Europe Today: EU joins Ukraine peace talks in Abu Dhabi as race to replace Lagarde heats up

Good morning, it's Tuesday, November 10th, you're watching Euronews, and this is Europe Today. Our top stories. The European Commission and the European Council will send a joint team of senior officials to peace talks in Abu Dhabi between Ukraine, Russia and the United States. The EU institutions will be joined by France, Germany and the United Kingdom. Whether a face-to-face with Russia will happen is unclear this morning. The Abu Dhabi talks marked the resumption of trilateral peace negotiations since February, when the war on Iran abruptly shifted Washington's focus. Nvidia shares took a dive yesterday after the chipmaker's board announced an investigation into reports that chief executive Jensen Huang was the target of a foreign espionage operation. Wang, the face of the global AI boom, said he would cooperate with the probe. He apologized to his family and Nvidia employees for an affair, which US officials believe was with a woman working as a Chinese spy. And Hungary's former Prime Minister Viktor Orbán's brother, Aron Orbán, has reportedly been arrested in a suspected human trafficking investigation. Prime Minister Peter Magyar announced the development yesterday, pointing to police raids in Budapest and surrounding areas. Investigators are probing an alleged network involved in arranging visas and residence permits for foreign workers in exchange for money. The case adds to a series of corruption investigations launched since Magyar defeated Viktor Orban in April. Welcome to the program, I'm Stefan Grobe. The Eurozone is facing a crucial moment. With the race to succeed ECB President Christine Lagarde gathering pace, European finance ministers must decide who will steer the single currency through an increasingly uncertain economic future. Since the outbreak of war in Iran, energy costs have surged, while investors are demanding more to insure against European sovereign debt risks. Can Europe really deliver growth while reigning in public spending? Who better to answer these questions than the president of the Eurogroup himself, Kyriakos Mitsotakis, finance minister of Greece. Welcome to the program. Great to have you here this morning. Good morning. Great to be joining you. So, let's start with two warning signs that have been emerging recently, rising energy prices and bond yields. How concerned are you about the economic impact of these developments? We're obviously mindful, and this is certainly something that the ministers of finance of Europe are discussing, not only in the Eurogroup and the ECOFIN meetings, but I would say continuously, we're continuously in touch to coordinate action. Obviously, we're in an era of expensive capital, an era of cheap capital is behind us. Even if you make the comparison of 2016 and 2026, the average 10-year bond yield in 2016 was 1.1%. Now it's 4%. We're operating in an era of more expensive capital. And this is happening for a series of reasons. Part of it is fiscal, double the average deficit compared to 10 years ago. Part of it is what you described right now, energy, higher spending, social spending. So, Greece has been through a massive economic and financial crisis, you know that better than anybody. Do you see any parallels with the current situation, or are we facing a fundamentally different set of circumstances? Every situation is different, and I'm often asked, you know, from my Greek hat, are there lessons in the Greek crisis? And I often try to reply... One, that the word hubris is Greek. And second, that I believe in inspiration in politics rather than in lessons. So the inspiration here is that right now you have five countries in Europe in headline surplus. It's Denmark and the four countries that ran bailout programs in the previous decade. So we managed to take difficult decisions, take them, some with delay, some as fast as we could. And now we're in a position of fiscal strength. And this resilience, which is a title I would say overall for Europe, but certainly for Greece as well, It's quite significant to be able to tackle the very significant headwinds that we have. Are there any lessons learned to be learned in Germany? Because there are a lot of calls right now that Germany needs to fundamentally engage in structural reforms. What can Germany learn from Greece? Well, I was recently in Berlin being asked exactly this. What I said before was my reply. I believe in inspiration. There are certainly no lessons on my end for my good colleague Lars Klingbeil and the German government. I think Germany knows what it needs to do and what it needs to deliver. It has a phenomenal potential and it can unlock significant growth. It's a productive powerhouse. And in one phrase, Europe needs Germany and Germany needs Europe. So part of the reform agenda that we're prioritizing at the Eurogroup actually. is going to help with the growth prospects of every single member state of Europe. The Capital Markets Union, the Banking Union, our discussions on energy, all of those elements that can unlock growth potential will end up affecting Germany, will end up affecting Greece, every single citizen who's watching us. And this is why we need to move fast. Speaking about citizens, how concerned are you about inflation? Do you fear that... Prices will go up again, and how can households be protected? First of all, the number which was announced, this 4% number, is obviously driven by energy. So overall, this is connected to your first question, the energy crisis that we have in front of us. And we're trying to coordinate our action, and we're trying to coordinate our support towards citizens. This happens in different forms depending on the fiscal capabilities of every country. But generally speaking, the overall idea is to support citizens at a quite challenging winter. Now, obviously, the best thing that you can do is invest in energy infrastructure. This is the most sustainable response, I would say. But we also need temporary measures. We also need targeted measures. We also need tailored measures that will support