Good afternoon everybody, it's my pleasure to welcome you this afternoon. My name is Mari Cross and I chair the Future Proofing Europe series, which is a series that we have supported by the Department of Foreign Affairs and very much dedicated as you can see from the title Future Proofing Europe. And as I say, you're welcome today as is the audience on Zoom to our enlargement and reform, why it matters and how it can be done. And we're delighted to be joined today by Dr. Anna Luermann, who is the Minister of State for Europe and Climate of Germany, and who has been generous enough to take time out of her schedule to speak to us today. So Dr. Luermann will address us for approximately 20 minutes, followed by a question and answer session, and your participation is very much encouraged and also to the audience on Zoom. You'll be able to join the discussion using the Q&A function on Zoom, which you should see on your screen. And please feel free to send your questions in throughout the session as they occur to you, and we will come to them once Dr. Luermann has finished her presentation. And a reminder that today's presentation and both the Q&A are on the record. Please feel free to join the discussion on Twitter using the handle at IIEA, and we're also live streaming this morning's discussion via YouTube. So the European Union, as we're all very much aware, is currently debating two inextricably connected issues of EU enlargement and reform. And these discussions are taking place against the background of challenging geopolitical situation with wars in Central Europe and in the Middle East. And in her address to the IIEA as part of the YouTube Purfing Europe project, Dr. Luermann will present views, German perspective on these questions and the challenges facing Europe in this moment of what is definitely global turmoil. Some, it's a pleasure now to present Dr. Luermann. The minister is a German political scientist and a member of Alliance 90, the Greens. And she has been serving in the Bundestag since 2021, German federal election. And she holds, as we have said, the position of minister of state in the federal foreign office in the cabinet of Chancellor Schultz. And it's of interest to note it's your second time that Dr. Luermann has been in the Bundestag, and I think worth mentioning that she made history in 2002 as the youngest ever member of the Bundestag. After she left then to pursue academic career. And she holds a number of degrees. She has a PhD from Humboldt University, and also a BA from the University of Hagen. A master's degree in gender and peace studies from University for Women in Sudan, which is of particular interest and an MA in research, training and social sciences also from Humboldt University in Berlin. And from 2018 to 2021, she served as an assistant professor in the Department of Political Science at the University of Gothenburg, and as the deputy director of the Varieties of Democracy Institute from 2018 to 2020. I think as is clear from Dr. Luermann's academic career that her research interests include very much democratic resilience, elections, regime legitimacy and democracy, which is very relevant to our discussion today. So minister, the floor is yours and we look forward very much to hearing your presentation. Yes. Ladies and gentlemen, dear guests, dear friends, I'm very, very happy to be here today. It's really a pleasure to be received here to discuss with you. And these are really issues that you outlined that are on top of our agenda and on top of my minds. And I would like to start by sharing some insights from my trip to Kiev a year ago. That was almost exactly a year ago together with actually female colleagues in the General Affairs Council, so other female EU ministers. And we went to Kiev, and of course, there was a bomb attack from Russia, and we did what Ukrainians have become accustomed to do now. We went to a bomb shelter, and to the parliament, and of course for us it was, okay, we're going to sit there now and in silence and wait. And the Ukrainians were like, no, no, no, we will continue work. We need to talk to you about the changes to our media law. We need to talk to you about how we will appoint our judges, how we will make other rule of law reforms. And at first I was a bit puzzled because I thought, okay, how can we do that while our sort of the life of other Ukrainians is at risk above us here. But then I really, in this discussions, I really realized that what this whole discussion about the EU enlargement actually means for Ukrainians. It is more than some bureaucratic checking the boxes or something like that. It is really this symbol for the hope of a life in peace, of a life in freedom, of a life in dignity, as members of the European Union. Sort of to have that what we often take here for granted in Ireland or in Germany, and what they are currently fighting for what they're risking their lives for. And this is really this EU accession process is really the symbol of this promise. And I think it's really our duty here sitting in our warm and cozy homes in Ireland or Germany to make sure that we keep this promise and that we work together on ways how Ukraine can actually achieve this. And it's really something that we do because we want to support Ukrainians as our friends, but also because we know it strengthens our own stability and security. And if we make sure that our immediate neighborhoods, Ukraine, Moldova, Georgia, also countries of the Western Balkans are safe and secure within the EU instead of unstable outside under the influence of countries that don't have the best intentions for us in our future. And therefore I really believe that this EU enlargement is a key issue that we need to work on. It will expand our area of freedom, security and also justice. And it's clear that for that the Canada countries need to do a lot of reforms. Of course, as I told you now the Ukrainians are really working very hard on it. Also, in Moldova they made good progress. That's also why we're going to start the accession and negotiations now very soon. Also, Georgia has candidate status. When we turn our attention towards the countries of the Western Balkans, then we see a bit of mixed back. You know, these countries have been on their way to the EU for more than 20 years now. They had this promise in Tessaloniki back at a conference. And they haven't really made it yet into the EU, as we all know. And that is partially because there were stumbling blocks from the side of the EU over again and again. But also because, at least in some of the countries of the Western Balkans, the reform process that's for diplomatically isn't on the highest priority list of the leading politicians in those countries. And of course, the most important country here, Serbia, gave a very bad example of that now just before Christmas when elections took place in a way that the international observers have raised a lot of doubts about the credibility of the electoral results. And I really think that that's unacceptable at a country that wants to become an EU member, holds an election in a way that actually doesn't fulfill the standards for credible elections. Because that's the very basis of what we're doing here, the basis of democracy is free and fair elections. And if we can't be sure that the result actually reflects the will of the people because there were reports of being of people from other parts of the country to the capital, there were reports also very credible reports and we know it actually has a fact that opposition politicians have much less access to the media for instance than government politicians and all that. And that's really something that during this enlargement process needs to change. And that also shows, again, the whole power of this enlargement process. I mean, we support those that want to move closer to our values to our standards. So at the same time we also give incentives to those that might need a little incentive here and make it clear that if you want to achieve the benefits of the single market for instance, of traveling freely in Europe and these kind of things, then you really need to make sure that you also make progress on these reforms. So, my first big point is yes to enlargement and yes to enlargement because it is also in our own security and stability interest. The second point is that we also need to be aware that if we enlarge our EU, a larger EU, doesn't automatically mean that it's also a stronger EU, right? That's the goal we want to achieve. We want to strengthen our union with the enlargement, but there's no automaticism. We also need to do our homework as EU if we want to achieve this. You know, already now and I know there are some people who have a lot of experience also in the EU institutions here in this room. Already now the process in process often are too slow, it's sluggish, there's room for improvement already now, but I think if we have some process now that looks like a detour when we're 27 members, this might actually turn out to be a dead end when we're more than 27 members, right? And if you want to prepare to go to sail on the high seas, then you better have a boat that doesn't already look a bit shaky when it's somewhere on a lake or a little river inland, right? So we really want to make sure that our institutions, our processes, our structures are ready for enlargement, are ready for 30 or 35 members. And we need to start this discussion now so that we can say we are ready once the candidate countries are ready with their reforms. And that of course means that we need to think about the size of the European Parliament with new members. I mean, it's one of the most obvious things to talk about the size and the functioning of the commission. Do we really want to have 35 commissioners sitting around the table? Is that an efficient way of governing Europe? Not really sure. Can we find some other solutions here? We also need to think about these vetoes because we often see now, and I think we've had a very stark example of that before Christmas, that individual countries use this right to actually block the whole of the EU moving forward. And maybe for reasons that are not even related to the issue that actually is being voted on, right? So I think we really need to think about how we can ensure that every country is seen, that every national interest is seen, but in a way that doesn't allow for these blockades that slow us down overall. So we need to talk about vetoes and about increasing the use of qualified majority voting. And therefore we're working very actively on that already in some areas of the foreign policy topics. We also want to work on this in the fiscal area and also think about other issues where we can reduce the veto. And particularly when we think about, we just had a very lively discussion also on all the global challenges that faces the EU. If we really want to be seen as a confident, as an actor that has an impact actually in this, we need to speak with one voice and we need to work closer together. And therefore, together my French colleague, we've asked a group of experts to already make some