:00:00. > :00:00.ailing banks set to pull out of the UK due to the Brexit Road. -- Brexit
:00:00. > :00:14.vote. Now it is talking business. Welcome to Brussels. It is the
:00:15. > :00:20.so-called heart of Europe. The EU mission for ever closer union. A
:00:21. > :00:26.series of crises now stand to threaten that ambition. In this
:00:27. > :00:49.week's talking business, we examine the future of the European Union.
:00:50. > :00:56.Welcome to the European Parliament in Brussels. I am Tanya Beckett.
:00:57. > :01:01.After nearly six decades of expansion, the European project
:01:02. > :01:06.appears to have stalled. In June the UK voted to leave the European
:01:07. > :01:10.Union, the first member to do so. A wave of anti-EU sentiment is
:01:11. > :01:16.sweeping across the region from Paris to Athens. One of the people
:01:17. > :01:20.at the heart of the European Project for a generation was John cod tree
:01:21. > :01:26.she. He was an architect of the euro and as the European Central Bank
:01:27. > :01:30.president he steered economic and monetary policy across the euro zone
:01:31. > :01:35.and the rest of the EU and much of the world as a pivotal time in our
:01:36. > :01:43.history. He believes the answer to the current problems is greater
:01:44. > :01:54.integration. What we need is to apply all the pillars of governance
:01:55. > :01:57.that I have in mind. It remains very important for the European Union.
:01:58. > :02:03.The imbalance procedure remains important. We do not have a
:02:04. > :02:09.political federation, we need governance in the euro area and we
:02:10. > :02:20.need also strong governance in the domain of the structural reform and
:02:21. > :02:26.in the domain of all which can complete and achieve the single
:02:27. > :02:31.market. I was the first to call for a minister of finance for the euro
:02:32. > :02:37.area and a Ministry of Finance for the euro area to run the governance
:02:38. > :02:42.I have already mentioned, fiscal, economic and financial. On the other
:02:43. > :02:47.hand, we need more democratic accountability at the level of
:02:48. > :02:51.Europe and at the level of the euro area, which means you have a very
:02:52. > :02:56.important decision to take, where the country concerned, say Greece,
:02:57. > :03:00.is not in agreement with the recommendations which are made by
:03:01. > :03:06.the commission and the Council, then you ask the Parliament in a format
:03:07. > :03:12.which would be the format of the euro area to have the last word.
:03:13. > :03:15.Because in such cases it seems to me it is not only legitimate, but
:03:16. > :03:19.indispensable to ask the representative of the people to have
:03:20. > :03:25.the last say. The representative of all people of the euro area because
:03:26. > :03:32.the entirety of the euro area would be at stake. Within Europe, economic
:03:33. > :03:37.growth is quite prior. Relatively. Our economy is too inflexible and
:03:38. > :03:41.speaking of Europe as a whole, too inflexible, there are big
:03:42. > :03:47.differences from country to country. In a world which is changing so
:03:48. > :03:53.rapidly, you have to adapt very rapidly and we are less rapid, less
:03:54. > :03:58.mobile, less agile than the United States of America and this is one of
:03:59. > :04:04.the main problem is that we have to cope with. We summed up saying we
:04:05. > :04:09.need a lot of structural reforms. It is a big world, if I may. A lot of
:04:10. > :04:16.things inside. One of the most important concept is to be as agile
:04:17. > :04:22.as possible in a world which, because of India, China, Indonesia,
:04:23. > :04:27.Mexico is changing extraordinarily rapidly. Does the structure of the
:04:28. > :04:36.EU whole country is back from pursuing their own path and pursuing
:04:37. > :04:39.growth? I don't think they are. There are no elements which would
:04:40. > :04:45.hamper structural reforms. Most of the structural reforms are coming
:04:46. > :04:49.through national decisions, decisions of governments, decisions
:04:50. > :04:53.of Parliament. Decisions in many countries of social partners
:04:54. > :04:59.themselves. Of course, that makes things not that easy. If we had a
:05:00. > :05:05.single place where you would decide everything it would simplify the
:05:06. > :05:14.structural reform implementation. That is not the case. Structural
:05:15. > :05:18.reforms are national decisions. The UK has voted to leave the European
:05:19. > :05:24.Union and some debate now as to what it should take. What part do you
:05:25. > :05:30.think it should take? All decision-makers, in my
:05:31. > :05:35.understanding, in the UK, in Europe and in the rest of the world and
:05:36. > :05:40.many decisions are taken in the rest of the world, not only in Europe or
:05:41. > :05:46.the UK. Does decision-makers have to know where they go. Reducing or
:05:47. > :05:54.eliminating uncertainty as rapidly as possible is, of course, they must
:05:55. > :05:58.from that standpoint. It is better to say we activate article 50 at the
:05:59. > :06:03.end of March than to say we were activated at the end of the year
:06:04. > :06:10.were after the German election. The sooner the better. To reduce
:06:11. > :06:16.uncertainty. The fact that Britain has decided to leave the European
:06:17. > :06:19.Union is, of course, a loss for the remaining countries. Is there a
:06:20. > :06:27.message there that Brussels needs to be receiving? Don't forget that even
:06:28. > :06:34.without the UK, the 27 are the biggest trade partner of the world.
