Odd Lots - Olli Rehn on the Big Competitiveness Challenge Facing Europe

Episode Date: October 22, 2025

The 2010s saw economic weakness across Europe's periphery. Countries like Greece, Spain, Italy, and so forth were the sites of so much stress. In the 2020s, however, it's reversed. The periphery is holding up well, but the industrial core is facing stress. Germany, in particular, the old powerhouse of the continent, has been slammed by the surge in electricity costs and competition with China. Other Northern states have felt similar pain. So what is the future for Europe? Can the EU project itself continue to evolve and integrate? On this episode, we speak with Olli Rehn, governor of the Bank of Finland and a member of the ECB's Governing Council. We discuss the near and medium-term challenges facing the EU and the prospects for finding a robust growth path in the future. Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.

Bloomberg Audio Studios. Podcasts Radio News. Hello and welcome to another episode of the All Thoughts podcast. I'm Tracy Alloway. And I'm Joe Wisenthal. Joe, do you remember earlier this year? There was a moment when everyone got really excited about Europe for the first time in probably decades. You see, you know what I always think about is for the two of us, for a long time of our careers, one of the many sub-themes that we go, it's like, when is, like, Europe going to turn on?

the fiscal tabs. When are they going to start spending money in Germany, all these questions? When are they going to be less so focused on austerity or balanced budgets, et cetera? And then finally, and maybe Trump had something to do with it and defense spending had something to do with it or politics. Finally were getting spending. It was like five minutes and everyone was really excited about some of the defense stocks and the euro's railing and it looked, you know, a little bit more politically stable perhaps than the U.S. What's happening though? I, like, how's that going? I'm not sure. I haven't followed it as closely as I should have. I will say, I mean, the euro is still pretty strong against the dollar.

And if you look at the euro stocks, that's still doing pretty well as well. So there is some optimism that is still circulating the market. But you're absolutely right. We should talk about what this means. What does it actually mean for Europe to, quote, unquote, seize this moment, right? This very particular moment. And what exactly does Europe want to achieve? Totally.

And, you know, a lot of the conversations that we have in the U.S. context certainly apply in the European context. So industrial competition with China. Whatever we're feeling here in the U.S., certainly very heightened anxiety in Europe with the stress on the auto industry and the chemicals industry and so forth. Energy prices. Obviously, electricity costs in the U.S. becoming a major topic, et cetera, just as big in Europe, if not bigger, especially in the wake of the Ukraine war, the shutting off of the nuclear power plants in some countries, et cetera. So pretty much everything that we're sort of wrestling with here, the right, the sort of productivity. The splintering of the traditional parties within domestic politics.

Our parties have a bit more of a monopoly than the European ones do, but there's similar stresses going on. So anything that we're talking about here, it's very useful to see how it comes across from the European lens. Absolutely. So I'm very happy to say we do, in fact, have the perfect guest. We're going to be speaking with Ollie Wren. He is, of course, the governor of the Bank of Finland. He is also a governing council member over at the ECB. So, Ali, thank you so much for coming on all thoughts. Thanks very much for the invitation. Great to be here.

So from your seat in Europe, wait, where are you actually based in Europe? Where do you spend most of your time? I have a dual life, not schizophrenic, but dual life. I have two home fields, two home terrans. One is Helsinki and Finland. The Bank of Finland is the National Central Bank of Finland. But we are also, at the same time, we are a member of the Euro system. And my second home terrain is thus Frankfurt and the governor.

