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[00:00:00] No, I think it's just the very first thing, listen, in anything, is just take stock of how the situation is. Don't lie to yourself. I think that's the best rule I think you would all agree in all circumstances.
[00:00:16] This is the Debunking Economics podcast with Steve Keen and Phil Dobbie.
[00:00:23] Well that was Mario Draghi, former president of the European Central Bank, former prime minister of Italy, for a short spell, although that didn't work out terribly well.
[00:00:33] Talking about his report from earlier on in the year about EU competitiveness, and the hard truth about which he talks is that Europe is not competitive, so what's going to be done about it?
[00:00:46] We'll look at that this week on the Debunking Economics podcast.
[00:00:58] So before we remind ourselves of what Mario Draghi had to say back in September, more recently Donald Trump of course has been picking his top jobs for his administration.
[00:01:08] They've been rolling thick and fast over the last week or so, including Howard Lutnik as Commerce Secretary.
[00:01:16] I'm surprised he didn't actually pick his former personal finance officer, Alan Weisselberg, but perhaps that's because he's recently been sentenced, well last year anyway, for time in jail for a decade long time.
[00:01:27] He's been a strong tax fraud scheme of which one of the beneficiaries obviously was Donald Trump.
[00:01:32] But look Nick for Commerce Secretary.
[00:01:33] He is the guy who's going to be spearheading the tariff and trade policy of the new regime.
[00:01:40] He is a billionaire, of course, making his money from, well, you know, of course, the finance industry.
[00:01:45] He was chief executive of Cantor Fitzgerald, which is a fund management advisory services sort of firm.
[00:01:52] They also do real estate, of course, anywhere where you can make money.
[00:01:55] He's described himself as a strong capitalist.
[00:01:58] He's praised Trump for offering a competitive growth model.
[00:02:02] He supports the elimination of income tax.
[00:02:05] That is one way to get rid of tax fraud, isn't it?
[00:02:07] Get rid of tax.
[00:02:08] So, I mean, before we talk about Europe, I mean, it does all tie together this idea that there's going to be a tariff policy that is pushed ahead.
[00:02:17] Steve, it sounds like this guy is the right man for the job.
[00:02:20] Well, I'm just waiting, I'm brushing myself for the chaos we're going to see coming out of that because, I mean, the particular focus I've got is the desire to eliminate the deficit.
[00:02:30] And you just find this is just, you know, the belief that the government's borrowing money, therefore it's going to go bankrupt as we cut out the spending.
[00:02:39] And they're talking, given the scale of the deficit in America right now, they're talking cutting $2 trillion of spending.
[00:02:46] That's $2 trillion fall on GDP.
[00:02:48] And that's a serious, serious recession.
[00:02:53] And we'll wait and watch to see that happen.
[00:02:55] That is a third of their government spending.
[00:02:57] That's right.
[00:02:58] Yeah.
[00:02:58] That's another question entirely.
[00:03:00] But there's going to be chaos in trying.
[00:03:03] And we'll have to, you know, wait and see just how that chaos plays out.
[00:03:08] We're going to get a version of the Argentinian experiment in America.
[00:03:13] Argentina is small enough to ignore.
[00:03:15] America is not.
[00:03:16] So it's going to be intriguing to see, you know, what the hell comes out of this.
[00:03:20] It's, you know, how long do your hats?
[00:03:23] So we, so the tariffs is going to be interesting.
[00:03:25] We talked about it last week, of course.
[00:03:26] But it's going to be interesting as the U.S. makes itself great again as a protected country with higher tariffs and a stronger U.S. dollar and maybe more inward investment as companies set themselves up in the United States.
[00:03:41] The question is, what does that mean for Europe?
[00:03:43] And how does Europe compete with all of that?
[00:03:45] Well, that's, I mean, Europe has been beginning with a lead ball around its legs called the Euro and the Maastricht trading.
[00:03:52] And we're already seeing that damage in Germany in particular, which is, you know, suffering a fall and quite a substantial fall in income.
[00:04:02] Yeah.
[00:04:03] Well, the economy contracted 0.3% last year.
[00:04:06] It's expected to grow by 0.1% this year, although there's some saying actually, no, it's going to be negative this year.
[00:04:13] So the economy has stagnated before we even look at the impact on tariffs on Europe.
[00:04:18] And this is a classic thing because the actual treaty is called the Growth and Stability Pact.
[00:04:23] And it's led to anything.
[00:04:25] It's led to stagnation and instability.
[00:04:27] But the extent to which people can hang on to these things despite their evident failure to work as they expected they would work is something I've just got used to over the last 20 years or so, certainly after the Brexit experience.
[00:04:44] The inability of people to realise the system is not working and then change it is remarkable.
[00:04:50] So Europe is going to continue being handicapped by Maastricht and the limitations on government spending and the effect of the Euro and completely scrambling trade effects within Europe and globally.
[00:05:04] And the loss of energy is the big thing for the German economy, of course, losing cheap energy from Russia.
[00:05:13] It doesn't need any other problems that it's about to get them.
[00:05:16] Well, Mario Draghi summarised it pretty well in his report to the EU earlier this year.
[00:05:23] On September the 9th, the future of EU competitiveness was the report.
[00:05:28] In it, he says, you know, the EU is very exposed to international trade.
[00:05:32] So the trade to GDP ratio exceeds 50 percent compared with 37 percent in China, 27 percent in the US.
[00:05:40] So they're relying on trade.
[00:05:42] They're just about to have tariffs placed on them.
[00:05:44] There's a dependence on a handful of suppliers for raw materials and they import over 80 percent of digital technology, which obviously is becoming increasingly important in the world.
[00:05:55] Energy costs.
[00:05:57] Well, electricity prices are two or three times higher than they are in the US and China.
[00:06:01] They're lagging in new technology.
[00:06:03] So four of the world's top 50 tech companies are European, just four of the top 50.
[00:06:09] And on defence, they're least able to defend themselves because only 10 members spend 2 percent of their GDP on defence compared to 3 percent in the United States or 6 percent in Russia.
[00:06:20] So there we are.
[00:06:21] They're reliant on trade that they're going to see diminishing.
[00:06:24] They've got high energy costs.
[00:06:27] There's a lack of innovation in new sectors.
[00:06:29] I mean, how do you even start to fix those problems?
[00:06:31] Yeah, that's the problem.
[00:06:33] I mean, it is such a melange because when you do something, I bring in a European-scale currency without having a European treasury.
[00:06:42] And you therefore remove the capacity for balance of exchange rate adjustments within Europe, which is what happened.
[00:06:53] With the euro, they lost two things, the capacity for exchange rate adjustments and the capacity for independent fiscal policy and monetary policy for that matter.