:06:35. > :06:42.Even without the UK the euro area has a number of citizens which is
:06:43. > :06:51.superior to the United States of America. We are big. Even without
:06:52. > :06:58.the UK. I am joined now by a panel of guests from business, politics
:06:59. > :07:05.and research. The director of the think tank, Brueghel. Catherine is a
:07:06. > :07:13.Socialist MEP here in Belgium and sits on the industry, energy and
:07:14. > :07:15.research committee. Ben Butters is policy director of an organisation
:07:16. > :07:21.representing 20 million businesses across Europe. Let's start with you.
:07:22. > :07:24.When we talk about greater integration of Europe, from an
:07:25. > :07:29.economic perspective, what are we talking about? A lot of very
:07:30. > :07:37.intelligent people start talking about changing the institutions,
:07:38. > :07:40.installing an EU finance minister. They are all very interesting ideas
:07:41. > :07:46.but I think we need to do something else. We are at the crosspoint.
:07:47. > :07:54.Everybody acknowledges that. Either we go backwards, we stopped
:07:55. > :07:58.integrating more and more, we start disintegrating a little bit, or we
:07:59. > :08:04.go forward. Standing still is not an option, let's be clear on that. It
:08:05. > :08:10.is the populists who want us to go backwards. That is not my point of
:08:11. > :08:13.view. We have to move forward. Kathleen is talking about moving
:08:14. > :08:18.forward or backwards but you're in situ talks about moving sideways. We
:08:19. > :08:24.have to have different speeds in the European Union. We have to have a
:08:25. > :08:27.stronger core and we have to have a circle outside that is economically
:08:28. > :08:30.quite integrated but less politically integrated and the
:08:31. > :08:39.United Kingdom, with its decision to leave could be the first member of
:08:40. > :08:44.this outer circle. An integrated economic area with less political
:08:45. > :08:48.integration and less political influence on the lawmaking and
:08:49. > :08:55.everything that constitute the basis of that integration. That seems a
:08:56. > :08:59.very practical solution, some want more integration, others don't,
:09:00. > :09:03.others want to sit on the sidelines. For business and doing trade within
:09:04. > :09:08.the EU, I am assuming that would not be your first choice? It is all a
:09:09. > :09:12.bit abstract to our members. They want it to work and much of it
:09:13. > :09:17.doesn't from the point of view of a small business. The single market is
:09:18. > :09:20.a concept for many of them but it doesn't deliver in real terms for
:09:21. > :09:25.many businesses. They cannot sell their services and their products as
:09:26. > :09:29.easily in the European Union as they can in other countries. That has to
:09:30. > :09:33.be made to work. That is going backwards. They need to make rules
:09:34. > :09:38.that are already in place work properly. Then we can think about
:09:39. > :09:44.the possibilities for the future. Is it realistic to have a one size fits
:09:45. > :09:48.all approach? It doesn't seem to be realistic. As we were discussing,
:09:49. > :09:52.there are many member states who are not playing ball, they are not
:09:53. > :09:56.delivering. Perhaps we need to reflect on whether an alternative
:09:57. > :10:02.model is possible. I think first of all we need a proper inventory of
