November 21, 2024 • 47 mins
Europe's aim is to become a global leader in adopting next generation clean technologies. In the first phase, beginning in 2020, the focus was on meeting ambitious emission reductions goals. Four years later, the European Commission is making an important adjustment to its strategy. The new goal is to have Europe be a global leader in adopting and producing those technologies. They call it the Clean Industrial Deal. Some background: Up until very recently, Europe's climate goals were met by sourcing many advanced clean energy technologies from China, including solar panels and electric vehicles. European leaders quickly understood that it would be far better for companies within Europe to produce the clean technologies than to import them from China or other countries. Joining us today to walk us through the new era is Barbara Glowacka of the EU Commission. She advises leaders at the highest levels of power in the European Commission on energy and law.
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Speaker 1 (00:02):
Where top executives and crazy entrepreneurs gathered to talk about
the future of electric vehicles. This is the Driving with
Done podcasts.
Speaker 2 (00:12):
Hello and welcome to the Driving with Done podcast. I'm
Michael Dunn, your host. Now, Europe and it's auto industry,
let's be honest, are under more pressure right now than
at any time since World War Two on the Eastern Front,
war in Ukraine. At home, high energy prices and expensive
(00:32):
rigid unions make it tough for European companies to compete globally.
In recent weeks, Volkswagen, Yeah, that's right, Mighty Volkswagen has
announced plant closures and is laying off thousands of people.
What's clear is that the old ways do not work anymore.
Many in Europe are beginning to understand the need to
(00:54):
adjust to new realities, but even efforts on that front
are hard. Just this week, Europe's brightest hope in batteries,
North Vote, filed for bankruptcy. The company reported cash enough
to run operations for just seven more days. Yikes, that's
a setback. What's the problem, Well, Europe arguably was the
(01:15):
world leader in setting very ambitious climate goals, but they
did not have the firepower at home to supply those
clean technologies for their own home market. Instead, the home
of four hundred and forty million people has come to
rely on other countries, mostly China, for clean technologies like
solar panels, electric cars and batteries. Strong market, not so
(01:40):
strong industry. Things got to change so to get traction,
the European Commission has just launched a massive new initiative
called the Clean Industrial Deal. Our guest today, Barbara Glawaka,
is a Cabinet member of the Commission for Energy at
the European Commission. Born in Poland, educated at Harvard and Cambridge.
(02:01):
Barbara knows energy, she knows Europe, she knows business, and
she knows the law. Today she will walk us through
the vision of the Clean Industrial Deal how Europe aims
to punch through to a much more optimistic future. Barbara,
(02:29):
good morning, and welcome to the Driving with Done podcast.
Speaker 3 (02:33):
And oh Michael, I'll good to be here.
Speaker 2 (02:35):
Barbara, I am so happy to have you with us today.
This is a very important topic, timely and there's no
better person to talk to it than you. Born in Poland,
educated at Harvard and Cambridge, working at the highest levels
of power within the European Commission and today joining us
from this side of the Pacific. What town is it?
Speaker 3 (02:56):
Davis? And uh, just close to Sacramento, but exactly.
Speaker 2 (03:00):
Davis, California University, California at Davis. What brought you there?
Speaker 1 (03:06):
Very good question, as you said, I'm European. I work
for the European Commission, so this is an executive arm
of the European Union. I've been working in the European
Commission for the past thirteen years, mostly doing energy regulation,
also some energy enforcement and the antitrust sector. But for
(03:30):
the past three years I've been advisor to the Commissioner
for Energy, which is a quite pivotal moment in Europe
as we were handling the energy crisis. War in Ukraine,
our energy played an important role and still playing as
it's being attacked and used as a weapon.
Speaker 3 (03:49):
In the war.
Speaker 1 (03:50):
Yes, and so I was sat the Commissioner's office, advising
her on renewables, deployment, on addressing the international challenges, on
working with our closest neighbors and international allies. And I
done that job until August this year, and now I'm
(04:14):
in its where I'm doing a research for the European
Commission on how you and US can cooperate together on
the diversification of supply Chaine for clean energy.
Speaker 2 (04:26):
Technology, diversification of supply Chaine for clean energy, which is
crucial to our future. Absolutely, you were there, take us back,
you're advising on energy. Russia invade Ukraine? What was that
morning like?
Speaker 1 (04:43):
It was very difficult period because the news and the
fact that something is happening, of course started earlier, and
we noticed it already a few months before. So Russia
invades Ukraine and in February. Already in October the year before,
we started noticing the rise of energy prices. So what
(05:06):
we saw is that Russia was booking capacity and gas
storages around Europe and not using it. They stopped sending
us to spot markets, and they started even not to
comply with long term some long term energy contracts, and
so we noticed that they're behaving in a very weird
way because obviously all those actions cost almost a panic
(05:31):
on the market, as prices starting to go through the roof.
Speaker 2 (05:34):
Barbara, just to jump in here, this would have been
you guys were seeing this saying there's a pretty good
indicator that they have plans to do something.
Speaker 1 (05:42):
Absolutely, because you know, that that if they're trying to
influence the market, if they're trying to cause the prices
to go up, they purposely withhold the supplies. And we
knew they were flaring GUS, so you know, there was
no problem with supplies. They were just basically preferring to
into the air, regardless of the climate damage, rather than
(06:03):
even you know, comply with the contracts or sell it
on the spot market and booking capacity in storages knowing
that they're not going to use it. Then you know
that somebody is trying to manipulate the market, so you
start seeing the what's coming, And of course there were
the news was also public knowledge of the military accommulating
(06:30):
on the Ukrainian border.
Speaker 3 (06:32):
And and US was also quite vocal about if.
Speaker 1 (06:35):
It's military intelligence, so we knew it's coming. There was
always hope that things could be averted, but obviously it
did not happen. So that morning we woke up and
immediately we kind of knew what we needed to do,
and we started working on intensifying the support on gas
(06:57):
markets in Europe because we knew that if I shall
manipulated the market, that they will continue to do so
to try to pressure us into certain policy actions, and
we knew that we cannot allow that to happen. So
we needed to have, you know, accelerate all our strategies
on rectifying the energy markets and ensuring that we have
(07:19):
good tools to counter what Russia.
Speaker 2 (07:21):
I was trying to do you right now, to put
this into perspective, if we could on a scale of
one to ten, how important was supply of energy gas
from Russia at that moment?
Speaker 1 (07:33):
Was it stood into half of our supplies almost give
or tech. Yeah, wow, so forty five percent to be exact,
very significant supplies you can imagine. So in absolute figures,
was one hundred and fifty bcm of gas that all
of a sudden, you know it's at risk. So it
(07:54):
was a big wake up call on Russia not being
a reliable partner and as allowing them to have such
a strong penetration in the markets despite you know, having
some worn warning signs that it might not be a
good idea.
Speaker 2 (08:14):
So all right, so it's on. I'm going to do
a hard pivot. Let's go back to the beginning. Barbara,
your own story. Where were you born and where were
you educated?
Speaker 1 (08:25):
So I was born in Poland. I'm from the western
part of Poland. But I was born still where Poland
was part of the so called communist regime, so planned
economy and authoritarian country, and so yes, not obvious that
(08:48):
I would end up where I am now. And so
I was educated in Poland, and pretty much like most
of our other colleagues that I was with, I was
in Poland most of my time. You know, as soon
as market opened, we had opportunities to go, but there
was not enough money to go, so most of the
(09:10):
education and our holidays were always in Poland. But as
market was opening out, there was tremendous opportunities. I see
a lot of similarities between West East sorry Eastern Europe
and China and the nineties, you know, opening of the market,
but China, of course bigger scale, and there's nothing and
(09:30):
all of a sudden there are investments coming in, people
starting to get richer, and there's.
Speaker 3 (09:36):
Nothing on the market.
Speaker 1 (09:37):
So any type of investment you did in the nineties
in Eastern Europe, same as in China, was ahead because
it was easy to start. And so in Poland that
was a great period in the nineties, but still most
of the society was quite poor. And then there was
this great moment for Poland when we decided to go
(09:58):
westwards and we joined or we start to have the
negotiations to join the EU.
Speaker 2 (10:04):
And what was that approximately when did Poland decide to
join the EU?
Speaker 1 (10:09):
So the well, the decision to go westward was pretty
obvious for us after the fall of communism, because the
whole point was, you know, you wanted to go into democracy.
Of course, it's not easy because you have people who
were associated with Communist party, you had, you needed to
(10:29):
go through this democratic transition. But going towards the EU
was the goal that we wanted to have, and of
course NATO because having Russia as your neighbor was always
fred And so for Polish people, you know, going towards
the EU and going towards NATO meant economic.
Speaker 3 (10:52):
But also the vans security.
Speaker 1 (10:55):
So we joined the European Union in two thousand and
for And what is crucial about that is that all
of a sudden you give potential investors a security about
your rules, about your laws, about the regulation, stability of
your government. So all of a sudden it becomes quite
(11:18):
secure to do the investment in your country. And from
that on, Poe and Prospert quite significantly, and so.
Speaker 2 (11:25):
That's one of the reasons why you studied law.
Speaker 3 (11:28):
Yes.
