Transcripts For BLOOMBERG Bloomberg Surveillance 20180125

Surveillance. We will be joined bygood mornind welcome the irish Prime Minister for exclusive interview. Ursula vontalking to. We will also speak to theresa may. Earlier i spoke to Philip Hammond. Now, before we get to more talk from davos, lets get straight to the bloomberg first word news. Imfs managing director has urged Steven Mnuchin to explain his comments in which he appeared to back a weaker dollar. To its lowestd level since december 2014 after mnuchins endorsement. We have said an hour presentation on monday that the u. S. Tax reform is likely to strengthening and the mediumterm in the mediumterm. I really hope that secretary mnuchin has a chance to clarify what he said. Nejra donald trump has said that he quote would love to talk under oath to robert mueller. He is investigating whether anybody close to him colluded with russia. The met last month with special Prosecutors Team and have been speaking by phone as part of a continuing it changed continuing exchange. Donald trump warned turkey about expanding its military defenses in northern syria. He said that such action could lead to direct conflict with u. S. Forces. Trump urged turkey to deescalate, avoiding civilian casualties. In a china, we have had the strongest signal yet that the pbocs governor may be about to retire. An official news agency reported that he is not being reselected as a member of the countrys national committee. His absence signals that he is likely to retire from the central bank before march, when the conference usually holds its annual meeting. A Brazilian Appeals Court has unanimously upheld a sentence against the former president. They also voted unanimously to increase his. Prison sentence all but kills his chances in octobers general election. The Sao Paulo Stock Exchange closedt a record high at a record high. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Mark . And wee are in davos have had those comments from Philip Hammond, who is content with the level of sterling, which closed yesterday at a postbrexit referendum high. The lefthand column is equities, they were done for a second consecutive day. Interest is the second column. Euro changed against the dollar. 2 and change. 2 sterling is up a fraction, new postbrexit referendum high. That is the great bar in the second column gray bar in the second column. Philip hammond it is happy with the dollars strength. The euro is the currency of the day, you saw at the bottom. Own the currency bone the currency today . Nejra one of the big issues in the brexit story is the irish border problem. Theresa may reaffirmed britains commitment to a frictionless order, allowing negotiations to progress to trade. The utes chief negotiator the negotiator. The message from the republic of ireland has been clear. The Prime Minister says that there will be no return to the borders of the past in the against events of a hard brexit. We have an exclusive interview. See f all, how you to do you see this irish border problem resolved . First of all, i think it is important to say that brexit is a british policy. That is not something that ireland decided to do. We regret the decision that was t it. But we respec ireland remains at the heart of europe. That is what would belong and that is where we are going to belong and that is where we are going to stay. There is a border in ireland, it is a political border. When we say we want to avoid a hard border, what we mean is that we want to avoid any new barriers to the Free Movement of people and free trade. We believe that can be best achieved by a very close relationship between the United Kingdom and European Union. I heard chancellor merkel saying that the relationship with the United Kingdom can be as close as they want. It requires the United Kingdom to understand and appreciate possible tot is not cherry pick. You cant have all those things and not bear the responsibilities and obligations. When you talk about the assurances of the Prime Minister of the u. K. , is a nimby translated does it need to be translated and how difficult would that be . The short answer is yes. Ireland is part of the European Union. We negotiate as part of the European Union and were very happy with that outcome. The next thing is to translate that into a legal text. We expect that to be done. We also want to begin negotiations on the transition phase, because i think it is in the interest of business and the public. Francine when you talk about that transition phase, ireland has always pushed for a fiveyear transition phase. Do you believe once we are in the transition phase come that could be extended . I think what is crucial is what the new relationship is going to be. If the new relationship is going to be one that is very close, while then the transition phase can be quite short. But if it is going to be a hard brexit, which would involve major changes, i think the transition phase would need to be longer. I cant answer the question definitively now. Were talking about something in the region of two years. Francine when are you expecting to have more details on this new relationship and what it would look like . We will talk about the details towards the end of february and we meet again in march. What would be most helpful is a better understanding of what relationship the United Kingdom would like. What we have heard for a long time is that we want the relationship to be as deep and close as possible. Those are encouraging words, but we would like to see that fleshed out. As she said, the relationship to as they can be as close want. There are costs with all of the things that come with the European Union. Francine what are the chances that brexit never actually happens . I can only work on the basis that it is happening. A referendum occurred in the u k and people voted by a narrow majority for brexit. Im not sure that constitutes a majority for a hard brexit. London voted to remain. My role as the Prime Minister of ireland, as a european head of government really, is to deal with the facts as we find them. We have to operate on the basis that they are leaving. If there is a change of mind, that is entirely up to them. Francine you said you want deep Free Trade Agreement to the u. K. And the eu following brexit. Are there divisions between the countries about what exactly that means and what Financial Services would be included in it . I think there are certainly different perspectives. We are trading now more with the eurozone