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00:00Now, according to a landmark report, European Union countries are buying too much of their
00:06defence equipment from outside of the EU. Indeed, almost two-thirds of it comes from
00:10the United States. The report also outlines a failing to invest enough in joint military
00:17projects and warns of a possible dependence on China. Well, those findings were published
00:23today in that report by the former European Central Bank chief, Mario Draghi. And here
00:29to discuss its findings, Armen Georgian is with me now. And Armen, look, before we get
00:33into what Draghi is actually saying in this report, let's talk about the political context
00:39because that matters here too. Well, we're just at the start of a new five-year mandate
00:42for the European Union. We had EU elections in June. So as a result of that election,
00:47the European Parliament has already been renewed. The European Commission is being formed as
00:52we speak. So this is one of the things that is intended to kind of give the new EU mandate
00:57a direction for these next five years. But we've already had things that are meant to
01:03do that same thing, Nadia. So we had in recent months Enrico Letta, former Italian prime
01:08minister, he produced a report on completing the EU single market. He talks about similar
01:13things to what Mario Draghi was talking about in this press conference today. We've also
01:17had the unveiling of the EU strategic agenda, which is a document that EU leaders themselves
01:22come up with, which happened at the end of July, if I remember rightly. And that also
01:27talks about very similar things, you know, how the EU has to become more geopolitically
01:31savvy in competing with China and the United States, how it has to make more of its innovation
01:37capacities, how it has to pursue its technological prowess vis-a-vis these other big powers.
01:43So all of these reports or publications in a way, they've sort of gone in a broadly similar
01:50direction, I think. And what about the tangible proposals then that Draghi is making now?
01:56Do you think that they'll be implemented? Well, you mentioned the emphasis on investment.
02:01I think that's probably one of the things that he wanted to emphasise most, particularly
02:07to finish the green transition, the technological transitions that we need. Let's take a listen
02:14to Mario Draghi talking about that question of investing in European key industries.
02:19The needs that all this entails are massive. The investment share will have to rise by
02:29around five percentage points of GDP to levels last seen in the 60s and the 70s. I always
02:37like to make a comparison. The additional investment provided by the Marshall Plan between
02:4748 and 51 amounted to one, two percent of GDP. So he's talking about that massive investment
02:56programme, the Marshall Plan decades ago. But the question is, is there political appetite
03:01in the EU now for that kind of investment programme? We've already had reactions, Nadia,
03:05from the German finance ministry and from the Dutch government, both saying to boil
03:11it down, more joint borrowing is not the answer. And we've always had in the EU this sort of
03:16divide between the more frugally minded countries and those that are willing to spend more money.
03:23But I think the big question really is, where does the money come from, this massive investment?
03:28Even if there was a political appetite for it, which I think is questionable, but even
03:32if there were, where is the money going to come from that Mario Draghi is talking about,
03:36this massive investment? If it's going to come from the private sector, the private
03:39sector has to feel that there's a profit motive. Otherwise, there's no incentive for the private
03:44sector to spend the money, right, to make the investment. If it's going to come from
03:49the private sector, how do you do that when the EU is also telling EU member states they
03:55have to balance their budgets and be careful with spending? Remember, France right now,
04:00along with Belgium and several other EU countries, they're under a special excessive deficit
04:06surveillance procedure by the European Union. So how can the one hand is saying, spend more
04:11money to compete with China and so on and be more technologically advanced, etc. The
04:16other hand is saying, yeah, but you've got a big budget deficit, watch out, don't spend
04:21too much money. So how does all that actually work out?
04:25Huge questions then. Thanks very much, Armen Georgian, for us there.