CNBC Interview with EU Commissioner for Economic and Financial Affairs, Pierre Moscovici from the World Economic Forum 2018

Following are excerpts from a CNBC interview with Pierre Moscovici, EU Commissioner for Economic and Financial Affairs and CNBC's Steve Sedgwick and Geoff Cutmore from the World Economic Forum 2018.

GC: Really pleased to have with us on set now Pierre Moscovici. Pierre is the EU Commissioner for Economic and Financial Affairs. Good morning to you.

PM: Good morning.

GC: Look, did you recognize David Cameron's characterization of Brexit, as not being as bad as he expected? As-, as going reasonably well?

PM: I remember that he campaigned against Brexit, so he thought it was really bad. That kind of reflection, to me, is not inspiring, because I-, I truly believe that Brexit is not a good thing. It's a lose-lose story, as well for the UK and for the
EU. We try to get it sorted as good-, as well as possible, but still, it's a problem we would have loved to be rid of.

SS: So-,

PM: I think it-, it's much-, it would have been much better to have the UK staying in the EU, it would be much better if it can happen. We must manage to have the, I would say, softer, better Brexit possible, because, even if the UK is no more in the EU, it will be a-, a European country, and we need to cooperate with them on trade, on customs, on security, on defense. We need to be very close. But, for that, we need to have a successful negotiation, and so-, well, that kind of judgment-, well, maybe that's guilt.

SS: Pierre, hard or soft Brexit, I do worry that, if we get this wrong, Europe will lose out on a lot of international financial business that is based in London at the moment, but is EU business, as well. I know that Dublin, Luxembourg, Paris, Frankfurt, all want some of that business, but so many experts I speak to, and I don't know what Jes Staley's going to say, later, they fear that if London loses it, and that relationship isn't worked out between Brussels and London, going forward, it's going to go to New York, it's going to go to Hong Kong, and Europe loses out.

PM: Well, we need, again, to have a good relationship on all fields, and I saw what my friend, Pierre Gramegna said, we must not hurt London, but we must also favor the Eurozone financial places, whether they are Frankfurt, Paris, Dublin, or others. So, again, Brexit is not without consequence. It's not the status quo with a bit of change. It is going to be a drastic change. Let's try to make it, again, a positive change, or a-, as little damaging for each other, but still, again, let-, let's not mistake, it is a lose-lose story. We need to reduce the losses, we need to have the best relationship possible in all fields, and this includes finance, but still, there will be changes. Let's-, let's not lie about that.

SS: Sure.

GC: We've-, we've heard Vítor Constâncio, Ewald Nowotny, others, expressing some concern now about recent moves in exchange rates. Here we have, apparently, what appears to be a change of policy from the US Treasury Secretary, on commenting on the dollar, perhaps to gain trade advantage. Would this be disappointing, if that is in fact what's going on?

PM: I saw what Steven Mnuchin said, and I also saw that there were some movements. Well, it's not the habit of the Commission to comment a lot on exchange rates. That would rather be the business of central bankers. For the time being, we see nothing which is absolutely out of control, so-, but we need to be, of course, vigilant, watching it, because we need to strike the right balance, especially between the dollar and the euro.

SS: Look, I mean, Pierre, we're all-, I mean, we're all happy that Europe is recovering, as well, and, to be fair, I've spoken to you many times over the years, as has Geoff, and you never lost your faith in Greece, and other countries-,

PM: Mm.

SS: So that credit to you, sir, as well. But when I see the euro trading 1.2450 against the dollar, having had a big rally, and looking like it's got legs to go further, does that worry you that actually, we need-,

PM: No-,

SS: A response from Europe, because otherwise there's a trade war-,

PM: No-,

SS: Which Europe's going to lose?

PM: I answered you. We are not going to improvise about that. We need to see that in the medium-term, and we need to address that with cool blood, and a cool head. But, again, as you said, let's look at the reality. Yesterday, the President of France, I know France, I am French, said, 'Here, France is back.' I must say, Europe is back.

SS: Yes.

PM: We come here with good news, and with some strength. The average growth in Europe is going to be over 2.2%, widely over. It's higher than the US growth. Our public finances, now, are really sound, and we are going, and, in this year, to get, I hope, definitely rid of problems like the Greek case.

SS: Mm.

PM: Greece is going to be, and that will be an historical event, after ten years of crisis, a normal member of the Eurozone. So, we need to concentrate on our competitiveness, on our attractiveness, and I'm quite convinced that we will make it. And, you know, on all fields, and this includes also currencies, probably, we will do whatever it takes, as Mario Draghi says.

SS: Pierre, very briefly, because I know we've got to move on, Bernard Charlès has turned up, as well, is history turning itself on its head? Is there a new phase going on here? We talk about the China-US relationship. You've got a French President, and you're a former French Finance Minister, talking about globalization, no barriers, no tariffs, and you've got an American President raising tariffs. As a student of history, do you think we're changing-, that something's going on here?

PM: History doesn't change in one meeting in Davos, and two speeches. If you look at history, you need to have a longer perspective. But I think that what changes is the fact that we are now in a period of growth, the highest since eth last ten years, but also, there is now growing consciousness that inequalities are unacceptable-,

SS: Yes.

PM: And we need to reduce that. When 82% of the world's wealth is taken by 1% of the people, when companies, multinationals, can avoid taxes, to pay their fair share of tax where they create profit and value-,

SS: Yes.

PM: and I think about digital, we need to solve that, and that's my job, as Tax Commissioner, that's the purpose of most of the meetings I will have here. It's not anti business, it's just pro fairness. I'm quite sure that, in this new world, in this new period, we can combine open societies, open economies, and far economic policies.

SS: I know you've got to go, and I'm glad you got that in about digital taxation-,

PM: Thank you.

SS: Because I know you wanted to, as well, so thank you for that, Pierre, and we will watch history. And I wonder what percent of that 1% is here in Davos. I bet it's pretty big.

PM: Probably the highest 1%-,
[Laughter].

SS: Exactly.

PM: But-, but I-, I think they are conscious of their duties, too.

SS: Well, they are, but they've still got the money and the rest of us haven't-,
[Laughter].

SS: Pierre, nice to see you. Pierre Moscovici, EU Commissioner-,

PM: That is true.

SS: For Economic and Financial Affairs, Taxation and Customs. We'll see you again soon, thank you, sir.

PM: Thank you.

ENDS