than britain. We are very enthusiastic about having a Free Trade Agreement and a Customs Union. I know a lot of the countries and Central Eastern europe have a similar view. Other countries might not be as concerned. Financialain, services, those will put your finger up in some ways. The city of london would like access to Financial Services and markets, but what is the u. K. Going to give in return . Francine what would u. S. For in forrn what would you ask in return . Perhaps we can negotiate something that is not very different. Francine what kind of agreement do you think we will get . Is it a norway or canada plus . It is difficult to speculate. I think it will be a new agreement between the United Kingdom and the eu. Difficult to compare it to norway, which is a relatively small country like ireland. I think it will be a specific agreement for the United Kingdom, but of course, as ireland we want that to be as close as possible. , butuld have a norway plus i think we need to get into the details as to what that means. We need to get down and dirty with the details. Francine i want to talk about apple. The apple case has been well documented, but ireland still have not collected the money from apple. Why . We have to set up an escrow account. We anticipate collecting the money in quarter to this year quarter 2 this year. We are absolutely disputing the case. The allegation is that ireland had some sort of special do with apple, and we did not special deal with apple, and we did not. We think we can prove it in court. The court cases could take many years. We will collect the money in advance. Francine is there reputational damage to ireland attached to this . It certainly has not been helpful. Ireland is a country that has a very clear tax policy. Our Corporate Tax rate is 12. 5 . It is not going on for them up or down. Other countries have a higher tax rate on paper, but actually they collect less, and the figures prove that. It certainly has not been helpful and ireland has got some bad press as a result. We are really one of the most transparent countries when it comes to taxes, the fact that we have a low, simple, and transparent rate. Francine she wants to sue ireland over not collecting payment. Do you expect that to go away . I dont think it is necessary, because we are in the process of setting up that escrow account. We have an agreement with apple and we expect to start receiving money into the account within months. The Second Quarter of this year is not that far away. Francine the Trump Administration seems to be talking quite a lot about ireland. The press conferences a legend you would reduce your tax rate further. Have you had any dealings with the Trump Administration . We are in contact all the time, largely through embassies and officials. What i can absolutely assure everyone is that our Corporate Tax will not be going up or down. It is 12. 5 and it has been for a long time. We are happy that other countries are emulating our success. All 4 Major Political parties in ireland support that policy. Investors get the kind of certainty that they just couldnt get in countries where politics swing so much from left to right overnight. Francine does it affect the popularity of your tax . We dont think that is going to have a major impact on us. We welcome the fact that other countries are copied our copying our policies. Are in the we Single Market, in the eurozone, we have a really good pool of system,a good education so there are lots of reasons why our economy is growing and economies investors invest in ireland. Francine do you have an idea of how many banks you can attract to ireland because of brexit . In the thousands. There are ready have been big events. Barclays, bank of america are increasing and ground operations in dublin. Francine when we heard from President Trump on monday, due to arrive here any man in davos, he was talking about tariffs on solar panels and washing machines. What does that mean for europe . That is a possibility, but i really hope the u. S. Does not go down the road of protectionism and restricting free trade. One of the reasons why america is such a great economy is because it has embraced Free Enterprise and the free market. I would not like to see them moving away from that. One of the points that i will be making when i am in america is that trade and investment goes both ways. There are Many Americans employed by irish companies. Investment in trade and jobs goes both ways. Free enterprise and the free market make us all better off. Government is there to make sure it delivers fairness. Francine is there anything that europe can do . We were hearing from Steve Mnuchin yesterday saying that a weaker dollar means good for america because of the experts. Are we entering a currency war phase . I dont think so. As far as europe is concerned, the euro is doing well. Interest rates are down, so i think having a strong currency has. Francine i want to go back to the banker bonuses in ireland. Capsthe caps will the change anytime soon . Not anytime soon. It is still that some of the banks are in state ownership. We are slowly reprivatizing them again. Francine what is the question that you get asked the most here in davos . , so youret arrived one of the first people i have spoken to. Last night i had to had the pleasure of attending the gates at dinner and had the pleasure of meeting a lot of people involved in International Development. One of the things that i think probably i probably did not realize about davos is that a lot of people here who are activists and were talking about International Development and global cooperation, multilateralism, and i think that is a real positive in my point of view. Francine we were speaking to the managing director of the imf and she was concerned about the inequality. What do you think europe will become in five years . Will we see more integration . Inequality between the states . The states are also the haves and havenots. For the last two years in ireland, poverty, and deprivation is falling. Inequality ise narrowing. You can achieve greater equality within your country in terms of within the European Union itself, i think ensuring we have a good european budget will be important. That we will continue to support countries in Central Eastern europe to build up their infrastructure. And also support agriculture policy. Ireland is not a net contributor to the European Union budget, but we have benefited so much and structural funds, unlocking our