Euronews Correspondent Sasha Vakulina sits down with four of Europe's business and political leaders at the World Economic Forum in Davos to discuss how EU expansion might affect voters concerned with economic decline across the bloc.
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00:00 Nearly 20 years after the European Union's big bank enlargement in 2004,
00:05 the bloc's long-stalled ambition to accept new members has experienced a striking revival.
00:11 Beyond the moral and geopolitical arguments for the EU's expansion,
00:16 is there also a business case to be made?
00:17 I'm very pleased to have the speakers here with us today at the session.
00:23 On my left, Milojko Spajic, Prime Minister of Montenegro, thank you very much.
00:29 Also, we have with us Rostislav Shurma, Deputy Head of the Office of the President of Ukraine.
00:35 Maria Gabriel, Deputy Prime Minister and Minister for Foreign Affairs of Bulgaria, thank you.
00:40 And Christian Levin, President and Chief Executive Officer,
00:43 Scania from Sweden, Alliance of Sea or Climate lead.
00:46 Welcome to everybody who is joining us here in the room at Davos at the World Economic Forum
00:50 annual meeting. The geopolitical and moral case for EU enlargement is clear. Now, if done right,
00:56 it will bring greater stability to the EU's eastern neighbourhood and provide incredible
01:01 economic opportunities to tens of millions of Europeans outside the EU borders.
01:06 But what's in it for EU voters concerned about jobs, concerned about inflation,
01:11 and what's in it for businesses concerned about the EU's stagnating productivity?
01:16 Let's start with you, Prime Minister.
01:17 So, I think I'll start from the perspective that is not often seen in Europe,
01:22 because as a Japanese student, I would take a perspective maybe from the Far East.
01:27 As you might remember, in 1986, we had Plaza Accord that basically had currencies of Japan,
01:36 Germany and France heavily appreciating after that, and then we have the dollar being devalued.
01:43 What it did to Japan, you had like 20 years of, you know, they call it lost decades.
01:50 They had like big issues, structural issues that happened afterwards.
01:54 We didn't see that in Europe, and nobody ever actually noticed that,
01:59 at least in Europe, I don't see many people talking about it.
02:01 And that's an obvious case to me that even the big countries such as Germany, France, etc.,
02:08 they definitely have benefits of joining you. And having such a big market to cushion all of
02:14 these external big pressures, big factors like this was something that, you know, Germany and
02:22 France, they continued growth, didn't have any big bubbles until 2008. There was basically,
02:28 there was a global financial crisis. But before that, they didn't face the same destiny that Japan
02:34 faced. Let's ask some of the existing members. Deputy Prime Minister Maria Gabriel, what's
02:37 your take on this? Well, I think that first when we talk about jobs, I think that we need to think
02:43 about young people and people with skills. And the enlargement is always showing that we have
02:48 access to those young people that will not leave their region, they will stay and they will be
02:52 there really to co-create, to shape the solutions of the future. Second, if you'd like to attract
02:58 investment, we need to connect different regions, we need to have infrastructure, energy or climate,
03:03 all these in order to expand the market, we need really to do the enlargement. And finally,
03:09 even for inflation, let's be very honest, there is a lot of external factors for inflation and
03:16 enlargement is transforming them into something that we can manage, that we can control even,
03:22 and at least to mainstream and to reduce some of the risks. So I definitely see benefits much more
03:27 than risks. Yeah. And finally, the business perspective. Yeah, coming out of a small
03:32 country such as Sweden, we can only be the witness of free trade is working. Free trade is what is
03:38 creating wealth. So there is no reason why we should not be able to tell the young people,
03:44 the future workforce, the consumers that this is a threat. It's not a threat.
