Europe Today: Is the EU about to take on a tougher economic stance towards China?

[00:00:14]Good morning. It is Friday the 29th of May. I'm Maeve McMahon and this is Europe today. [music] Your morning dose of European news and analysis live here on Euronews. Coming up, Romania is on high alert after a Russian drone crashed into an apartment building in the major city of Galati close to the border with Ukraine. A mother and her child were injured and 70 residents evacuated in the most serious drone incident Romania has seen since the war [music] began. And the US and Iran are reportedly edging edging closer to a deal on a 60-day memorandum of understanding to extend the ceasefire and begin talks on Iran's nuclear program. But the deal >> [music] >> still needs approval from President Donald Trump and has not quite been confirmed by Tehran. The developments come as Israel's Benjamin Netanyahu orders the IDF to seize 70% of the Gaza Strip. Plus, the head of the World Health Organization has arrived in the DRC [music] pledging to quote do everything in his power to help contain a deadly Ebola outbreak. He's told locals they're not alone and they'll be supported in overcoming >> [music] >> the outbreak. But with just days to go before the much anticipated World Cup, the US, Mexico and Canada have announced new measures for travelers arriving from affected regions in Africa. [music] Meanwhile, in a major blow to the German Chancellor Friedrich Merz, speculation is growing that North Rhine Westphalia's Prime Minister Hendrik Wüst could emerge as a potential replacement. [music] And no formal challenge has been launched, but with coalition tensions rising and Friedrich Merz's approval ratings struggling, the rumors are an unwelcome distraction for the leader of the EU's [music] biggest economy. But first, an unusual Friday for EU Commissioners. Commission chief Ursula von der Leyen is pulling her team together this morning for urgent talks [music] on whether the European Union should take a tougher economic stance towards Beijing. The closed-door discussion is seen as a very first step [music] towards potentially stricter trade measures. For more on these important meetings, I'm joined here in the studio by our very own Mairéad McGuinness. Good morning, Mairéad, and just tell us about these discussions and why they're happening now.

[00:02:26]>> Well, this is happening today, Maeve, because there's now this deepening sense of urgency about what the EU needs to do to address a glut of cheap, subsidized Chinese exports that are flooding the EU markets. We're hearing talk even of a China shock 2.0. So, a situation similar to that of the US 25 years ago in the Rust Belt, deindustrialization and mass job losses. And if we look at the data, it's clear to see because the difference between what the EU exports to China and what it imports from China, so that's the trade deficit, stood at a massive 360 billion euros last year. That's been ballooning over the past decade and signs in the first quarter of this year that it's actually getting worse. So, von der Leyen is pulling together her top team together. This is a conversation, an initial discussion about how the EU could sharpen its stance, but it is very political and geopolitical, Maeve. I spoke to a diplomat this week who said that China has predatory tactics, that it's willing to weaponize dependencies for geopolitical gain. And with Germany particularly vulnerable, we know Germany lost 120,000 manufacturing jobs last year alone.

[00:03:36]>> So, this meeting, of course, of very high importance. How will Brussels respond? Will they be able to get a united front?

[00:03:41]>> Well, it's difficult because we know EU countries are split on this issue, but there are a few ideas on the table. They could discuss tariffs, quotas, potentially anti-subsidy duties. But there's a new idea going around as well, which is this idea of forcing EU companies to to diversify their suppliers, making sure they procure the materials from at least two companies from more than one country.

[00:04:02]The EU's industry boss, says Stefan Sejourne, who's very close to President Macron in France, of course, has championed this. Let's take a listen to what he had to say last week.

[00:04:14]>> You cannot reasonably expect today to source 100% of your raw materials for a given product from a single country, including for the sake of your own business economic security.

[00:04:25]>> Now, it's important to note, as I said, EU countries are split. France is pushing for a harsher stance. Germany is much more cautious, wants to avoid a full-blown trade war with Beijing. And finally, May, if Beijing is also taking notice of this, saying yesterday that the EU is being selective in its interpretation of data, threatening retaliation. So, in this discussion, which starts at 9:00 a.m. this morning, the commissioners, I think, will have to tread a very fine line, and expect this conversation to continue when EU leaders gather here in mid-June.

[00:04:53]>> Okay, Margaret. Thank you so much for that update there. And for more coming up, we'll be joined by Michael Baranowski. That's the Polish under secretary of state for trade. Michael Baranowski is also a political scientist and the author of numerous publications on transatlantic relations, European policies, and European security defense.

[00:05:12]He'll also be reacting to an incident that took place this morning in Romania, which the country is, of course, on high alert. A drone incident that saw a residential building struck and has put many neighboring countries, of course, in a very difficult position. So, Minister, we're thrilled to have you with us in the studio. Thank you so much. And of course, I want to talk to you about trade. But first, I need a reaction to this incident that we've seen this morning in Romania.

[00:05:37]Residential buildings been impacted here. Many people evacuated. The whole country now on high alert.

[00:05:42]>> It's extremely extremely serious. It's really hard to overstate how much of an escalation this is. This is another drone attack. Let's remember that now people have been injured in Romania.