:10:03. > :10:05.what is on the inventory for businesses and work out what is
:10:06. > :10:08.going wrong. Then the commission in its role as guardian of the treaty
:10:09. > :10:13.needs to put pressure on member states and make them do what they
:10:14. > :10:19.are supposed to be doing. We have to really focus on the rooms where they
:10:20. > :10:24.are important for everybody. It is absolutely central at the same rules
:10:25. > :10:31.on services or on consumer protection were on state aid are
:10:32. > :10:36.applied in the same way across the entire economic area. If you don't
:10:37. > :10:40.do that, you cause major distortions. Some businesses in
:10:41. > :10:45.France or in Belgium would benefit at the expense, or in Ireland, would
:10:46. > :10:50.benefit at the expense of small businesses elsewhere. We need the
:10:51. > :10:55.same application of rules so the level playing field is there as
:10:56. > :11:00.regards business. Do we really need to charity political objectives? I
:11:01. > :11:05.don't think so. We do need to do it in the Eurozone. The Eurozone needs
:11:06. > :11:10.to move ahead. There we are on this page. Thank you all for now. Later
:11:11. > :11:14.we will look at the way the EU balances its pursuit of price
:11:15. > :11:17.stability against it need to promote growth and prosperity. We will also
:11:18. > :11:24.look at the relationship with the rest of the world as it faces a
:11:25. > :11:28.backlash against the Transatlantic Trade and Investment Partnership.
:11:29. > :11:35.First, our comedy consultant looks at the EU dilemma from Ireland.
:11:36. > :11:39.Let's get real about challenges. There is no doubt the EU is facing
:11:40. > :11:44.many challenges as it considers its future. Are any of those challenges
:11:45. > :11:47.as challenging as getting around Dublin city centre at the moment
:11:48. > :11:54.while a new tram link is being forced through the narrow city
:11:55. > :11:59.streets? Forget about Brexit or Eurozone uncertainty, this is what I
:12:00. > :12:04.call real disruption. There was a time when if you mentioned the EU in
:12:05. > :12:08.Ireland it was synonymous with building badly needed new roads,
:12:09. > :12:11.motorways between our main cities. It was wonderful. We were grateful
:12:12. > :12:22.but now it is more complicated than that. It is more complicated than
:12:23. > :12:24.that. The fiscal adjustment is something Ireland has had to pursuit
:12:25. > :12:32.by virtue of being a member of the single currency and Eurozone.
:12:33. > :12:37.Ireland has had to obey rules. In order to remain a member of the
:12:38. > :12:39.single currency they have had to proceed fiscal policies which are
:12:40. > :12:43.considered necessary from an european perspective but in many
:12:44. > :12:47.ways they are economically irresponsible because it is
:12:48. > :12:51.undermining large parts of the Irish economy. The building behind me is a
:12:52. > :12:54.perfect emblem of that attitudinal shift. It is the brand new
:12:55. > :13:01.headquarters of the Irish Central bank. If you years ago it was a
:13:02. > :13:07.tragic husk because it was the former headquarters of Anglo Irish
:13:08. > :13:10.bank. The poster boy for Irish economic collapse. Is there a
:13:11. > :13:18.lingering resentment as a result of what happened all those years ago?