[00:07:04] So they're incredibly constrained in what they can do.
[00:07:08] And it hasn't worked.
[00:07:10] I mean, the whole idea of forming the euro, the original idea was to have a single free trade zone, which was quite effective before they brought in the euro.
[00:07:20] And now they've got the single free trade zone internally.
[00:07:25] But they have – the economies have stultified courtesy of the inability to have sensible fiscal policy imposing the same interest rate across – that's actually varied by the impact on government bonds.
[00:07:40] But it's a mess.
[00:07:41] It is just really a mess.
[00:07:42] And you think, how do you unscramble the eggs?
[00:07:45] Yeah, well, unless you take it to the next stage.
[00:07:48] You've either got to step backwards or step forwards, haven't you?
[00:07:51] But it seems like – I mean, part of the problem is they are so focused on this idea that we've got to have fair competition within Europe.
[00:07:59] So, for example, one country cannot subsidize a particular industry within their country because that would be uncompetitive for the rest of Europe.
[00:08:08] So, they're so focused inwardly on how do we make sure there's fair trade within European countries that they've lost their focus on how competitive are we on the international table.
[00:08:19] Yeah, and we can certainly see that with the German automobile industry used to be a global leader in terms of both quality and volume of sales.
[00:08:29] And now they're completely lost out to both Chinese and American competition.
[00:08:34] So, it is – Europe's growth and stability pact has had the opposite effect, and there seems to be no way to escape from the trap.
[00:08:45] Yeah, and that fact that the motor industry might say, well, it just evolves.
[00:08:50] But there's nothing to replace it, is there?
[00:08:52] So, if it is diminishing – so, this is, again, it's a point Mario Draghi points out –
[00:08:57] that there's no EU company with a market cap over €100 billion that has started from scratch in the last 50 years.
[00:09:05] But all six US companies with a valuation over €1 trillion have all been created in the last 50 years.
[00:09:12] The top three investors in research and development in Europe have all been in the automotive industry.
[00:09:19] In the US, they are all tech companies.
[00:09:21] So, that's the problem, isn't it?
[00:09:22] It's all backward looking, and there's no scope for innovation for whatever reason.
[00:09:27] Well, I mean, the reason is the mess they've made with the European Union and the euro,
[00:09:33] and the limitations on government spending, the fact that you say that they're focused on internal competition,
[00:09:39] so you can't subsidise a particularly promising firm in your country.
[00:09:46] Whereas America does that quite well at the state level.
[00:09:49] So, in some ways, they're even more constrained than American states are on the spending that they allow to happen.
[00:09:56] Now, some of that's going to avoid, you know, a pork barreling, which is something you should try to avoid.
[00:10:03] But it also means that you – if you get a company like – you know, Tesla is the obvious example –
[00:10:09] getting support from its local state.
[00:10:13] And that is also a country – a company which is going to grow quite dramatically.
[00:10:18] And then all of America benefits from that, not just Texas.
[00:10:23] Whereas that's not allowed to happen in the European case.
[00:10:26] You can't subsidise because that gives you an unfair advantage.
[00:10:30] Even though, as you know, the point is, but the company grows, and Europe's got it.
[00:10:34] But that's not happening.
[00:10:35] It's a focus upon specialisation.
[00:10:38] And conventional economic theory leads to snafus like this because the whole focus of conventional theory
[00:10:44] about the benefits from trade is in terms of specialisation.
[00:10:48] You move your resources from where they're less profitable, where they're more profitable.
[00:10:53] The trouble is those resources are things like blast furnaces, which are rather hard to use to make computers.
[00:11:01] The whole idea of the conventional theory, if people go back and read the definition of economics that –
[00:11:09] it wasn't – it was Lionel Robbins put forward in the 1930s, which is about –
[00:11:14] it's about the maximisation of utility by specialisation, moving –
[00:11:24] improving the use of resources.
[00:11:26] And there's a punchline at the end.
[00:11:28] Which have alternative uses?
[00:11:30] Now, this is the huge hole in conventional thinking about trade because they imagine that capital is amorphous.
[00:11:37] Capital can be converted from being used in the steel industry across to being used to make semiconductors.
[00:11:44] No bloody way.
[00:11:45] If you shut down the steel industry and end up with rust, you don't end up with a semiconductor factory instead.
[00:11:51] So, it's, again, conventional economic theory lies behind the incredibly handicapped situation to what Europe has now put itself.
[00:12:00] So, why is it all happening in America then?
[00:12:03] Is it just because it's too hard within Europe because you're not getting the government support?
[00:12:09] There's also the problem, of course, isn't it?
[00:12:11] Which, I mean, Draghi sort of has an answer to this as well.
[00:12:15] That it's just a whole load of member states all with their own legal structure, their own tax systems.
[00:12:22] It's just working your way through understanding all of that.
[00:12:26] Dealing with multiple countries rather than dealing with one is just a nightmare for a company that,
[00:12:32] even if you had a profitable idea, it's going to be less profitable in those early days just through the regulation and administration that's involved in it all.
[00:12:40] Yeah.
[00:12:40] And this is one of the crazy things about the euro itself that it was imposed both by people like Wynne Godley,
[00:12:47] who knows what he's talking about when it comes to government finances, and Milton Friedman, who doesn't.
[00:12:52] But the point they both agreed upon was that if you're going to have a United States of Europe go to be competitive with the United States of America,
[00:13:03] then you have to have a national budget and a national level planning system.
[00:13:12] It can't be state-based.
[00:13:14] Now, America's got that, even though American government, state government spend a fair amount of money and raise a fair amount in taxes.
[00:13:22] State taxes.
[00:13:23] They are far smaller than the federal government, and that's the opposite case in Europe because the national governments,
[00:13:30] even though they're constrained on what they can do by the Maastricht Treaty,
[00:13:33] they're far larger than the administration for the European Union in Brussels.
[00:13:42] So they simply don't have the structure.
[00:13:45] Everything's in the wrong bloody place.
[00:13:47] This seems to be Europe's problem,
[00:13:49] and they've accentuated by having a single currency.
[00:13:52] Well, I mean, the single currencies, I mean, there's limited, you know, discussion for another day.
[00:13:57] We talked about it in the past.
[00:13:58] I mean, the single currency is good and bad, isn't it?
[00:14:01] Perhaps the good has sort of diminished somewhat in this digital age.
[00:14:04] Who cares whether you've got multiple currencies or not?
[00:14:06] But it's the fact that we are dealing with different structures and not having this Europe-wide fund.
[00:14:15] So Draghi's idea for, and this is one of many where he's talking about a Europe-wide solution,
[00:14:22] he says there should be an EU-wide innovation fund.