Council of the ECB. And the same goes for the large part of our civil servants, economists and lawyers at the Bank of Finland, like in the other 19 national central banks. That's the Euro system. Perfect. So from your seat in Helsinki and Frankfurt, does it feel like something's changed within Europe? Does it feel like there is the sense that maybe the current time period is some sort of opportunity? Certainly things have changed in Europe a lot for the verse, as we know, because of Russia's unjustified brutal war in Ukraine. But second, as a wake up to that situation,

including the impact of President Trump as well. And I will say that if you look at Europe for the moment, we have one issue which is above others, and that is common defense, and spending on common defense from air defenses to drone production and other elements of military technology and production. And that's also very much. an economic issue. Actually, it's a financial opportunity in a sense that the best argument for

safe assets in Europe is indeed defense spending. We need both national and European funding. This is, in my view, a possibility to pave the way for a deep and liquid European capital market. That's great. I'm glad we jumped right into this question of further integration and some of the stakes here, particularly as it relates to defense, because this has been something that's been on my mind a lot and I wanted to get in with you. When we're thinking about industrial capacity or thinking about industrial competition, scale is really important. The size of the market is very important. And this is part of the whole premise of the euro area, which is let's have an integrated market. And yet, on the other hand, domestic politics are still a thing. I have to imagine in defense specifically,

there must be a lot of anxiety at each individual country. Do we want our national maker of rolled up into some larger conglomerate. To what degree, whether we're talking about defense or other any other industrial sector, does there still remain a tension between the scale required for competitiveness and the desire for some sovereignty within each country to have their maker of X or Y? Yes, there is that tension, but that's why we do, we make policy and that's why we try to change things in Europe. Actually, that brings to my mind an anecdote concerning precisely common defense, how things have changed. Okay.

The country I know best, Finland, joined NATO in April, 2023. And I recall my own time military service in the early 1980s in the Savo Brigade in eastern Finland, in the city which used to be the headquarters of Misen Manorahem during the winter war. Today, that Garrison area is actually a regional subheadquarters of NATO. So you see the change in terms of defense in this regard in Northern Europe. Talking about economies of scale, yes, we lack a genuine single market in many areas like services and to some extent capital. And that's why we are very committed to move forward with, for instance, the Savings and Investment Union, which aims at, say,

transforming the formidable savings of Europeans 10 trillion, that's the estimate to productive investment by some kind of, say, popular capitalism. That's, in my view, one essential element of creating a more unified Europe and creating a more competitive Europe. The other thing when it comes to building up a defense industry that is sometimes debated is this idea of should you spend money on investing in defense programs? or should you spend money, you know, buying the products that these defense companies are actually producing? Because what's the point of building out this massive capacity if you don't have a dependable customer for the foreseeable future? How would you structure that sort of spending to make

sure that it's durable, I guess, and effective? That's a very critical question in the European context. And that's why, as we are conducting joint European funding exercises in this regard like the 150 billion euro safe instrument by the European Commission. It's essential that we purchase those arms and arms technologies by common procurement and by investing in joint research and innovation projects. That's the way to get more bang for the euro. And that's now the effort which the European countries and the commission are engaged with. In fact, it is quite clear that we are going to, in Europe,

we are going to purchase both, say, domestic European products and also American products. In some areas, the US is more advanced. For instance, Finland is purchasing 64 F-35s to replace our existing fleet of 64 F-18s, which date from the early 1990s. How costly is it? I guess to put it bluntly, I don't know, that the U.S. is not the reliable trading partner. It might have seemed to be. I mean, I know there's still a lot of trade and you just mentioned, you know, replace the plane fleet, et cetera. But clearly, we all read the news. We all know what's going on. How costly is it for Europe? And do you perceive there to be a lot of, frankly, unnecessary duplications of investment efforts across the Atlantic currently because of trade tensions?

We do expect that and that's having a negative impact on productivity and thus on the economy, growth and well-being. As far as the impact of US tariffs is concerned, we have tried to estimate that it's a bit difficult as policy making is fairly volatile, so it depends on the day or the week. We've noticed. When you take the cut-off data, you know that perhaps. But our estimate, which is roughly done on the basis of the current US tariff regime, is that it will hit growth in the Eurozone roughly by half a percentage point next year.