Speaker 1 (11:29):
So actually, for me, the great thing about law is
the rule of law and how important it is in
your daily lives.
Speaker 3 (11:39):
Also the impact it has.
Speaker 1 (11:41):
On economy, on how people can security, do investment and
have faith that they were.
Speaker 2 (11:48):
All trust goes way up exactly.
Speaker 3 (11:51):
So for me that was important.
Speaker 1 (11:52):
So I wanted to do law, but I was always
very interested in energy as well, and I was always
interested into in an me.
Speaker 3 (12:00):
So I chose law, but I always had side interests.
Speaker 1 (12:05):
And I studied law and a poet and the Polish University.
But I also had a strong interest in Europe, and
I wanted to understand Europe better, and therefore I started
shifting towards Europeano that that means I had to have
experience and some exposures in Brussels, because that's where the
(12:29):
seed of the European Commission is.
Speaker 2 (12:32):
I think you're being modest. You skipped over a couple
of important chapters there. I think one is called Harvard,
the other one called Cambridge.
Speaker 1 (12:39):
That's true, Well, I'm getting there. So when when I
when I came first time to Brussels, I noticed that
you know, whereas my ambitions have been what.
Speaker 3 (12:49):
Ever published people were doing.
Speaker 1 (12:51):
I noticed it, you know, there was so much more
out there, and so when I came first to Brussels,
I realized that I could potentially try to stay in
the US as well. But I didn't have any money,
and that was for me a question. Okay, you know,
it sounds great, but way too expensive. And what I
(13:11):
was encouraged to do is just you know, I was
to apply and then once you get in, you will know,
you will figure it out. I thought it was interesting idea,
but okay, I have no nothing to lose. I knew
I couldn't count on the family support, but I thought,
at least I'll try, and if I get in and
I cannot use it, at least I will feel proud.
(13:32):
And so I applied, and I got into every single
university in the US.
Speaker 3 (13:35):
I applied to Nice, which was really nice.
Speaker 2 (13:39):
From the beginning, you knew that you wanted to study law.
So tell me why in your view is law so important,
especially these days.
Speaker 1 (13:48):
I think that's a very important point, because what you
realize is that a lot of investments that you do,
you know, it's subject to those risks.
Speaker 3 (13:57):
What the government next.
Speaker 1 (13:58):
Steps will be and if there's no of law and
there's no full democracy, there are no checks and balances.
And having my experience from communist Poland, you also cannot
trust the data that comes off the country. And that
means that you know the investment is good until it
(14:21):
stops being good, and that there is there is risk.
Speaker 2 (14:24):
Is impossible to quantify, really absolutely so, Barbara, let's talk.
You're a big picture for a moment. Give us an
idea of what's going on there and what are the priorities.
Speaker 3 (14:36):
Thanks for this.
Speaker 1 (14:37):
I think it's a very good question because we are
at the pivotal moment at the European Commission. We just
elected new president, which is the same president as before,
but she will have a new cabinet of commissioners, and
I think at this moment it's a good time to
look at what has been achieved and what we can
(15:00):
expect from the EU in the future. But if you
allow me, I want to just also explain a little
bit what the EU is for your listeners, because I
often feel that the EU and the US is a
bit misunderstood.
Speaker 2 (15:16):
You're being polite. I think a bit misunderstand is an
understatement it's important.
Speaker 1 (15:22):
To view the EU as one market because that's basically
what we are striving and what I think we already achieved.
So one market of four hundred forty million people, around
twenty three million companies and globally the second biggest market
(15:42):
in the world, so in terms of GDP, so a
big powerful force that you know, initially started as individual
member states, but they all gave away power in order
to be part of a club where you have three
movements of goods, people, services.
Speaker 3 (16:02):
And capital.
Speaker 1 (16:03):
So just to make sure that everything can freely flow
in the EU as it does in the United States
in between states.
Speaker 3 (16:11):
And what it's very.
Speaker 1 (16:11):
Interesting to me is when I'm here to see that
sometimes the EU has more power in certain regulatory issues
on the EU level than the federal government in the US.
That sometimes the states here have more to say than
member states in the EU, because what we're trying to
make sure with our regulation is that nobody can stop
(16:32):
any any good or person or service or capital from
throwing in between borders. So you should really view the
EU as one market. And as I said, we do
that because in this global world, you know, as a
bigger market, we can do more and I think we
can achieve better prosperity for the European citizens. But it
(16:54):
also means that it's a great opportunity for investors from
outside because of a sudden you know, with one establish
you have access to four hundred and forty million people,
wealthy consumers.
Speaker 3 (17:04):
So this is my big picture.
Speaker 1 (17:06):
Also what the EU is because the way you is
structured is that we have the member states that have
a say, we have the European Parliament that is elected
directly by all European citizens, and we have the executive
arm which is the European Commission. And what the European
Commission does is proposes policies and proposes laws. And once
(17:30):
it proposes a law, it goes to the Member States
which send their representations to look into it, and it
goes to the European Parliament which also looks into the law.
And then there is a big negotiation between the Parliament
and the Member states which are represented in softign called
(17:50):
to the European Council, and the European Commission is supporting everyone.
Speaker 3 (17:56):
In making the decision. So this is how the laws
are taken.
Speaker 1 (17:59):
But that means that the initiative of policy action of
what will be the law comes from the European Commission,
and the European Commission has the President and it has
the commissioners, which are equivalent of a secretary at the.
Speaker 3 (18:14):
US level who had the departments.
Speaker 1 (18:17):
Like in the US, you have also the departments and
they are the ones responsible for driving proposing the policies.
Speaker 3 (18:26):
And the laws. And so the.
Speaker 1 (18:29):
Role of the President of the European Commission is quite
powerful because they will be the driving force of you
know what will be happening next, which direction the EU
will go and in twenty twenty and then when hermande
started in twenty one, the proposal was we go for
the European Green Deal and that was very bold and
(18:51):
impressive vision at the time because EU was the fact
that the first continent that said by twenty fifty will
be climate neutral. That meant that we needed to see
how we can deliver on this promise. So the entire
mandate of the previous Commission under the President usrue lab
and the Lion was to end sure that we can
(19:14):
deliver on the climate neutrality by twenty fifty and that.
Speaker 2 (19:18):
Meant massive climate at that time.
Speaker 1 (19:21):
Yes, but the climate that was presented this is the
growth strategy for Europe that would help us also to
achieve the climate costs. So it is, you know, more
than just climate, is a strategy for the industry that
we want to by driving the policy shift towards going
green and then you know, steering the innovation into that direction.
(19:45):
So it was both climates and growth that were part
of this big picture, and that meant a modeling that
we've done what needs to be changed, and a massive
revisions of rules across you know, energy, mobility, housing, agriculture,
you name it. We needed to change pretty much all
the rules to put Europe and this drive towards green energy.
(20:10):
But legislation, of course was one and second was funding.
Speaker 3 (20:14):
There was also a.
Speaker 1 (20:14):
Massive funding that was dedicated to helping the drive. Legislation
gave companies the predictability to say, you know, we told
them this is what the way we're going. Now when
you make an investment and your FDI these decisions, this
is how we envisage the Europe.
Speaker 2 (20:35):
To go back to the importance.
Speaker 1 (20:37):
Of law, yes exactly, and I think low plays a
crucial role here because you know, when you make your investments,
you need to have a vision for the next twenty years.
Because that's basically the timing that you will be looking
to to get the benefits of your investments.
Speaker 3 (20:54):
So having this.
Speaker 1 (20:55):
Clear vision that is negotiated via legislative process and and
you know that it will be stick because you know
when you have something done via legislation like we like
to do in Europe, it's not only it cannot so
easily change with any administrations.
Speaker 3 (21:11):
You know most of these legislation will survive for a
long time, so.
Speaker 1 (21:16):
That gives predictability and therefore we were hoping in Europe
and of course we see it. It's much materializing is
to ensure private investments. But the second component was of
course the public investments.
Speaker 3 (21:32):
And to give you.
Speaker 1 (21:33):
An idea, the EU operates on a seven year budget
and in this time we had a budget of around
two trillion euros, so it was a little bit more
and dollars, and because the budget was both the contributions
from member states but was also you twenty seven member
(21:54):
states decided to go and borrow on the capital markets
jointly after COVID, so we had pretty good budget of
almost two trillion for seven years and half trillion, so
almost five hundred and fifty billion US dollars in seven
years went towards the green policies and to ensure that,
(22:17):
you know, the EU Green Deal can be implemented. That
was the public support that that is going into.
Speaker 2 (22:23):
This and and the profuly one in four euros.
Speaker 1 (22:27):
Yes, so a big public support towards those those policies.
Speaker 3 (22:32):
And you know, the money keeps on going.
Speaker 1 (22:35):
Just a week ago, Commission selected eighty five projects to
receive four point eight billion euros in grants, so almost
five billion dollars for clean tech manufacturing. And you know
two days ago we announced one point four billion euro
for startups.
Speaker 3 (22:50):
For strategic technologies in the EU.
Speaker 1 (22:52):
So you see that money constantly being given to companies
operating in the EU to ensure that we can support them.
Speaker 2 (23:01):
So far, so good. You have a vision, so good,
you have legislation, you have funding.