potential, we think the same should happen for the rest of your. When he to give the countrys in the western balkans a path to membership. I think that is the best way that we can secure them. Francine thank you so much for your time this morning. That was the Prime Minister of ireland. Lets get straight to london and the Bloomberg Business flash. Has reported a slump in profits. Net income of two shareholders felt in the Fourth Quarter fell in the Fourth Quarter. Regionsas the nordic bank struggles. Hyundai motors earnings have fallen short of estimates after strikes her output hurt output. Fourthquarter operating profits fell 24 . Overes in south korea wages stretched into midjanuary. That is the Bloomberg Business flash, francine . Lets have a look at what is happening to markets today on the side. What is happening in davos and what is going to happen at the ecb meeting. Have a look at how wonderful gmm function at our wonderful jim and function here gmm function here. Steve mnuchin seemed to move s strongthe u. S. dollar policy, which has been advocated for many years. The pushback from the white house has not stopped the dollars descendentncy. The big question when it comes to todays ecb meeting, will mario draghi push back against the strong euro, which of course has continued its recent strength in 2018. What he did back in september was warned against the volatility against the currency. That started a couple of months of decline in the euro against the dollar. Will we see that again . We have seen a number of hops want to takewks their foot off of the pedal. The september of course is the end of this phase of qe. Qe currently at 30 billion euros. What a fascinating day it will be today. Francine Japan Holding onto gains after hitting a new postbrexit high yesterday. We spoke to the u. K. Chancellor Philip Hammond about the currencys strength and britains strategy for negotiating trade deals are after it leaves the eu. We are inmond negotiation with the european toon and we will not be free commence trading deals with countries until after the transition period that we are negotiating right now with the European Union. In march,probably be 2019. That does not mean that we need to stop negotiating the deals to put them in place once negotiations are over. Francine Steve Mnuchin said that a weak u. S. Dollar is good for the u. S. Economy. Are you worried that he we are seeing currency wars that we are seeing a currency war . Philip hammond i hope not. It hopes tot that answer some of the questions in the u. S. About the Global Trading system, make americans feel that the system is fairer to them and ease some of the system, thennd the i think that is a good thing for all of us. Francine what a weaker pound uld a weaker pound help u. K. Exports . It helps exports but raises the cost of imports. A weaker pound has led to higher inflation and stagnant real wages. Getting that inflation rate down and a rising pound will help to do that, helps to drive increases in real wages. Francine is there a sweet spot where pound is . Over the last few days we have seen the pound appreciate against the dollar, but it is very stable against the euro. Francine so today is the kind of sweet spot . I think so. There now a consensus is there a consensus about what kind of relationship the u. K. Wants with the eu . So that all of the supply chains and business relationships that we have built up can continue. We also want to build trade links with the rest of the world, recognizing that the fastest Economic Growth is coming in areas beyond europe. Francine should the u. K. Stay in the Customs Union . We will not be able to because when not be members of the European Union. But making sure that goods can flow with low friction across the border between the u. K. And the eu is very important to both sides. Im sure we will want to form a close customs agreement with the European Union. Francine it would also solve the Northern Ireland question. Philip hammond it would, but there are many other ways that we can do that. Francine with passporting out of the equation come what kind of agreement are you hoping for . Financialmond services has to be a part of our relationship with the European Union. We can operate without passports. We can get some kind of advanced equivalents regime, but has to be a regime which is robust and objectively determined. That has to be robust. Francine what would it look like . Equivalence is fine as long as it is objectively assessed, not politically determined. We have to negotiate that with the European Union. Uks Financial Services sector is larger than the rest of the European Unions put together. I hope we will be able to come to a sensible solution that recognizes the challenges, has an architecture of regulatory cooperationory which makes both sides feel comfortable and allows it European Union real Economy Companies to gain access to the uks Financial Services market. Francine do you expect the details of the future relationship to be laid out clearly by the Time Parliament votes on the withdrawal deal . Probably not the full details, but we would expect the highlevel shape of the relationship to be emerging by that time. Francine will bitcoin be regulated . Are you interested in bitcoin regulation . Philip hammond i am interested in bitcoin. The Central Banks have been looking at bitcoin. It is an interesting new development. I think we should be cautious about bitcoin and possibly we do need to look at the way we regulate this environment before the amount of outstanding bitcoin becomes large enough to be systemically important and in theobal economy Global Economy. In regulating cryptocurrencies, we do not constrain the potential of the technology that underlies it, the blockchain technology. Francine that was Philip Hammond speaking to us here at the World Economic forum in davos. Later in the day we will be joined by theresa may. Dont miss that exclusive interview. We will be talking about her meeting with the trump and of course brexit. The barclays ceo says that his bank is prepared for brexit and could benefit from tax cuts in the u. S. he spoke to me earlier gone. Here he is here he is. I think there was a consensus that we need to reget great reregulate the Financial Markets and do it in a way where we maintain parity across those Financial Markets. I think a lot of good was done and a lot of important new regulation was brought into the Financial System over the last 10 years. I have consistently supported a more rigorous