because of covid, then because of the ukraine war. You want to bring those rules back but there is no agreement whatsoever between your members on how to do that. Thats a fundamental problem. We really dont want to, only to bring them back. We are a little more ambitious. We would like to reform them. Some would and some wouldnt. Well. Thats the whole point. I would say everyone would like to reform them, but in different and sometimes opposite directions. And this is the political tricky and difficult story. Why . Well, first, why everyone is aware of the need to reform them because they were useful from a certain point of view. We have a threshold of 3 of deficit, for example, that we will keep and was useful. But on the other side, they were not able to reduce our debt, especially for countries with high debt. Especially for countries like yours, italy. Italy right now running a National Debt around 140 plus of gdp. Yeah. In greece, its around i70 . Even in france, its more than iio . The rules have consistently been broken and now there is a raging argument between france and germany about whether more flexible rules should be introduced. I would put it to you that this total lack of agreement sums up a fundamental problem with the eu and running an eu economy. There are just too many different Political National interests. There are national interests, as you know very well. But at the end, i am confident that an agreement will be reached on this. Why are you confident . I am confident because im speaking every day, or every couple of days, with finance ministers, and i see that the distance among them is reducing. But first of all, im seeing that they are all aware of the need to reach an agreement, which is the point. The point is that to have more realistic rules means that you will have more enforceable rules. And at the same time, that you can have rules encouraging growth. This is the deal that we need. But whats wrong with. . Because we had very ambitious rules. They were not implemented, not enforced, and the debt continued to grow. And we had low growth. And that looks like a systemic problem. And theres other problems, too, which, again, you have to take some responsibility for as economy commissioner. For example, the idea was, post covid, to create this massive fund that the eu would raise money for and which would be distributed to those countries worst hit by the pandemic. It was worth over, what, 700 billion euros, in theory. The problem is that in efforts to get countries to come up with specific plans to invest the money to generate new growth, those countries have completely failed. Italy and spain are prime examples. Theyre supposed to take more than 200 billion euros, they cant even figure out how to invest the money. Well, until now, we disbursed 163 billion out of. Out of a theoretical 700 and something. And we have a plan going until the end of 2026. So, yes, you are right. We have delays in. Why . Again, why . You know, european people will be watching this interview thinking, we are really struggling and the eu institutions and those who talk about generating pan eu Economic Growth are simply failing to deliver. No. I think people is aware of the fact that we have an unprecedented decision, which is to put together 700, as you said, 700 billion, which is an enormous amount of common money. And we reached this common money with common funding, so the European Commission going to markets and raising this money. But, commissioner, what is lacking is Common Collective purpose and indeed sometimes even common standards of integrity. 0laf, the Anti Fraud Office of the eu, has already said just a couple of months ago its now investigating serious potential fraud in the use of this Pandemic Recovery cash. They wouldnt say which countries, but they said theres some serious issues there. And we know that funds earmarked for hungary and for poland have been suspended because youre deeply unhappy with some of the things the governments in those countries are doing. So theres a real mess here. No, nota mess. This is really. Sounds like a mess. No, i think this is really what the common money are supposed to be used for. Well, not forfraud. Not for fraud, of course. And if there will be fraud, there will be prosecuted. But conditionality, we have conditions for this common money. You cant raise in the market 700 billion and then give to Member States without targets, common thresholds and conditionalities. Problems with poland and hungary is that we have some conditions connected to the respect of the rule of law that are absolutely necessary for us to disburse the money. Is hungary, for example, ever going to get the money . I think they will. We are working to make this possible, but they have to deliver on the rule of law. Do you think that this is not the right way . I think it is the right way because the problem that we had in the past was that, ok, the commission is giving good recommendations to Member States and Member States are accepting these recommendations, yes or no . 60 . 70 . Now, if you have common funding attached to your recommendations, i think its an enormous tool to make our economy, but not only economy, we were talking on rule of law. Right. So weve dealt with the growth situation. Weve talked about the impact of the pandemic. Well come back to the Russia Ukraine war. Lets talk about your belief in one of the most fundamental challenges facing the eu in economic terms, that is transitioning to a greener European Economy. Its a big thing for you. Turns out that when it comes to delivering, when it comes to the actual money to enable this green transition, everything that the eu is doing looks like peanuts compared with what the United States and china are doing. Well, i think if we look to the situation now, i think the european common funding we were referring to is strongly helping from this point of view. Um. Forgive me, in terms of actual money from the eu for the green transition, im struggling to see more than, you know, tens of billions that are promised and not actually delivered yet, but promised, but look at the United States. Joe biden� s Inflation Reduction Act has actually delivered more than 700 Billion Usd to Renewable Energy infrastructure, to electric vehicles, to green manufacturing. Its an extraordinary investment. The eu has nothing like it. Well, there is something comparable to this, which is exactly what we were referring to. You should know that 280 billion, part