Speaker 1 (23:07):
Yes, But a big part of the legislation, and I
think it's important to stress it here, is setting out
long term goals. As I told you, the goals were
embodied and the legislation to give the vision and the
security for businesses to invest. So, for example, said that
(23:27):
we want to have forty eight point five percent of
renewables in the entire energy system. It's quite specific forty
two point five. It's because of negotiations between member states.
But that means that we have a very strong vision
how much renewables we want to have in the EU.
(23:49):
But then all of a sudden, as we are going there,
we realize that because effectively most of it very often
comes from China, and all of a.
Speaker 3 (23:57):
Sudden you have the hang on barbers.
Speaker 2 (24:01):
So when we talk about so that is the goal
is sorry forty two point what there's a goal for
a percentage of renewables in our economy the EU, but
we didn't factor and where who would make those renewables
for us? Is that the issue?
Speaker 1 (24:18):
Well at the beginning because the first law that came
in indeed it's the Renewal Energy Directive. It sets the goal,
but it doesn't say yet anything about the manufacturing. I
sink that law came later. We came with this aspirations later.
But the point is that all of a sudden you
(24:39):
realize that there starts to be a little bit of
dilemma because on the one hand, you want to go
fast with renewables. On the other hand, you know you
want to have this as a strategy for growth, for
the EU. As I mentioned to you, this was part
of the announcement of the European Green Deal, so it's
important to see how do we combine this too. And
(25:00):
I think it's also important to understand what the renewables
means for Europeans because we do not have fossil fuels
like the US does. So renewables for US means climate
of course, helping climate, but it also means energy independence.
That means that you know, we will have the energy
(25:21):
that will be produced in the EU at cost net
zero cost, because fossil fuels are not only important, but
they are also costly. If you produce renewables in the EU,
that means that you can.
Speaker 3 (25:37):
Do it much cheaper.
Speaker 1 (25:39):
So we started with Russia attacking Ukraine, and we started
with Russia manipulating the energy prices. We saw the countries
that had the biggest renewable energy penetration, the biggest amount
of renewables production, they were handling the crisis much better.
Speaker 3 (25:55):
Because you are, all of a sudden less reliant.
Speaker 1 (25:58):
And that's why it's a matter of of climate, but
it's a matter of energy security, and it's a matter
of costs. And I think costs is also an important
factor because as you companies were coming out of the
energy crisis, you know, they still face a significant high
energy costs and even today when we manage to control
(26:19):
the costs and the energy prices quite well, they still
pay two three times more than a global competitors. And
this is a problem for the EU companies.
Speaker 2 (26:30):
That is significant.
Speaker 3 (26:32):
It's significant. It's yeah.
Speaker 1 (26:35):
So the policy is important, you know, from various perspectives,
and therefore it's we want to achieve it, and we
want to achieve it fast to help the U industry,
but it also cannot be an expense of EU industry.
So it's a little bit of a dilemma that all
of a sudden you need to resolve going forward.
Speaker 3 (26:55):
This is very much recognized.
Speaker 1 (26:56):
And what the president did is just you know, as
she was running in the elections and while she was
still a president and there well she still has the
president under the previous commission, which is going to end
determity end by the end of November, is that she
asked Mario Draghi to write a report on how we
(27:19):
can improve Europe, what are we lacking, how we can
help Europe going forward, And you saw that the big
focus was now on competitiveness of the EU industry because
we want to move towards advancing the goals of the
European Green Deal. But as I said, we still recognize
(27:42):
that this could be a challenge for the U industry
if the ones who benefit from our transformation will be
Chinese companies. And therefore it's now the new strategy for
the next five years that has been already announced by
the President and which you can expect from the Commission,
is that big focus on supporting the U industry. And
(28:04):
I know your listeners are very interested in the automotive sector,
and the automotive sector in the U is an example
of the industry that it's very much struggling. It accounts
for ten percent of deployment employment in the EU. So
we can't afford to lose And important is I said,
we want the US and everyone in the world to
(28:26):
view US and one market. EU is the second largest
producer of motor vehicles in the world. It's second after China,
far ahead of the US, and so this is the
industry that's been crucial.
Speaker 3 (28:38):
For the EU.
Speaker 1 (28:40):
And now we see that as we move towards the
clean mobility, we see bigger penetration of the US of
the sorry bigger penetration of the Chinese companies sales makers
in Europe. So that starts to be something that we
need to pay stronger attention to because we have absolute
(29:02):
faith that our companies can compete on merits. We have
excellent brands and europe excellent companies, well established and producing
really good quality cards. But the moment you do not
compete in merriage, but the competition goes and starts to
be unfair. That's where we have a problem and that's
where we need to help the industry.
Speaker 2 (29:22):
And so this month we've seen a vote probably two
weeks ago and just confirmed i think today in Europe
on terrors. Can you tell us a little bit about that.
Speaker 1 (29:31):
Indeed, you started an investigation into the way the cars
are produced in China. The investigation was announced during the
State of Union addressed by the European President in September
twenty twenty three, so almost.
Speaker 3 (29:51):
A year ago.
Speaker 1 (29:52):
And what the colleagues we're focusing on is investigating whether
the cars that are being exported to Europe are benefiting
from any state subsidies, so whether there is a component
on on fairness. And you know in the trade. The
(30:13):
investigation has been completed. Colleagues determined that indeed there was
an element of unfairness, as I mentioned, and therefore Commission
made the proposal to impose the tariffs, and that was
voted at the beginning of October and confirmed by the
member states. And now the tariffs have been imposed.
Speaker 3 (30:35):
They enter into effect today.
Speaker 1 (30:38):
And as I mentioned to you, EU works as a
one market, so we have one tariffs for the entire
ear taking into effect as a result of this investigation.
Speaker 2 (30:48):
Now the majority of countries voted, of course, or there
are several that abstained. And then importantly, and sort of
from the outside looks confusing, Germany voted against the tears.
Can you help us understand what caused them to do that?
Speaker 1 (31:04):
Well, I can also tell you what what we see
from public domain, because Germany was also quite vocal trying
to explains its position in a sense that you know
there US is still a very significant exporter to of
of its cars to China, and we actually have run
(31:26):
positive trade balance of our exports to China, and of
course Germany is a big contributor to that.
Speaker 3 (31:34):
So in terms of the figures.
Speaker 1 (31:37):
The positive trade balance is significant on global level one
hundred billion euros. The moment you go into tariff's discussion,
you of course think of potential for retaliation, and I
think here you have to be careful when when you
have this exchange trade exchange to what extent what you
(32:01):
do could affect you back. But I think here what
is important to underlines that colleagues work on solid evidence
of specific cases where state subsidies were given, and therefore,
you know, when you go with solid evidence, you kind
(32:23):
of sure that you have a good case and a
good defense for what you're.
Speaker 3 (32:29):
Doing, and I think that's key into your use action.
Speaker 2 (32:33):
So with this play out in a sense, how do
you see this playing out from here, with those terrors
in turn incentivize investment into Europe by the Chinese or
what do you anticipate as next steps?
Speaker 1 (32:46):
I think as well, I think one of the important
part of this what's happening is also the message, and
the message is we will protect our industry.
Speaker 3 (32:58):
Because this is.
Speaker 1 (33:01):
Important for the EU and China is an important trading partner.
Speaker 3 (33:05):
We're very happy.
Speaker 1 (33:06):
To trade with them, but when our the interests of
our industry are at stake and we have a solid
evidence that you know, the competition is not fair, then
Europe will act and I think that's the that's the
main message. But the fact that the tariffs have been
imposed does not mean that alternative solutions cannot be found.
Speaker 3 (33:29):
And I know that in parallel there are.
Speaker 1 (33:31):
Discussions ongoing the whole time on potentially ending the startiffs.
Speaker 3 (33:37):
If Chinese manufacturers can offer.
Speaker 2 (33:40):
Price commitments, I'm sorry.
Speaker 1 (33:43):
So it's called price undertaking, so commitments on the minimum
prices that they would apply to their products.
Speaker 2 (33:51):
I see, So wow, that would be interesting. I haven't
thought of that before. Is there any precedent for that
kind of thing standard?
Speaker 1 (33:58):
This is part of you know, custom trade discussions that
are happening. When you spot that certain products are sold
with competitive advantage that you know, you can either post
tariffs or you can have negotiations that that advantage will
be eliminated.
Speaker 2 (34:19):
Put a floor on the pricing, you guys, what you
want to.
Speaker 1 (34:22):
Have is the price as it should be, and not
the one with unfair components to it.
Speaker 2 (34:29):
Okay, this is part of it, of course, a much
bigger global picture. Just reading earlier today at the WTO
that many Western countries it got competitive with China in
an open forum. The Western country is saying, China, your
playbook is over capacity, and then you just export like crazy,
(34:50):
take market share in global markets. And this doesn't look
like it's we're playing the same game by the same rules.
In China, of course, was quite un happy. United States
has put in place one hundred percent terrifs on Chinese imports.
Canada has followed suit. It's real and it's big, and
its kind of feels like tensions are mounting. China not saying, oh,
(35:12):
you know what you guys are right, China feeling you know,
what have we done wrong? We're just producing for the
market globally and we're doing renewables, and then the West
is getting defensive all of a sudden. So we're in
new territory. Barbara.