regulatory environment, but now there is a new equation to it. It does seem as if the u. S. Is willing to be very much on the front foot, in terms of making the u. S. Market competitive. Some 40 of our revenues are generated in the u. S. All of a sudden it has become one of the lowest Tax Jurisdictions that we operate in. To that point, the biggest u. S. Banks were already the worlds most profitable and best capitalized before tax reform. And before what may happen in the way of deregulation. As you mentioned, barclays get some benefit out of that, but 60 of your business does not. How the european and u. K. Banks compete with american banks that now have the ability to price so much more aggressively . We are a british bank and we are dedicated to the United Kingdom and to Great Britain. Ofhink we are very mindful having to remain competitive. This is very new. What is coming out of the u. S. Is new for all this. We think the United Kingdom has a lot of tremendous assets. What are a british bank. We will be fine. It very much helps us relative to european competitors, the scale of our business in the u. S. Does it make you want to shift . Given that the dynamics of the American Market are so much more appealing, you want to do more business there . We have had this transatlantic strategy that we set out and we are going to stick to that. Our roots are in the u. K. We have a tremendous business in Great Britain and europe, for that matter. We want to stay a global institution. Lets see how regulators respond to this. Francine have you started moving the 150 jobs to dublin. We are making investments in dublin to be prepared to use our irish subsidiary to redomicile our european branches. What are continuing to be prepared so that no matter what happens with brexit, we will be run ourcontinue to business across europe. Francine that was the barclays ceo. We talked to him about some of the investigations from the department of justice and the u. S. In the u. S. Heres nejra cehic with the bloomberg first word news. Nejra the imf managing director has urged Steven Mnuchin to explain his comments. The dollar slid to its lowest level since december 2013 after mnuchins endorsement of a weaker greenback. We are setting out a presentation that the u. S. Tax reform is likely to lead to u. N. Dollar strengthening. I really hope that secretary mnuchin has a chance to clarify what he said. Nejra donald trump has said that he would love to talk under mueller, who is investigating whether anybody close to him colluded with russia during the 2016 campaign. They met last month with the special Prosecutors Team and have been speaking by phone as part of a continuing exchange over logistics. Donald trump warned that expanding its military offensive in northern syria. Suchld he said that action could lead to direct conflict with the u. S. Forces. In china, the strongest signal yet that the pbocs long serving governor may be about to retire. He is not being reselected as a member of the countrys national committee, its top political advisory body. He is likely to retire from the central bank before march. A Brazilian Appeals Court has sentencely hel upheld a against the former president. They also unanimously agreed to increase his sentence. Opinion polls had him leading the field by a wide margin. The Sao Paulo Stock Exchange closed at a record high. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am nejra cehic, this is bloomberg. Francine . Francine saudi aramcos ceo says that the tax burden will be linked to the price of oil. While it would help the kingdom raise extra money, the movement may not prove popular with potential investors. I spoke with the saudi aramco ceo and asked him if the energy giant would be a Public Company in one years time. Ares a company, we interested in the second half of 2018. And the transaction seem that will carry that is currently waiting for the decision from the shareholders, which is a governmental the second listing. There is certain work that needs to be done in preparation for listing on the Stock Exchange. Definitely in saudi arabia. Ready. Mpany we are we are hopeful that we will be listed by the second half of 2018, but it is all depending on the decision. Francine do you think the government is nearing an agreement . What kind of things are they looking at to make a decision . We have to appreciate that this is a big decision. Saudi aramco is a major contributor to the gdp of saudi arabia. A lot of information will pass theugh the committees, Government Committees that are looking at listing saudi aramco. Different Stock Exchange decisions need to be evaluated and then ultimately, somebody needs to come up with a decision, pros and cons. Considering the size of saudi aramco and what it means to saudi arabia. Francine is this a choice between two listings or is this a choice between listing internationally or domestically . We were definitely list internationally. Domestically. We want to list internationally. That is where the consideration is happening. We did a lot of work in the different Stock Exchanges, the new york, the tokyo, the hong kong Stock Exchange. Advantagese has its and pros and cons. The committee is looking at all of the information and a decision will hopefully come in due course. Francine is there a risk that this is not a global listing . This was sold as an international listing, why the reticence . We are not going back. The committee is still evaluating the options of the listing in the kingdom and internationally. Francine what do you think the committee is looking at . Is it regulation . Are they negotiating with Stock Exchanges . Know, they are not negotiating with Stock Exchanges negotiatingare not with stock changes. Exchanges. The Government Committee is looking at a lot of information. Iews ande a lot of v all that needs to be looked at. Francine when you look at the listing and the pros and cons of different exchanges, if this is delayed on the international stage, do you think that it will be less attractive for Foreign Investors investing in saudi aramco . A lotk when a lot of things will happen when we do the road show. I think a lot of investors will be interested in aramco regardless of the decision. With all of that information come we know, we are confident how strong we are. So we are not concerned about the impact of saudi aramco, because we are confident that the company, performance, and all that will attract a lot of attention. Francine that was the saudi aramco ceo speaking to