[00:14:27] And this innovative Europe company would be a new entity.
[00:14:32] So if you've got a company that's seen as being innovative,
[00:14:34] you're classified as an innovative European company,
[00:14:38] and you'd have one identity throughout Europe,
[00:14:40] you'd have harmonized legislation across the region.
[00:14:43] So your tax will be harmonized.
[00:14:44] Just in other words, for a start,
[00:14:47] in this move towards having just a unified Europe,
[00:14:49] let's start by unifying in getting behind companies that we see growth potential.
[00:14:56] Guess, you know, if you can't go all the way, that's a good first step, isn't it?
[00:15:00] Yeah, it's better.
[00:15:02] But again, the constraints Europe have got are just ridiculous
[00:15:08] compared to the situation in America and certainly in China.
[00:15:14] Europe's performance as a continent has been tragic compared to every other continent
[00:15:20] except possibly South America.
[00:15:22] Yeah.
[00:15:23] Well, China's easy to see, isn't it?
[00:15:25] Because they pump a lot of money into either directly or indirectly,
[00:15:29] whether it's from the federal government or through banks which are owned by governments
[00:15:33] or through local authorities which are funded by the government.
[00:15:36] And all of them are pumping money in, whereas less so in the United States.
[00:15:41] And obviously, the Maastricht Treaty makes sure it doesn't happen.
[00:15:44] You know, it hardly happens at all within Europe.
[00:15:45] Do you think that's the fundamental issue?
[00:15:48] It's public money.
[00:15:49] But you can't help feeling, even if you said,
[00:15:51] well, there's loads of public money available within Europe,
[00:15:55] it's still going to be used inefficiently to try and drive this growth.
[00:15:59] And these companies would still go to the States anyway.
[00:16:02] It's hard to say.
[00:16:03] I mean, you look at the European situation and, you know, I've been a critic.
[00:16:07] The reason I voted for Brexit was nothing to do with Britain.
[00:16:09] I thought it would be a way to, you know,
[00:16:11] send a wake-up call to the European Central Bank
[00:16:13] and get them to reduce the damage that the Maastricht Treaty does
[00:16:19] to the capacity for governments to run deficits,
[00:16:22] which is an essential step in creating fiat money.
[00:16:25] And the freely availability of that fiat money is a large part
[00:16:28] of what enables commerce to occur in the private sector.
[00:16:31] Of course, that would complete backfire.
[00:16:33] It was completely stuffed up by the Tories.
[00:16:36] And the result is that, in fact, it strengthened the European Union.
[00:16:40] And you now have, you know, Britain talking about rejoining
[00:16:43] and may well face the threat of having to rejoin with the euro,
[00:16:46] which would be absolutely catastrophic.
[00:16:49] But what you fundamentally do by having a focus upon cutting government spending,
[00:16:55] what you're doing is cutting the creation of fiat money.
[00:16:57] Now, as much as Americans, you know,
[00:16:59] this is why I think it's going to be fun seeing what happens in America as well.
[00:17:03] If Musk gets his way to attempt to cut government spending
[00:17:05] and eliminate the budget deficit, what they're eliminating is fiat money.
[00:17:10] And with that level of economic activity in America after COVID,
[00:17:15] in comparison of how well America's grown since COVID compared to the other,
[00:17:22] particularly Europe and the UK, it comes down to the amount of money they've created
[00:17:26] by running the deficit.
[00:17:27] They don't know what they're doing on that front.
[00:17:29] But there's plenty of fiat money around.
[00:17:31] There's plenty of – therefore, there's monetary demand for new companies.
[00:17:34] That itself enables new innovations to occur because the revenues from sales are substantial.
[00:17:42] Whereas if you only have simply credit money being created,
[00:17:46] you have less – and that money comes with a debt sting to the borrowers as well,
[00:17:53] you get less reliable growth, less reliable innovation in the private sector
[00:17:59] through simply the lack of finances to make it feasible in the first place.
[00:18:02] So here's an opportunity, isn't it, for euro,
[00:18:03] which we'll explore more when we come back after the break.
[00:18:07] But if the US is going that way and they basically are saying,
[00:18:11] yes, there's going to be less money spinning around in the economy,
[00:18:13] therefore you can create a very efficient company.
[00:18:15] But there's – people have less money in their pockets,
[00:18:17] therefore they can't buy the stuff that you're making.
[00:18:21] And we're going to make it expensive for them to buy stuff that's imported.
[00:18:24] All of that's an opportunity for Europe then, isn't it?
[00:18:26] I mean, if Europe was to –
[00:18:27] Yeah, America's about to shoot itself on the same feet that a euro blew off
[00:18:31] back when it started the euro.
[00:18:33] So, yeah.
[00:18:33] So they switch places.
[00:18:34] Yeah.
[00:18:35] Oh, yeah.
[00:18:36] I mean, I'll buy popcorn,
[00:18:37] but I better get it from China, China rather than anywhere else.
[00:18:40] The only place that's going to be making it by the sounds of it.
[00:18:43] That's right.
[00:18:43] Look, when we come back, let's talk about what Europe could do
[00:18:46] and let's talk about the technology side of things and the growth in AI as well
[00:18:49] because I've got a thought on this, which I think could be a real winner.
[00:18:53] I can't quite share it.
[00:18:54] And if it is, you heard it here first.
[00:18:57] Back in a second on the Debunking Economics podcast.
[00:18:59] This is the Debunking Economics podcast with Steve Keen and Phil Dobby.
[00:19:09] Okay.
[00:19:09] Okay.
[00:19:09] So we are looking at, you know, the problems that Europe is facing,
[00:19:12] the fact that it is – I mean, it's burdensome, isn't it?
[00:19:16] The regulation that you've got within Europe.
[00:19:18] And on top of that, the fact that everyone has to follow the Maastricht Treaty
[00:19:22] so you cannot spend even to support growth industries.
[00:19:26] Now, Mario Draghi has come up with this report,
[00:19:28] which is rather shocking to a lot of Europeans,
[00:19:30] probably why it's been dropped.
[00:19:31] I mean, everyone read it and then it's not talked about anymore
[00:19:35] because he was talking about Europe spending more at a Europe-wide level.
[00:19:40] And that is what's going to happen.
[00:19:42] And let's look at one area where there is obviously some growth
[00:19:46] and that's in artificial intelligence.
[00:19:49] His point is we've got to make sure we don't overburden it with regulation.
[00:19:54] So he doesn't say this, but here's my idea, right?
[00:19:57] And for AI, the biggest cost, obviously, for a lot of companies
[00:20:02] is the chips and the server space.