Speaker 3 (35:27):
It's interesting.
Speaker 1 (35:28):
And in that respect, I can tell you that you
and US are also pursuing a bit of different strategies
when when it comes to two Chinese companies, because you
see that, as you said, the US administration imposts tariffs
and they progress the measures on what investments the Chinese
(35:51):
companies can do in the US, and so the economies
of US and China have started to look couple quite significant.
Thing you has not pursued it to such a strong
extent as the US did. So you see that Chinese
companies are investing in the EU. And that also was
(36:12):
part of the chapter in mister Druggy report which I
mentioned earlier, which pointed that on the one hand, it's
great to have these additional investments in Europe because it
can bring high quality jobs, it can help us with
you know, exchanging on innovation, on technologies, strengthen the trade ties.
(36:34):
But the report also mentions that there could be a
symmetries arising from small member states negotiating with such large
foreign investors, and that could lead to certain concessions that
might not be very convenient. And so what the drug
is reported suggesting that we should have a more coordinated
(36:56):
approach among member states when it comes to those investments
coming in from China.
Speaker 3 (37:02):
Now that's the report.
Speaker 1 (37:03):
How it's going to be taken out, I cannot say
yes yet. But what's interesting to know that this is
a debate that it's going on in India.
Speaker 2 (37:10):
That's a great point, Barbara, like we're already seeing that
with the Chinese ev makers, battery makers making Hungary. They're
home away from home for Europe. The major investments into
Hungary they're their ally, and then Germany or France or Italy.
You look around and say, wait a second, we're really
vulnerable here. Yes we're in Europe, but what about our industry?
Speaker 3 (37:31):
So I think, you.
Speaker 1 (37:32):
Know, pursuing a common strategy to make sure that we
get the best deal we can for.
Speaker 3 (37:39):
The EU but also for individual members states. It's always better.
Speaker 1 (37:43):
To negotiate when you have certain training power, and I
think that's what the drugs report is pointing out to,
and that's what we can expect as more voices coming
out in the EU of moving as we move forward.
Speaker 2 (37:59):
I had heard independently that the view from Europe with
regards to the US may have changed too recently in
a way that maybe Europe's being what's spreading its risk
a little bit unsure about where the United States is
headed and not the same solid partner that it's been historically.
(38:19):
Is that accurate or is that just rumors on the street.
How does Europe view the US these days?
Speaker 1 (38:25):
I think it's important to underline that US is a
very important partner for Europe. So I would say maybe
more rumors on the street. I think, you know, the
biggest trading partner.
Speaker 3 (38:39):
I think it's also.
Speaker 1 (38:40):
Important to understand that when we couldn't rely on Russian
gas anymore, we turned to the US and US has
been great and supplying energy to Europe. You know, within
a short period of time, US companies spot the opportunity.
There was a vacuum created in the market by Russia
(39:01):
and the gas flew in and that even strengthened our
our joint corporation. But energy or any other part of
the economy, US is simply a very important partner for
for the U. I would say following Russian invasion into Ukraine,
the corporation and the level of engagement has even strengthened.
Speaker 3 (39:25):
And going forward, regardless of the administration, we will have
to or we will continue with.
Speaker 1 (39:33):
Cooperating with the US because of of the importance so
I think those because of the trade and and because
of our historical ties, we will always do the admost
too to ensure that we can stay strong partners on
the geopolitical scene.
Speaker 2 (39:52):
How does one compete with that big manufacturing machine called China.
Speaker 3 (39:58):
I think it's a very with question.
Speaker 1 (40:01):
And as I said, the help towards the EU industry
and making the U industry an important global competitor is
the big next next focus of the Commission. So as
we had with the previous mandate, the European Green Deal,
now with the new mandate, we.
Speaker 3 (40:20):
Have the Industrial Deal, the European Industrial Deal.
Speaker 1 (40:24):
That's what's coming out from the messaging in the EU
and that space also on mister Drugy report is how
do we support the U industry to be more competitive
in the global world.
Speaker 2 (40:37):
That will be the theme of the next seven years exactly.
Speaker 1 (40:41):
That will be the theme and that's what you can
expect in terms of the policies, in terms of the financing.
So it's still very compatible with the Green Deal because
as I mentioned, the European Green Deal was supposed to
be also the give the boost to the European industry.
Speaker 3 (40:58):
And now we.
Speaker 1 (40:59):
Say, okay, we have the legislation on the European Green Deal.
Now we shift a bit more towards the industry. And
as we shift towards the industry, we need we know,
we need to help them. And here what you saw
from the announcement, what the president was running to be
the president when she was re elected and from her
(41:19):
messages to the European Parliament is we will focus on
supporting our industry and that means is in regulatory burden.
So seeing the areas where we can help the industry
you to have less of this red tape and burden
as they operate, which it's very important for small and
(41:41):
medium sized companies in Europe. Second is financial support. But
there's also a very interesting announcement that the President made
is on the capital So basically what we see in
the EU, and what also was mentioned and it's being
(42:02):
mentioned quite a lot in Europe, is that every year
three hundred billion euro of savings from the European consumers
is going towards the US, and that is because we
do not have capital markets.
Speaker 3 (42:16):
In the EU.
Speaker 2 (42:17):
And so one hundred billion.
Speaker 1 (42:18):
Yes, So these are the European savings that you know,
gets invested and gets transferred to the US, and very
often then that money is used to invest into European
startups that are coming to the US to Silicon Valley,
you know, to get the financing. So there's kind of
(42:39):
a bit of a distortion here when we think, well,
wait a second, maybe we could do something to strengthen
the capital markets in Europe. And I think that will
be a big part of the focus and the new
commission as well.
Speaker 2 (42:53):
Barbara, this is fascinating. We've got time for just one
two more questions. One that I really wanted to get
at it at the beginning was what do you drive?
How do you get around?
Speaker 3 (43:03):
I bike?
Speaker 1 (43:08):
So when Dave Davis is great because Davis is a
very bikable city. You can buy on the streets and
there's always a lane for cyclists, and there are those
kind of green belts where you bike in green areas.
But I also buy in Brussels, and I think what
pushes me towards bike is congestion. I just don't like
(43:29):
wasting time. I'm a working mother, I'm a mother of two.
I don't have time to sit in traffic. And I
need to know that if I leave from home at
specific time, I will be where I need to be
when you know what Google tells me.
Speaker 3 (43:44):
Google Maps tells me I need in terms of time.
Speaker 2 (43:47):
Given your experience growing up in a communist country, what's
the number one thing that people in the West need
to understand about when they're negotiating or dealing with more
autocratic nations.
Speaker 1 (44:01):
I think the uncertainty of your investments. I think the
lack of understanding where the economy stands. As I said,
when there's no democracy, there's no checks and balances, the
numbers can be pretty much dictated from the top, and
I think that's a risk. And second risk is that
(44:23):
you simply don't have a good overview of what's happening
in that country. The policies can change abruptively, abruptly, and
so you think you're going to go one way, but
that can pretty much change because when you have checks
and balance in the democratic system, that takes a lot
of time to change a policy.
Speaker 3 (44:41):
You know, you will have many parties.
Speaker 1 (44:44):
Negotiating on that change, whereas in authoritarian regimes that can
happen very fast and there will be nobody to stop it.
So I would say, first uncertainty on where the economy stands,
what's behind the figures that you see, and and the
changes in the policy that can affect your business that
(45:05):
can happen quite fast, that you simply won't have any
way to, you know, to go to anybody and complain
because there's nobody to help you with that situation.
Speaker 2 (45:16):
Right, there's no recourse. Wait, hold on, I'm going to
talk to you.
Speaker 1 (45:19):
I don't know there, So I think having this and
that's very important for me in Poland, because in Poland
we started to drift a little bit into, you know,
the territory where the rule of law starting not to
be the.
Speaker 3 (45:31):
So well preserved. And now I'm very happy with the
new government. I see the.
Speaker 1 (45:36):
Curse, the it's reversing the curse and the independence of judiciary,
independence of policy makers, and and the fact that even
if something goes wrong, you will have those judges that
will be able to you know, compensate you for if
if something went wrong and if you were treated unfairly.
(45:56):
I think that's a very important thing for every business
to take into a Barbara.
Speaker 2 (46:01):
I would like to thank you for joining us today,
giving us a clear picture of Europe's vision and the
tough realities on the ground.
Speaker 3 (46:10):
Very nice talking to you, Michael, Thanks for inviting me.
Speaker 2 (46:12):
Thank you, bye bye. Barbara is a straight talker, She's smart,
and she knows what's at stake. She makes a compelling
(46:32):
case for where Europe needs to go next. It does
feel like Europe is at a critical juncture. Developing and
manufacturing their own clean technologies is not only an ambition,
it may actually decide Europe's fate global power or global
also ran. Will they have the grit, the money and
(46:53):
the know how to get the job done? Well, I
think we will not have to wait very long to
find out. Hey, I hope you enjoyed this episode. I
am Michael Dunn and this is the Driving With Done
podcast where you meet the experts creating the technologies that
will power tomorrow's cars.