me here at the World Economic forum in davos. One of the Worlds Largest Telecom Operators wants to whatsapp. What does it mean for the company . Joining us is ursula burns. We will get to the messaging system and the plans and a second, but how are you enjoying davos . What is the mood like . I am enjoying it a lot. I have been vacant, or on fewtion from davos for a years, so it is good to be back. Good vibes here and it is a great place to collaborate and meet people and to actually have some very important discussions in a kind of relaxed way. I think it helps move us forward. Francine forward. Francine what are you expecting from President Trumps speech . How will he be received . Does it put in question the future of globalization . I dont think there is much that can be said right now that would surprise anyone. Of newnt expect a lot thoughts or ideas from the president s speech. I dont expect whatever he says to be too shocking to people, because i think that the shock old. R has been kind of life 38 years 38 years in a, x. Pany with a big then i got the opportunity to jump into a completely different industry with different challenges. Had to go through a rebranding of itself under the same name. Is the same thing, from analog to digital, and a rebranding. It is an industry that is ripe for change. Ons approach is that from a Telecom Company only to a tech and Telecom Company. We are positioned well to do it and we are in a great market to do it. Francine but you are in one of the most destructive injured tructive industries disruptive injuries industries. We are eurasian, russian markets, algeria, so these are markets that people generally do not run to. Veon happens to be number one or number two in all of these markets, we are very well positioned. There are more than one billion people that we should be able to y. Rve relatively easilu as far as messaging, we will both work with providers and develop our own messaging service if that is what is necessary. It is not just a competition, it is a cooperation. Francine you have 200 million users, right . How many actually downloaded the app . Usersut 40 of our download the app. About 40 . And we expect that to grow, by the way, as we actually add services. Downloading the app is not the most important thing. You have to use it afterward. How sticky is the app . Francine this is an app for everything . Is operating uber in davos with this kind of traffic. You would basically be able to get any kind of digital services. Your bill,ually pay do a lot of care infrastructure on the app. Unlike switzerland or the u. S. , a large number of our users are so bank, or under banked, they actually have to use this as a banking cap as well app as well. It is not just communication, it is living your life. Francine how do you tell the shareholders. Your you do a lot of business in use back to stand and kazakhstan. How do you hedge all the risks . Veon andisks are to the industry. We tell the story three different ways. The shareholders, we talk about improving our fundamental operations. So growing the top line, delivering profitability, and strong cash flow. The great news is that we are performing in all three of those items. About,ents, it is all we are going to make your life easier by making this device your portal to the rest of the world. We continue to grow. And to governments, it is about keeping us strong, working closely with us, so we can be a provider to your citizens. And a strong taxpayer as well. Francine everybody is trying to make my life easier. Are you concerned that facebook subtly says, i want to make your life easier, and that is the brand that are recognized . We would be happy if we could work in an environment where a company like facebook listens and can provide more services to the clients that were serving. We are in environments and markets that you do not hear a lot about everyday. We have clients in charge of, armenia. Georgia, we have to focus on our countrys. Francine every day there is a too about the me movement. Has that talk arrived in davos . Absolutely. When i got here yesterday morning my agenda was pretty full. I had all kinds of meetings, but a lot of Panel Discussions as well. I had one last night and i had will have another one tonight how do weocused on increase access and success for women and girls . How do we increase the voice of women and girls . Had we increase the strength of women and girls . I know it is part of the message sure, but it is also a topical think around the world thing around the world. Francine are a lot of the people translating the talk into action . I will be skeptical until we start to see real action. Right now i think it is largely talk, but i do know that the more that you talk about it, the be tor it is going to avoid doing something about it. Im happy that this conversation is happening. You cannot avoid the conversation. You have to at least listen, even if you do not buy it. We have an amazing amount of tailwind. What are we doing . Half the population, what are we doing to actually include these people . What are we doing to protect these people . What are we doing to make sure they are successful . Francine thanks so much. Lets get straight to the Bloomberg Business flash with nejra cehic. Nejra the uks chancellor has said that he is very happy with the current value of the pound. Philip hammond was speaking to Francine Lacqua at the world. Conomic forum in davos getting that inflation rate down helps to drive increases in real wages. That is good for the economy. Is there a sweet spot where pound is . Over the last few days, we have seen the pound depreciate against the dollar will rapidly, but it is pretty stable against the euro. We are happy with where the currency is at the moment. Nejra later we will be speaking to theresa may. More from davos next. Net income attributable to shareholders fell to 600 and 4 Million Euros from 1. 