But the good news is that the European economy is actually demonstrating resilience. We are still growing this year, probably around 1% or so, 1.2%. And we are projected to grow by 1.1.3% in the next two years, despite the headwinds of both geopolitical tensions and try for wars. So you wrote something for Vox a few months ago called Europe must not waste its currency moment. And, you know, reading it, it sounds very much like there's perhaps an ambition to maybe replace some of the influence or some of the global role of currently fulfilled by the US and the

dollar with the euro. Is that how we should be reading it? Is there like a conscious effort underway currently to expand the euro's? influence in the world? There is deliberate conscious effort to enhance the euro's global role in the currently changing international monetary system. And if I put the background first, I think we are seeing the international monetary system or the global financial system in transformation for the moment. And you have two main drivers in broad sense. On one hand, the geopolitical confrontation and on the other hand we have a technological disruption thanks to digital assets

crypto stable coins central bank digital currencies how this will play out will be quite crucial as to the evolution of the monetary system concerning the geopolitical competition we see China's efforts to strengthen the role of reminb or the yuan for instance with the rodent belt initiative and linking trade agreements to an enhanced role of the yuan. But, and there is a major, but there are still capital controls in China, and there is no legal certainty in China in the Western sense. So that creates quite significant limitations for the Remembe. In the technological side, we've seen the growth of stable coins more recently.

We've seen certain volatility of cryptos last week, Friday. Just a little. Just a little, yes. And for instance, stable coins, they are clearly intended to increase demand for U.S. treasuries to fill the federal deficit of the United States of America and thus to enhance the role of U.S. dollar and U.S. dollar dominance. I believe that on the basis of historical experience, let's say, for instance, by the writings of Professor Barry Ahing Green of Z. Berkeley, that historical shifts in the international monetary system take place slowly and on the basis of the structural changes in the economy and security structures. That's why I believe that US dollar dominance will prevail for quite long,

perhaps less as a single unipolar hegemon in the monetary system than before, and we may move towards a more multipolar monetary system. and the euro can have a significant reserve role there on the condition that we can strengthen the foundations of the European economy in security in terms of economic dynamism and in terms of digital sovereignty. When it comes to economic dynamism, people are pretty pessimistic about Europe these days. They look at an industrial sector that is maybe being hobbled by a competition with China. They see the various countries as not being at the forefront of the AI investments. With tech in general, there's a perception that the economies are still overregulated.

It's not a great place to have a startup and so forth. What is the sort of the bull case or maybe the sales pitch for sort of the Euro Inc, the European economy? Where does growth come from in a dynamic durable manner? There is a vibrant startup community, for instance, in Finland. Finland is probably the exception. You do hear about Finnish startups. Sweden, France, many other countries. Actually, we have a rather vibrant startup community in Europe.

By the way, welcome to Slash, even though I'm not the organizer, but Slash is the well-known major conference in Helsinki. We'd love to come to that sometime. If you can introduce us next 2026, we'll be. love to come. That's the major startup. That sounds great. Global startup even since early 2010.

Okay. It's good to know. The name slush comes from November because you have so much slash in November. That's why it's for slush. But it's a very bright event in the darkest time of the year. But this is why everyone goes into the saunas the rest of the time to get out of the slush. Yeah. Well, I do it 12 months per year, a few times per week.

Sounds great. It sounds fantastic. Not bad. Not bad. But even more serious. So we have startups, we have some unicorns, but the general challenge in Europe is that in the scale-up phase, many companies choose the US, say, Silicon Valley or New York Stock Exchange

or combination of both because it's easier to get venture capital. You have a large market, which is culturally fairly similar, even though there are certain differences between California and Helsinki, Helsinki, and, say, South Carolina. Right, yes, okay. So in any case, it's the scale-up phase and internationalization phase where we have to do better. And that's why, for instance, our government's efforts to enhance growth in Finland are focused on funding of scale-ups and growth companies. So when I think about a business being competitive, especially in the areas that people seem to be very excited about nowadays, things like AI, data centers, I guess defense nowadays.

I think about one aspect of competitiveness is price, right? And if your input costs are higher than a lot of other people, then you're going to struggle to provide these things at a low cost. And in Europe, the big input costs that people seem to struggle with is energy, right? How in the world does Europe start to compete in terms of global competitiveness with energy prices so high? And what can you do about it? We have to go back to Finland metaphysically, mentally now again, because we have an X number of data center investments coming in Finland, mostly with foreign direct investment.