of this Big Next Generation eu programme, are exactly for the green transition. And this is mandatory. So you have to demonstrate if you want our common money to be disbursed, that you delivered on renewables, on hydrogen, on heat pumps, on wind farms, etc. And these are for us, this 280 billion, unprecedented and good. With greatest respect. Problem is what will happen after 2026. Well, to be honest with you, a lot of what the eu and its various Member State Governments are committing seems to be future oriented and not actually delivered. And heres the words of your fellow commissioner, mr sinkevicius, whos the environment commissioner. He says, we have to be honest. It is definitely different circumstances now compared with 2019, when we did have maximum support and political willingness to act on these green issues right across europe. He acknowledges that the politics of this in europe has fundamentally changed. Well, i think the great change that we have with Next Generation eu, putting together common funding, eurobonds, something that you know was. You worked here in brussels some times ago. Yes. Some time ago. And you may remember that the eurobond was a sort of devil to address. Of course. Now the eurobonds are there for 800, 750 billion, and substantial part of this is for the green transition. Yeah, but address my point about politics. If you look at whats happening in germany right now, where there is a huge argument about what to do on domestic heating, phasing out fossil fuel oil and gas heating, look at the argument over. Even the ban on petrol and diesel cars being sold after 2035 where people are pushing back. The poles are even launching a lawsuit against the eu because of that deadline. In sweden, for example, theyve stopped investing in high speed rail. Theyve scrapped incentives to buy fossil free cars. You can look right across europe, you can even look at the uk, outside the eu, but, nonetheless, part of a trend, which is loosening some of the commitments to some of the net zero projects. Yes, but i. This is a european trend. This is a european problem. And my view, of course, with all respect for the decisions that were taken by the uk Prime Minister, is that the European Commission is not now deciding to put the brake on the process. No, but dontjust say, oh, this is a uk phenomenon. As i said, this is happening across the European Union. I agree with you, its a european problem. But what are we. . How are we reacting to this european problem . Of course, we need some flexibility because if you ask households to change their Heating Systems in a few weeks or in a couple of years, you could have a difficult reaction. We know that we need to support especially lower income households. This, to quote greta thunberg, is notjust a climate challenge, it is a climate emergency. Emergency. And this is the reason why the European Commission is not putting the brake to the process. So we have to deal with the problem, which is a common european problem, but without changing our point of view. This would be a terrible mistake also for the European Economy because we are competing with the United States and china. If we put the brakes on the process, we will be lagging behind in this competition. Lets talk about one specific aspect of the Energy Crisis europe has been through. It, of course, is linked to the russian invasion of ukraine. And one of the goals, the diplomatic goals of the eu in the last 1. 5 years has been to economically isolate russia, to put deep pressure based on economic sanctions on the kremlin. Isnt the truth that as another winter looms, we see increasing evidence that key eu Member States are finding ways to circumvent economic sanctions on russia, not least in the Energy Market . Yes, the risk of circumvention is there and we have to address it. I also know that the packages of sanctions that we delivered is really very impressive. It happens. Its impressive on paper. Youve just said to me quite candidly, yes, circumvention is happening. So what are you doing about it . 0h, we have. We have always solutions to the problems. The fact is, then, if the solution will work or not. Ok, so lets take one specific. We have special Envoy On Circumvention who is touring all european Member States to check and avoid. So lets take one. 0ne specific, if i may, commissioner. Research in germany shows that the amount of oil product imported into germany from india has risen by more than ten times in the last year. At the very same time, Indian Imports of russian oil have spiralled. Theres an obvious connection there. The oil that germany is getting from india probably comes from russia. Are you telling the germans right here, right now they have to cut that out . I think we should address this problem as we are addressing similar problems of triangulation, increase of export from eu Member States to Central Asian countries. You can talk about kazakhstan, you can talk about armenia. Kazakhstan, an increase of exports from kazakhstan to russia. This is how the risk of circumvention is working. Well, you clearly know about it. But. Im just not being convinced that youre stopping it. We work on this. We work to stop this. At the same time, first it happens that i was the Italian Foreign minister after the annexation of crimea, and i can assure you that the level of sanctions that the eu decided in front of this crisis, and the level of support to ukraine that the eu delivered after this crisis, is incomparable to what the eu was able to do ten years ago after the crimea annexation. In this case, it was very difficult to agree on personal sanctions. Now, we have 11 packages of sanctions and we have we are, by large, the European Union, the Stronger Economic supporter of ukraine. I want to end with some quick thoughts about migration, which some have described as the most corrosive, the most dangerous and divisive issue facing the European Union today. Youre italian. You know that your Prime Minister, giorgia meloni, is saying that italy is being invaded and that italy will not, to quote her phrase, become europes refugee camp. But youre economy commissioner. You also know that europe, in demographic terms, desperately needs, in the long run, the boost that comes with immigrant labour. So how are you going to square that circle . I think we need, to put it simply, but then implementation is not so easy, we need to gradually and strongly shift from illegal migration to legal migration. Yes, indeed, as you were