suggestions on this. They've presented quite an interesting report sailing on high seas back in fall. And now we really need to discuss this in all EU member states and think about what kind of EU reform we need. I'm also looking forward to listening to your suggestions later in the Q&A and your points here where you think EU reform is really needed. And the European Council has already decided in December that now these processes, the enlargement and the reform need to go in parallel, so move at the same time. And that the Belgian presidency has asked to present us with a roadmap with some idea of how this discussion can continue now in June already. So this is really a debate that is happening. And here, and that maybe already brings me to my third point, that is enlargement, reform and all on the basis of our common values. I mean, that's what brings us together. We are a union of common values. And here in particularly also the rule of law, which we need to defend against attacks from outside, like Russia for instance, but also from attacks from inside. And therefore, we really cannot accept if EU members repeatedly attack freedom of press or controlling of the judiciary. We really have to use the instruments against these kind of attacks, protect ourselves against this because only if we stand on the same foundation, on the same values, then we can actually also act strong together. And therefore, we should use these instruments that we have. I know a lot of you are experts and we've heard about the article seven procedures. So it's a procedure where we can, at EU level, when we're concerned with the development of the rule of law values in general in EU country, we can address this in the council. And we have done that now for two countries for Poland and Hungary too late, I would say, so already when processes went in the wrong direction for quite some time. And here these instruments, and we can also withhold parts of the budget for these countries because we're actually afraid that because of the declines in the rule of law, we actually cannot be sure that the funds of the EU are used in the way that they're supposed to be used. And it's our taxpayers, your money, right, that is being used. So therefore we really need to make sure that it's spent in an appropriate manner. So these instruments, I think we need to really apply them more coherently and also think about how we can strengthen them because we cannot afford also in an enlarged EU to have more members. And then, you know, just adding more members increases also the risk of these kinds of deterioration. So we also need to think about how we can improve them, maybe use them more earlier, maybe also reduce the thresholds that are needed to apply them so that we really protect the rule of law and the values on the basis that we stand on. And to conclude, I think I want to actually end with a positive example of where the EU member states have been working very well together, which is addressing the climate crisis. I think here we all agree that this is one of our core challenges at the moment. And now at the COP 28 in Dubai, we could really see how when the EU works together, you know, we're negotiating that together as EU, we can actually achieve something. So for the first time now, we have agreed as world based also on EU initiatives, EU leadership, EU negotiation skill that we want to transition away from fossil fuels globally. Also, the oil producing countries have agreed to that. And now, of course, the action needs to follow this. But yeah, I'm also confident based also on German Irish corporation on this field, you know, we had had the lead in a working group on so-called loss and damage on the way on the question of how we actually deal with the losses that already exist because of the climate crisis. We are working together so well that we actually managed to build confidence also of partners in other parts of the world so that in the end we could achieve this compromise. And now we have to work on the action here in this field, mainly on renewable energies. That's also what we decided in Dubai that we want to triple renewables until 2030, that we want to double energy efficiency. And here I think we really as Germany and Ireland we can work together to make this actually a reality on the European continent to work on green energy on green hydrogen together. This is really where also prosperity in the future lies and the way how we can make sure that we continue to live on a planet that actually has temperatures that we can thrive in. And thrive in as human race, right. So, these are some of the issues that are at stake now, when in six months, all five months even only European citizens go to the polls for the European Parliament elections. We will, for the first time in Germany, 16 to 18 year olds can go vote, so young people can participate in this election. Very happy about that. This has been something that I've been working on already back in the days when I was a young member of parliament, one of my most key agenda items that I've been pushing for and I had to wait for 20 years. Yeah, but it's at least being implemented so you have to have endurance in politics, but I'm confident if we work together as Germany and Ireland but also in the European Union we can achieve solutions to all these challenges. And we have done so in the past. And I think that's that's the way forward and therefore I'm happy to discuss with you these kind of issues now here and looking also forward to your suggestions and ideas. Thank you. Thank you very much minister for that overview. And we know the points you stressed, particularly your commitment to Ukraine and a very accelerated accession process for Ukraine, and also the fact that the, the situation, the war situation has not only brought Ukraine so much closer to the EU but has also given more momentum to the Balkan states which, as you mentioned their membership in that area has been languishing for for about 20 years. And the floor is now open for questions both from our in house audience, and but also our audience on zoom or questions can be taken. When you put the question I would be grateful if you could give your name and affiliation. So we have one first question over here, and the microphone is available. Thank you minister for your presentation. My name is Claudia but let's go I'm a postdoctoral researcher at the Institute for European Studies in Brussels. I was wondering, what are the prospects for Ukraine and Moldova to join the EU, like, do they have any credible or tangible prospects to join the EU, given that they have contested borders so Ukraine has an active conflict with Russia, and Ukraine has a frozen conflict with Russia through the separatist region of Transnistria. So what can the EU do really to integrate these countries given these contested borders, and is there any alternative to a new membership in the meantime. Thank you. Thank you. Yeah, this microphone is working like this right. Yeah. So, yeah, thanks for this question, and it's an important one. And I also, when we think about Georgia, I mean, we often forget about about this book of frozen conflicts there and when I was in in Georgia recently, I also went to to the administrative boundary line with South Ossetia to take a look actually at what's happening there because, again, that's also one of the things you know sometimes we are like all the EU is the EU actually doing enough in, in terms of foreign policy and here we are using an instrument very effectively the EU monitors as police men and women from all over Europe that are active here at this administrative boundary line to actually make sure that that the other side doesn't doesn't cross cross over where they're not supposed to or not doesn't creep into into the wrong direction. And, and this works this also mediates the conflict there and make sure that it doesn't boil up so I just want to mention that here because it's often not known what actually we're doing and also effectively in terms of conflict prevention and mediation as an EU is this really quite an impressive instrument. But of course, when we talk about EU membership this is an issue that that also needs to be discussed. What I always say, both in Ukraine and in Georgia is to that really these countries should really focus on the reforms that they can address on that's a lot to do, particularly also in Georgia where the government hasn't been so active on the reform front as they could have been as you know probably. And then I'm sure we will find also a solution to to these issues. We have found the solution to this issue when it came to Cyprus, not that I'm advocating to just replicate that model. But really here my my answer to this is that a bit like we cross the bridge when we get there we we have a lot to work on until these countries can have the status of having the membership within reach. And then I'm confident we'll find some solution also for for this issue of contested boundaries. Thank you. Thank you for that. We have another question here Alan and then Alan Duke's former director of this Institute. Minister you spoken in the context of enlargement of the need to look at our institutions and processes and you mentioned specifically that the unanimity rule and the veto. We've seen how the use or misuse of that veto can actually obstruct other areas of policy. I mean in one specific case the application of article seven is being compromised severely by the use of the veto because practically in practical terms it applies to most of the major economic and foreign policy decisions. If we look at the political landscape in the current EU and perhaps in some of the members of the candidate states. My view is that we're seeing a move to the right. And it seems to me and I hope I'm wrong about this that the further the political center of gravity moves to the right the more problematic. The use of the veto will be so that we're actually running out of time to do something sensible about broadening the scope of Q and B. So far there has been a huge reluctance in most member states able to mention it. And I excuse your native country and France because they at least have said maybe we should think about this. The odd thing to my mind is that when people look at needles I observe in Ireland the people in Ireland who are most vocal in demanding a change in the unanimity rule in the UN Security Council are also the most vocal and saying we have to keep the unanimity rule in the EU. It seems to me to be an odd kind of position to take. But do you believe minister that there's any real chance that we will come to some sensible decision about expanding Q and B in time to prevent it being overtaken by this movement to the right in the political forces. Thank you. Thank you. Yeah. I share your argument in that sense that indeed the problem is if the political landscape is becomes more polarized. And if you have more people be it or more parties be it on the on the extreme right or on the extreme left that can come to power. Then that makes the unanimity more and more problematic because it just means that