[00:20:04] So if you are an innovative company and you've got an idea,
[00:20:09] the biggest obstacle you're going to face is how you're going to get the server space
[00:20:13] and the chips that need the processing power.
[00:20:16] Now, you can go to Amazon Web Services, for example,
[00:20:19] that means you are, you know, buying server space from America.
[00:20:23] Here's an opportunity for Europe.
[00:20:24] Why isn't a Europe-wide, publicly owned server capacity,
[00:20:31] almost like the roads of the future,
[00:20:34] which opens up the way for innovative companies in Europe
[00:20:38] and reduces the reliance on U.S. big tech?
[00:20:42] So there's a, you know, a funneled investment made by a Europe-wide entity
[00:20:50] that is helping European companies to grow and establish itself in this space,
[00:20:56] which is dominated by America and China at the moment.
[00:20:58] I don't know a little problem about service.
[00:21:00] I mean, you've got to buy the chips.
[00:21:03] We're talking pretty much NVIDIA chips these days,
[00:21:06] because, I mean, most people talking to the, listening to the podcast,
[00:21:11] will probably know this already.
[00:21:12] But what you've got with artificial intelligence is basically enormous scale
[00:21:17] matrix transformations using GPUs, graphical processing units,
[00:21:23] rather than CPUs, central processing units.
[00:21:26] For which NVIDIA is making an enormous amount of money,
[00:21:30] and it just keeps on increasing.
[00:21:31] So they just had their results announced this week,
[00:21:33] and they exceeded expectations.
[00:21:35] Strangely, the markets didn't take to it too well
[00:21:36] because they didn't exceed expectations by as much as expected,
[00:21:39] but the growth is still phenomenal.
[00:21:41] So, but you'd be saying, well, okay, so they've got a leg up,
[00:21:45] a head start, but why wouldn't Europe say, well, okay,
[00:21:48] well, let's just not sit back and let that happen.
[00:21:50] Why don't we fund something locally that will help fight off that dominance
[00:21:56] by one player in one market,
[00:21:59] a market that is about to start charging us tariffs on everything we export?
[00:22:03] I mean, why wouldn't you start and say, well, we need to become self-sufficient?
[00:22:07] It's going to be very hard for that to be done in the commercial sector,
[00:22:10] so let's put public money behind it.
[00:22:11] Yeah, I mean, it's feasible in some senses,
[00:22:13] but the problem is the reason I mentioned GP is because the energy required,
[00:22:18] you know, the amount of energy and the amount of water for cooling
[00:22:23] in huge servo farms is enormous,
[00:22:26] and energy costs in Europe,
[00:22:28] courtesy of the whole Ukraine war effect on supply of Russian energy,
[00:22:35] energy in Europe is substantially more expensive than it is in the USA,
[00:22:40] and there's no guarantee.
[00:22:42] Because they're using fossil fuels.
[00:22:44] Fossil fuels.
[00:22:44] I mean, even nuclear has got a problem in Europe because if the drought,
[00:22:49] I mean, they've got droughts and floods.
[00:22:51] You don't have normal weather anymore.
[00:22:52] You've got droughts or floods.
[00:22:53] But some of the rivers in France, and France is the major country in Europe with nuclear power.
[00:22:59] I think it's about 75% of its power,
[00:23:01] less your power comes from nuclear.
[00:23:04] They need water cool.
[00:23:05] They've got to, you know, you've got steam,
[00:23:07] you're ultimately driving a steam turbine.
[00:23:09] You've got to cool down the superheated water coming out of the,
[00:23:13] from the pumps out of the reactor and ciphering it through.
[00:23:17] And you cool it by dumping it in, you know,
[00:23:19] you're mixing it with river water,
[00:23:21] and you've got limits on how much you can increase the temperature of the river.
[00:23:25] And some of the rivers were just too low a couple of years ago
[00:23:27] to enable the power stations to run.
[00:23:30] So it's a little bit.
[00:23:31] Yeah, they have storms in the US as well, of course.
[00:23:33] Bigger ones, in fact.
[00:23:34] But, I mean, that's, but it's, but the answer surely is,
[00:23:38] it's a, I mean, it may be a two-step process.
[00:23:40] It might take a number of years.
[00:23:42] But you've got the choice.
[00:23:43] You can say, well, okay, let's make ourselves continue to be reliant on,
[00:23:47] which really is the road of the future.
[00:23:48] It's server space and, you know, and the processing power behind that,
[00:23:53] which does take up a lot of energy.
[00:23:55] So let's make ourselves dependent on the United States,
[00:23:59] which is using and will be using increasingly fossil fuels to support those servers,
[00:24:03] because that is the, clearly the direction of travel in the United States.
[00:24:08] Or let's do it locally where energy costs three times as much.
[00:24:12] Maybe it's going to become five times as much as US energy becomes cheaper.
[00:24:15] But let's get that cost down because we'll have to create greater volume in energy
[00:24:19] to support this local infrastructure,
[00:24:22] which means that we have to invest faster in energy.
[00:24:26] And yeah, okay, if it's, if nuclear close to French rivers is a problem,
[00:24:31] let's stick nuclear on the islands of Scotland.
[00:24:33] You know, there's a lot, you know, there's a lot of geography of, you know,
[00:24:37] of varying types within Europe.
[00:24:38] So you can find a mixed solution.
[00:24:40] It's just making the investment to, to allow it to happen.
[00:24:44] But if you make that investment, you get, you get more, you, America,
[00:24:48] Europe has got to go down the road of becoming more self-sufficient in energy anyway.
[00:24:52] So why not go at it wholesale to support the growth area,
[00:24:56] which is going to be these servers and make it publicly funded
[00:24:59] and then allow competition to sit on top of that?
[00:25:03] And provide a public resource in that sense,
[00:25:06] which is, which we can at larger scale than any private individual could do
[00:25:09] or private group.
[00:25:11] So rather than have multiple privates,
[00:25:12] have one large American super cluster of servers.
[00:25:17] Yeah.
[00:25:17] Yeah.
[00:25:18] Because then you don't need to worry about subsidizing companies.
[00:25:21] You can't say, because then you're picking ideas.
[00:25:22] You can say, well, we're not subsidizing, you know, individual ideas,
[00:25:26] but what we are doing is subsidizing the infrastructure
[00:25:28] that all of these ideas will be reliant on.
[00:25:30] Yeah.
[00:25:30] Well, I mean, you certainly need to have,
[00:25:32] if you're going to think into competitive terms,
[00:25:34] trade competitive terms about AI,
[00:25:37] then at the moment, I think all the major AI companies,
[00:25:40] actually that's not true.
[00:25:41] The Chinese would have their own AI,
[00:25:42] but then sends a commercially available AI.