Speaker 1 (47:13):
Electric autonomous software.
Speaker 2 (47:15):
To find this is a Driving with Done podcast.
Speaker 1 (47:19):
Thank you for joining this episode of the Driving With
Done podcast.
Speaker 2 (47:23):
To connect with Michael Donn, visit doninsights dot com or
find Michael on x or LinkedIn. This is the Driving
With Done Podcast
Where top executives and crazy entrepreneurs gathered to talk about
the future of electric vehicles. This is the Driving with
Done podcasts.
Speaker 2 (00:12):
Hello and welcome to the Driving with Done podcast. I'm
Michael Dunn, your host. Now, Europe and it's auto industry,
let's be honest, are under more pressure right now than
at any time since World War Two on the Eastern Front,
war in Ukraine. At home, high energy prices and expensive
(00:32):
rigid unions make it tough for European companies to compete globally.
In recent weeks, Volkswagen, Yeah, that's right, Mighty Volkswagen has
announced plant closures and is laying off thousands of people.
What's clear is that the old ways do not work anymore.
Many in Europe are beginning to understand the need to
(00:54):
adjust to new realities, but even efforts on that front
are hard. Just this week, Europe's brightest hope in batteries,
North Vote, filed for bankruptcy. The company reported cash enough
to run operations for just seven more days. Yikes, that's
a setback. What's the problem, Well, Europe arguably was the
(01:15):
world leader in setting very ambitious climate goals, but they
did not have the firepower at home to supply those
clean technologies for their own home market. Instead, the home
of four hundred and forty million people has come to
rely on other countries, mostly China, for clean technologies like
solar panels, electric cars and batteries. Strong market, not so
(01:40):
strong industry. Things got to change so to get traction,
the European Commission has just launched a massive new initiative
called the Clean Industrial Deal. Our guest today, Barbara Glawaka,
is a Cabinet member of the Commission for Energy at
the European Commission. Born in Poland, educated at Harvard and Cambridge.
(02:01):
Barbara knows energy, she knows Europe, she knows business, and
she knows the law. Today she will walk us through
the vision of the Clean Industrial Deal how Europe aims
to punch through to a much more optimistic future. Barbara,
(02:29):
good morning, and welcome to the Driving with Done podcast.
Speaker 3 (02:33):
And oh Michael, I'll good to be here.
Speaker 2 (02:35):
Barbara, I am so happy to have you with us today.
This is a very important topic, timely and there's no
better person to talk to it than you. Born in Poland,
educated at Harvard and Cambridge, working at the highest levels
of power within the European Commission and today joining us
from this side of the Pacific. What town is it?
Speaker 3 (02:56):
Davis? And uh, just close to Sacramento, but exactly.
Speaker 2 (03:00):
Davis, California University, California at Davis. What brought you there?
Speaker 1 (03:06):
Very good question, as you said, I'm European. I work
for the European Commission, so this is an executive arm
of the European Union. I've been working in the European
Commission for the past thirteen years, mostly doing energy regulation,
also some energy enforcement and the antitrust sector. But for
(03:30):
the past three years I've been advisor to the Commissioner
for Energy, which is a quite pivotal moment in Europe
as we were handling the energy crisis. War in Ukraine,
our energy played an important role and still playing as
it's being attacked and used as a weapon.
Speaker 3 (03:49):
In the war.
Speaker 1 (03:50):
Yes, and so I was sat the Commissioner's office, advising
her on renewables, deployment, on addressing the international challenges, on
working with our closest neighbors and international allies. And I
done that job until August this year, and now I'm
(04:14):
in its where I'm doing a research for the European
Commission on how you and US can cooperate together on
the diversification of supply Chaine for clean energy.
Speaker 2 (04:26):
Technology, diversification of supply Chaine for clean energy, which is
crucial to our future. Absolutely, you were there, take us back,
you're advising on energy. Russia invade Ukraine? What was that
morning like?
Speaker 1 (04:43):
It was very difficult period because the news and the
fact that something is happening, of course started earlier, and
we noticed it already a few months before. So Russia
invades Ukraine and in February. Already in October the year before,
we started noticing the rise of energy prices. So what
(05:06):
we saw is that Russia was booking capacity and gas
storages around Europe and not using it. They stopped sending
us to spot markets, and they started even not to
comply with long term some long term energy contracts, and
so we noticed that they're behaving in a very weird
way because obviously all those actions cost almost a panic
(05:31):
on the market, as prices starting to go through the roof.
Speaker 2 (05:34):
Barbara, just to jump in here, this would have been
you guys were seeing this saying there's a pretty good
indicator that they have plans to do something.
Speaker 1 (05:42):
Absolutely, because you know, that that if they're trying to
influence the market, if they're trying to cause the prices
to go up, they purposely withhold the supplies. And we
knew they were flaring GUS, so you know, there was
no problem with supplies. They were just basically preferring to
into the air, regardless of the climate damage, rather than
(06:03):
even you know, comply with the contracts or sell it
on the spot market and booking capacity in storages knowing
that they're not going to use it. Then you know
that somebody is trying to manipulate the market, so you
start seeing the what's coming, And of course there were
the news was also public knowledge of the military accommulating
(06:30):
on the Ukrainian border.
Speaker 3 (06:32):
And and US was also quite vocal about if.
Speaker 1 (06:35):
It's military intelligence, so we knew it's coming. There was
always hope that things could be averted, but obviously it
did not happen. So that morning we woke up and
immediately we kind of knew what we needed to do,
and we started working on intensifying the support on gas
(06:57):
markets in Europe because we knew that if I shall
manipulated the market, that they will continue to do so
to try to pressure us into certain policy actions, and
we knew that we cannot allow that to happen. So
we needed to have, you know, accelerate all our strategies
on rectifying the energy markets and ensuring that we have
(07:19):
good tools to counter what Russia.
Speaker 2 (07:21):
I was trying to do you right now, to put
this into perspective, if we could on a scale of
one to ten, how important was supply of energy gas
from Russia at that moment?
Speaker 1 (07:33):
Was it stood into half of our supplies almost give
or tech. Yeah, wow, so forty five percent to be exact,
very significant supplies you can imagine. So in absolute figures,
was one hundred and fifty bcm of gas that all
of a sudden, you know it's at risk. So it
(07:54):
was a big wake up call on Russia not being
a reliable partner and as allowing them to have such
a strong penetration in the markets despite you know, having
some worn warning signs that it might not be a
good idea.
Speaker 2 (08:14):
So all right, so it's on. I'm going to do
a hard pivot. Let's go back to the beginning. Barbara,
your own story. Where were you born and where were
you educated?
Speaker 1 (08:25):
So I was born in Poland. I'm from the western
part of Poland. But I was born still where Poland
was part of the so called communist regime, so planned
economy and authoritarian country, and so yes, not obvious that
(08:48):
I would end up where I am now. And so
I was educated in Poland, and pretty much like most
of our other colleagues that I was with, I was
in Poland most of my time. You know, as soon
as market opened, we had opportunities to go, but there
was not enough money to go, so most of the
(09:10):
education and our holidays were always in Poland. But as
market was opening out, there was tremendous opportunities. I see
a lot of similarities between West East sorry Eastern Europe
and China and the nineties, you know, opening of the market,
but China, of course bigger scale, and there's nothing and
(09:30):
all of a sudden there are investments coming in, people
starting to get richer, and there's.
Speaker 3 (09:36):
Nothing on the market.
Speaker 1 (09:37):
So any type of investment you did in the nineties
in Eastern Europe, same as in China, was ahead because
it was easy to start. And so in Poland that
was a great period in the nineties, but still most
of the society was quite poor. And then there was
this great moment for Poland when we decided to go
(09:58):
westwards and we joined or we start to have the
negotiations to join the EU.
Speaker 2 (10:04):
And what was that approximately when did Poland decide to
join the EU?
Speaker 1 (10:09):
So the well, the decision to go westward was pretty
obvious for us after the fall of communism, because the
whole point was, you know, you wanted to go into democracy.
Of course, it's not easy because you have people who
were associated with Communist party, you had, you needed to
(10:29):
go through this democratic transition. But going towards the EU
was the goal that we wanted to have, and of
course NATO because having Russia as your neighbor was always
fred And so for Polish people, you know, going towards
the EU and going towards NATO meant economic.
Speaker 3 (10:52):
But also the vans security.
Speaker 1 (10:55):
So we joined the European Union in two thousand and
for And what is crucial about that is that all
of a sudden you give potential investors a security about
your rules, about your laws, about the regulation, stability of
your government. So all of a sudden it becomes quite
(11:18):
secure to do the investment in your country. And from
that on, Poe and Prospert quite significantly, and so.
Speaker 2 (11:25):
That's one of the reasons why you studied law.
Speaker 3 (11:28):
Yes.
Speaker 1 (11:29):
So actually, for me, the great thing about law is
the rule of law and how important it is in
your daily lives.
Speaker 3 (11:39):
Also the impact it has.
Speaker 1 (11:41):
On economy, on how people can security, do investment and
have faith that they were.
Speaker 2 (11:48):
All trust goes way up exactly.
Speaker 3 (11:51):
So for me that was important.