Thanks to the combination of relatively inexpensive electricity and relatively cool climate, which is conducive for data centers. So in that sense, there are differences within Europe, as well. The key is very much to continue the green transition with consistency. For the moment, still countries like Germany are suffering from higher electricity and energy costs. That is true, largely because Germany was so dependent on Russian fossil fuel, especially because it's energy-intensive chemical and other industries who have been so dependent. But the green transition is moving forward, we lean much more on renewable energy than before. Of course, energy efficiency and smart electricity systems play also a key role here. And I would expect that this green

transition will be, I mean, not concluded, but will be very far by the end of this decade, so that we have a much more competitive condition in Europe in this regard. I add one thing often when you compare fossil energy and you compare, you compare fossil energy to, say, renewable energy. The capital costs in renewables are often higher, like, say, investing in wind parks or solar energy. But the running costs are quite low. Meanwhile, in fossil fuels, it's often, let's say the reverse or that the capital costs are not that huge, but yeah, very significant. running costs. So once you are far enough in the green transition, preferably supplemented by nuclear energy in my view, then our cost competitiveness in terms of energy will also be much better.

It sounds like the solution to some of the what ails Europe is just everyone needs to be more like Finland. Sounds like you haven't figured out and everyone else in Europe needs to be more like that. No, for real, when it comes to broad like industrial pressure, can you like attribute, and maybe this is more of a German-specific question, but I think it probably applies more broadly. Is it possible to decompose the degree to which competition with China, especially things like chemicals, China's very competitive chemicals, though it doesn't get much attention. Obviously, cars globally is just a huge story. When you look at like sort of the sputtering out of industrial production in Germany or just Europe more broadly, is it possible to

decompose how much of it is undercutting on price from China versus the higher costs that have surged, particularly since early 2022? Well, it is possible, but I don't have the figures of the cuff. But I recall that in 2022, which was the high point of energy costs in Europe. So we calculated with a friend of mine, and then we verified that by our economists. That year, Europe paid 800 billion euros for, for. fossil fuels instead of the long-term average of 300. So we paid 500, 600 billion euros more that year, which then was roughly 3% of GDP.

So in 22, we had, you can say that it was kind of an extra tax of every European of 3% of the income on average, which of course created quite a lot of popular opposition and criticism. Fortunately, we have been, it's not actually about fortune, it's about political will and action. We have been able to broadly adjust to the end of Russian gas in Europe, but we still have some work to do in many countries. You mentioned Germany, Germany still has work to do in order to reduce its energy costs in its industrial production. If you could wave a magic wand

and do one thing to boost European either productiveness, productivity or competitiveness, basically make all of Europe, more like Finland, what would it be other than installing saunas in everyone's house? That's a good idea, actually,

even though fairly electricity. Yeah, I was not, let's not hope it would be energy. Yeah, that's fair. Depending if you use electricity or wood in heating. I have both in the summer cottage it's wood by the lake. More seriously, more seriously, if I could do one thing, I would complete the single market without a delay

and also create a genuine savings and investment union with a deep and liquid capital market because this would help address the challenge of venture capital and financing of European startups and growth companies. What would it do? what would that sort of cohesive market do that you can't do right now at a national level? Would it just lower capital costs for everyone? For instance, concerning the savings and investment union, you have actually a long list of

concrete decisions that it will require. But the key things are in many ways to have a safe asset, a European safe asset, which would facilitate the creation of genuine European capital market. And then in addition to that, there are quite reasonable proposals of creating either tax incentives or other decisions that encourage people to invest people, meaning individual citizens and households. Sweden actually is a very good example of this, so that in Sweden, for instance, you have a certain portion of your retirement payments that you have to invest to the stock market or funds. Oh, I see. Yeah. Which has helped to create a culture of investment in Sweden.

And we are actually, even though Finland was mentioned as a role model, but we are benchmarking Sweden in this regard because they have the most vibrant venture capital market also. Thanks to this quite well-functioning capital market. It makes total sense that, you know, I think of the euro area, whatever version of it we want to talk about is it's an ongoing project. it's always a work in progress. It'll probably never be completely finished. There's always more to do. But this, to my mind, gets to the sort of like the challenge of domestic politics, right? And like, we all see what's happening here. We're October 16th. Our government is shut down.