:13:19. > :13:21.It is very easy to nationalise our successes and European eyes are
:13:22. > :13:26.failures and I think that is something that is quite common
:13:27. > :13:31.across the entire EU. I think Ireland remains committed to the EU
:13:32. > :13:38.as we saw with our independent poll. Over 90% of those surveyed want
:13:39. > :13:43.Ireland to remain part of the European Union, notwithstanding the
:13:44. > :13:47.UK decision to vote to leave and with 87% of Irish people feeling we
:13:48. > :13:55.have benefited from our membership of the EU. I think Irish people have
:13:56. > :13:56.a very positive view towards the EU, notwithstanding the challenges and
:13:57. > :14:03.difficulties that relationship has got. Within a year or so, trams will
:14:04. > :14:08.be running smoothly across this approach and the construction chaos
:14:09. > :14:12.of the last while Will be a thing of distant memory. Maybe it is the same
:14:13. > :14:15.with the EU. Instead of worrying about whether Brexit will
:14:16. > :14:20.precipitate the catastrophic failure of the EU, maybe we should look at
:14:21. > :14:24.it as a stage in its natural evolution as the EU works out what
:14:25. > :14:31.shape it has, what function that has one all the bridges and roads have
:14:32. > :14:34.been built. Our take on the EU future and, remember, you can see
:14:35. > :14:48.more of his short films on our website. Our guests. But come to you
:14:49. > :14:53.on the issue of economic growth, or the lack of it. Is one of the issues
:14:54. > :14:59.which is undermining sentiment in the EU and the Eurozone at the
:15:00. > :15:04.moment. There is a global slowdown in trade. We have seen the numbers
:15:05. > :15:08.being revised downward. We have a global issue here. We have a
:15:09. > :15:14.specific Eurozone issue and the Eurozone has performed much worse
:15:15. > :15:18.than international comparisons suggest. It should have performed,
:15:19. > :15:23.if you compare it with the United States, the Eurozone has done much
:15:24. > :15:27.worse. We have been slow in resolving issues. The banking
:15:28. > :15:31.problems are festering in parts of the continent. We have been slow
:15:32. > :15:37.with monetary policy response. There is a mistake to raise the rates,
:15:38. > :15:44.that was a major mistake. We have been too much on the austerity site,
:15:45. > :15:49.especially in the 2011-13 period. There were mistakes but now most of
:15:50. > :15:52.those policy mistakes have been corrected and we should seek
:15:53. > :15:59.gradually a recovery. It is too slow and people feeling. There is not
:16:00. > :16:02.enough job creation. We need a more vigorous response from the stronger
:16:03. > :16:08.countries, including from Germany and we need a real bus on single
:16:09. > :16:15.market productivity and structural reforms are difficult. I think we
:16:16. > :16:20.need to be very focused, leave the austerity behind us, but not just
:16:21. > :16:24.start investing in anything. Invest in changing our economy to a
:16:25. > :16:29.sustainable economy. That goes hand in hand with a fairer taxation
:16:30. > :16:35.system. It is people who are paying for these austerity measures. Our
:16:36. > :16:40.businesses, multinationals, are not saying that you are paying their
:16:41. > :16:45.fair taxes. Combating tax avoidance, making sure everybody pays their
:16:46. > :16:48.part of the tax, that will rebalance the growing gap between people who
:16:49. > :16:53.work, you lose a lot of money. They see their wages go down and people
:16:54. > :17:00.enjoy getting the money from companies. Would you see corporate
:17:01. > :17:08.taxation as central to the wealth disparity issue? If you do get the
:17:09. > :17:16.big companies, the Apple case is the most obvious one. Corporate taxation
:17:17. > :17:19.has been appallingly low. That reinforces a sense of unfairness of
:17:20. > :17:25.the system. Effective tax rates throughout the union on capital have
:17:26. > :17:34.been rather weak. I think there is certainly a case in reducing tax
:17:35. > :17:39.rates for low income households. In the countries that have the physical
:17:40. > :17:47.space, Germany, they could give a little bit of space on low income
:17:48. > :17:50.tax and help boost the economy. They could trigger some investment,
:17:51. > :17:56.trigger some command. That is where I would act on the corporate
:17:57. > :18:02.taxation said. The discussion is stopped. We need some harmonisation
:18:03. > :18:07.or at least some consolidated tax bases and these proposals get stuck
:18:08. > :18:10.because they need unanimity. Let's ask the question about the EU
:18:11. > :18:17.relationship with the rest of the world. Drink Brexit, the point was
:18:18. > :18:21.made at the EU has failed to strike some key trade deals. It has perhaps
:18:22. > :18:26.become too introspective. Would you agree? No and I think it is
:18:27. > :18:31.premature to say they haven't succeeded. They are still
:18:32. > :18:35.negotiating with the US. It may seem like a long time, but looking at the
:18:36. > :18:38.track record for most free trade agreement discussions, that is
:18:39. > :18:47.pretty early in the process. This whole narrative about the deal being
:18:48. > :18:53.dead. TTIP being the trade partnership with the United States.