especially the most vulnerable and those in need. So this is exactly what we're trying to do. And part of our job, I would say, at the Eurogroup, and I think I can't stress this enough, Is having a common understanding of the problem and the common vocabulary of the problem, if you look at the solutions, if you look at how you can optimally react, if you look at what happened... I want to change topic for a second. Just a second. Yesterday, NATO Secretary-General Mark Rutte was with you, with the finance ministers. That is pretty unusual. Why was he invited and what did he have to say? Actually, it was a very interesting discussion. And what are we looking at? I mentioned at the beginning that we're operating in an era of more expensive capital. We need to make every euro count. We need to unlock the value, the impact of every single euro that we spend. And we have higher needs to invest in defense. So, by definition, we have the National Escape Clause in defense. Our calculus changed after Russia's invasion in Ukraine. So, what do we need to understand? How to do it? It's not only a question of how much. It's also a question of how. So we know that we're not doing enough joint procurement. We know that we're not doing enough R&D in Europe. We know that we need more interoperability in our systems. So coordinating this action, not only at the level of the defense ministers, by the way, but at the level of the finance ministers who need to pay the bills is significant. I have one more question briefly. The Eurozone is heading into the winter of decisions. There's the... The Ukraine thing, there's the budget, the next EU budget, and there is the succession of Christine Lagarde. Do you think you can wrap these issues up by December, find an agreement? That's absolutely the time frame that we have in front of us. And I was asked yesterday about the last element of your question, the ECB succession. Be that in the reforms, be that in the decisions, or be that in filling the posts, Christine Lagarde has announced that she's going to be staying at her post until February the 7th. This means that ideally we need to have a decision formally by the end of the year, by December. It's a decision happening at the leader's level. It's not only one position, actually. It's three positions. This is quite unprecedented. It's the president and two chief economists and one executive board member post as well. Many view this as a package. I think this is fair. So it's a decision taken at the level of the leaders. And the Eurogroup will facilitate. We will follow this closely as ever. Thank you so much, sir, for coming on this morning. Eurogroup President and Greek Finance Minister Kyriakos Pirekakis. On the ECB succession race, our Europe editor Maria Tadeo spoke exclusively with Spain's economy minister Carlos Cuerpo on the sidelines of the Eurogroup meeting. Madrid is pushing hard for its candidate, Hernández de Cos, to replace Christine Lagarde. Let's take a listen. It's the right window of opportunity for Spain, not only because the way that we've been leading some of the important discussions at the European and the EU level, also looking at the performance of the Spanish economy, but mainly because I think we have the right candidate. Pablo not only has been in the central bank world for almost 30 years, he's been leading, as you said, the Spanish central bank, but also the BIS. He has a steady hand, a strong background in economics, and also, of course, A man who is able to gather consensus, which is very important at the head of an institution like the ECB. Some would argue the problem with the Spanish is that they are pro-debt, more joint debt, and perhaps not as fiscally conservative as others would like to see around the governing council. Is that going to be a problem? The Spanish are very fiscally responsible. You just have to look at what has happened over the past few years with the Spanish fundamentals and the reduction in our debt-to-GDP ratio by more than 22 percentage points, strong confidence from the markets, from investors in the Spanish economy. That's what we are putting forward as well. You're putting forward a candidacy in the midst of an election campaign. You may not be in government in just a few months. Is that not going to penalize this process? Well, I think and I hope that what we are presenting is a Spanish candidate, not a governmental candidate. It's a candidate that has consensus also throughout the different parties in Spain. But you have to lobby for it, too. And the prime minister is not going to show up at a European council this week either. How are you pushing for your guy? Well, we've been lobbying for the past few months already very heavily, both at the prime minister level and also myself, trying to also... Push and make everyone understand that this is the right man at this point to lead the ECB. He's the right person. So let's hope that the rest of the colleagues will also see it this way. And somehow it's for the leaders also to come to an agreement and to decide. We'll Maria Tadeo speaking with Carlos Cuerpo. For the first time since February, Ukrainian, be Russian and US negotiators are set to meet right in Abu Dhabi for a new round of talks aimed at ending nearly five years of Russia's full-scale war against Ukraine. The two-day discussions, beginning today, back. are expected to focus on security guarantees after previous rounds earlier this year failed to deliver any tangible progress towards ending the war. For more on this, our correspondent Toby Gregory joins us now from the United Arab Emirates. Good morning, Toby. What do we know about the preparations, the negotiating format and the issues on the agenda? Well, we know that overnight, Ukrainian, American and Russian officials all landed here in the UAE for the talks that are going to take place in a few hours time. Of course, these are the first talks to take place since February and they have been shrouded in secrecy. We don't know the venue, we don't know if there's any media access and we certainly don't know any topics of discussion from authorities here in