03:48 Deputy Prime Minister Gabriel, let me continue here with you. You have served two terms in the
03:53 European Commission and now serve as the Deputy Prime Minister of Bulgaria, which makes you just
03:58 perfectly placed to explain some of the tensions over enlargement between the EU Commission and
04:03 the member states on one hand and among member states on the other. Now, what accounts for this
04:08 and how can we overcome this? Would a stronger business case help or would geopolitics and
04:14 domestic politics continue to get in the way there? And maybe if I can, I can add to that
04:20 before I was in the European Parliament. So you have the institutional triangle with experience
04:26 in the European Parliament, the Commission and now in the Council. Well, I think that we should
04:31 make an additional effort, really not to separate the different arguments, because when we talk
04:37 about solidarity, the transformative power of enlargement, that means business case. That means
04:42 new opportunities for business, for investment, how we can increase the attractiveness. And for
04:48 me, enlargement in that case, it's always shared values. We need to talk about this because it's
04:54 something that we share in this difficult world of rule of law, democracy. It's also our capacity
05:01 to respond to global challenges. That's enlargement. That's what we need to address. OK, if we show to
05:07 our citizens that on daily basis, in their daily life, there are benefits, we'll be much more
05:14 able to convince them. So I think that on one side, we have always to put a little bit more
05:21 visibility on the strengths. On the other side, of course, there are challenges because what is
05:27 the alternative? I think that there is no alternative, but we need to address the
05:30 challenges and these challenges are internal, both for EU and the countries that would like to be
05:37 members of the European Union. In that case, I must say that we need to address some of the
05:43 internal reforms that we need in the European Union. I think that we need to change the approach.
05:48 When I was Digital Commissioner, that was the Regional Roading Agreement. That was so an
05:53 important step. Now we have the innovation agenda. There are so many young, talented people in the
05:59 region. Digital innovation hubs, how they are working in deep tech or in fintech. I think that
06:05 we need really now to talk a little bit more and much more, I must say, on this positive side.
06:11 Christiane Levin, Scania has a unique perspective to contribute because your company invested
06:17 heavily in some of those 2004 accession countries, like Poland, for example. What are some of the
06:23 advantages a global European company like Scania was able to gain back from that 2004 enlargement?
06:30 And what risks and opportunities for European businesses do you see in the current range of
06:36 candidate countries? Yeah, look, Scania is a global company, but we are also very European. We have,
06:43 let's say, 50% of our customers are European based. 75% of our suppliers are European based.
06:49 If we think about our factory footprint, it's in France, it's in the Netherlands,
06:56 it's in Poland, and it's in Sweden. So it's a kind of a dependence that we have,
07:01 interdependence that we have. If we only take since 2004, the Polish economy, if I'm rightly
07:08 informed, has grown about three times since then. Our sales of vehicles to Poland and the total
07:14 market, total Polish market has increased five times. If we look to our services sales, which
07:19 is so important for the profitability of a company supplying trucks, has increased 10 times. So that's
07:26 just giving you the magnitude. And the Polish hauliers today, with more than a million vehicles,
07:32 are dominating the European haulage industry. Polish drivers, extremely important to keep Europe
07:39 rolling, and Ukrainian drivers, we saw when they were moving back after the full-scale invasion of
07:44 Russia, when they were moving back to defend their country, there was a shock to the European
07:48 manufacturing system because we were suddenly lacking 30,000 Ukrainian drivers. So there are
07:55 a lot of parallels also when you look size-wise. And we are in Ukraine also since 30 years. We
08:01 have our own workshops, our own importership, our own head office there. And we see no reason why
08:07 Ukraine could not follow and be a future Poland from our point of view. And we can only encourage
08:14 other private companies to take the advantage to come to Ukraine and invest in Ukraine already now.
08:19 We, as an example, are doing our best year ever, did our best year ever, 2023, in Ukraine, based
08:26 on the huge need of transport that is coming, partly because of the war and partly because
08:31 of the development. As part of the EU, I think we would see this development not only for Ukraine,
08:38 but we would see it for Montenegro, we would see it for other countries joining the EU in a very
08:44 similar manner. And some of the new markets here in the EU are very competitive. And that's good
08:50 for us. Well, that's the question, right? It is good, but yet could it be tricky then, also with
08:55 some of the challenges of other competitiveness? Well, you could see that as a challenge or you
08:59 could see that as an opportunity. I see that as an opportunity. I think it would be very good for
09:04 us to have a bit of more internal competition in Europe. I think we have become a little bit fat
09:09 and happy and you see productivity coming down as a result. Rostislav Shulman, Deputy Head of the
09:14 Office of the President of Ukraine. Ukraine's enthusiasm for EU membership has put enlargement
09:20 somehow back to the top of the political agenda. Now, Ukraine is, however, the largest and the most
09:25 populous candidate country after Turkey and is fighting the war of aggression for almost two
09:33 years now with a full-scale invasion. So some EU voters and member states will be concerned about
09:39 whether the EU can, so to say, digest Ukraine easily. What do you have to say about that?