Speaker 1 (11:52):
So I wanted to do law, but I was always
very interested in energy as well, and I was always
interested into in an me.
Speaker 3 (12:00):
So I chose law, but I always had side interests.
Speaker 1 (12:05):
And I studied law and a poet and the Polish University.
But I also had a strong interest in Europe, and
I wanted to understand Europe better, and therefore I started
shifting towards Europeano that that means I had to have
experience and some exposures in Brussels, because that's where the
(12:29):
seed of the European Commission is.
Speaker 2 (12:32):
I think you're being modest. You skipped over a couple
of important chapters there. I think one is called Harvard,
the other one called Cambridge.
Speaker 1 (12:39):
That's true, Well, I'm getting there. So when when I
when I came first time to Brussels, I noticed that
you know, whereas my ambitions have been what.
Speaker 3 (12:49):
Ever published people were doing.
Speaker 1 (12:51):
I noticed it, you know, there was so much more
out there, and so when I came first to Brussels,
I realized that I could potentially try to stay in
the US as well. But I didn't have any money,
and that was for me a question. Okay, you know,
it sounds great, but way too expensive. And what I
(13:11):
was encouraged to do is just you know, I was
to apply and then once you get in, you will know,
you will figure it out. I thought it was interesting idea,
but okay, I have no nothing to lose. I knew
I couldn't count on the family support, but I thought,
at least I'll try, and if I get in and
I cannot use it, at least I will feel proud.
(13:32):
And so I applied, and I got into every single
university in the US.
Speaker 3 (13:35):
I applied to Nice, which was really nice.
Speaker 2 (13:39):
From the beginning, you knew that you wanted to study law.
So tell me why in your view is law so important,
especially these days.
Speaker 1 (13:48):
I think that's a very important point, because what you
realize is that a lot of investments that you do,
you know, it's subject to those risks.
Speaker 3 (13:57):
What the government next.
Speaker 1 (13:58):
Steps will be and if there's no of law and
there's no full democracy, there are no checks and balances.
And having my experience from communist Poland, you also cannot
trust the data that comes off the country. And that
means that you know the investment is good until it
(14:21):
stops being good, and that there is there is risk.
Speaker 2 (14:24):
Is impossible to quantify, really absolutely so, Barbara, let's talk.
You're a big picture for a moment. Give us an
idea of what's going on there and what are the priorities.
Speaker 3 (14:36):
Thanks for this.
Speaker 1 (14:37):
I think it's a very good question because we are
at the pivotal moment at the European Commission. We just
elected new president, which is the same president as before,
but she will have a new cabinet of commissioners, and
I think at this moment it's a good time to
look at what has been achieved and what we can
(15:00):
expect from the EU in the future. But if you
allow me, I want to just also explain a little
bit what the EU is for your listeners, because I
often feel that the EU and the US is a
bit misunderstood.
Speaker 2 (15:16):
You're being polite. I think a bit misunderstand is an
understatement it's important.
Speaker 1 (15:22):
To view the EU as one market because that's basically
what we are striving and what I think we already achieved.
So one market of four hundred forty million people, around
twenty three million companies and globally the second biggest market
(15:42):
in the world, so in terms of GDP, so a
big powerful force that you know, initially started as individual
member states, but they all gave away power in order
to be part of a club where you have three
movements of goods, people, services.
Speaker 3 (16:02):
And capital.
Speaker 1 (16:03):
So just to make sure that everything can freely flow
in the EU as it does in the United States
in between states.
Speaker 3 (16:11):
And what it's very.
Speaker 1 (16:11):
Interesting to me is when I'm here to see that
sometimes the EU has more power in certain regulatory issues
on the EU level than the federal government in the US.
That sometimes the states here have more to say than
member states in the EU, because what we're trying to
make sure with our regulation is that nobody can stop
(16:32):
any any good or person or service or capital from
throwing in between borders. So you should really view the
EU as one market. And as I said, we do
that because in this global world, you know, as a
bigger market, we can do more and I think we
can achieve better prosperity for the European citizens. But it
(16:54):
also means that it's a great opportunity for investors from
outside because of a sudden you know, with one establish
you have access to four hundred and forty million people,
wealthy consumers.
Speaker 3 (17:04):
So this is my big picture.
Speaker 1 (17:06):
Also what the EU is because the way you is
structured is that we have the member states that have
a say, we have the European Parliament that is elected
directly by all European citizens, and we have the executive
arm which is the European Commission. And what the European
Commission does is proposes policies and proposes laws. And once
(17:30):
it proposes a law, it goes to the Member States
which send their representations to look into it, and it
goes to the European Parliament which also looks into the law.
And then there is a big negotiation between the Parliament
and the Member states which are represented in softign called
(17:50):
to the European Council, and the European Commission is supporting everyone.
Speaker 3 (17:56):
In making the decision. So this is how the laws
are taken.
Speaker 1 (17:59):
But that means that the initiative of policy action of
what will be the law comes from the European Commission,
and the European Commission has the President and it has
the commissioners, which are equivalent of a secretary at the.
Speaker 3 (18:14):
US level who had the departments.
Speaker 1 (18:17):
Like in the US, you have also the departments and
they are the ones responsible for driving proposing the policies.
Speaker 3 (18:26):
And the laws. And so the.
Speaker 1 (18:29):
Role of the President of the European Commission is quite
powerful because they will be the driving force of you
know what will be happening next, which direction the EU
will go and in twenty twenty and then when hermande
started in twenty one, the proposal was we go for
the European Green Deal and that was very bold and
(18:51):
impressive vision at the time because EU was the fact
that the first continent that said by twenty fifty will
be climate neutral. That meant that we needed to see
how we can deliver on this promise. So the entire
mandate of the previous Commission under the President usrue lab
and the Lion was to end sure that we can
(19:14):
deliver on the climate neutrality by twenty fifty and that.
Speaker 2 (19:18):
Meant massive climate at that time.
Speaker 1 (19:21):
Yes, but the climate that was presented this is the
growth strategy for Europe that would help us also to
achieve the climate costs. So it is, you know, more
than just climate, is a strategy for the industry that
we want to by driving the policy shift towards going
green and then you know, steering the innovation into that direction.
(19:45):
So it was both climates and growth that were part
of this big picture, and that meant a modeling that
we've done what needs to be changed, and a massive
revisions of rules across you know, energy, mobility, housing, agriculture,
you name it. We needed to change pretty much all
the rules to put Europe and this drive towards green energy.
(20:10):
But legislation, of course was one and second was funding.
Speaker 3 (20:14):
There was also a.
Speaker 1 (20:14):
Massive funding that was dedicated to helping the drive. Legislation
gave companies the predictability to say, you know, we told
them this is what the way we're going. Now when
you make an investment and your FDI these decisions, this
is how we envisage the Europe.
Speaker 2 (20:35):
To go back to the importance.
Speaker 1 (20:37):
Of law, yes exactly, and I think low plays a
crucial role here because you know, when you make your investments,
you need to have a vision for the next twenty years.
Because that's basically the timing that you will be looking
to to get the benefits of your investments.
Speaker 3 (20:54):
So having this.
Speaker 1 (20:55):
Clear vision that is negotiated via legislative process and and
you know that it will be stick because you know
when you have something done via legislation like we like
to do in Europe, it's not only it cannot so
easily change with any administrations.
Speaker 3 (21:11):
You know most of these legislation will survive for a
long time, so.
Speaker 1 (21:16):
That gives predictability and therefore we were hoping in Europe
and of course we see it. It's much materializing is
to ensure private investments. But the second component was of
course the public investments.
Speaker 3 (21:32):
And to give you.
Speaker 1 (21:33):
An idea, the EU operates on a seven year budget
and in this time we had a budget of around
two trillion euros, so it was a little bit more
and dollars, and because the budget was both the contributions
from member states but was also you twenty seven member
(21:54):
states decided to go and borrow on the capital markets
jointly after COVID, so we had pretty good budget of
almost two trillion for seven years and half trillion, so
almost five hundred and fifty billion US dollars in seven
years went towards the green policies and to ensure that,
(22:17):
you know, the EU Green Deal can be implemented. That
was the public support that that is going into.
Speaker 2 (22:23):
This and and the profuly one in four euros.
Speaker 1 (22:27):
Yes, so a big public support towards those those policies.
Speaker 3 (22:32):
And you know, the money keeps on going.
Speaker 1 (22:35):
Just a week ago, Commission selected eighty five projects to
receive four point eight billion euros in grants, so almost
five billion dollars for clean tech manufacturing. And you know
two days ago we announced one point four billion euro
for startups.
Speaker 3 (22:50):
For strategic technologies in the EU.
Speaker 1 (22:52):
So you see that money constantly being given to companies
operating in the EU to ensure that we can support them.
Speaker 2 (23:01):
So far, so good. You have a vision, so good,
you have legislation, you have funding.
Speaker 1 (23:07):
Yes, But a big part of the legislation, and I
think it's important to stress it here, is setting out
long term goals. As I told you, the goals were
embodied and the legislation to give the vision and the
security for businesses to invest. So, for example, said that
(23:27):
we want to have forty eight point five percent of
renewables in the entire energy system. It's quite specific forty
two point five. It's because of negotiations between member states.