that governments that might be so far away from the center of European politics can block then then everyone right. And I don't think it's necessarily just a characteristic of the far right could theoretically also be of the far left which we don't really have in power now at the moment but indeed that's that's a problem and that's exactly why we need to think about something that I like to call flexi so because you know before people like to talk about I don't know Europe of concentric circles I think also that you your question went a bit in that direction or whether we need a core Europe you know the famous Wolfgang Schäuble who yeah unfortunately just passed away he he was talking a lot about about this that we need a core Europe and then something around it. But I think that that doesn't actually address the challenge of today and the challenge of today is rather that after an election we could have and that could happen in France actually right. We could have extreme rights party in government that is then far away from the consensus of the rest of the EU and we need to find answers to that and I think one answer is the improvement of the rule of law instruments and here we can have improvements and we're working on that with the Belgium presidency as well we can have improvements that don't require treaty change because these are also relatively new instruments right they were just being used for the very first time over the last year so we can do a lot with developing new procedures and these kind of things. But in the end we also need some reform that might need then a change of rules and unanimity. So that's the absurd thing you need unanimity to change unanimity right yes. And I'm quite optimistic I mean you might have realized that I'm an optimist in general but also in this field I think I have reasons for that because more and more the point things in that we cannot afford to just enlarge the EU. Without getting ready for it and we will have I mean you know how the EU decision making is is often made we will have a point in time also where we will need to have that conversation of are we ready. And then there will be a discussion between those that really want the enlargement and tend not to be so keen on working on on on the issue of capacity to act and and those that rather prioritize this issue. So I think we need to we need to start this discussion by really thinking about OK what kind of EU do we want we want a stronger EU. I think in that we all agree with the EU 27 and when we want a stronger EU we need to be bigger and it needs to improve its capacity to act and we have now for the first time in the European Council in December we had the agreement that these discussions at least needs to take place in parallel. And there are also several ways of how we can protect legitimate national interests for instance. Without leaving those full scale veto rights without necessarily need to justification and these kind of things on the table there are also some discussions a lot of work for think tanks by the way to really think about these things through how we can introduce safeguards for instance now that we you know just from the top of my head one suggestion could be that we say OK in general we move to qualify majority voting. But if a country manages to mobilize five other countries saying that oh here the national interest of one country is really really challenged and at stake then some sort of safeguard for instance the discussion in the European Council is required. So so I think we need to think a little bit creatively of how we can do this or maybe another idea is to have to have the veto only veto rights only three times a year. For a country now that would sort of reduce the possibility. I'm just you know just thinking a lot I think we need to we're in a state is faced at the moment where we need to untapped some creativity around this because it is also a legitimate grievance that I hear often particularly in smaller or medium sized member states that this is something very dear and the safeguard that that countries don't want to to give up. So when you think about how can we preserve the safeguard mechanism without but reduce its destructive potential. I'm quite sure it can be done. And thank you minister. I know we have one other question but in relation to that I just wanted to follow up Q and V as you mentioned makes smaller countries nervous. But in the report that you mentioned of the Franco German report with the 12 experts. They had some guardrails for Q and V such a sovereignty safety net. That's would be inspired by Article 31 rebalancing of voting shares is another possibility or an opt out for policy areas which are going to Q and V. So there are proposals around already significantly in those reports. But just on that I know that you you had mentioned you were interested in getting some structural changes even before the European parliamentary elections that would perhaps lock in changes that that Alan mentioned in case there was a tilt of the parliament. Do you feel that's feasible to have some changes before the European parliamentary election some sort of movement towards recent structural changes. Well, I think the moment for that would have been now last December. So like the European Council a few weeks ago. But unfortunately in the lead up to that there was so many other issues piling up that it wasn't possible and the thing that was possible that was to agree that this discussion needs to take place and that it needs to be a key issue for the next legislature of the European Parliament and the Commission. So I think that's where we stand. We're still thinking a bit about whether there are things that can be done without sort of any big big, big decisions or unanimous unanimous decisions, some reforms to make things faster for instance in the rule of law field. That's maybe something that could happen. But I think most of these discussions will have to take place after the elections with all the risk attached to it. And yeah, but also one reason for my optimism is that we have this group of friends actually of qualified majority voting in the foreign affairs field already. Where and this is really a group where we started out quite small with I think five countries and we are now I think 11 or 12 full members plus a range of observer and observers and also Island has joined this group as as an observer to work with us here particularly also on these issues like guardrails and safety nets and these kind of things. So that really is a reason for why I think this could be possible. Because we're I mean as always in politics we need to first have a have a topic on the center of the stage like today and and talk about it and develop some ideas and solutions and compromises and then we can also have the necessary votes. Thank you. So gentlemen John there had and then off the back. Thank you so much. My name is Barster practicing here in Dublin. And first of all, thank you Minister for your very interesting presentation coming to talk to us here today. And I was struck by your description of hiding is where in the bomb shelter in Kiev. And I wanted to myself how you or I or anyone was here would respond if we're sheltering from the far greater intensity of bombardment and Gaza being carried out by Israel with obviously international backing. And in that context as someone who has an MA in peace studies is very interested to hear. I'm just wondering if you have any view on the application now being brought by the Republic of South Africa to the International Court of Justice against Israel where obviously very serious charge of genocide has been made. And as a follow up to that, if interim measures are indeed ultimately permanent measures are directed by the court. Would it be your view that the European Union as a whole and the member states of the European Union including course Germany and Ireland should comply in full with any directions issued by the court. Yeah, thanks for that question and it's really the whole suffering in the in the Middle East is really. Yeah, on top of my mind as on on many minds in the last months and it was really, I mean this this this brutal attack by by Hamas on on on Israel in October it was really left many speechless. No, I mean they were really violence that targeted innocent civilians in a very dramatic way. And, and now when we look to Gaza and see the suffering there of of of innocent civilians that come in between the the the alliance between between Hamas and and and the Israeli Defense Forces. This is really a violence and suffering that needs to stop and that's that's very clear. I mean, as many conflicts, it's very complex because on the on the one hand, of course, Israel has the right to defend itself against these these brutal attacks that are still ongoing also I mean they are. Bombs still also targeting Israel also it's from from Gaza but also from who tease from partially also from the north and so so that needs to stop and also it's also clear that that the Israeli response to this violence needs to be in line with humanitarian law and needs to make sure that civilians are not targeted in that way and Alina Behrberg was just in the region again and emphasized again to to her interlocutors that there needs to be more humanitarian access and that he strikes against against Hamas need to be more targeted and and and civilian lives need to be spared. We also advocated for humanitarian pauses. So there is indeed a need to to also say this and and to to to be clear that the Israeli response must be proportionate but from our perspective it's very clear that this doesn't amount to to genocide and therefore we are not of course not not not supporting the the the case made by by South Africa now and what is critical now is that the human suffering stops and that we come back to attract towards the political solution which can only evolve around the two state solutions solution and which we're actively working on trying to get the sides to to get to a stage where where they can actually start talking about these things. Thank you minister. The I have two more questions but just one from the zoom retired Brigadier General Jarraharn mentions the recent questionable general election in Serbia and his question is does any formal process exist for the EU to temporarily suspend candidate status for countries that blatantly infringe the democratic process in their elections. I mean does it exist. Is it is it desirable. Is it how does one deal with with the situation which is the reason and well. Well first of all sort of the let me start with the general so in general yes the new EU accession methodology follows two clear principles one is more for more so countries that fulfill steps on the way to the EU should get more benefits from the EU if they once they proceed. And at the same time also less for less. So talks on chapters can be frozen stopped benefits such as funds can be with with with holding. And and that therefore the methodology exists also just think about the frozen negotiations with Turkey. I was clear that this wasn't going