[00:06:00]In September about 20 drones have crossed into Polish space. These are not mistakes. These are provocations. And only a few weeks ago Russia redirected with their electronic means Ukrainian drone that hit fuel depot. So we are now no longer in peace. Let's see what how EU reacts. Let's see how NATO reacts.

[00:06:26]>> And how will they react? What's needed?

[00:06:28]>> It's very clear actually. We have very clear situation who is the aggressor here.

[00:06:37]It's of course up to Romanian government to decide whether or not activate Article 4 of NATO that allows for us to have a consultation. EU has already spoken through the lips of President von der Leyen.

[00:06:55]There is a full solidarity with Romania and no one has any questions who is at fault here and that steps need to be take taken to push back against those drone invasions, drones attacks coming from Russia. Unacceptable.

[00:07:09]>> And meanwhile of course as you heard there from Marit Jones, our correspondent, there's crucial talks taking place today about China. And is it time do you think for the EU to get tough on Beijing?

[00:07:19]>> It is and we are getting tougher. So I just concluded meeting of the competitiveness council yesterday with my fellow economy and trade ministers. There is a I heard in your interview that there are perhaps some splits. What I can confirm is that we are absolutely unified in terms of the impact that Chinese overproduction, the unfair trade practices have over Europe. So, we are building a tools, a set of tools including the Industrial Accelerator Act, including giving a boost to our industry to push back against those overproduction.

[00:07:59]>> these tools have teeth? And do you blame China for wiping out our European industry?

[00:08:05]>> China is using non-market practices. We are not faced with a level playing field. We are seeing subsidies, we are seeing overcapacities, and we are seeing trade instruments on the part of China. So, we have we are getting tougher. Frankly, I think we need to be clearer and move faster.

[00:08:30]And that's what I expect from today's meeting of the European of the Commission.

[00:08:34]>> And just briefly, a final question on EU-UK relations. And we know, of course, Donald Tusk was in was in London this week. Would you like to see the United Kingdom rejoin the EU one day?

[00:08:43]>> I personally would, absolutely. I think UK is getting closer.

[00:08:48]The UK British people have seen that they made a mistake, and since then they have been moving closer. The treaty that Poland just signed with the UK, it's more of a on the defense side, is another step. I think UK is getting closer, as are many other partners like Canada and others. Europe is a good place to be. We just need to push back against the Russian and Chinese influences.

[00:09:12]>> Okay. Minister Banaszak, thank you so much for joining us here on Europe today. And now we can move on to Portugal, where authorities have made a number of arrests in alleged corruption case linked to the Portuguese Socialist Party. It comes just hours after the Socialist Party in Spain saw their headquarters examined over a number of corruption allegations. For more, we can now head over to Lisbon and bring in Euronews correspondent Ricardo Figueira.

[00:09:36]Good morning. Just tell us, what is the latest and how's the country responding?

[00:09:42]>> Good morning, Maive. Well, the latest news is that the man in the center of this political scandal uh called Duarte Moral, he's going to be heard by the judge today.

[00:09:53]Uh Duarte Moral and his wife, Ruth Remão. Well, who is this person? He is a direct aid to uh José Luis Carneiro, to the secretary general of the Socialist Party. He used to be a direct aid to António Costa, the now president of the European Council, too. And um well, he runs a political campaign company.

[00:10:19]So, the news is that him, his wife, and several other uh party members, about a dozen party members, have made about 2 million euros in direct contracts from uh city halls and city boroughs run by the Socialists. The other man at the center of the of of this case is Miguel Coelho. He was the mayor of one of the Lisbon boroughs.

[00:10:45]Um and he's now the leader of the of the Socialists in the Lisbon Municipal Assembly. So, uh these are the people at the center of the scandal. The secretary general, uh José Luis Carneiro, he uh has made a press conference in this building right behind me yesterday. He said the searches conducted by the police were not against the party, but against these specific individual.

[00:11:15]However, uh this is not a small pawn.

[00:11:18]This is a direct aid to the secretary general, and he also used to um uh to be an aid of of António Costa.

[00:11:28]>> So, quite a lot of information for us to digest there. Just as we're processing what's going on in Spain, uh Ricardo Figueiredo, thank you so much for that live broadcast there from Lisbon.

[00:11:37]Now, Hungary's new Prime Minister, Peter Magyar, is in Brussels today to meet EU Commission boss Ursula von der Leyen.

[00:11:44]He's, of course, trying to unblock the frozen EU funds for his country. For more on this very important story, we're here joined here in the studio by our Hungary reporter, that's Sandor György.

[00:11:54]So, big day for Peter Magyar. We've been talking about this for weeks. The stakes couldn't be higher. What are your expectations?

[00:12:01]>> Good morning, Maeve. Well, indeed, Peter Magyar was already here yesterday. He met NATO Secretary General Mark Rutte and Belgian Prime Minister Bart De Wever.