But it feels like various versions of this stress are replicating themselves across the sort of rich, developed Western countries. France, their government always seems to be like two weeks away from collapsing. Who knows if they'll have a government? I don't know if Belgium has a government these days. I think the Dutch have an election coming up. Who knows what's happening there? If you look at polls in Germany, we all know that parties like the AFD, which are on a very different trajectory, are doing very well in the polls there, et cetera. Like how much of the, yeah, it's great to say, like, people here in D.C. at these conferences and here at Bloomberg, I love the idea of, like, integrated markets. But how much is the roadblock that, you know,

you foresee to get to where you want, essentially the reality of domestic electoral politics in each of the member countries. It's a continuous challenge and you're right. So when you said that Europe or the European Union or the Eurozone is a community or community of states that is in constant movement, I would wish that it would be in a more rapid movement, but it is indeed an unfinished business and will continue to be so. That's why it is actually so fascinating and meaningful to work for Europe. On these two brief points, first the political battles or the political competition of the souls of the people are done in Europe in the member states. Yeah. National politics are key here and that's why I have a high regard for national politicians who face this

silence in the town hall meetings and in the social media or elsewhere and of course in terms of policymaking. So we have to be able to do such concrete policies that help alleviate the concerns of the citizens and boost sustainable growth and job creation in Europe. That's the essence. Second comment is that it's quite interesting that even though we have had and continue to have populist movements challenging, say, the more centrist parties in almost all countries of Europe, still the European Union is holding together. And it is structurally kind of... And it's still fairly popular. Isn't it?

Like, actually, the polls still show a fair amount of popularity of these, like, multinational European organizations. It is, for instance, in France, the right-wing party, Iran has torn down its criticism concerning the euro in recent years. And Europe, or in this case, the European Union, works as glue that helps to keep together the policymaking structure of Europe. So in that sense, it has a certain impact, kind of second-level reverse impact. on domestic politics as well. Quite illustrative is that in Finland on Monday, after many years of discussion, we were able to agree,

or the eight parliamentary parties were able to agree on a long-term commitment to balanced budget and debt anchor, which is historic. And it is also respecting the EU fiscal rules. Even the parties that have been quite critical on Europe are part of this agreement, it's in my view, it's actually quite encouraging. Earlier this year, everyone got very excited about Germany and finally wanting to spend, right?

We weren't going to be terrorized by the Black Zero, the Schwarzenoel forever. Do you get the sense that things are changing in other countries? Because again, here in the U.S., the headlines we see for a place like France is worries over the deficit, political, I don't want to say, incoherence, but certainly a little bit of political chaos. feel like all of the Eurozone is becoming more comfortable with the idea of spending for strategic purposes at this moment in time, or is it primarily still Germany? It is primarily majority of all the member states, but you are right. There is a certain variety of concerning the emphasis, and Germany plays a key role here. The decisions of the

German government and in fact German government and opposition earlier this year are now taking effect, they are budgetary laws, so they will be implemented. That's critical. But so other countries, like all the Nordics, the Nordics together are 27 million people and relatively wealthy area in the globe. And all the Nordic countries are expanding their defense expenditure significantly. So are all the Eastern European countries and several of the Western European countries. So overall the pictures.