But that means that we have a very strong vision
how much renewables we want to have in the EU.
(23:49):
But then all of a sudden, as we are going there,
we realize that because effectively most of it very often
comes from China, and all of a.
Speaker 3 (23:57):
Sudden you have the hang on barbers.
Speaker 2 (24:01):
So when we talk about so that is the goal
is sorry forty two point what there's a goal for
a percentage of renewables in our economy the EU, but
we didn't factor and where who would make those renewables
for us? Is that the issue?
Speaker 1 (24:18):
Well at the beginning because the first law that came
in indeed it's the Renewal Energy Directive. It sets the goal,
but it doesn't say yet anything about the manufacturing. I
sink that law came later. We came with this aspirations later.
But the point is that all of a sudden you
(24:39):
realize that there starts to be a little bit of
dilemma because on the one hand, you want to go
fast with renewables. On the other hand, you know you
want to have this as a strategy for growth, for
the EU. As I mentioned to you, this was part
of the announcement of the European Green Deal, so it's
important to see how do we combine this too. And
(25:00):
I think it's also important to understand what the renewables
means for Europeans because we do not have fossil fuels
like the US does. So renewables for US means climate
of course, helping climate, but it also means energy independence.
That means that you know, we will have the energy
(25:21):
that will be produced in the EU at cost net
zero cost, because fossil fuels are not only important, but
they are also costly. If you produce renewables in the EU,
that means that you can.
Speaker 3 (25:37):
Do it much cheaper.
Speaker 1 (25:39):
So we started with Russia attacking Ukraine, and we started
with Russia manipulating the energy prices. We saw the countries
that had the biggest renewable energy penetration, the biggest amount
of renewables production, they were handling the crisis much better.
Speaker 3 (25:55):
Because you are, all of a sudden less reliant.
Speaker 1 (25:58):
And that's why it's a matter of of climate, but
it's a matter of energy security, and it's a matter
of costs. And I think costs is also an important
factor because as you companies were coming out of the
energy crisis, you know, they still face a significant high
energy costs and even today when we manage to control
(26:19):
the costs and the energy prices quite well, they still
pay two three times more than a global competitors. And
this is a problem for the EU companies.
Speaker 2 (26:30):
That is significant.
Speaker 3 (26:32):
It's significant. It's yeah.
Speaker 1 (26:35):
So the policy is important, you know, from various perspectives,
and therefore it's we want to achieve it, and we
want to achieve it fast to help the U industry,
but it also cannot be an expense of EU industry.
So it's a little bit of a dilemma that all
of a sudden you need to resolve going forward.
Speaker 3 (26:55):
This is very much recognized.
Speaker 1 (26:56):
And what the president did is just you know, as
she was running in the elections and while she was
still a president and there well she still has the
president under the previous commission, which is going to end
determity end by the end of November, is that she
asked Mario Draghi to write a report on how we
(27:19):
can improve Europe, what are we lacking, how we can
help Europe going forward, And you saw that the big
focus was now on competitiveness of the EU industry because
we want to move towards advancing the goals of the
European Green Deal. But as I said, we still recognize
(27:42):
that this could be a challenge for the U industry
if the ones who benefit from our transformation will be
Chinese companies. And therefore it's now the new strategy for
the next five years that has been already announced by
the President and which you can expect from the Commission,
is that big focus on supporting the U industry. And
(28:04):
I know your listeners are very interested in the automotive sector,
and the automotive sector in the U is an example
of the industry that it's very much struggling. It accounts
for ten percent of deployment employment in the EU. So
we can't afford to lose And important is I said,
we want the US and everyone in the world to
(28:26):
view US and one market. EU is the second largest
producer of motor vehicles in the world. It's second after China,
far ahead of the US, and so this is the
industry that's been crucial.
Speaker 3 (28:38):
For the EU.
Speaker 1 (28:40):
And now we see that as we move towards the
clean mobility, we see bigger penetration of the US of
the sorry bigger penetration of the Chinese companies sales makers
in Europe. So that starts to be something that we
need to pay stronger attention to because we have absolute
(29:02):
faith that our companies can compete on merits. We have
excellent brands and europe excellent companies, well established and producing
really good quality cards. But the moment you do not
compete in merriage, but the competition goes and starts to
be unfair. That's where we have a problem and that's
where we need to help the industry.
Speaker 2 (29:22):
And so this month we've seen a vote probably two
weeks ago and just confirmed i think today in Europe
on terrors. Can you tell us a little bit about that.
Speaker 1 (29:31):
Indeed, you started an investigation into the way the cars
are produced in China. The investigation was announced during the
State of Union addressed by the European President in September
twenty twenty three, so almost.
Speaker 3 (29:51):
A year ago.
Speaker 1 (29:52):
And what the colleagues we're focusing on is investigating whether
the cars that are being exported to Europe are benefiting
from any state subsidies, so whether there is a component
on on fairness. And you know in the trade. The
(30:13):
investigation has been completed. Colleagues determined that indeed there was
an element of unfairness, as I mentioned, and therefore Commission
made the proposal to impose the tariffs, and that was
voted at the beginning of October and confirmed by the
member states. And now the tariffs have been imposed.
Speaker 3 (30:35):
They enter into effect today.
Speaker 1 (30:38):
And as I mentioned to you, EU works as a
one market, so we have one tariffs for the entire
ear taking into effect as a result of this investigation.
Speaker 2 (30:48):
Now the majority of countries voted, of course, or there
are several that abstained. And then importantly, and sort of
from the outside looks confusing, Germany voted against the tears.
Can you help us understand what caused them to do that?
Speaker 1 (31:04):
Well, I can also tell you what what we see
from public domain, because Germany was also quite vocal trying
to explains its position in a sense that you know
there US is still a very significant exporter to of
of its cars to China, and we actually have run
(31:26):
positive trade balance of our exports to China, and of
course Germany is a big contributor to that.
Speaker 3 (31:34):
So in terms of the figures.
Speaker 1 (31:37):
The positive trade balance is significant on global level one
hundred billion euros. The moment you go into tariff's discussion,
you of course think of potential for retaliation, and I
think here you have to be careful when when you
have this exchange trade exchange to what extent what you
(32:01):
do could affect you back. But I think here what
is important to underlines that colleagues work on solid evidence
of specific cases where state subsidies were given, and therefore,
you know, when you go with solid evidence, you kind
(32:23):
of sure that you have a good case and a
good defense for what you're.
Speaker 3 (32:29):
Doing, and I think that's key into your use action.
Speaker 2 (32:33):
So with this play out in a sense, how do
you see this playing out from here, with those terrors
in turn incentivize investment into Europe by the Chinese or
what do you anticipate as next steps?
Speaker 1 (32:46):
I think as well, I think one of the important
part of this what's happening is also the message, and
the message is we will protect our industry.
Speaker 3 (32:58):
Because this is.
Speaker 1 (33:01):
Important for the EU and China is an important trading partner.
Speaker 3 (33:05):
We're very happy.
Speaker 1 (33:06):
To trade with them, but when our the interests of
our industry are at stake and we have a solid
evidence that you know, the competition is not fair, then
Europe will act and I think that's the that's the
main message. But the fact that the tariffs have been
imposed does not mean that alternative solutions cannot be found.
Speaker 3 (33:29):
And I know that in parallel there are.
Speaker 1 (33:31):
Discussions ongoing the whole time on potentially ending the startiffs.
Speaker 3 (33:37):
If Chinese manufacturers can offer.
Speaker 2 (33:40):
Price commitments, I'm sorry.
Speaker 1 (33:43):
So it's called price undertaking, so commitments on the minimum
prices that they would apply to their products.
Speaker 2 (33:51):
I see, So wow, that would be interesting. I haven't
thought of that before. Is there any precedent for that
kind of thing standard?
Speaker 1 (33:58):
This is part of you know, custom trade discussions that
are happening. When you spot that certain products are sold
with competitive advantage that you know, you can either post
tariffs or you can have negotiations that that advantage will
be eliminated.
Speaker 2 (34:19):
Put a floor on the pricing, you guys, what you
want to.
Speaker 1 (34:22):
Have is the price as it should be, and not
the one with unfair components to it.
Speaker 2 (34:29):
Okay, this is part of it, of course, a much
bigger global picture. Just reading earlier today at the WTO
that many Western countries it got competitive with China in
an open forum. The Western country is saying, China, your
playbook is over capacity, and then you just export like crazy,
(34:50):
take market share in global markets. And this doesn't look
like it's we're playing the same game by the same rules.
In China, of course, was quite un happy. United States
has put in place one hundred percent terrifs on Chinese imports.
Canada has followed suit. It's real and it's big, and
its kind of feels like tensions are mounting. China not saying, oh,
(35:12):
you know what you guys are right, China feeling you know,
what have we done wrong? We're just producing for the
market globally and we're doing renewables, and then the West
is getting defensive all of a sudden. So we're in
new territory. Barbara.
Speaker 3 (35:27):
It's interesting.
Speaker 1 (35:28):
And in that respect, I can tell you that you
and US are also pursuing a bit of different strategies
when when it comes to two Chinese companies, because you
see that, as you said, the US administration imposts tariffs
and they progress the measures on what investments the Chinese
(35:51):
companies can do in the US, and so the economies
of US and China have started to look couple quite significant.