[00:25:47] You're talking all the American companies,
[00:25:49] and there is no European rival.
[00:25:51] So it's huge to have-
[00:25:55] Because I mean, too busy focused on putting money
[00:25:57] into supporting the car industry.
[00:25:58] Yeah, yeah, yeah.
[00:25:59] Which is failing anyway.
[00:26:01] And then the other side, I mean,
[00:26:03] Draghi's plan calls for more investment in renewables.
[00:26:07] You know, no brainer there, nuclear hydrogen, bioenergy,
[00:26:10] carbon capture as well, if that works.
[00:26:13] Storage.
[00:26:14] And more importantly,
[00:26:16] the rapid deployment of interconnections,
[00:26:18] because, you know,
[00:26:19] we do have this problem at the moment
[00:26:21] that you might have a country
[00:26:22] that generates a lot of renewable energy,
[00:26:24] might have a surplus.
[00:26:25] There's no way of getting it to outside the area
[00:26:29] into another jurisdiction.
[00:26:30] So the interconnections between all European countries
[00:26:32] sounds pretty basic,
[00:26:34] but that's Europe working together.
[00:26:36] And, you know,
[00:26:37] and some of that should be done
[00:26:38] by Europe-level funding, I think.
[00:26:40] So all of these plans rely on Europe thinking
[00:26:44] almost as one nation, don't they?
[00:26:46] You know, you can have individual countries, perhaps,
[00:26:49] but you've got to have agreements
[00:26:50] on putting money into a European-wide pot
[00:26:53] to invest in all of this,
[00:26:55] whether it's server farms,
[00:26:57] renewable energy resources.
[00:26:58] There's got to be a Europe-wide industrial plan,
[00:27:02] in effect.
[00:27:03] Yeah, and that's, I mean,
[00:27:04] this is the thing which China has shown is feasible,
[00:27:07] that it's done incredibly successfully.
[00:27:09] I mean, that's, you know,
[00:27:11] I keep on coming back to my experience
[00:27:13] of being there in 81-82
[00:27:14] versus what it's like these days.
[00:27:17] And the technological transformation
[00:27:18] is just breathtaking.
[00:27:20] And that's having industrial policy saying,
[00:27:23] we want to build up this capability
[00:27:25] and getting the,
[00:27:26] putting engineering first and foremost
[00:27:28] and putting economics in a subservient situation
[00:27:33] rather than thinking forever
[00:27:35] about your budget deficit,
[00:27:37] which is what the Europeans have done.
[00:27:38] So yeah, they've got to have that,
[00:27:41] you know, continental scale of thinking.
[00:27:45] And that comes back to the point
[00:27:47] that both Godley and Friedman made
[00:27:49] when the euro was first devised,
[00:27:52] that the only way it's going to work
[00:27:54] is if you actually have a supranational,
[00:27:58] a continental treasury,
[00:28:01] a continental attitude to development.
[00:28:03] And this may be,
[00:28:05] because the way it stands now
[00:28:07] has been a complete failure.
[00:28:08] The odds of disaggregating
[00:28:11] and going back to the independent currency
[00:28:13] seems impossible.
[00:28:14] So the only way forward
[00:28:15] is that idea of more unity.
[00:28:18] And, you know,
[00:28:19] there are some people who argue
[00:28:20] that that was the whole idea
[00:28:21] in the first place
[00:28:21] to force a form of European Union
[00:28:24] by setting up a dysfunctional system
[00:28:26] in the meantime.
[00:28:28] Maybe that's the case,
[00:28:29] but certainly the only way
[00:28:30] that Europe's going to be able
[00:28:30] to compete with America or China
[00:28:32] is to behave as a nation
[00:28:34] rather than a, you know,
[00:28:37] a hobbled bunch of independent states,
[00:28:39] which is what it is now.
[00:28:40] So the United States of Europe,
[00:28:41] which people would then say,
[00:28:43] oh, well, you know,
[00:28:44] and Britain would say,
[00:28:45] well, we don't want to be part of that,
[00:28:46] but we probably should be.
[00:28:47] I mean, I actually don't have
[00:28:49] a problem with it.
[00:28:49] The idea that you have
[00:28:50] a European government.
[00:28:52] I mean, the big problem, again,
[00:28:54] was the way the European Parliament
[00:28:56] was working was,
[00:28:57] it was a bodge, wasn't it?
[00:28:59] It was trying to put together
[00:29:00] another layer of government
[00:29:01] and what we'd be talking about.
[00:29:02] I mean, the other crazy thing
[00:29:04] about Europe,
[00:29:04] and we can't ignore this,
[00:29:05] is that it's not a genuine parliament.
[00:29:08] It's the only parliament
[00:29:09] on the planet
[00:29:09] where the parliament
[00:29:10] can't draft laws.
[00:29:11] The laws are drafted
[00:29:12] by the European Union,
[00:29:14] the bureaucrats,
[00:29:14] and submitted to the European Parliament
[00:29:17] for discussion
[00:29:18] and maybe amendment,
[00:29:19] but they can't originate.
[00:29:21] And I'm no great fan
[00:29:22] of what politicians
[00:29:22] have done globally anyway
[00:29:24] in terms of their capacity
[00:29:25] to draft sensible laws.
[00:29:27] But it has always been
[00:29:29] about reducing the level
[00:29:30] of democracy,
[00:29:30] not increasing it.
[00:29:32] And, you know,
[00:29:34] you've got unelected officials
[00:29:36] dominating Europe completely.
[00:29:38] I'm not particularly fond
[00:29:39] of the current crop
[00:29:40] of elected officials
[00:29:41] in the rest of the world,
[00:29:42] but again,
[00:29:42] at the same time,
[00:29:43] the whole idea
[00:29:44] has been about
[00:29:44] taking the public.
[00:29:45] It's exactly the same
[00:29:46] as the US though,
[00:29:48] isn't it?
[00:29:48] You have people
[00:29:49] being put into positions
[00:29:50] of power
[00:29:51] who haven't been elected.
[00:29:52] No one voted for you
[00:29:52] on Musk.
[00:29:54] Yeah, well,
[00:29:56] America elects its king.
[00:29:58] That's what it does
[00:29:58] whenever it has.
[00:29:59] It's not a parliamentary system.
[00:30:01] It's a cut-down version
[00:30:03] of royalty.
[00:30:04] That's what they're doing.
[00:30:06] But at least
[00:30:07] you are actually
[00:30:08] choosing the king.
[00:30:11] There's some complaints
[00:30:12] about the last election process,
[00:30:14] but that's what they do.