say encouraging. I don't shout for victory yet, but we are on the right road here. You know, it's really great to have you on the podcast because both Tracy and I covered the Eurozone crisis of the early, the first half of the 2010s quite intensely. And there are numerous headlines that you would make news. And I saw your name and numerous headlines over the time. And maybe next time you come on, I'd love to just like do an hour and just talk about that time, provided we don't want to give you like Euro crisis PTSD etc but I do have one you know I have a million questions about what that time was really like but I was talking about this with someone last night you know as the crisis metastasized over time there all these we're going to introduce to do bailout

fund and I forget acronym after acronym therapy stability mechanism yeah all that's like yeah all these acrony and acronym acronym soup yeah but then the crisis ended essentially on the day that Mario Draghi said that sovereign spreads were an impediment to monetary transmission And once he said that closing spreads were sort of mandate consistent with the ECB, from then on everything, that was it. That was the moment that the crisis really turned. Couldn't that have happened a lot earlier? Was there a lot of unnecessary pain that was incurred in Europe because it took so long to sort of get to the point that the ECB could find a way that it was within its remit to close spreads? I think it's a legitimate question and I have been thinking about that quite a lot. I've actually answered to this question in my book called Walking the High Wire. It's a good name. It's about the Eurozone crisis.

In fact, it is true that once Mario said his now legendary words, whatever it takes within our mandate to save the euro, then the animal spirits. That was it. It turned around that day. And the market started to believe that the ECB is functioning as the central bank must function. as the lender of last result. Right. That was the moment it became a true central bank in some sort.

Yeah, yeah, that's right. That's right. And that's why before that, it was kind of incrementalist firefighting. This was not without value because we were able to keep the euro afloat and support many countries, Greece, Portugal, Ireland, Spain, with the funding of the European stability mechanism or its precursor. In fact, now the countries that then the. Then where in the EU IMF programs have been in the past years, they have been one of the best performance in economic terms.

Everything is totally flipped since the 2010s. So they have reformed their economic structures to a large extent and they are much more competitive for the moment. And their public finances are on a sound basis. But there are years of pain in Greece and particularly Italy as well, like truly like incredible economic damage. And by some measures, they would say like on par with the Great Depression in the United States. Could Europe have gotten to that point? Could Mario Draghi have given the whatever it takes speech in 2009? Did it have to wait as long as it did?

And all these other mechanisms have to try first. Mario Draghi started as ECB president in November 2011. Well, you're right. So there's no way he could have given the speech at 2009. Could Jean-Claude Trichet have given the speech in 2009? You have to ask him. Okay. But I think it's –

Could they have moved faster? Were all of these steps necessary in which they kind of before the ECB as an institution got comfortable with its role that it would be much like the Fed and other central banks, some sort of backstopper lender of last resort? Did everything else need to be tried first? You are talking like I was talking to my wife in the sauna during the Eurozone crisis from 2009 onwards. So pretty much I share your view. Okay. And if you take more, let's say, historical view of that. So when the euro was created, then the kind of major event, like the Eurozone debt crisis,

was not perceived apparently in the minds of the creators of the Euro. Yeah. Because there was no stability mechanism like the IMF. The European stability mechanism is the IMF in the European context. Actually, the ESM has more capital than the IMF, total capital. So that was not in existence when the crisis hit. We had to create in the run on the flight. And the second problem was that among the economists,

there was much discussion about whether the Eurozone or the economic monetary union is an optimal currency area. But macroeconomic imbalances and financial stability issues were kind of forgotten at the time. So very strong focus also in the economists community. I think that's something that deserves some self-criticism among the economists as well. We have to do an episode just about the Eurozone crisis at some point, but we can't do it right now. In our five minutes left. In our five minutes left.

So just going back to the start of this conversation, which was about whether or not this is a moment potentially for Europe. If Europe doesn't, the Eurozone doesn't successfully mount some of the changes. that you've discussed, if it wastes this current opportunity, what's the most likely path for the block as a whole? And then secondly, how would you know that Europe has kind of achieved this global success? Are there things that you look out for? Is it share of currency used in global trade or something like that? Well, first, what's the measure, what's the yardstick of measuring success of, say, European economic policy? I think fundamentally that is the well-being of European citizens and say freedom, entrepreneurship, well-being, also social

protection of European citizens. Access to saunas. Access to sonas. That's a basic human right. I agree. Essential civil liberty. My mom had a sauna when she was in Estonia and it was amazing. That's to the second part. But then the first part, what if Europe won't be able to do the necessary things in order to become stronger in terms of security and the economy. I guess some kind of muddling through will continue, and that is a very gloomy future for the Europeans. So I would very much prefer us stay united, have the capacity of renewal and reform,