anywhere so it's basically frozen at the moment when it comes to to Serbia now what we're doing at the moment is I mean we have we have made some some very clear statements also. And now we're waiting for the final report from the Action Observers with sort of all the evidence collected which is expected in the coming weeks and then I think indeed we need to discuss at the level what consequence that has for also the accession negotiation process. And I don't think we can go back to business as usual. Thank you. The gentleman at the back had a question. Thank you very much for your really interesting presentation. Andy McGuire from TU Dublin. For people who are here. That's Kevin Street and Baldwin Street and what have you. And I find people in this room and think and why we're here where we're thinking global and we want to act global and it's wonderful. Fantastic. And we're all very much a part of it. And then you mentioned sustainability and that kind of boils down to you know thinking global and acting local. And then you were talking about I think Alan Dukes mentioned it as well. There is the internal stability of the EU with the existing systems and you know we can take them for granted as you know. And we talk about the right wing and how it's developing and comfortable with that. In Ireland we have a political movement that seems to be gaining a strength that's not as right way and likely to get into power next time round. And what I think that right wing crowd have in common with with this new movement in Ireland is that they think local and act local. The EU I feel strongly and I'm so pro European Union. You have no idea it's been so good to me and to this country and what can we do to try and get the EU and its values and its perspectives to act and think more locally. For example in Ireland I think we've done something called the Citizens' Assembly, which I think has enhanced our political debate so much because it's taken off the agenda to stuff on the side. And are there things in Germany that you're doing to enhance democracy beyond elections or what do you think of the Irish Citizens' Assembly and can that be replicated. Can I have thoughts on that about strengthening values within the Union. Thanks. Excellent question. I write on point. First, yes, we're very inspired by the Irish Citizens' Assemblies. In fact, we're so inspired that we've been copying them in Germany. So we've already had I think now three attached to the National Parliament. They have not gained such a prominence in the public discussion, unfortunately, in Germany as they have in Ireland, even though in terms of methods they were quite very similar. But somehow they haven't fully sort of had that impact that I think probably most citizens in Germany don't know that we have Citizens' Assemblies now. So we really need to think a bit about how we can improve that, maybe really find some very, very controversial topic that then everyone really also reports about these Citizens' Assemblies. Maybe that's one thing. They have also been used at the EU level, you know, in connection with the Conference on the Future of Europe. But I think there, unfortunately, the Irish example wasn't followed so closely. So there were Citizens' Assemblies. But on a very, very broad topic, namely the Future of Europe, and with a very unclear link of those Citizens' Assemblies to then what came out of this conference. So I think methodologically that here in Ireland, yeah, it's done better with a very focused topic, with a lot of expert input, and with a clear link then of the Citizens' Assemblies to what happens in Parliament and the political process afterwards. So that's clearly an inspiration from Ireland. And yeah, and I think in general, though, the Citizens' Assemblies are one step, but not enough to really bring the EU and also democratic institutions in general closer to citizens. One answer, of course, is also to strengthen the local level, to give more power to the local level, to let more issues decide there. That's one of the things that we've been advocating as a work for. And I think as EU, and particularly also now in the coming months, we just need to over and over and over again really talk a lot about what you said, what the EU has ever done actually for every citizen for everyday life and such. I think that must be the answer. Just try to put it louder. I think this has to be the last question. Thank you very much. I want to pick up your point, Minister, the law, the need for unanimity to change unanimity. In this context, we've had in Ireland since 1972, nine referenda on European issues, six treaties and the fiscal compact. And on the Neese Treaty and the Lisbon Treaty, we thought they were so good that we voted twice, which brings the number to nine. There is a risk in holding a referendum on very sovereignty sensitive questions, how do you protect your national interest and so on. And I'm interested to know when the Friends of QMV group that you mentioned, to what extent are you seeking to find your creative solutions within the boundaries of the existing treaties as a de-risking mechanism to deliver the outcomes that are desirable. Ah, thank you very much. I mean, this is really, you know, the absurd situation is that the existing treaty has the so-called Passarell Clause that you probably know, but for everyone else also. So it says in the existing EU treaties that in certain areas we can move to QMV without any treaty change, right? It was already in the treaty, it was foreseen that there might be a point in time, for instance, an enlargement or something else, where we need this flexibility. So also all countries already have agreed to this potential, back when they agreed to the treaty. Unfortunately, that is basically a pregnant, non-pregnant thing, right? Either you do it or you don't. So in order to get actually the majorities to do it, some creativity and something in between actually would be desirable, but there our lawyers are not very certain at the moment if any creativity wouldn't actually require a treaty change. So, and it's actually a bit of an absurd situation. So if you go all the way, you don't need treaty change and if you do something in between, you might need treaty change. So, yeah, but we're working on that. And that's exactly also one of the reasons why I'm so insistent and almost really, I think by now I annoy a lot of my colleagues in the General Affairs Council in Brussels because I keep on emphasizing this issue that we need to start the reform discussion now, so that we're really ready once the Canada countries are ready because all sorts of questions come along the way, right? These legal questions and indeed there are many ways of improving and changing things within the treaties. You know, as German government we are also open for treaty change and there might be some ways there, but apparently now in many countries there's not much appetite for treaty change. So we'll have to see there are also other options of including these kind of reforms into the enlargement treaties themselves. That's also something that's being discussed because they will have to be ratified anyway. So there are, yeah, all sorts of discussions that we're having at the moment and really a discussion that needs to be also held in all EU member states with creative solutions coming from all member states. So I really encourage you to think about these issues to come up with also your own suggestions and ideas and during the next legislature of the EU Parliament will be a time where they will be taken into consideration. So thanks so much. Minister, thank you very much indeed. I think we owe you a great debt for coming to share your views, the German government's views, but also to address an issue which I think we are all aware is at the very top of the EU agenda at the moment, the issue of enlargement. And also, for assisting us here to become more aware of the threat assessment of that is facing the EU in relation to European security. And I think this is something that we really have to work on enhancing public appreciation that the moves that are underway in Europe to promote enlargement affects us all in terms of European security. So we thank you most sincerely for that. And hope that we can continue discussions with between Germany and Ireland and as partners within the EU. And once again, many thanks. Just before we close our head of research Barry wanted to have a few words if you just for two minutes he says. Good afternoon everybody. I'm barry called for the direct research lovely to have everybody here. Just a couple of focal at the end just to echo Mary thanks obviously for Dr Lerman and team it's been great to have you here but also marry as well for your skillful chairing as ever. I also just in addition to the thanks for the Department of Foreign Affairs which Mari mentioned at the start. I also just want to stress our appreciation for the German Embassy here in Dublin, master cord and Christian Resch at the back of the room there as well. You're great supporters of the Institute and it's always great to work with you so thanks very much for your support. I just want to mention quickly the 2024 program is very much up and running and two dates for your diary which may be of interest on the 22nd of this month. We're delighted that we're going to welcome with Canadian colleagues, the Catherine Stewart who's Canada's climate change ambassador is going to be here alongside Dr Catherine Welsh from the Department of Foreign Affairs, talking about the outcomes from and then also want to look forward to on the 6th of February the EU sanctions envoy David O'Sullivan who was also late of this parish former director general is going to be talking to us about the EU sanctions on Russia. There's much more as well available on the website but there are two in person events that are coming up. I look forward to seeing some of you there. Thanks very much for being with us and have a good rest of your afternoon.