Thing you has not pursued it to such a strong
extent as the US did. So you see that Chinese
companies are investing in the EU. And that also was
(36:12):
part of the chapter in mister Druggy report which I
mentioned earlier, which pointed that on the one hand, it's
great to have these additional investments in Europe because it
can bring high quality jobs, it can help us with
you know, exchanging on innovation, on technologies, strengthen the trade ties.
(36:34):
But the report also mentions that there could be a
symmetries arising from small member states negotiating with such large
foreign investors, and that could lead to certain concessions that
might not be very convenient. And so what the drug
is reported suggesting that we should have a more coordinated
(36:56):
approach among member states when it comes to those investments
coming in from China.
Speaker 3 (37:02):
Now that's the report.
Speaker 1 (37:03):
How it's going to be taken out, I cannot say
yes yet. But what's interesting to know that this is
a debate that it's going on in India.
Speaker 2 (37:10):
That's a great point, Barbara, like we're already seeing that
with the Chinese ev makers, battery makers making Hungary. They're
home away from home for Europe. The major investments into
Hungary they're their ally, and then Germany or France or Italy.
You look around and say, wait a second, we're really
vulnerable here. Yes we're in Europe, but what about our industry?
Speaker 3 (37:31):
So I think, you.
Speaker 1 (37:32):
Know, pursuing a common strategy to make sure that we
get the best deal we can for.
Speaker 3 (37:39):
The EU but also for individual members states. It's always better.
Speaker 1 (37:43):
To negotiate when you have certain training power, and I
think that's what the drugs report is pointing out to,
and that's what we can expect as more voices coming
out in the EU of moving as we move forward.
Speaker 2 (37:59):
I had heard independently that the view from Europe with
regards to the US may have changed too recently in
a way that maybe Europe's being what's spreading its risk
a little bit unsure about where the United States is
headed and not the same solid partner that it's been historically.
(38:19):
Is that accurate or is that just rumors on the street.
How does Europe view the US these days?
Speaker 1 (38:25):
I think it's important to underline that US is a
very important partner for Europe. So I would say maybe
more rumors on the street. I think, you know, the
biggest trading partner.
Speaker 3 (38:39):
I think it's also.
Speaker 1 (38:40):
Important to understand that when we couldn't rely on Russian
gas anymore, we turned to the US and US has
been great and supplying energy to Europe. You know, within
a short period of time, US companies spot the opportunity.
There was a vacuum created in the market by Russia
(39:01):
and the gas flew in and that even strengthened our
our joint corporation. But energy or any other part of
the economy, US is simply a very important partner for
for the U. I would say following Russian invasion into Ukraine,
the corporation and the level of engagement has even strengthened.
Speaker 3 (39:25):
And going forward, regardless of the administration, we will have
to or we will continue with.
Speaker 1 (39:33):
Cooperating with the US because of of the importance so
I think those because of the trade and and because
of our historical ties, we will always do the admost
too to ensure that we can stay strong partners on
the geopolitical scene.
Speaker 2 (39:52):
How does one compete with that big manufacturing machine called China.
Speaker 3 (39:58):
I think it's a very with question.
Speaker 1 (40:01):
And as I said, the help towards the EU industry
and making the U industry an important global competitor is
the big next next focus of the Commission. So as
we had with the previous mandate, the European Green Deal,
now with the new mandate, we.
Speaker 3 (40:20):
Have the Industrial Deal, the European Industrial Deal.
Speaker 1 (40:24):
That's what's coming out from the messaging in the EU
and that space also on mister Drugy report is how
do we support the U industry to be more competitive
in the global world.
Speaker 2 (40:37):
That will be the theme of the next seven years exactly.
Speaker 1 (40:41):
That will be the theme and that's what you can
expect in terms of the policies, in terms of the financing.
So it's still very compatible with the Green Deal because
as I mentioned, the European Green Deal was supposed to
be also the give the boost to the European industry.
Speaker 3 (40:58):
And now we.
Speaker 1 (40:59):
Say, okay, we have the legislation on the European Green Deal.
Now we shift a bit more towards the industry. And
as we shift towards the industry, we need we know,
we need to help them. And here what you saw
from the announcement, what the president was running to be
the president when she was re elected and from her
(41:19):
messages to the European Parliament is we will focus on
supporting our industry and that means is in regulatory burden.
So seeing the areas where we can help the industry
you to have less of this red tape and burden
as they operate, which it's very important for small and
(41:41):
medium sized companies in Europe. Second is financial support. But
there's also a very interesting announcement that the President made
is on the capital So basically what we see in
the EU, and what also was mentioned and it's being
(42:02):
mentioned quite a lot in Europe, is that every year
three hundred billion euro of savings from the European consumers
is going towards the US, and that is because we
do not have capital markets.
Speaker 3 (42:16):
In the EU.
Speaker 2 (42:17):
And so one hundred billion.
Speaker 1 (42:18):
Yes, So these are the European savings that you know,
gets invested and gets transferred to the US, and very
often then that money is used to invest into European
startups that are coming to the US to Silicon Valley,
you know, to get the financing. So there's kind of
(42:39):
a bit of a distortion here when we think, well,
wait a second, maybe we could do something to strengthen
the capital markets in Europe. And I think that will
be a big part of the focus and the new
commission as well.
Speaker 2 (42:53):
Barbara, this is fascinating. We've got time for just one
two more questions. One that I really wanted to get
at it at the beginning was what do you drive?
How do you get around?
Speaker 3 (43:03):
I bike?
Speaker 1 (43:08):
So when Dave Davis is great because Davis is a
very bikable city. You can buy on the streets and
there's always a lane for cyclists, and there are those
kind of green belts where you bike in green areas.
But I also buy in Brussels, and I think what
pushes me towards bike is congestion. I just don't like
(43:29):
wasting time. I'm a working mother, I'm a mother of two.
I don't have time to sit in traffic. And I
need to know that if I leave from home at
specific time, I will be where I need to be
when you know what Google tells me.
Speaker 3 (43:44):
Google Maps tells me I need in terms of time.
Speaker 2 (43:47):
Given your experience growing up in a communist country, what's
the number one thing that people in the West need
to understand about when they're negotiating or dealing with more
autocratic nations.
Speaker 1 (44:01):
I think the uncertainty of your investments. I think the
lack of understanding where the economy stands. As I said,
when there's no democracy, there's no checks and balances, the
numbers can be pretty much dictated from the top, and
I think that's a risk. And second risk is that
(44:23):
you simply don't have a good overview of what's happening
in that country. The policies can change abruptively, abruptly, and
so you think you're going to go one way, but
that can pretty much change because when you have checks
and balance in the democratic system, that takes a lot
of time to change a policy.
Speaker 3 (44:41):
You know, you will have many parties.
Speaker 1 (44:44):
Negotiating on that change, whereas in authoritarian regimes that can
happen very fast and there will be nobody to stop it.
So I would say, first uncertainty on where the economy stands,
what's behind the figures that you see, and and the
changes in the policy that can affect your business that
(45:05):
can happen quite fast, that you simply won't have any
way to, you know, to go to anybody and complain
because there's nobody to help you with that situation.
Speaker 2 (45:16):
Right, there's no recourse. Wait, hold on, I'm going to
talk to you.
Speaker 1 (45:19):
I don't know there, So I think having this and
that's very important for me in Poland, because in Poland
we started to drift a little bit into, you know,
the territory where the rule of law starting not to
be the.
Speaker 3 (45:31):
So well preserved. And now I'm very happy with the
new government. I see the.
Speaker 1 (45:36):
Curse, the it's reversing the curse and the independence of judiciary,
independence of policy makers, and and the fact that even
if something goes wrong, you will have those judges that
will be able to you know, compensate you for if
if something went wrong and if you were treated unfairly.
(45:56):
I think that's a very important thing for every business
to take into a Barbara.
Speaker 2 (46:01):
I would like to thank you for joining us today,
giving us a clear picture of Europe's vision and the
tough realities on the ground.
Speaker 3 (46:10):
Very nice talking to you, Michael, Thanks for inviting me.
Speaker 2 (46:12):
Thank you, bye bye. Barbara is a straight talker, She's smart,
and she knows what's at stake. She makes a compelling
(46:32):
case for where Europe needs to go next. It does
feel like Europe is at a critical juncture. Developing and
manufacturing their own clean technologies is not only an ambition,
it may actually decide Europe's fate global power or global
also ran. Will they have the grit, the money and
(46:53):
the know how to get the job done? Well, I
think we will not have to wait very long to
find out. Hey, I hope you enjoyed this episode. I
am Michael Dunn and this is the Driving With Done
podcast where you meet the experts creating the technologies that
will power tomorrow's cars.
Speaker 1 (47:13):
Electric autonomous software.
Speaker 2 (47:15):
To find this is a Driving with Done podcast.
Speaker 1 (47:19):
Thank you for joining this episode of the Driving With
Done podcast.
Speaker 2 (47:23):
To connect with Michael Donn, visit doninsights dot com or
find Michael on x or LinkedIn. This is the Driving
With Done Podcast
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My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.