1 billion euros. The bank struggles with a transformation that will ultimately make it more efficient. Hyundai motors earnings have fallen short of estimates. Fourthquarter operating profits fell 24 to 731 million. Sales fell in the u. S. And china. That is the Bloomberg Business flash. Francine . Francine wall street is warming up to donald trump. Some have said the president s policies will help drive markets higher. The jpmorgan ceo spoke to us in davos yesterday. The next year looks pretty good. Polls holds potholes. Puttics aside geopolitics aside. Funds ares, hedge much more than they are today. In some respects, that anticipates my next question. Is there any reason to believe that this part of the cycle, 201 2019 maybe are going to be euphoria20062007, the before the crash . I dont think so. We are wondering if we are going to have a recession. There needs to be something to trigger the recession. Inevitable and as a business or an individual, you should be prepared for those kind of things. The weather is gorgeous today. You have to be prepared, but i am not predicting it immediately. We build the company regardless. We are building 400 new branches. Were going to build that regardless of the cycle. Were going to build more technology regardless of the cycle. The bond market is beginning to grow in the anxious about inflation. Are you . Yes. I think it is legitimate. Inflation will probably go up. I believe when we are sitting here one year from now it should come growth has accelerated it should, growth has accelerated. People will still be worried about it, right . If you ever have real inflation and low growth, of course that is a bad scenario. Good growth and slightly higher inflation is a good scenario. There is a worry that the policymakers are too attached to the phillips curve and theyre going to take the punch bowl away to quickly. I am not worried about that, because you have strong global growth. They are very slowly taking the punch bowl away. Eventually ecb and japan will do it. They can reverse it. They can change their minds. They are not going to sit there and continue do the same thing. We will see. We have to be prepared. You need to remember that the fed or Central Banks do not always have the luxury of in butg operating nine times for the night benign times. Needed to do something dramatic to reduce inflation backed and. You think the fed will be a little bit more dynamic . I think so. They will have no other choice. They are trying to look out. They are kind of a large ship. They cannot turn everyday. They want to make sure their policy course is accurate. Secretary mnuchin told a bunch of reporters here in davos that a weak dollar is good for american trade. What is your view . Usually 18 secretary of treasury says a strong dollar, that means a strong dollar, you have a strong economy. The u. S. Economy is a strong but the other world economies got even stronger. The dollar going down helped the trade deficit. I read this morning that somebody said if it goes down another 10 , the trade deficit could go way. That ithe is referring is slightly beneficial to the trade deficit. Jpmorgan announced a Huge Investment plan yesterday. 400 branches, you are paying more than 20,000 of your employees higher wages. 37,000 a year in a major city to start and they get pension and medical. It is a good start. Francine that was the Jpmorgan Ceo Jamie Dimon speaking to us at the World Economic forum in davos. Today we have an exclusive interview with theresa may that is coming up shortly. President trump is due to land any minute now and he has a speech tomorrow. Tonight we understand he will be speaking to a lot of the ceos. President trump to have a very familiar message when he comes here at the World Economic forum. He will probably tell the participants here that they were wrong. One year ago a lot of the davos participants predicted that trumps protectionist rhetoric would lead to a slump in Economic Growth. Maybe President Trump will go on stage and take a victory lap. Bloomberg surveillance continues in the next hour. Tom keene it joins me and we will be speaking exclusively to theresa may and the irish Prime Minister. This is bloomberg. Francine mario draghi versus the euro. How dovish does the ecb president have to be . Low can you go . The dollar continues its slide following Steve Mnuchins remarks. President trump heads to davos hisell everyone that message is good for globalization. Im Francine Lacqua with tom keene live from the World Economic forum in davos. Theresa may coming up. We expect the landing of President Trump any minute now. Tom this is the most extraordinary thursday ever. The news flow is extraordinary and how everybody is adapting to the drop in the dollar. It is not that it has overcome davos, but it has almost become the zeitgeist of the economic forum. Francine a lot of people say it is an open and free economy. Coming up on the World Economic forum in davos, we will bring you that exclusive interview with the u. K. Prime minister theresa may. Will also be talking to the wto president. We will talk about dollar dynamics. We will also have the first interview with the Prime Minister of the netherlands. Tom it is going to be fascinating. Within all this is the news flow. Lets get our first briefing of the morning from new york city. Taylor President Trump says he would love to speak under oath to president special counsel robert mueller. Mueller is wrapping up one part of his probe, as to whether President Trump obstructed justice. President trump has issued a warning to turkey. He has told president erdogan not to attack u. S. Armed kurdish fighters. Economy shrank in the Fourth Quarter. The gdp fell 0. 2 . A drop in korea and car experts exports werecar offset. Appeals court has upheld a corruption charge against silva in brazil. Day,l news 24 hours per im taylor riggs. This is bloomberg. Tom thank you so much much,ne thank you so taylor. Steve mnuchin has defended his suggestion that a weaker dollar would help trade. We spoke to the imf managing director Christine Lagarde earlier and this is what she said about the dynamics. We have said in our World Economy presentation on monday that the u. S. Tax reform is likely to lead to u. S. Dollar strengthening in the mediumterm. Assessment in the mediumterm view. I really hope secretary mnuchin has a chance to clarify what he said every of he said. Francine it was a fascinating conversation. I thought she was spectacular on bitcoin. Tom i think we should explain and this goes to the conversation with the chancellor of the exchequer and what we are going to see with Prime Minister may how absolutely original that headline was across the dollar on weak dollar yesterday. Havee lagarde and others to react to it with their own politics. Francine if you look at economics, youc say a currency is weaker and it helps with exports, but it is highly unusual to hear the treasury secretary of the United States say that. The pound was rallying on hopes for a softer brexit and strongerthanexpected labor market data when we talked to the chancellor of the