Currently, we have a keyword for Chinese economy, which is new normal, meaning current day China's economy is very different from before because the growth has slowed down. In the past, we talked about this problem from a macroeconomic point of view. Today, we want to talk about new normal from a microeconomic point of view. We are very delighted and honored to have five excellent panelists today with us. I'd like to present them first. First, Mr. Shi Wencha, President of China Union Pay, Mr. Zhang from Chairman and CEO of City Capital, Zhang Fangyou, Guangzhou Automobile Industry Group, Mr. Rubini, Professor of Economics from Stern School of Business, New York, and finally, Mr. Zhang Weiyin, Professor of Economics from Beijing University. Welcome. So I'd like to ask each of you different questions. And I'd like to hear your reply one by one. First question I'd like to ask Mr. Zhang Weiyin, Professor Zhang, you have been studying companies and enterprises in China. So I'd like to ask you the following question. Now, enterprises and entrepreneurs, are they having a better life under the new normal economy? Whether it's new normal or old normal in China, economy should be developed based on entrepreneurship and not on government subsidies. And what's different now under new normal? Actually, in the past 30 years, entrepreneurs earned money by arbitrage, taking advantage of imbalances of the Chinese economy in the past. And now, under the new normal, we need innovative entrepreneurs who can create value, who can create what customers need today instead of just taking advantage of imbalances in the economy. In the past, entrepreneurs only looked at short term, but today, under the new normal, entrepreneurs should have a longer term point of view, like in a time span of 5, 10, even 20 years. So entrepreneurs today have to pay attention to system and institutions. So we really have to have a stable economic institution and system so that entrepreneurs can continue or initiate their innovation in the current economy. Currently, we've seen that are still some imperfections in Chinese economy. For example, the protection of IPR is still not perfect. So if rule of law in the financial and economic sectors cannot be protected, it's very difficult for entrepreneurs to transform into a more innovative pattern of development under the new normal. Many people think we should rely only on government policies. I don't think so because entrepreneurs know better the economy than the government officials. Policies can only depend on known factors, but economy and entrepreneurs should rely on a reliable rule of law or a reliable and predictable system so that they can continue to innovate. So in terms of difference between private entrepreneurs and state-owned company entrepreneurs, I don't think entrepreneurs from SOEs can be called entrepreneurs. Sorry for the president and chairman here. Because entrepreneurs should take risks. Take risks. That's why I don't think SOE entrepreneurs are real entrepreneurs because they don't have to take real risks like private entrepreneurs. From my observation, SOE entrepreneurs or SOE chairman do not have more than three, above three years of visibility. That's why they cannot really innovate. Thank you, Mr. Zhang. I meet Mr. Zhang Fangyou every year in Davos. And I know Guangzhou Automobile is faced with many challenges in China. Under the new normal. So Mr. Zhang Fangyou, I know that you have some joint ventures with foreign stakeholders. So under the new normal, what are the challenges you are facing? And also in China today, manufacturing, including car manufacturing, is facing challenges, but also opportunities. So I'd like to know, what do you think about the new normal? Thank you, Mrs. Hu. Guangzhou Automobile group. Maybe some of you don't really know this group, but there are top 10 automobile car groups in China. And Guangzhou Automobile is ranked number five. We have a joint venture with Honda or N Toyota too. We also have a joint venture with Chrysler. We also have our own brands, such as Trend T or Legend. So you ask me a group like us who have joint ventures with foreign companies. And we also have some state shareholding. So joint venture accounted for 75% of our businesses. So the challenges we are facing are as follows, because we have joint ventures with foreign companies. So maybe we are more adapted, or we are more able to adapt ourselves to new normal, because we have different products and mechanisms. We try to introduce different products and capitals. And based on these, our group and our companies are going through innovation too. I'd like to give you some figures. In this year, the automobile industry grew by 4%. But we have grown by more than 10%. In 2014, we had a growth rate of 25%. And 2013, we had a 45% of growth, which may seem exaggerated for you, but it's real growth for us. That's exactly because our products cater to Chinese customers' needs and taste. For example, last year, our growth rate is much higher than the average growth rate. And we have four different kinds of car models who are actually sold out. Customers can even find them in our dealerships. So they are very well set, sold. So under the new normal, what are your different advantages and disadvantages for you as a car group? In terms of advantages, our advantages is our products who cater to Chinese customers. And in terms of disadvantages, the overall economy grows much slower than before, so we have to adjust our growth rate too. Our advantages is that now we have our strength of innovation. For example, our brand, Tran Chi, has been enjoying very good sales figure in the car industry. Of course, under the new normal, we are facing some challenges, but we also have very good advantages, which are deep rooted already in our company's DNA. So I think we can remain optimistic. Thank you, Mr. Zhang. Now I'd like to ask Mr. Shi the relation between real economy and financial sector. So I'd like to ask you, Mr. Shi, Chairman of Union Pay, why the liquidities of financial sectors are not coming through into the real economy to help the physical economy. How do you see this problem? Worldwide, globally speaking, in terms of an economic cycle, we are seeing that financial sector now is disconnected from the real economy. Even more so now than before, in the 80s, I think this started in the 80s. A lot of liquidities remain within the financial sector and do not go through into the real economy. Is it a demand side problem or a supply side problem? I personally think both. From demand side, China under new normal is changing its economic structure, economic structure. Those who needed money before maybe don't need money now. And now there are new sectors which need liquidity, but these needs are not well known to the financial sectors. Maybe it's a communication channel problem. So financial sector still doesn't know about these new needs. And from supply side, currently financial institutions, their old customers are needing less and less liquidity. And financial institutions are trying to quantify, trying to find and quantify the new needs in the current economical situation. That's why we have this connection between financial sector and real economy. What is the status of China's financial institutions this year? I think financial institutions are a bit too much. If we know more about China's economic situation, like China... More on the development of Chinese economy, we could see there is difficulty to encounter a financial crisis. Crisis may not be a better term, a good term to describe the current situation. For the past 30 years, China was developing at a very fast pace, but for financial professionals, these are getting more difficult. Now we are facing market pressure. My colleague here is from the financial circle. I'm sure he faces much pressure. So okay, could you reply to this question? What kind of a pressure do you encounter? What are your major difficulties this year? I think I should add one point to my colleague, the separation between real economy and the financial circles. I think because there are many good debt enterprises that should be eliminated long ago. If we use the market clearing definition, such enterprises should withdraw from the market long ago, but because they got support from the government and banks are not ready to accept their own failure, that's why they were allowed to survive and the financial capital is not able to enter the real economy, as my colleague just now has pointed out. As a whole, in terms of investment, everybody knows that we are facing hard times that we should be very prudent in investment. Everybody is doing short-term operation that after investing on one field, it's hoped that others would follow suit. That's why there was this stock market catastrophe last year. In 2015, one journalist told me that after interviewing many Chinese companies, not one of them holds an optimistic view, but none of them is desperate about the Chinese economy. So that I think that this year we cannot underestimate the risk in the financial market. The risk will not be lower than 2015. I think that we are all expecting Professor Rubini to tell us on the imbalance in world economy has such imbalance been solved? Well, I would start saying that of course the beginning of the year has been a period of significant turmoil in the financial markets, significant correction of U.S. and global equity. The triggers are many, the first one being concerns again like in August and September, that China might have a hard landing and the hard landing of growth might lead to a collapse of the currency in the stock market. I don't believe China is going to have a hard landing, but the market starts to believe that. Secondly, the U.S. economic data are mixed and weak, the latest ones and maybe the Fed made a mistake in starting raising interest rates from zero in December. You have this geopolitical risk in the Middle East and the rising conflict between Sunni Saudi Arabia and Shia Iran. And those tensions are affecting markets. You've had this collapse of all prices. Collapse of all prices if it's driven by a positive supply shock should be good for the global economy and instead it seems to be rattling financial markets. I think for a couple of reasons. One is that maybe it's driven not just any longer by a positive supply shock, but also about concerns about aggregate demand globally, weakness of growth in China, weakness of growth in emerging markets, weakness of growth in the United States. So if the fall in all prices are reflecting weak global growth is bad news about the global economy. That's one of the factors explaining it. We also have concerns about what's going on in Europe. The migration crisis, terrorism, the risk of Greek exit from the Eurozone, the risk of British exit from the European Union, austerity and reform fatigue in the periphery of Eurozone, bailout fatigue in the core of the Eurozone. People already started to worry about this integration and Balkanization of Europe and the Eurozone. We have now stresses in credit markets where high leverage companies in all energy but other sectors are now subject to significant stress in the United States and other parts of the world. And after years in which revenues and profits of corporations have been growing very robustly right now, there's a bit of a slump in US and global earnings and top line and bottom line. So I think it's like a perfect storm of all these things happening. And the specifics of China, I would say the following thing, markets tend to be manic depressive, go from excessive optimism to excessive pessimism. In a year ago, they were believing in this rhetoric of the Chinese government, that China could achieve a soft landing, that could maintain growth at 7%, that the Chinese were a bunch of super-heroic technocrats who couldn't do any wrong. And now they've gone to the other extreme of saying the policymakers are incompetent, they cannot stabilize growth, the currency, the stock market, they're lying and cheating, growth is not seven, not even six, is four going to zero. We'll have a hard landing, it's gonna lead to a collapse of stock market and the currency. And my view for the last few years on China's been neither