saying, we need legal migration. We have a very tight Labour Market despite the low growth and in several areas we havejob vacancies. Do you think the italian people you know italy well do you think they are listening and understanding that argument that youve just outlined . All the Business Community in the centre north and north of italy are very aware and use legal migrants. The problem is that to reduce illegal migration, we need the european cooperation, but we need also to strengthen legal migration. Yeah, you dont have european cooperation. The idea of burden sharing is an important one, but, frankly, if you talk to people in hungary, in poland, in many other countries, they are not interested. Making progress, you know that migration is always the most divisive issue. I remember very well how it influenced also the uk Referendum Conversation On Migration and the invasion, etc. I dont think that we can refer to invasions. Migration will be with us for the next decades. We have to bring irregular migration into legal migration. But you are a former National Politician in Italy Of The Centre left. You know as well as i do that the Migration Issue is fuelling anger amongst populations, and it is powering the right and sometimes the far right in countries across europe. In 2019, you said this Liberal Democracies face a double competition, one from radical alternatives like china, but another from within. There is an, you said, an anti democratic contagion internally, which is becoming a real threat. Multilateralism, free trade, environmental sustainability and freedom are all at risk. That was four years ago. Do you think things are getting worse . They went better for a certain period, also thanks to the multilateral vision of the new us administration. They went better thanks to our collective response to covid. But now the risk is that we go back to this risk. So we have, i think, to be very careful showing that we have a common purpose in addressing migration, because migration is the main trigger for this potential anti democratic tendency in all european countries. Im not referring only to the eu. This is a real threat that we have to address collectively, and i think that. Right now, you dont have the tools. No, we are working on, we are near to have an agreement, a new migration pact. And i think there is the awareness of the fact that we should shift from illegal to legal. This is already very important. To implement it will not be very easy, of course. And there, commissioner gentiloni, we have to leave it. I thank you very much indeed forjoining me on hardtalk. Thank you. Hello there. Some of you may be forgiven for thinking that summer has returned this weekend. Yes, for some of you, the weather is set to get a lot warmer. But before you get there, at the moment, cloud is thickening to our west and we have rain on the way as well for quite a few. Now were starting to see rain edge into northern ireland. Thats going to be turning steadier and heavier over the next few hours, but some patches of rain also for the southwest of scotland, the north west of both england and wales. With extensive cloud around, its a mild start to thursday morning, with temperatures into double figures widely. But across the northern half of scotland, with some clearer skies here were starting on a chilly note. Now, through thursday, this low pressure is the system thats bringing the rain. So its going to be quite windy. You can see some fairly tightly packed isobars there. The rain at its heaviest in the morning across northern ireland. That wetter weather then swings across scotland, northern england, wales and some damp weather too, for the midlands for a time, east anglia and southern parts of england probably staying dry until after dark, with some bright spells coming through the cloud. And for many areas of the uk, temperatures are running above average. Now eventually you might see a little bit of Rain Thursday evening trickling down across parts of Southern England and east anglia, but it wont really amount to very much. 0n into fridays forecast, weve got another zone of rain pushing into western scotland. The rain now clearing further southwards as this ridge of High Pressure starts to build in, and that should mean that the weather becomes increasingly dry. Therell be a bit more sunshine to go around and those temperatures are creeping up 22 in london, while the average for this time of the year in the capital is 16 degrees. Now, the process of that High Pressure really starting to flex its muscles continues into the weekend. Pushing the band of rain ever further northwards across scotland where it could be quite wet across Northern Areas of scotland on saturday. 0therwise, lots of sunshine around and those temperatures climbing. Well, we could see highs of 26, maybe a 27 this weekend in the very warmest areas. Certainly those temperatures are a long, long way above average. And if we look at temperatures in october now, we often see the highest temperatures in a month getting to the low 20s, but its quite rare to see temperatures up to 26 or 27. That would make it one of the hotter days that weve seen in october in this country. Live from london, this is bbc news. President biden has called for an end to the divisions that led to the speaker of the House Of Representatives being ousted. Uk Prime Minister rishi sunak pledges billions of pounds for transport projects after scrapping the Northern Section of hs2. And the mens Cricket World Cup starts today with the hosts india favourites to lift the title. Hello. Im sally bundock. A im sally bundock. Very warm welcome to the programme. A very warm welcome to the programme. We start in the us. President biden has called for an end to the divisions that triggered the fall of the speaker of the House Of Representatives. Kevin mccarthy was ousted by hardline republicans, who were unhappy hed brokered a deal with democrats to prevent a government shutdown. So far, two republican have confirmed they will run for the job. 0hio representative jimjordan on the left, and Steve Scalise of louisiana on the right, who is already the Majority Leader of the house. So until mr mccarthys replacement is elected, legislative activity in the house is essentially halted. 0ur North America correspondent gary 0donoghue reports from washington. The office of speaker of the house of the United States is hereby declared vacant. House of representatives
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