exchequer but the currency strength and britains strategy for negotiating trade deals. He told me the current level of the pound is pretty much satisfactory. We are obviously in a process of negotiation with the european. Nion the negotiation period will probably be about two years after we leave in 2019. That does not mean we cannot begin negotiation. Francine Steve Mnuchin saying yesterday that a weak u. S. Dollar is good for the u. S. Economy. Are you worried that we are research ncy wars resurface . I certainly hope not. Softness ofthat the the dollar is helping u. S. Exports. To the extent that helps to answer some of the questions in the u. S. About the Global Trading system, make americans feel that the system is fairer for them and ease some of the pressure around the trade system, i think that is a good thing for all of us. Francine the pound has been appreciating quite a lot. What a weaker pound help you care exports significantly . Economy. S a very open it helps exports, but it raises the cost of imports. One of the challenges of the has been ar so weaker pound has led to stagnant wages and that has been driving some of the challenges we have had at home. A rising pound will help to get those inflation rates down and helps to drive increasing real wages. Francine is there a sweet spot . We have seen the pound appreciate against the dollar quite rapidly, but it is stable against the euro, so we are happy where the currency is. Francine today is the sweet spot. I think so. Francine when you look at the abinet in the u. K. , is there consensus . We are all clear we want to have a good deal with the European Union, the greatest possible level of access reciprocally to our markets so that all the supply chains, all the business relationships we have built up over 40 years can continue, but we also want to build trade links with the rest of the world recognizing that the fastest Economic Growth is coming in areas beyond europe. We will not be able to stay in the eu Customs Union, but making sure that goods can flow with low friction across the border between the u. K. And the eu is very important to both sides. Im sure we will want to form a close customs agreement with the European Union to make sure that happens. Position if the u. K. s were to stay in the Customs Union, it would also resolve the Northern Ireland question. Of course, but there are many other ways that we can do that. Francine with passporting as the equation, what sort of Financial Services are you hoping for . Financial services has to be part of our relationship because they are such a large and important part of our economy. Passportsrate without through some kind of enhanced equivalents regime, but it has to be a regime that is robust and that is objectively determined. It cannot be something that is dependent on the whim of the european commission. Francine what would it exactly look like and will we find out well, equivalents is fine, so long as equivalents is objectively assessed and not politically determined. Francine the framework for that is what . We have to negotiate that with the eu the Financial Services sector in the u. K. Is larger than the rest of the European Unions put together. We have some negotiating weight in this discussion and i hope we will be able to come to a sensible solution that recognizes the challenges, has an architecture of regulatory cooperation which makes both sides comfortable, and allows European Union real Economy Companies to gain the benefits of access to the u. K. Financial services market. You expect the details of the future relationship to be laid out clearly and in full by the Time Parliament votes on the withdrawal deal . Probably not the full details, but we would expect the highlevel shape of the future relationship to be emerging by that time. Francine talk to me a bit about bitcoin. Will appear regulated . Are you interested in regulation . I am interested in bitcoin. The bank of england has been leading looking at bitcoin. It is a very interesting new development. I am i think we should be cautious about bitcoin. And possibly we do need to look at the way we regulate this environment before the amount of outstanding bitcoin becomes large enough to be systemically important in the Global Economy. But itot there yet, could get there soon. What is really important is that in regulating cryptocurrencies, we dont inadvertently constrained the potential of the technology that underlies it, the blockchain technology, which has a more important, wider application. Francine that was the u. K. Chancellor of the exchequer, Philip Hammond. Later in the day, we will also be joined by the u. K. Prime minister. A lot of the questions to her will be on how much she wants to protect Financial Services, what kind of priority that will be, and the agreement over ireland, Northern Ireland. Joining us now is bloombergs executive editor for economics running the show, the davosmeister. Awaiting president to arrive by helicopter any minute. Absolutely. They say davos is usually a downhill march by thursday, friday, but this year it is an uphill slog until Donald Trumps address tomorrow afternoon. Francine what kind of messaging are we expecting from the president . Lap . He take a victory people are saying this president will be a disaster for the economy and actually they would be wrong. Absolutely. The first message will be absolutely a bit victory lapy. You saw him on twitter last night talking about america winning, that is the first message. A lot of people in davos last year were suggesting the economy could slide under him. Neither has occurred. The second messages to try to around globalization views, tie America First into an International Agenda and argue they are not objectives opposing aims. Into thent to get dollar discussions. When i saw that red headline go across the bloomberg, i was stunned. Most people think your fondue , how bigith ministers is the media slog from washington to davos . Is he showing up with 300 reporters . He will certainly have bloomberg on air force one, so we will see. He is moving to a world stage, the home of globalization, and very much his traditional views will be challenged and he will be asked to explain or square his views with the agenda here. Tom before we get to the economics that you are expert in , if we look at the morning walk back by the secretary and secretary ross, is that just what it was . They are beginning to walk back the bombshell of yesterday . Headlines just rolling a few minutes