and thus gain the required self-confidence to also gain a stronger role in global terms. finally, I want to add that we are very committed, despite the current headwinds, we are facing in terms of geopolitical tensions and trade wars. So we as Europeans, we are committed to multilateral international cooperation. And we want to work together with our partners, the U.S., global south, and beyond. I just have one last question. It feels like here in the U.S., I sort of expect that for the rest of the U.S... of my life that we will continue with some sort of ongoing divorce with China, that like we're, we're never going to go back to the early 2010s or the 2000s where it seemed like we could

just be like friends. Maybe I'm wrong. Maybe I'm being too pessimistic, et cetera. When you think about the future of relation with Europe and China, where do you see that going? And especially again, because our president has obviously thrown up trade barriers between the United States and the euro area. Is there a pivot to China in the works? Could you see that relationship over time actually deepening? Like, what are you thinking about in terms of the trajectory of that relationship? Because here it seems terrible. There is an ongoing discussion on that in Europe, both at the European level and in the member states. You have two sides of the coin. On one hand, Europe is trading a lot with China and it's quite dependent on China, but it's a mutual dependency in many ways. and it's broadly free trade, not always so fair, but free trade.

On the other hand, in China, the Communist Party has taken stronger political control, and China is, let's not forget, China is supporting Russia in its military actions, military aggression in Ukraine. And that has clearly, I'm not sure if the Chinese have fully realized this, but that has clearly seriously damaged the image of China in Europe because we see that they are an ally of Russia and they are trying to, with that alliance, they are trying to destroy our freedoms in Europe.

All right. Oliver, thank you so much for coming on all thoughts. Really enjoyed it. Thank you very much. Thanks for the discussion. Joe, that was really interesting to get a European perspective. I'm not to say, you know, saying that the EU could have acted quicker

on the debt crisis. I think you could almost always level that criticism at central banks. And to some respect, I mean, this is what we saw during the financial crisis, right? So 2008, it took a while for the Fed and everyone else to realize what was going on. And then they came up with all these programs. And then when you had subsequent crises, they could roll them out really quickly. You know, it's like a cliche, oh, you try everything else until you get to the right answer. Yeah.

It is technological, isn't it? I guess. Of course, like, I guess by definition, when you get to the last thing, you try everything else by that point, associates like they took a while. And I have certainly never been, I've never asked a guest a question and then been told, oh, I talked about this in the sauna with my wife, this very same topic. So that was sort of a response I wasn't expecting. You don't talk in the sauna with your wife about. I just don't expect, I just don't expect guests to have had the same conversation with their wife. But I do think in general, it does feel like things are changing enormously.

And I know a lot of it is still talk at this point. But certainly speaking with Ollie, you do get the sense that there is a conception in Europe that now is the time when actually you kind of have a newspeg or an opportunity to actually do some of the things you've said you're going to do for a long time. It's funny to think about policymakers having a newspeg is if they're like, oh, let's do a podcast. on this episode. They're just waiting for the headline. Now they can do it. But like it does feel like whatever cliche you want to use, the rubber is hitting the road. There are serious constraints, right?

The industrial economy is deeply stressed. The energy situation is stressed. President Trump is putting trade stress. They have industrial powerhouses that are like being undercut by China or facing very stiff competition with China. There is a war going on in Europe. as you mentioned, when thinking about the future of China is the fact that China has been a important trading partner. That was really interesting. That's very interesting. So, you know,

there are a lot of big issues that are being forced upon Europe right now in multiple directions, whether we're talking about the war, whether we're talking about trade, whether we're talking about President Trump. So if they're going to do something that sort of changes the trajectory of the European project, I see why it now is the time. It's not the rubber hitting the road, Joe. It's the birch branch hitting someone's back in the sauna. That's what's happening. Ali, we had a title, Ali Ren on the birch branch hitting the back in Europe.

That's our title. Let's leave it there before we go any further. All right, let's leave it there. Okay, this has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Joe Wisenthall. You can follow me at the stalwart.

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