09:45 Also, given what Christian Leven just said about, in many cases, companies already working?
09:51 Frankly speaking, I've heard from Christian more about opportunities rather than challenges
09:56 and more about the stimulus for the competition. The European Union was much smaller when they
10:00 took Poland and they digested it. So I think this won't be a problem. The second, I think,
10:07 we should focus on the synergies. For the last seven decades, I think we forgot that peace and
10:14 security, this is not for granted because we had a very good period of continuous development,
10:20 maybe with some financial pauses, but it was continuously growing, improving the quality of
10:26 life of people. But then something happened that nobody of us in the civilized world could imagine.
10:31 Please imagine that in your country, some other country comes in. What it will mean for your
10:38 citizens? And it happened so that Ukraine has what to contribute in the EU about the security,
10:46 about the defense, about the military tech. Because even now, if we even look at the Ukrainian
10:53 battlefield and we need to supply the armors and ammunitions, the European defense industry and
10:58 military tech industry is not ready even to supply, not even to replace the warehouses,
11:03 but just to supply the current needs. And we have this industry and this is not our industry. This
11:09 is the industry for the defense and security for the whole European Union. Another thing is about
11:15 the economic synergies. The first is about the markets because the new entrance, this is a big
11:20 market for many companies. And at the same time, this is a very good contribution to manufacturing,
11:27 to the domestication of some resources of the value chains. Because on the example of Ukraine,
11:35 we do understand that we have people, very skilled, very well educated people.
11:41 And second, we have natural resources, which the European Union lacks at the moment. If you take
11:46 the list of the critical minerals, iron ore, the biggest deposits and the biggest production of
11:52 iron ore. Lithium that we already mentioned during the discussion, the second biggest deposit in
11:57 Europe. Graphite, the first biggest deposit. Manganese and I think titanium, the biggest
12:03 deposits in the world. So this is what we will contribute into the whole European Union.
12:10 Oil and gas, the biggest deposits and renewable potential for the renewables, for the onshore wind,
12:16 for the territory, for the solar. So it will definitely make the whole system stronger and
12:22 more sustainable. So I would look at this as a long term business project where you get the very
12:30 decent return investing in the development of those territories. Prime Minister, most of the
12:36 Western Balkans countries have been somehow stuck in this process in the waiting room for
12:43 like an entire generation. Your country, Montenegro, is specifically seen as one of the best
12:48 performing candidate countries in the neighborhood. Now, what economic arguments do you use to make
12:54 your case in Brussels for a speedier accession process? Somebody who comes from a private sector
13:01 like myself, it was pretty puzzling to see a situation that Montenegro and some other countries
13:07 from the Western Balkans and the wider region, we lack that economic connection with the EU,
13:14 actually. So when I became a minister, a technocrat minister of finance in 2020,
13:19 we inherited a country that was infrastructure was fully built by the companies, financiers out
13:25 of the EU. The main tourists as a tourist country that receives millions of tourists every year,
13:32 the main tourists were coming out of Russia. We did a lot to change that. So now,
13:38 a number of Russian tourists became like seven or eight percent. So it's way less and dependence on
13:44 the Russian market for tourism. We signed with EIB a big investment deal on our railways
13:50 within Montenegro. So that was the first time ever that we get like such a big investment from
13:55 Europe. Then we with the private market, obviously, with the EU growth plan, what I tell to EU guys is
14:01 like, hey, it's not about that. Montenegro's finances are pretty, pretty healthy. We have 60
14:07 percent debt or GDP. We are like fiscal deficits within the criteria, mastery criteria. So we can
14:14 finance most of the things ourselves. But the EU growth plan is so important because it's such a
14:19 strong signal to the private sector. Montenegro used to be more like Mongolia or Kazakhstan in
14:25 terms of the economic structure. But then we were like economically, geopolitically or strategically
14:32 Brussels. So that discrepancy doesn't work long term. So if you want to be if you want to be part
14:41 of the club, you have to be both economy and value based. So I think this is the winning combination.