[00:30:15] Whereas in the European case,
[00:30:18] you're locked into
[00:30:19] the ideas
[00:30:20] that were put forward
[00:30:21] by the auto-liberals
[00:30:23] who drafted the euro
[00:30:24] and the whole constitution
[00:30:26] in the first place.
[00:30:27] And again,
[00:30:27] you're stultified.
[00:30:28] You can't change it.
[00:30:29] It's the dark hand
[00:30:31] of the past
[00:30:31] dominating what Europe can do.
[00:30:33] Whereas America
[00:30:34] and China,
[00:30:35] for all their flaws,
[00:30:35] don't have that handicap.
[00:30:37] So even if Europe said,
[00:30:39] well, okay,
[00:30:40] let's burn
[00:30:40] the Maastricht Treaty,
[00:30:41] let's have a big celebration.
[00:30:43] Let's burn it.
[00:30:43] Let's all get together.
[00:30:44] Oh, I'd be there.
[00:30:44] I'd throw in some of the matches.
[00:30:46] Have a big party, exactly.
[00:30:48] Even if they did that
[00:30:48] and they said,
[00:30:49] right, good,
[00:30:50] that means we can now
[00:30:51] spend big
[00:30:51] on renewable energy
[00:30:53] and industrial strategy
[00:30:55] that includes
[00:30:57] our tech future
[00:30:58] which makes us
[00:30:58] less dependent
[00:30:59] on China
[00:30:59] and the United States.
[00:31:01] because if you don't do that,
[00:31:02] you really are stuffed.
[00:31:04] You're saying,
[00:31:04] well,
[00:31:04] the future
[00:31:05] lies in everyone else's hands
[00:31:07] just as energy
[00:31:08] in the past
[00:31:09] we relied on other suppliers.
[00:31:11] So let's spend big
[00:31:12] to make sure
[00:31:13] that we are self-sufficient
[00:31:15] but also innovative
[00:31:16] because Europe does have
[00:31:17] smart people living in it.
[00:31:19] You know,
[00:31:19] it's not as though...
[00:31:19] Well, the crazy thing is,
[00:31:21] I mean,
[00:31:21] one of the major handicaps
[00:31:22] Europe has
[00:31:23] in the computing industry
[00:31:24] and the most...
[00:31:25] I keep getting
[00:31:26] initials confused.
[00:31:27] It's IMSL
[00:31:29] or ASML.
[00:31:30] ASML, isn't it?
[00:31:32] Yeah.
[00:31:32] So the Dutch company
[00:31:33] that makes the machines
[00:31:34] that make the chips.
[00:31:35] Yeah.
[00:31:35] So without that single company
[00:31:37] we wouldn't have
[00:31:38] the technological level
[00:31:39] we expect
[00:31:39] from other countries
[00:31:41] today
[00:31:41] but that technological level
[00:31:43] hasn't been reflected
[00:31:44] in a European entity
[00:31:45] in its own right.
[00:31:46] We're buying chips
[00:31:47] from Taiwan.
[00:31:48] You know,
[00:31:49] you have
[00:31:51] artificial intelligence
[00:31:52] from companies
[00:31:54] in America.
[00:31:56] I presume
[00:31:57] the NVIDIA chips
[00:31:58] are cut
[00:31:58] on the same machines.
[00:32:01] Europe
[00:32:01] hasn't got
[00:32:02] the downstream benefit
[00:32:03] of that incredible innovation.
[00:32:05] So if
[00:32:06] there wasn't
[00:32:07] the investment
[00:32:07] of pumping money
[00:32:08] into investing
[00:32:09] into growing
[00:32:10] this sector
[00:32:12] would it still work?
[00:32:14] Would it happen
[00:32:14] without a
[00:32:15] Europe-wide government?
[00:32:17] Can those
[00:32:18] individual countries
[00:32:19] agree that
[00:32:20] they would be
[00:32:20] Europe-wide spending?
[00:32:21] They've got to come to this
[00:32:22] by the way
[00:32:22] on defence as well.
[00:32:23] You know,
[00:32:24] I mean,
[00:32:24] if America says
[00:32:25] well we're going to be
[00:32:27] less influential
[00:32:28] on the defence front
[00:32:29] which some people
[00:32:30] might say is a good thing
[00:32:31] and Russia becomes
[00:32:32] more adversarial
[00:32:34] then
[00:32:36] Europe's got to
[00:32:36] get its act together
[00:32:37] on a united front
[00:32:39] in defence
[00:32:40] as well
[00:32:40] because there's
[00:32:41] enormous duplication
[00:32:42] of effort
[00:32:42] and variation
[00:32:44] of input
[00:32:44] across the
[00:32:45] European community.
[00:32:46] So can they do
[00:32:47] all of that?
[00:32:48] Can they get
[00:32:48] a defence strategy?
[00:32:49] Can they get
[00:32:50] an innovation strategy
[00:32:52] and a technology strategy?
[00:32:54] Can they get
[00:32:54] all of those
[00:32:55] strategies together
[00:32:56] and implement it
[00:32:57] effectively
[00:32:57] so long as
[00:32:58] they're a whole
[00:32:58] series of
[00:32:59] different countries
[00:33:00] even if there was
[00:33:01] you know,
[00:33:02] everyone was putting
[00:33:02] money into a
[00:33:03] Europe-wide bucket
[00:33:04] or did they
[00:33:05] This is the problem
[00:33:07] they're still so
[00:33:07] defined by national
[00:33:08] boundaries
[00:33:09] and the national
[00:33:11] boundaries
[00:33:12] including language
[00:33:13] I mean trying to
[00:33:14] coordinate
[00:33:14] an American
[00:33:16] military is easy
[00:33:17] there's one language
[00:33:17] across the entire
[00:33:18] country
[00:33:20] across Europe
[00:33:21] how many
[00:33:21] you know
[00:33:21] there are 18
[00:33:23] major language
[00:33:24] groups at least
[00:33:27] But there's
[00:33:28] trouble
[00:33:30] it's not
[00:33:31] enough of a
[00:33:31] language
[00:33:32] across the
[00:33:33] entire
[00:33:33] continent
[00:33:34] to enable
[00:33:35] the level
[00:33:36] coordination
[00:33:36] that's natural
[00:33:37] in America
[00:33:38] because of one
[00:33:39] language
[00:33:39] and natural
[00:33:40] in China
[00:33:40] because of one
[00:33:41] script
[00:33:42] I think there's
[00:33:43] four major
[00:33:44] language groups
[00:33:44] in China
[00:33:45] and numerous
[00:33:46] dialects
[00:33:47] they all read
[00:33:48] the same
[00:33:48] script
[00:33:48] So what are we
[00:33:49] saying?