the UAE. But what we do know is it's a trilateral meeting. The United States will be mediating between Kiev and Moscow and we also know that Ukraine are pushing for security guarantees both against Russian aggression and also what their future defensive capabilities might look like. So for the EU it's slightly different. They're not involved in the direct talks today, but they are going to meet Ukrainian officials at some point during these meetings to discuss the future. There have also been talks that they should, suggestions that they should have a seat at the table. We'll certainly keep you updated throughout the day as the talks progress. All right, Toby Gregory in the UAE. Thank you very much for this update. Now, to make sense of what's happening in this round of peace talks, I have Sasha Vakulina with me here on the set. Good morning, Sasha. Sasha, you have been following these developments for a long time. Beyond security guarantees that I mentioned earlier, what else can we expect And how much progress is there realistically in the pipeline? Let's just set the scene here. Ukraine still wants a ceasefire and Russia still wants Ukraine to capitulate. Now, this is where we are and this is how we are going into these talks. In an evening address on Monday, Volodymyr Zelensky said that Moscow also plans to cut Ukraine into two parts along the Dnipro River. That actually is even more territorial, demands that what we've heard already from Moscow regarding the four regions, including the territory that Russian forces never occupied plus annexed. Crimea. Zelensky also confirmed that Ukrainian team will propose de-escalatory steps. This is, of course, in line with Ukraine's first and foremost goal of having any sort of a ceasefire, specifically when it comes to the civilian energy infrastructure. According to the U.S. officials, now talks will proceed today in two parts, and both sides have allegedly shown a little bit more of flexibility privately when it comes to the territorial issue. This is, of course, the most crucial one, the most complicated one. And this is where Ukrainians are also hoping to take any steps and any progress regarding the possible trilateral meeting in the leaders format where the territorial issue could be discussed, Stefan. We've heard that there are European representatives in Abu Dhabi, but But they won't probably have a seat at the negotiating table. What is their role then? That is a very interesting setup, what was happening at the talks. Indeed, European representatives will be there. They will not be at the table in the trilateral format, as you said. Who will be there? We know that the representatives from the UK, France, Germany and Italy, as well as the EU and NATO will be there. There are certain consultations that are expected to take place. With Ukraine and with the U.S. representatives before the trilateral talks, so there will be some contact. Now, Ukraine and Ukrainian officials do really want to have the Europeans at the table. They see Ukraine, of course, as part of any future European security architecture. But Russia opposes this idea. And in fact, Putin's foreign affairs advisor, Yuri Ushakov, said, quote, no one is going to invite them to the negotiating Nearly half a century after the island was divided, the Cyprus conflict remains one of One of Europe's longest-running unresolved disputes. But a fresh round of talks this week has raised hopes of breathing new life into the stalled reunification process. The challenge remains enormous. The Greek Cypriot side insists on a federal solution, while Turkey continues to push for a two-state arrangement. For more on this, let's head to Athens, where our correspondent Faye Dulgeri is standing by for us. Good morning, Faye. So we haven't heard about this. Yeah, we haven't heard about the Cyprus conflict in a long time. Why are there talks happening just now, Faye? Yes, good morning, Stefan. Making progress on the Cyprus issue has been one of the major challenges and a personal bet, we could say, for the UN Secretary General Antonio Guterres, whose term is ending by the end of the year. So he would like to deliver, we could say, a kind of a roadmap to his successor because he has acknowledged many times himself that this is a very important issue for him And he will consider his term very successful if he delivers. Who delivers that? Also, this has been one of the major challenges in the pre-election pledge of the president of Cyprus, Nikos Christodoulides, who is approaching the halfway point of his term, and he also needs to deliver results, especially if he wants to get re-elected in the presidential elections of 2028. And of course, we must not forget that the passage of time is making the prospect of ...of a de facto partition of the island. What can we expect from these talks? Yesterday's meeting was very positive. Nikos Christodoulides, the president of Cyprus, when he left the meeting was very cheerful. He said he was very satisfied by the meeting. The most important outcome was the opening of two new points in the green line that divides the island into the next step. Yesterday's meeting paved the way to a new trilateral meeting between Nikos Christodoulides, Tufan Erhüman, and the UN Secretary-General this time by the end of the year. And the main objective, of course, is to reach an agreement to convene an expanded meeting between Greece, Cyprus, Turkey, and the United Kingdom, which is a guarantor country, in in order to restart talks. And what are the complications in the process at this point? The main obstacle, of course, remains the disagreement on the form of the new state. The Greek-Cypriot and Greece side want a bi-zonal, bi-communal federal state, while Turkey wants a two-state solution. Also, there are differences in political equity, in security arrangements and the future of the Turkish troops on the island. So the two sides also remain divided over the conditions and the... All right, Fay Dulgeri in Athens, thank you very much for these updates. And that's it for today, thank you for watching, I'm Stefan Grobe, take care and see you tomorrow.