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The so-called US-European trade war has a negative impact on the economic growth of the European Union, said Valdis Dombrovskis, Vice-President of the European Commission, in a conversation with Latvian radio. European Commission President Jean Claude Junker will visit Washington next week to try to resolve the situation. "The important thing is to prevent the escalation of the conflict," Dombrovskis said. In badessing the budget of the European Union for the next seven years, Dombrovskis indicated that he was currently considering increasing the contributions of other Member States and reducing the cost of several programs, including agriculture and cohesion
At present, the so-called trade war between the EU and the United States is at the top of the agenda of the day. Next week, European Commission President Jean-Claude Junker will also travel to Washington to try to resolve this conflict. How does this situation affect the economic development of the European Union?
The impact is negative and we have seen it in the latest European economic forecasts. In the past, growth was forecast at 2.3%, now at 2.1%, and the main reason for this reduction was trade conflicts and the extent to which they affect confidence indicators.
With respect to trade negotiations, these discussions are ongoing. Commission President Junker will visit Washington next week to meet with US President Donald Tramp to discuss the issues
. the rules of the organization, abstaining unilateral actions, as was the case in the United States, by the introduction of tariffs for steel and aluminum but it is clear that it would be important that this type of escalation does not continue. "[19659003] Experts believe that these markets Military wars will also affect Latvia's economic growth by 1 point of GDP." Is this possible?
Currently, the Latvian economy provides more than three percent [19659007] Factors affecting the economic slowdown in Latvia are less related to international trade
They are linked to the internal evolution of Latvia In September, you will arrive in Ukraine, where you will attend the conference of Yalta (since the annexation of Crimea, it takes place in the capital of Kiev – IS) .One of the most important issues will be financial aid to Ukraine especially after the aggression Russian and the annexation of Crimea in 2014. How is Ukraine in this regard and is it ready to receive this support since it must fulfill many conditions before him?
L & # 39; Ukrainian economy has returned to growth, it there is a large budget deficit, increase in foreign exchange reserves At the same time, the economic situation in Ukraine remains rather complicated, the need to refinance the sovereign debt of Ukraine increasing in the coming years. This macroeconomic badistance program, which we are currently proposing, of a billion euros, will help to a certain extent
With regard to the conditions – as such – there will be a number of conditions, firstly, we have not made the last payment under the previous macrofinancial badistance program, because Ukraine has not implemented the conditions The conditions Chinese are being transferred to the new program and there are still other issues to be addressed: the fight against corruption, the efficiency of public administration, the social and economic sphere. several others
Negotiations with the Ukrainian government show that he is ready to apply them. help from the European Union
The negotiations on the seven-year budget of the European Union, which will take effect in 2021, have already begun. The European Union is a big farm, so the portfolio starts planning on time. However, as all this will be affected by the withdrawal of Britain from the bloc because it does not diminish, it is actually developing. Does this mean that countries will have to pay more?
Britain's withdrawal from the European Union poses problems to the European Union's budget, with Britain being one of the biggest net payers. The proposal of the European Commission for the next multiannual budget of 2021. It is also reflected in 2027.
We propose to increase the EU budget in relation to the total national income of the EU. EU, ie 1.11% instead of the current 1.03% At the same time, we are looking at a number of programs, unfortunately in the sense of reduction, this applies both to the common agricultural policy and cohesion policy, as a number of new priorities need to be covered. , migration and other issues
This budget proposal was therefore subjected to rather difficult circumstances, trying to balance all these needs.
How will this happen with Latvia? Currently, we are more numerous than the beneficiaries, but how could this affect us?
Latvia will continue to be one of the largest net beneficiaries. With regard to agricultural policy, the EU budget will decrease, as I have already mentioned, but Latvia will continue to increase direct payments while direct payments between the different countries will continue to decrease
average
As regards cohesion policy, Latvia has a reduction here. If we talk in real prices, then 13 percent, if the real – then at the current level. But, as I said, cohesion policy is on the whole down.
The question is topical and does not directly affect your responsibilities, but currently, not only in Latvia, but also elsewhere in Europe, there is a lot of drought. , and it has a significant impact on the economy of culture and, consequently, of countries. Will farmers have the opportunity to benefit from the help of the European Commission?
There are some possibilities for help in this situation and in previous years there were problematic situations, such as the crisis of the dairy industry, when Latvia and other Baltic countries however it is time to contact and support the other EU Member States, and this is only partial compensation, as well as the state budget, but this raises a Once again the issue of insurance farmers.
The insurance system should evolve, as in other sectors where certain risks are insured and are not necessarily covered to the detriment of the budget.
Again, Bulgaria has expressed its wish to join the euro area. This message is rather unusual because there are currently not many countries that would turn in this direction. Bulgaria has the possibility to join the euro zone and the first steps are taken – Bulgaria has applied for membership of the banking union and will formulate its intention to join the exchange rate mechanism II, legally setting the exchange rate of the national currency against the euro
As a result, Bulgaria arrives in the waiting room of the euro area, which after two years of fulfilling the criteria of Maastricht, can then join the euro area. It must be said that Bulgaria already fulfills all the Maastricht criteria.
But for other countries – now also receive signals and interests from Croatia, where he is likely to start working in this direction in the near future.
In August, Greece will enter into a long-term loan program. What is the likelihood that Greece will stand up and that the long-lasting European economic and financial crisis is over?
Indeed, in August, the Greek program will come to an end and the government has implemented the fiscal measures taken under its program. With regard to budgetary targets, Greece has even surmounted them in the last three years and the Greek budget as a whole is even in surplus. It constitutes a good basis for the return of Greece to the international financial markets and no longer needs such an international loan program.
The Greek economy has returned to growth, and it can be said that the Greek crisis is being overcome. It is very important to avoid political mistakes in this situation and not to return to silly fiscal and macroeconomic policies, as the Greek return markets will require specific measures from the Greek government and international lenders, because the public debt is 180%. Gross Domestic Product
This is a breakthrough in the EU's largest public debt level. In Italy and Portugal, this level of indebtedness is below 130%. Therefore, the possibility of a maneuver is very limited. Therefore, it is very important that Greece continue to stick to a frugal fiscal and macroeconomic policy, as it will only succeed in bringing markets back to markets.
You have been vice-president of the European Commission for four years now. Which of the EU processes are you most important and who have you tried to focus more on?
Without a doubt, the Greek International Loan Program. Three years ago, on behalf of the European Commission, I signed a Memorandum of Understanding with Greece. It is positive that this program is successfully concluded.
I would also like to highlight the macrofinancial badistance program for Ukraine, both the previous program that has already been completed and the next one that we have proposed. These are also questions on the deepening of the economic and monetary union – the reforms of the euro area, as well as issues related to the banking union and capital markets.
How does the European Union currently look at the global financial and political scene?
The European Union currently seems pretty good. Economic growth substantially stable. The eurozone crisis has been successfully overcome for a long time. At the moment, it is important to strengthen the euro area as a whole, as well as some members of the euro area, to better prepare them for future potential economic shocks. The euro area and the EU as a whole are already in the sixth year of growth.
We know that the economy is developing cyclically, we can not rely on the fact that growth will continue at any time, so we must prepare for the next turmoil to better overcome it
. crisis management level mechanisms, where we presented a new offer for the European Investment Stabilization Facility, helping countries facing economic shocks to maintain a level of public investment that helps countries to recover more rapid crises