[00:12:10]And his team was having last-minute negotiations to save as much EU money for Hungary as possible. You know that there was a lot of conflicts between the previous government, the previous government of Viktor Orbán, and the European Commission froze 17 billion of EU cash because of corruption, because of rule of law issues. And now, Hungary and the EU decided that they will open a new chapter, they will open a new page for their relations. And Magyar is trying to save EU cash. Now, the problem is that by the end of August, the deadline for the recovery funds expires, and Hungary could lose up to 10 billion euros, which is huge. So, the work is underway. We don't know what will be the result. Peter Magyar spoke on his social media yesterday saying that they are close to an agreement. And he also said, very interestingly, that lifting his veto on Ukraine is not a condition to get this money. Let's take a look what he said.

[00:13:15]>> The issue of Ukraine, war, or gender have never been raised. Please, what we're discussing, and as far as amendments to the law are concerned, is the fight against corruption. There are still open cases, but basically we have struck our agreement on many important points.

[00:13:33]>> And of course, Sander, a big issue for us to underline is Ukraine's potential EU membership. How will that feature today in the talks?

[00:13:40]>> Well, Peter Magyar said that officially these issues are not linked, but I don't see any scenarios that, you know, Hungary gets a huge EU payout and they are not lifting the veto at June when, you know, all the countries should agree that Ukraine opens the first chapter. So, there might be a decision by Hungary by then. Peter Magyar said explicitly in the past that, you know, he's willing to lift his veto when, you know, Ukraine settles the right of the Hungarian minorities. By the way, it was not his veto, it was Orbán's veto. So, for the moment technical talks are ongoing with Ukraine and Hungary. If they find a solution for the minority issues, there will be no issue for Hungary and Ukraine could open the first negotiating chapter in June.

[00:14:29]>> Okay, and of course that meeting today, Sander, taking place at 1:00 and I'm sure you'll be filing a story for us then so we can all read it on euronews.com. Thanks for that update.

[00:14:37]But now we can move on because the European Commission has slapped a 200 million euro fine on the Chinese online shop Temu.

[00:14:44]Known for selling cheap clothes, gadgets, and children's toys, Brussels says they failed to identify the high risks of illegal products being offered on the EU market. The German MEP, Anna Cavazzini, has been working on this on behalf of the European Parliament and joins us live for more. Good morning.

[00:15:01]So, thank you so much for being with us.

[00:15:03]Just tell us what happens if Temu fails to comply after this fine. Could the EU go further?

[00:15:09]>> Yes, um let me first say good morning and um I'm happy and welcoming that the European Commission is finally following through on the basis of the Digital Services Act because we have a problem.

[00:15:19]We have a problem in the European Union with so many unsafe products, and products that are not complying to our standards, which are also of course not only harming the consumers, but also creating a problem for companies that are complying. So, that the Commission follows through is very, very important.

[00:15:33]And to your question, um it is of course important that the company complies. So, I think the ultimate goal is that they comply, um but of course if they are not um showing a path forward, then the Commission can go further.

[00:15:45]>> And what are the risks to European consumers? Many that they don't even realize are right there.

[00:15:52]>> Yeah, for example, the Commission um justified their um decision on tests, buying tests for example, and showing that a lot of products, like chargers, but especially also toys for children, are not safe, are not complying with the standards, um are also environmentally harmful. There are chemicals inside that are forbidden in the European Union. So, I think if, you know, consumers um trust our high standards that we are proud of in the European Union, they should also trust when buying it online.

[00:16:22]>> And do you expect now that Temu will play ball and change how they do business?

[00:16:28]>> Um I led the first European Parliament delegation to China recently. We also met with Temu when we were there, and I got the impression that they are in general willing to comply. They they showed a lot of eagerness to comply, and I think also of course they understand it's also benefiting them in China if they have higher standards. Um there's also a growing consumer market in China, of course. Um but it's also not so easy to just change the business model, because of course their business model is based on cheap products. Um they can't control all the individual traders uh online. It's very difficult to go to control them. So, they have to really step up, and they cannot only have nice words, but they have to show actions.

[00:17:03]>> And meanwhile, of course, we have the big talks taking place in the Commission today when it comes to China. How should the EU deal with China?

[00:17:11]>> I think there is a structural problem with unfair competition with products coming from China. It's not only the classical e-commerce products that we're just talking about of but of course also industrial products and I think the European Union needs to make sure that there is again a level playing field that there is again a market-based economy which is at the moment not possible and we are losing so many industrial jobs you mentioned it before especially also in Germany so I think the European Union needs to toughen up and that contains the industrial accelerator act that contains made in Europe provisions but we also need to find a short-term solution for the surge of imports so I think the commission needs to put some more safeguards in place.

[00:17:54]>> Okay, a long busy day here in Brussels and for all those gathering on those talks. Anna Cavazzini German MEP thank you so much for being our guest this morning on Europe today.

[00:18:03]Thank you and thank you so much for watching as you can see it is a busy news day so for many more insights on any of the stories that we're covering for you you can of course always visit euronews.com or visit any of our social media sites and if you've any points or comments or questions or queries for us here you can always write to us [email protected] that is our mailing list [music] but for now thanks you so much again for tuning in to us here on Europe today. Take care and stay with us here on euronews for more news [music] and programs.

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