a soft landing or a hard landing, I would say China's gonna have a bumpy landing or a rough landing, in fact to give you an estimate, I would say growth this year is not gonna be seven, it's gonna be somewhere in the low 6%, that is a bumpy landing and eventually by the end of this decade, potential growth in China is not more than 5%. So the good news is that if China's gonna have a bumpy landing, at some point, the markets are gonna calm down and they're gonna not worry about the collapse of the currency and the stock market and that's the positive but it's gonna take time because until now the data are negative and people are overreacting to what's going on in China and until things stabilize and there is more policy action the PBOC will have to do additional runs of easing, you have to use fiscal policy at the central level to boost aggregate demand, you have to do a variety of structural reform to boost economic growth and those things are gonna take time but on the negative I would say there is the fact that the Chinese are sticking with this objective of maintaining growth at six and a half to 7% when potential is going towards five and the only way to do so is to do new rounds of credit fuel fixed investment that imply more bad debts, more bad assets, more bad investments from commercial to residential real estate, to infrastructure, to excess capacity industrial and manufacturing sector where with the steel or cement or aluminum glass plates and many other sector there is excess capacity and there's not the willingness to shut down those firms and factories that have this excess capacity and therefore I worry that right now because of political arguments they need to double GDP within the decade is a political goal, people are emphasizing again maximizing growth as opposed to the rebalancing of growth from capital intensive resource oriented export and CAPEX towards more consumption, consumption of services and labor intensive growth that rebalancing is more rhetoric than actual and therefore there's an attempt to kick the calm down the road that implies more debts, more bad assets, more bad investments and eventually that could slow down the economy more than otherwise. So the good news is not a hard landing the bad news is that the policymaker seems to be not willing to do some of the necessary adjustments that are necessary to lead to that rebalancing of growth in a more sustainable and balanced way. So it's a bit of a mixed bag. I want to ask a question about the RMB. Okay, on the Chinese pregnancy. Raid. You ask about the currency? Yes.  I think, I don't think that's gonna be the case and not gonna be the case because net exports in China actually are rising the current accounts surplus is rising. Actually export growth is doing okay on a sequential basis. The six, seven million college graduates in China don't want to go and assemble t-shirts or even iPhones in factories. They want service jobs and for that one you need to have a stronger currency not a weaker currency. Right now China's currency is member of the SDR this is an exclusive club. We've rights also come responsibilities if China were to depreciate by say X percent, five or 10 currencies in emerging markets they're gonna fall by two X or three X that's gonna lead to rising inflation. It's gonna lead to a sharp increase in the real dollar value in local currency over their debts. It's gonna lead to financial crisis in emerging markets. And the Chinese say we're being responsible stakeholder of the global economy. We did not let our currency depreciate during the Asia financial crisis. We didn't let our currency depreciate during the global financial crisis and now being a member of the SDR we have to be responsible stakeholders and therefore the Chinese currency has to weaken in the sense that if you track the US dollar and the dollar might appreciate as the Fed exit zero policy rates the dollar might strain the relative to Euro, the yen, commodity currencies emerging markets and therefore Chinese currency has to depreciate gradually relative to the US dollar. The problem is that when you move your currency by one percent in China people feel the worst and they say it's gonna be five, 10, 15 percent. Why? Because the Chinese currency policy is not transparent. They want discretion of doing what they want but effectively then they have to intervene to maintain stability with US dollar because otherwise people believe there's gonna be the worst and then the capital flight accelerates that tightens domestic financial condition. I think the way out for China will be to move to a formal basket peg in which the weight of the dollar, Euro, yen, emerging market currency is given so if the dollar goes up say by five percent relative to Euro and yen then the Chinese currency can depreciate based on that weight by say two percent relative to US dollar and people know that two percent is two percent is not gonna be five, 10 or 15. But since the Chinese so far they want to have discretion rather than stick to this rule then there is no transparency and people expect the worst out of China and of course making moves on the currency at a time where there is concerns about growth and concerns about the stock market like it happened in August and happened again earlier this month leads to an exacerbation of those market volatility. So I think the Chinese both on monetary policy and exchange policy on the stock market have to move gradually to a more transparent and open sets of rules so that people can track what they're doing in a credible way. Got it. Thank you very much. Very impressive. Mr. Tang Wei Yin, one question. The government is appealing for innovation. If I were a young man, youngster, what proposal, what advice would you give me? I'm sorry, I cannot give such an advice because it has been said that innovation cannot predict it if government officials could give such predictions to entrepreneurs. These officials themselves should become an entrepreneur. I'm not in agreement with the concept that government should give subsidy to companies and enterprises. What government should do is to provide a level field for competition. Then the success and failure depends, relies on the entrepreneur's perception of the market. Now people are discussing what sector should the government encourage or provide support. We see that such thinking has led to failure in the past or there will be over capacity as you have seen in the past. For example, solar panels is a classic example. Thank you. But I would like to ask another question that governments should not issue too many policies, industrial policies. But what do you think? What are the sectors that are more promising in the future? But I cannot predict for the future that successful enterprises nowadays were not forcing 20, 30 years ago in 1990 Bill Gates himself did not have a very good opinion on the development of internet. Internet later found an extraordinary growth. Entrepreneurs need freedom. They don't need anything else. Zhang Yicheng, let's come back to the stock exchange because Zhang Weiying has explained on the innovation. If you have money at hand, would you invest on Chinese stock market? Would you exchange your renminbi into US dollars? I think for me, stock markets in China, I mean, you can find three different stock markets in one stock market in China. For example, blue chip board, which is a main board. Its valuation currently is not that high now. For example, there are many big banks or many big telecommunication or petroleum companies, such as China Steel, et cetera, et cetera. Their PE ratio is only 12 times. It's not that expensive. And another board for SMEs, PE ratio is already 30 to 40 times. And for entrepreneur board, at the end of last year, the PE ratio was 70, 70, and now it's 50 to 60 times. So if you ask me if I want to invest in equities or stock markets, I will invest in blue chip stocks. In terms of its dividends yield, it's already five or 6%, which is not that bad in terms of return. But for a startup board, you have to be very careful because of course there are good startups, but most of them maybe will disappear in 10 years. And in terms of exchange rate, I don't think there will be huge devaluation of renminbi in the future. As Mr. Rubini just said, we have current account surplus which is still very high. And the overall economic situation is not bad either, and we have very strong foreign currency reserve. And Chinese government also will save its face now that we are already in SDR, as we are already in SDR currency. PBLC said they were packed to a group of currencies, not only to US dollars. If they can give more clearer guidance to the market, I don't think there will be huge devaluation for renminbi in the future. Mr. Shi, would you want to say something in terms of financial market? Again, stock market issue, renminbi exchange rate issue, P2P issue, or some pension schemes in China. Pansy schemes in China. How do you look at these Chinese financial problems? So today, you want us to talk about new normal. So actually, I don't really understand new normal. What's new normal? Do you mean the normality in the new era or new normal in a different era or in the current era? Do you mean ordinary state of ordinary condition or regular condition or normal condition? What do you mean by new normal actually? Do you mean we have to think of this in terms of common sense? If we judge all this from common sense, I think we should believe in common sense. There is one stock in Chinese stock market which is called P2B, P2B. And actually, this company changed its name and then their stock increased for 10 days. So we really have to start from common sense. If anything which does not follow the normal or regular rules of things or rule of thumb, we should not believe in it. Mr. Zhang, many of you talked about dead companies or zombie companies. So Mr. Zhang Fangyou, we know that Guangzhou automobile group has been doing very well. But do you think there is indeed a excess capacity in China? How to reduce over capacity in China? Actually, we indeed have over capacity in manufacturing in China. That's why government has adopted different policies to reduce over capacity. So we have to follow what central government wants to do. So we have to reduce over capacity, which is a reality. But I think it's a, the over capacity can have a cyclical and a structural aspect. If it's a structural over capacity, which means we have too much capacity, too much of idle capacity. So for car industry, even last year there was a 4% of growth in car industry. This means if you have good products, you can still sell your cars. You can still use your capacity. But if you don't have good products or your costs are too high, then you cannot sell cars, then you have over capacity. I think the same issue exists in other industries too. There are, there is indeed structural over capacity in other industries. How do you reduce idle or useless capacity and increase the usage of useful, so-called useful capacity? This is what Chinese companies have to do now. For example, telecommunications or mobile phone producers. They also have to face this over capacity issue. Now, Chinese economy has been slowing down. This will also, as this was also required companies to reduce their over capacity. In other words, to better use your capacity and reduce your idle or useless capacity. Different cities and different regional governments have been issuing policies and adopted measures to reduce over capacity. For example, they merge different companies so as to reduce capacity without causing unstabilities in different areas and different cities. This is very important. Thank you. Professor Rubini, I'd like to hear you about supply sites, reform. What do you look at supply site reform from an American point of view, supply site reform? Can you give us some insights? And then I will ask Mr. Zhang, Professor Zhang to follow up. Yeah, I think that China, like other parts of the world needs, call them supply site reforms or structural reforms to rebalance its own economy. I think that three or four of them probably are key. The first one, as was pointed out by many other, the panelist, is there is now a significant amount of excess capacity in industry manufacturing, steel, cement, aluminum, glass plates, even the auto sector. In China, I think there are 100 different automakers. In the US, we have three. So the auto industry in China today looks like the US 100 years ago. So massive consolidation has to occur. And in many other sectors of manufacturing, there's excess capacity.  