14:46 And I really think that EU has to step up their game. And I think they're doing it. Finally,
14:52 we are going to have a big investment cycle in the next five to six years in Montenegro. We have
14:56 we expect EU companies and EU finance and use infrastructure vehicles to be much more active
15:04 than they used to be before. And we are we are ready for that. And I think EU is finally ready.
15:10 We somehow have had much more Western Europe leading the enlargement discussions over the
15:15 past decade or decades. Should Eastern Europe, Central Europe, Balkans have a rather more equal
15:22 saying? Mr. Shum, what's your take on that? Initially, I think there weren't the whole
15:27 science because when the war started, I think that the Eastern European countries and they were the
15:33 strongest backers of joining Ukraine. But in fact, the last half a year, you see what's going on
15:41 with the Ukrainian agri products was blocking the borders. I think this is the case when the niche
15:48 problems start impact the domestic politics. We overall we feel the very strong support now as
15:57 never of the core countries of the EU, like the Germany, like the France, like Italy,
16:05 that are basically the core supporters. And we have seen this changing.
16:09 Position of not every Eastern European, because the Bulgaria was quite, I would say,
16:17 quite strong, but some of the European countries, in fact, Eastern European countries have changed
16:24 a little bit, you know what countries I'm referring to their position. But I believe
16:29 that the European values and the long term strategic vision will will win this. This is
16:35 very interesting. How do we bring these business benefits into bigger, make it more important? Also
16:40 given Bulgaria's position when it comes to the Black Sea? Well, I don't agree that first we are
16:48 talking about Western Balkans because of Russia. It's simply not true. Remember the Bulgarian
16:54 Presidency of the Council with the Western Balkans summit in 2018 for a first time again,
16:59 the Western Balkans were on the top of the European agenda. And after we already have
17:03 seen the digital agenda, innovation agenda, the new growth plan that is right now, we have really
17:09 now a huge investment. And I think that we should definitely here see how all together we can
17:16 advance. Second, I must say that following my personal experience, when we have our foreign
17:22 affairs ministerial meetings, it's always central and eastern Europe talking about enlargement.
17:29 Western Balkans and Ukraine. It's me. It's my colleague from Slovenia, from Croatia.
17:34 And they think that even some some time when we have some tensions, it's important to discuss.
17:42 And they think that some of the reactions are because we have our experience and we don't want
17:50 to see other countries with the feeling to be treated like second category of citizens.
17:56 And they think that we should learn from the previous enlargement. I'm giving the example
18:01 of Bulgaria, what that means mechanism of cooperation, verification for more than 10
18:05 years just that was ended last year. That's important for rule of law, democracy. But let's
18:13 work since the very beginning. And they think, again, Bulgaria and Romania are not in Schengen.
18:18 Why? All the technical criteria are fulfilled since 11 years. I think that sometime we should
18:25 take a little bit of time and to discuss about this, because some of the reactions are not only
18:31 internally motivated. They are because we would like somehow to anticipate and not to have the
18:37 same attitude that we were already felt somehow during the years. And the other argument that I
18:45 would like to use, we must stay much more focused to show how we can transform the challenges into
18:50 opportunities. Bulgaria stopped the ban for the export of the Ukrainian grain. That was not an
18:57 easy decision. Three days, all farmers on the street. But we managed to explain to them that
19:04 that's an extraordinary opportunity to increase the connectivity in this part of Europe, to talk
19:11 about infrastructure, rail system or roads. And that means much more benefits for markets, for
19:17 companies, for citizens. It's not easy. But I think that that's why I'm not sure that we started
19:24 again to talk about Western Balkans because only of the Russian aggression in Ukraine. I think that
19:30 because we started finally not to talk only about chapters. Montenegro, I always remember the
19:35 numbers for many years. We are talking about this. We started to talk about competitiveness,
19:40 infrastructure, regions, young people, perspectives, security, independence, sovereignty,
19:45 strategic choice. I think that that's why now we have a change of the agenda. But that's the
19:51 right way we should continue in this direction. That's all we have time for today. Thank you very
19:55 much.