:18:54. > :18:57.It is premature to talk about it as that in the water. We need to
:18:58. > :19:02.perhaps recalibrated. It is still early in the process, but the EU
:19:03. > :19:06.needs to fundamentally be involved in these negotiations. Globalisation
:19:07. > :19:09.is here to stay and the EU needs to be one of the forerunners. They
:19:10. > :19:13.cannot afford it and if they let others define the parameters for
:19:14. > :19:19.international multilateral agreements problems will be greater
:19:20. > :19:22.for the European Union the long run. Globalisation has been sighted and
:19:23. > :19:26.we see this in the run-up to the presidential election in the US, for
:19:27. > :19:30.a recent for the disparity between rich and programming. The music that
:19:31. > :19:37.is the case or should we forge ahead in the EU with agreements such as
:19:38. > :19:46.TTIP? I don't think we need... I think TTIP is dead. A lot of
:19:47. > :19:53.politicians got to that conclusion. Not just people in this Parliament,
:19:54. > :19:59.but leading politicians in Germany. That doesn't mean any trade
:20:00. > :20:03.agreement is dead, that doesn't mean any trade agreement with the United
:20:04. > :20:08.States is impossible. I would be very much in favour if we could get
:20:09. > :20:12.the trade agreement with the states that said global standards in the
:20:13. > :20:17.world on environment, on social issues, but high standards. The
:20:18. > :20:23.problem with TTIP is that is lacking. They are doing it the other
:20:24. > :20:27.way, they are lowering standards on environmental issues and social
:20:28. > :20:32.issues. People are fed up with that, to be frank. We need another sort of
:20:33. > :20:37.trade. The trip we are dealing with today. Many people look at the
:20:38. > :20:41.position from a macro perspective and say it is good for economies.
:20:42. > :20:46.Economic figures would support that view but it is true there are
:20:47. > :20:50.individuals, sectors, communities who lose out. How can you afford
:20:51. > :20:55.that? You are pointing to the right problem. There are always winners
:20:56. > :21:00.and losers when you integrate trade and you have to think about the
:21:01. > :21:05.losers. The message that people are giving out the EU but also in the
:21:06. > :21:13.United States is you are thinking enough about us. To my mind, social
:21:14. > :21:17.standards are fundamental, environmental standards are
:21:18. > :21:25.fundamental. We need good trade agreement, not bad trade agreements.
:21:26. > :21:30.In the EU we have had a giant internal market, a giant trade
:21:31. > :21:33.agreement and we have trade agreements, we have said social
:21:34. > :21:36.standards. We have certain social standards toss-up there is a
:21:37. > :21:42.discussion on posted workers, working Time directive is and so on.
:21:43. > :21:45.These standards are there and the EU should leverage on that and it
:21:46. > :21:51.should actually use that as a selling point. Is there such a thing
:21:52. > :21:54.as a bad trade agreement for business? Can you distinguish
:21:55. > :22:00.between a good agreement and the bad one? There are good and bad
:22:01. > :22:03.agreements. I don't quite agree with the analogy between the single
:22:04. > :22:07.market and a trade agreement. There is a big difference between creating
:22:08. > :22:11.a market and striking a multilateral trade agreement. Of course, it has
:22:12. > :22:14.taken decades to build a single market. We are not Syncrude
:22:15. > :22:19.agreements should be agreed just for the fun of it. The need to be
:22:20. > :22:24.effective, they need to be robust and they need to factor in many
:22:25. > :22:28.elements. 90% of growth will come from outside the EU within the next
:22:29. > :22:31.ten or 15 years and Europe needs to be framing that process and being
:22:32. > :22:35.part of the benefits of that, but waiting for others to do it for
:22:36. > :22:45.them. Thank you very much to all of you. That is it from Brussels. Join
:22:46. > :22:49.us again next week. We will ask whether there is still more that
:22:50. > :23:00.unites Brix nations than divides them?
:23:01. > :23:04.We're looking at a colder start to the day, feeling certainly
:23:05. > :23:07.Some mist and fog patches around and a fine sunrise
:23:08. > :23:13.Thanks to weather watcher Joanna M for sending us that picture
:23:14. > :23:16.Just like yesterday, it's not going to be dry everywhere.