And of course that on a transitory basis implies rising unemployment. Some people have to leave individual firms, individual sectors, individual cities and regions and gradually move to the new industries of the future. Many of them are gonna be in the service sector. And I don't think that the employment problem is gonna be in the medium term a severe one because even with growth rates, say, potential of 5%, first of all, there is aging of population, so there is less labor supply. And the service sector tends to be much more labor-intensive than capital-intensive industry. And therefore, once the rebalancing of growth has occurred, China can maintain social stability and near-full employment, even with a growth rate of 5%. But politically, I think the nervousness is that if you shut down thousands of these firms and SOEs like Premier Zhu Rongji did over a decade ago, there'll be transitional unemployment rate and that's gonna lead to instability. Now the solution to that problem is a second piece of structural reform is to have the right types of fiscal policies. Today in China, every time there is a slowdown of growth, the fiscal stimulus takes the form of another round of credit-fuelled fixed investment that implies more bad investments, more bad assets, more bad debts. What China instead needs is to have a fiscal policy where you're building a social safety net. If people have unemployment benefits, if they have paid healthcare, if they have pensions, if they have ways of getting reskilled as they lose jobs in some sectors and have to move to another one, if people can be allowed to move from one city to another and not having issues of migrant workers and registration, that readjustment will occur and you'll have a safety net so that people are gonna accept that and the political and social instability is gonna be constrained. So you need a second pillar of structural fiscal reform. And the third one is that the allocation of savings and investment and of credit has been driven by politics because most of the financial system were state-owned enterprises and you have to have a better and more efficient allocation of saving to investments not to the state-owned enterprises being subsidized but to the private sector because the private sector is gonna be the one especially small and medium-sized enterprises, startups are gonna be creating the new jobs of the future in the indices of the future, tech, innovation, services and so on. But that implies that then you have to stop the moral hazard of bailing out everybody. You have to allow some financial institutions to fail. You have to allow some borrowers to fail and therefore impose some degree of market discipline that's gonna force then those in the private and public sector so he's allowed otherwise to adjust operationally and financially. So you need SOE reforms, you need the fiscal reform, need financial sector reforms and then if you do it in a coherent way there will be transitional costs but they're gonna be achievable and you also need reform of the system of registration to allow people to move from where the jobs are declining to where the new jobs are gonna be. So those are the four key reforms to be made. However, the imperative of maintaining growth closer to 7% means that China is doing all these reforms more slowly when it's optimal and desirable. They tend to kick the count down the road rather than doing it more front loaded but kicking the count down the road you're creating a bigger financial problem down the line. So the question is at which point President Xi having cracked down on corruption have established his own control on the major political and economic power is gonna feel like it can front load some of those economic reforms. The sooner they're done, the better it's gonna be. The later they are done, the greater the risk of a harder landing, I would say. Okay. Wei Ying, do you have anything to add about this public sector reform? Professor Zhang. So plus I reformed as Mr. Rubini just said, should not come from NDRC or central government. As we just said, over capacities due to companies which cannot produce what consumers want. So in order to solve this issue, we have to let some companies die or disappear like zombie companies. For example, some SOEs should let them fail in the steel industry. That's exactly the case. SOEs are not shut down but private steel companies are shut down or did not receive help. So we have to let the market play a bigger role. Thank you. So, okay. You first, Tiwen. Please, please call the door, Tiwen. Okay. Chi Chen. First, I come from the young global leader. I would like to ask President Shi. Everybody was talking of supply-side reform. That all of you said that the risk will be greater in 2016. This is not conducive to innovation against such background. How would you lead innovation work? Everybody will have a turn to speak. Supply-side reform, I think there are two levels, one on the macro policy, the other on the micro level. For the macro side, the current reform centers on reductions of taxes and the tax-oriented policy. From the micro policy, I am in much agreement with Professor Tung. Entrepreneurs' perception of the market is important for supply. They don't need outside advice or help under such circumstances. How do we look at this supply-side reform? I think if you could do macro reform, then go ahead. But at the micro level, then leave the reform to us for me on financial risk. I think in the past year, in general, government ministries are overstressing on innovation, especially for the financial sector in China. It's not a market-oriented financial circle. It's difficult to undertake reform. It will increase the risk. I think that the tempo on this reform should be lowered a bit, at least for the time being. Secondly, what we should do on the financial market, a multi-tier financial market. For example, government support is not that strong. There's not yet a bond market that we have more than 10 years of experience in such reform on the bond market, on the equity market, apart from improving the performance of the equity market on the PE ones. You should do reform. That should be sufficient to promote the growth of the stock market. For the equity market, we should not overemphasize on certain forms of trading. I think this is too risky and too early for China. Is there any other questions from the audience? I'm a journalist from JIC and I will ask Professor Zhang. From last summer, financial markets are undergoing turmoil. Public authorities have undertaken policies. Such turmoil has continued this year. What do you think the supervisory bodies should do in other words? Apple Pay has been introduced into China. China Union Pay is progressing steadily and such introduction into China isn't a bit late at this time. We will shorten your reply. Okay, simply put, I think the biggest lesson from the equity market is that government has overdone its job. Too much intervention from the public authorities. Government would think of using equity market to balance the Chinese economy. Then if it doesn't work, then government would intervene in buying stocks that would not lead to a healthy development of the stock market. For a healthy development, government should withdraw from this market and leave the market to professionals. Government should only set basic fundamental policies. That's all. Wontau, what do you think? In the beginning, the negotiations were difficult for bank cards, whether for Visa or Master. We stake on one principle. Apple, as a handset producer, is providing intermediate product. The Apple company doesn't take part in sharing the benefits. Now Apple has put forward such a request. The foresight agreement has been in practice for many years. Nobody has ever asked to share the profit. In fact, we are helping Apple to sell your handsets. So you should charge more fees so that the banks give it the name, calling it an Apple fee. This is a breakthrough of the traditional model. Your question on whether Apple has come too late, I think it all depends on how you look at it. How late is too late? If it's too late, then we will do nothing at all. Apple doesn't believe that it has come too late. Okay, last question from you, please. A short question, one sentence. They will give you a very brief reply. Rubini, thank you for talking about the Maniaco depressive markets. But we also know communication is about who received but also who sends it. Obviously there's a consensus that the communication from the Chinese government side needs to be improved on explaining. What would be your recommendation, giving the Chinese system? How can we have the Chinese government of the central bank be probably as subtle when he speaks as Janet Lennon or Mario Draghi? What would be your advice maybe on the other panelists on how the Chinese strategy and policy is better explained because what I realize, especially here, is that there is a big, big, big uncertainty which creates fear. I do agree with you that it's a problem, both communication and also transparency. For example, there is no transparency about the GDP number and that's why people don't believe those numbers and the Chinese can do more to adhere to the international standards that say the IMF is imposing on revealing more data about your economic and financial conditions. Secondly, I think that the transition to a more flexible exchange regime was botched, was not communicated properly. Effectively, China should be moving to a basket peg but if you don't have an explicit basket peg that says this is the weight of the US dollar and this is the weight of other currencies, then