[00:33:50] We're going to
[00:33:50] say there's
[00:33:50] going to be
[00:33:50] one government
[00:33:51] in Europe
[00:33:52] and everyone
[00:33:52] is going to
[00:33:53] speak English
[00:33:53] then we've
[00:33:54] got the
[00:33:54] problem
[00:33:55] sorted
[00:33:55] Wouldn't
[00:33:56] that go
[00:33:56] down well?
[00:33:58] We'll all
[00:33:59] speak French
[00:34:00] maybe
[00:34:00] Je ne sais pas
[00:34:03] It's not so bad
[00:34:05] It's perhaps a
[00:34:06] more attractive
[00:34:07] language than
[00:34:07] English anyway
[00:34:09] What we're
[00:34:10] talking about
[00:34:11] is something
[00:34:12] that's not
[00:34:13] achievable
[00:34:13] then
[00:34:13] I mean
[00:34:15] the first
[00:34:16] two steps
[00:34:18] surely are
[00:34:19] a Europe
[00:34:20] wide
[00:34:20] approach
[00:34:22] with
[00:34:22] Europe
[00:34:23] wide
[00:34:23] investments
[00:34:24] so countries
[00:34:25] are putting
[00:34:25] money in
[00:34:26] to
[00:34:27] a shared
[00:34:28] resource
[00:34:29] whatever that
[00:34:29] might be
[00:34:30] and it is
[00:34:31] implemented
[00:34:31] on a
[00:34:32] Europe
[00:34:32] wide
[00:34:32] basis
[00:34:33] with a
[00:34:33] plan
[00:34:34] that is
[00:34:35] Europe
[00:34:35] wide
[00:34:36] and not
[00:34:36] parochial
[00:34:37] It's that
[00:34:38] word
[00:34:38] it was
[00:34:38] all sounding
[00:34:39] fine
[00:34:39] wasn't it
[00:34:40] until I
[00:34:40] came up
[00:34:41] with those
[00:34:41] last two
[00:34:41] words
[00:34:42] not
[00:34:42] parochial
[00:34:43] that's
[00:34:43] the
[00:34:43] problem
[00:34:44] Yeah
[00:34:45] and the
[00:34:45] other thing
[00:34:45] is of course
[00:34:46] they've still
[00:34:46] even though
[00:34:47] they've got
[00:34:47] a single
[00:34:47] currency
[00:34:48] they've still
[00:34:49] got national
[00:34:49] boundaries
[00:34:50] for trade
[00:34:50] deficits
[00:34:51] and trade
[00:34:52] surpluses
[00:34:52] and that
[00:34:53] means the
[00:34:54] countries are
[00:34:54] worried about
[00:34:55] their money
[00:34:55] going outside
[00:34:56] their own
[00:34:57] bounds of
[00:34:57] running a
[00:34:58] trade deficit
[00:34:59] or the other
[00:35:00] countries as
[00:35:00] Germany was
[00:35:01] doing for
[00:35:02] so long
[00:35:02] and the
[00:35:02] Netherlands
[00:35:03] and most of
[00:35:04] the Nordic
[00:35:04] countries still
[00:35:05] do running
[00:35:06] huge trade
[00:35:06] surpluses
[00:35:08] those
[00:35:08] imbalances
[00:35:10] would have
[00:35:11] to be
[00:35:11] eliminated as
[00:35:12] well
[00:35:12] nobody knows
[00:35:13] what the
[00:35:13] trade balances
[00:35:14] of California
[00:35:15] is with
[00:35:16] Florida
[00:35:16] okay
[00:35:16] it's not
[00:35:17] an issue
[00:35:18] it would
[00:35:19] have some
[00:35:20] domestic
[00:35:20] ramifications
[00:35:21] because money
[00:35:21] circulates
[00:35:22] locally in
[00:35:23] so much
[00:35:23] industry
[00:35:24] so much
[00:35:26] trade
[00:35:26] but
[00:35:27] the fact
[00:35:28] that they've
[00:35:28] still got
[00:35:29] the issue
[00:35:30] of national
[00:35:30] boundaries
[00:35:31] for trade
[00:35:32] while they've
[00:35:32] got a single
[00:35:33] currency
[00:35:33] and they
[00:35:34] don't have
[00:35:34] it
[00:35:34] and their
[00:35:35] treasuries
[00:35:36] were all
[00:35:36] you know
[00:35:37] subservient to
[00:35:38] the rules
[00:35:39] of the
[00:35:39] Maastricht
[00:35:40] Treaty
[00:35:41] it is
[00:35:41] it is a
[00:35:42] real mess
[00:35:43] but
[00:35:43] untangling
[00:35:44] it
[00:35:44] the only
[00:35:44] way
[00:35:44] seems to
[00:35:45] tangle
[00:35:45] it
[00:35:45] seems to
[00:35:45] like
[00:35:46] coming
[00:35:47] together
[00:35:47] rather than
[00:35:48] pulling
[00:35:48] apart
[00:35:48] and they're
[00:35:49] all issuing
[00:35:49] their own
[00:35:49] debt
[00:35:50] so they're
[00:35:51] all issuing
[00:35:51] their own
[00:35:51] bonds
[00:35:52] for their own
[00:35:53] countries
[00:35:54] whereas if you got rid of that
[00:35:55] and said well okay
[00:35:56] we're just going to issue
[00:35:57] European bonds
[00:35:59] and
[00:35:59] and then you have the whole issue
[00:36:01] how do you decide whether Italians
[00:36:02] got the money or Greeks
[00:36:03] to you know say you get back
[00:36:04] to the national
[00:36:05] because you'd have an agreed
[00:36:07] industrial strategy
[00:36:08] I think it's fine on paper
[00:36:10] I mean it's
[00:36:12] because that is in a way
[00:36:13] whether it's a country or not
[00:36:14] that would be the same
[00:36:15] as the ongoing debate
[00:36:17] in a country
[00:36:18] like the UK for example
[00:36:19] whether the north of England
[00:36:20] or Scotland might say
[00:36:21] well we're not getting
[00:36:22] the support that we need
[00:36:23] you know there's too much money
[00:36:25] being spent in the south
[00:36:25] or we're getting more
[00:36:27] but we're not getting enough
[00:36:27] because you don't need as much
[00:36:28] in the south
[00:36:29] you're always going to have
[00:36:29] that conversation about
[00:36:30] where money is directed to
[00:36:31] but what you don't get
[00:36:33] in the UK
[00:36:34] is people saying
[00:36:36] well you know
[00:36:37] the north is losing out
[00:36:39] on the defence strategy
[00:36:41] you know
[00:36:42] because that's
[00:36:42] a whole of country approach
[00:36:45] and so you know
[00:36:46] there's some stuff
[00:36:47] which is
[00:36:47] across the whole country