when the Chinese currency moves by one to percent, people believe this is the beginning of 5, 10, 15 and that leads to the acceleration of capital flight and then need to intervene, to stop it and capital control and you get a mixed signal. And the same thing for the stock market. Unfortunately, the Chinese fed the stock market bubble because after the real estate market bubble went bust, Chinese savers were earning negative returns on their deposits. Then they went into the shadow banks that were giving them high return. Then they cracked down on the shadow banks, giving capital control they cannot invest in foreign assets. So the Chinese started feeding an equity bubble by allowing a borrowing at the margin and millions of people started to go and borrow and join brokerages and that created that bubble and that bubble went bust. And once when they bust for a while they were not doing anything, then they started intervening, then they stopped intervening, then they introduced circuit breakers that are not designed properly and therefore both the design of the policies and the communication of policies has been messy at best. So I think it's a bit of a learning experience, learning about how market react, learning about being more clean in communication, being more transparent on the data and hopefully slowly, slowly that's gonna occur but certainly there is a lack of credibility, there is a lack of transparency and there is this issue about communicating properly what you're doing. I think that's a challenge that the Chinese will have to face. Okay, now we have a normal time, now we allow panelists in one sentence to describe what are the challenges you are facing now. Mr. Zhang, give you five seconds to talk on this topic, the economy. Oh no, just one term, not one phrase. You have it. And to seek progress in difficulties and mutual risk. Wen Cheng, I will remain immobile, more instability. Professor Rubini, what term would you give to sum up the current situation? Stop kicking the car down the road and be serious about structural reforms and about rebalancing because the more you wait, the bigger the problem gonna become. Okay, thank you very much. Thank you.


Running effective one-to-one meetings at work, I think, are one of the most important things to get right if you want to firstly develop your team members, secondly improve the effectiveness and happiness of your team, third retain your best staff, and fourth, get promoted as a manager. In this video, I'm going to take you through nine tips to improve the effectiveness of your one-on-one meetings with your team and here is a quick preview of what I'm covering. These are all trial and tested approaches that I've used for years and at the end of the video I'll share some example agendas on what you could cover in your meetings. My name is Jess Coles and I've spent 25 years working in corporates and household names through to SMEs at all management levels. I've been managing teams of up to 35 people for over 25 years and I've won best team prizes at national and company level. If you're new to this channel, Enhance.training provides online business courses to help professionals, managers and business owners improve their performance. And if you like this video, please give it a thumbs up and subscribe. So let's start with our first tip. Aim to build trust from the start. The more your team members trust you, the more useful your one-on-one meetings are going to be. Trust will get you useful, honest discussion and feedback rather than only being told what the team member thinks you want to hear. There are lots of ways to build trust. Some pointers include make sure you do what you say and your actions and words are consistent. Be open and honest in how you deal with your team. Praise more than you criticise. Ask for your team members input and actively listen and take action on that input. Focus on developing your team members rather than controlling them. Admit when you've made mistakes and try not to repeat them. And build personal relationships with your team members as well as professional ones. Building relationships and trust takes time and effort. Make this a priority. My second tip for one-on-one meetings at work is to be clear about the purpose of the meeting. Having one-on-one meetings with employees is a perfect time to help them grow professionally as much as you can. Coach them into your team members to improve what they do. As they get stronger and better they will be able to deliver more personally and collectively as a team. This in turn reflects well on you as the manager and leader of the team. For example an obvious reward for you would be to add more people to your team. Use each meeting to discuss and debate different approaches to solving specific problems. Get your team members thinking by asking questions and help them get to their answer. Obviously share with them your answers if needed and together choose the best approach. You'll be helping to set the stage for each individual to work at their best and keep improving. My third tip for one-on-one meetings is to book a regular time in each of your diaries and stick to it. We're all busy at work and the pressures on each of us keep rising. It is so tempting to cancel or delay your one-to-one meeting. Don't. This sends completely the wrong message i.e. you're not that important to me. You want to consistently send the message you are very important to me. Book in your one-to-one meetings into the diary for the same time each week or every other week at a time that suits you both. You are much less likely to miss or delay meetings with a consistent time booked in. From my experience an hour is a good amount of time for each meeting but do book the amount of time that works best for both of you. My fourth tip for one-to-one meetings is to ask your team member to bring their agenda. Ideally both of you would agree and set your agenda before each meeting. In practice this is hard to achieve. I would suggest that you write a short set of bullet points and email this over to your direct report and ask them to also create a short list of what they would like to cover and email that to you. Then at the start of the meeting you can both spend a few minutes creating a joint list of the most important areas that you'd like to cover. This gives each of you an input into the agenda. You may find that similar themes keep coming up at which point booking a set structure for part of the meeting may be useful for both parties. Make sure your team member sets part of the meeting agenda whether you do it ad hoc just before the meeting or you have a set structure. For tip 5 start and finish the meeting with a positive, a win or a genuine compliment. Celebrating successes is so important. Everyone wants to be appreciated. In fact lack of appreciation is cited as the top reason people leave their jobs. So make the effort to celebrate your team member's successes. Start and finish the meeting with a positive, a win or a compliment that the team member has earned. And be specific, not general with these comments. My sixth tip for one on one meetings is to use the time to solve problems. Spending the time in a one to one meeting to share information is a bit of a waste of time in my view. The time would be much better spent jointly solving problems that you or your team member are facing. This turns the meeting into a useful working session with really useful outputs. Many managers ask their team members to bring problems and a solution with them to each one on one meeting. This forces a team member to problem solve and think through a solution. You the manager can give feedback, input and coach the team member to improving the solution if needed. By solving problems in the meeting, you're reducing the workload and working together, which further helps build your professional relationship. My seventh tip for one to one meetings is to review the team members progress on achieving their objectives. Flex how often you do this based on the individual and how they best work. You know, quarterly for self starters through to every other week for those that need additional help worked well for me. This is a great way to set out and maintain your expectations for the team member. By reviewing objectives, you are keeping yourself and the team members focused on achieving the objectives, and you can hold the team members to account. When you have regular checkups on progress, it is much easier to gauge the level of support each person needs. And this also gives you a great opportunity to feedback on the individual's performance so they know where they stand. Make sure you prepare specific examples to discuss and explain why you think this is an example of good performance or performance that needs improving. My eighth tip is to actively listen during the meeting itself. Learn to speak less than your team member during the one on to one meetings. A good tip is to wait at least a few seconds before you start speaking to make sure the other person has finished speaking rather than just pausing. It is amazing what you can find out by actively listening to what is being said. But actively listening, you're also reaffirming that your team member and what they're saying is important to you. This demonstrates your appreciation of them. Make sure you ask about how they're feeling, gauge their morale, and if they're happy at work. And also ask about their workload and the challenges that they're facing. Find out what they're thinking and feeling. My ninth and last tip for your one on one meetings is to ensure that you both leave the meeting with clear action items. Leave the meeting with action items, setting out what is going to be done by whom and by when creates valuable output from your time together. I suggest that you take notes during the meeting of all the key points raised and agreed upon. This allows you to follow up after the meeting to check that if your team member needs any additional support and to check, of course, on their progress. And as promised, on screen now are different sets of potential agenda items that you could include in your one to one meeting agendas. As mentioned in tip four, some people find a set structure useful, whereas others work better with a flexible agenda identifying the topics to discuss for each meeting. Work out what is best for you both to get the most out of your one on one meetings. So in summary, how to run effective one to one meetings at work is such an important skill to develop. If you want to develop your team members, keep them happy and deliver as individuals and as a team within the business. Do try different approaches to find out what works best for you and each member of your team. Flex the meeting style to each team member. Enjoy making your one to one meetings even more effective. And if you have any thoughts or suggestions of what works well for you, then please leave a comment below. I'd love to hear from you. And as always, if you like this video, please hit the thumbs up button below and subscribe. Thanks for watching and I look forward to speaking to you again soon.