[00:36:49] everyone benefits
[00:36:51] and the same thing applies
[00:36:53] in Europe
[00:36:54] and I think that's what
[00:36:54] Mario Draghi is talking about
[00:36:56] there's got to be
[00:36:56] more of this
[00:36:56] Europe wide approach
[00:36:58] when it comes to defence
[00:36:59] when it becomes
[00:37:00] when it comes to
[00:37:01] renewable energy infrastructure
[00:37:02] that's got to be
[00:37:04] you know
[00:37:05] and getting an interconnect network
[00:37:08] across the whole of Europe
[00:37:10] everyone benefits from that
[00:37:12] and that's the thinking
[00:37:13] that Europe's got to adapt
[00:37:15] and maybe you don't
[00:37:16] you know
[00:37:16] maybe you can do that
[00:37:17] while everyone's still
[00:37:18] separate countries
[00:37:20] but you've got to
[00:37:21] everyone's got to agree
[00:37:21] to put their money
[00:37:22] into
[00:37:23] you know
[00:37:23] the money's got to go
[00:37:24] into a pot
[00:37:24] maybe you know
[00:37:26] issuing local debt
[00:37:28] or maybe there's
[00:37:29] more European bonds
[00:37:30] issued
[00:37:30] you can still issue
[00:37:31] your own bonds
[00:37:32] for your own country
[00:37:32] but there'll be a lot
[00:37:33] of European bonds
[00:37:34] issued for
[00:37:35] you know
[00:37:36] Europe wide spending
[00:37:37] that may be the strategy
[00:37:38] to come together
[00:37:39] ultimately as well
[00:37:40] I've given up on the idea
[00:37:41] of them going back
[00:37:42] to national currencies
[00:37:43] and having euro
[00:37:44] for international trade
[00:37:46] but it would be
[00:37:47] you know
[00:37:48] the only feasible way
[00:37:49] out of the trap
[00:37:49] they've got themselves
[00:37:50] into is
[00:37:50] as you say
[00:37:51] more unity
[00:37:52] but the Europeans
[00:37:54] haven't shown
[00:37:55] the world's best
[00:37:56] track record
[00:37:56] on that over history
[00:37:57] let's say
[00:37:58] no
[00:37:58] well maybe now
[00:37:59] is the time to start
[00:38:00] but this idea
[00:38:00] of investing
[00:38:01] in big server farms
[00:38:02] and the energy
[00:38:03] that's required
[00:38:03] to support it
[00:38:04] it's got to be
[00:38:05] the focus hasn't it
[00:38:06] certainly with the
[00:38:07] growth of AI
[00:38:07] you've got to have
[00:38:08] the capacity
[00:38:09] to run those
[00:38:10] enormous matrix
[00:38:11] transformations
[00:38:12] on massive arrays
[00:38:14] of GPUs
[00:38:15] so yeah
[00:38:17] it's certainly
[00:38:18] one area
[00:38:19] where if you
[00:38:20] can dramatically
[00:38:20] reduce the cost
[00:38:21] by those scale
[00:38:23] advantages
[00:38:23] then you provide
[00:38:25] the states
[00:38:25] providing the
[00:38:26] service foundation
[00:38:27] and you can have
[00:38:28] innovation going
[00:38:29] out on top
[00:38:30] but Europe's got
[00:38:31] a lot of catching
[00:38:31] up to it
[00:38:32] and we'd have to
[00:38:32] as well
[00:38:33] just if we were
[00:38:34] doing that
[00:38:34] and we were
[00:38:35] providing our own
[00:38:38] domestic energy
[00:38:40] renewable energy
[00:38:41] and America
[00:38:41] was going down
[00:38:42] the road
[00:38:42] of using fossil
[00:38:44] fuels
[00:38:46] whether it's
[00:38:46] manufactured goods
[00:38:47] or whether it's
[00:38:48] services provided
[00:38:50] over infrastructure
[00:38:50] which is
[00:38:52] generated
[00:38:52] by fossil fuels
[00:38:54] I mean surely
[00:38:55] we'd be taxing
[00:38:56] them
[00:38:56] surely we'd be
[00:38:57] saying well
[00:38:57] as well as
[00:38:58] our reverse
[00:39:00] tariff on how
[00:39:00] much you've
[00:39:01] charged us
[00:39:02] we're going to
[00:39:02] have to put a
[00:39:03] tariff on you
[00:39:03] as well
[00:39:04] because you've
[00:39:04] got the
[00:39:05] you know
[00:39:06] you're making
[00:39:07] stuff cheaper
[00:39:07] because you're
[00:39:07] using cheaper
[00:39:08] fossil fuels
[00:39:09] so we're going
[00:39:10] to tax you
[00:39:11] on that as
[00:39:11] well
[00:39:11] here come
[00:39:12] trade wars
[00:39:13] yeah well it
[00:39:14] is all trade
[00:39:14] wars isn't
[00:39:15] it I mean
[00:39:15] that's inevitable
[00:39:16] yeah yeah
[00:39:17] trade wars
[00:39:17] with energy
[00:39:18] which is a
[00:39:19] we've always
[00:39:20] been energy
[00:39:21] behind a
[00:39:21] huge amount
[00:39:23] of trade
[00:39:23] and international
[00:39:24] conflicts
[00:39:25] this is going to
[00:39:26] add to it
[00:39:26] dramatically
[00:39:27] in an environment
[00:39:28] where energy
[00:39:28] is going to
[00:39:29] become scarce
[00:39:29] well
[00:39:30] Europe just
[00:39:31] need to
[00:39:31] unify
[00:39:32] just
[00:39:33] just
[00:39:33] need to
[00:39:34] adjust
[00:39:34] okay
[00:39:35] that's all
[00:39:38] what a
[00:39:39] well you know
[00:39:40] they got part
[00:39:40] of the way
[00:39:41] there
[00:39:41] Mario Draghi
[00:39:42] had his plan
[00:39:43] so that's
[00:39:44] you know
[00:39:45] that's the
[00:39:45] first step
[00:39:45] second step
[00:39:46] is somebody
[00:39:48] needs to
[00:39:48] read it
[00:39:49] and that's
[00:39:50] the struggle
[00:39:53] before we even
[00:39:53] start talking
[00:39:54] about implementing
[00:39:55] it
[00:39:55] but anyway
[00:39:55] very good Steve
[00:39:56] we'll catch you
[00:39:57] again next week
[00:39:58] good to talk
[00:39:58] as always
[00:39:59] okay mate
[00:39:59] see you then
[00:39:59] bye
[00:40:00] bye
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