ago, secretary mnuchin reiterated on a panel that the weaker dollar is good for the u. S. Economy. It is very clear that secretary mnuchin is perhaps the least enthusiastic treasury secretary for strong dollar policy in years. To comments are very similar ones the president made a few months ago. Weak taintinly a to the dollar policy. Could this be the beginning of currency wars . Certainly, if they were to use the weak dollar in trade, that would be part of currency wars. This is not the currency wars of the 1980s, though. The currency wars are more rhetorical these days. Francine how many questions will mario draghi field on the today . Dollar there is an ecb decision. Absolutely. Erasing president questions about raising questions about how much the higher euro is going to affect inflation. Tom i want to switch to the body language of a pseudohard power discussion of the president to a pseudosoft power or soft power reality. I walked through the Congress Hall yesterday and there were the assembled cameras with mr. Taking ad mr. Mccrone moment. Paint that into davos history. Is that just another government moment or was there Something Special about mr. Macrons visit . I think there is always a bell of the ball at davos and i think Emmanuel Macron was it this year. Previously, you are looking at tony blair, young, dynamic leaders, they kind of capture the attention for a year or so. They continue to do so, they maintain a leadership position, or they dont, as with tony blair. Emmanuel macron very much positioning himself yesterday as this modern leader of the free world against donald trump. Then you have Angela Merkel, a davos veteran, providing stability in european leadership. Tom what will you listen for . Ith Prime Minister may there are 18 themes. I think theres only one theme, i disagree with you. Brexit and everything goes through that prism. Tom i love this. Francine there is a link. E heard from Steve Mnuchin they say they are ready to do a trade agreement with the u. K. Reporting yesterday by bloomberg talking about how the special relationship with america has got a bit shaky, but it is vitally important for theresa may. She has to walk a very fine line with the u. S. She has to avoid the backfire in the british media of running too. S. Se to the u administration. Francine coming up in the next hour, we speak with the Prime Minister of the netherlands. We will be talking to him about globalization, trade, and why not currencies. This is bloomberg. Francine good morning from the swiss alps in davos. This is bloomberg surveillance. Live from the World Economic forum. Before we continue on globalization, protectionism, lets head back to london to check in on the markets. Thanks very much. Many of those conversations you referenced guiding markets over the last couple days. Those comments about the dollar from treasury secretary mnuchin. The session was pretty sluggish. Lacklusterto a session in europe. Interesting to see that the weak dollar and concerns about trade. Taking the edge off some of those big heavy weight players in the European Equity session. Gold and wti both moving a little bit higher on the commodities front. Be possible on gold. Lets show you the currency markets. Steve mnuchin continues to double down on his dollar comments. Clear and consistent, he says he was on the subject. What will mario draghi say about the euro . Will the bay any pushback be any pushback on the strength of the euro . The pound moved to know where. Nowhere. Francine the wto had a tumultuous 2017. The u. S. Continue to block nominees and issued a scathing review of chinese wto noncompliance. Saidto director general the wtos system is in trouble, but not broken. He joins us on the top of the mountain. Thank you for speaking to bloomberg. Overall, what do you worry about the most . Is it donald trump with an America First agenda, which could sputter trade, or do you worry about the next recession that would hurt trade even more . Both and a bunch of other things, as well. There are plenty of things to be worried about. When we came here last year, our major concern was a trade war. Were we entering a trade war . When youre later, we are not quite there, but there are risks and we have to be careful. Francine what would a trade war look like in 2018 . We did see President Trump talking about tariffs or solar panels or washing machines, but would it be something between china and the u. S. Turning ugly . I think it would be throwing out the rulebook, taking matters into your hands, believing you can fix everything by the power of your economy, whichever economy that is. The others will respond. It is difficult to control and reverse. Tom you are an electrical engineer from brazil, you understand dynamics. Toward vertical moves in foreignexchange and the backdrop of that is brazils leadership over a decade ago to say we dont want currency wars . You people lead in the discussion on currency wars. Are we now to brutal moves in Foreign Exchange . I think currency is a very tough situation. It is a difficult issue. Tom did Steve Mnuchin make it more difficult yesterday . You cannot talk currencies into a certain level. Currencies respond to a bunch of other elements. Real concrete elements in the market. And we try toonal avoid a situation where we are reactionary and we try to oripulate it by words actions, we will be in dangerous territory, i think. Francine but you think this could be the beginning of it . I think it is very difficult to avoid the desire of countries to have certain currency levels, not setencies, they do themselves up in the market. It depends on what others do, as well. We dont have full control of currencies. Tom i was as guilty of that this as anybody in the valley, we look at dollaryoung, sterlingdollar, what did mr. Mnuchins comments mean for the members of the wto not focused on, including the commodity nations . What does it mean for the members of your organization . I think the first thing is to assume exactly what he meant by that and how he intends to follow up. You cannot talk currencies into a certain level. I think currencies cannot be an instrument of added competition or competitiveness. Respond toy have to the fundamentals of the economy. Francine we are just looking at live pictures of a helicopter landing in davos. We understand that is the helicopter of the president of the United States. President trump just landing in davos. For a radio listeners, it is a helicopter, a large helicopter. The left time the u. S. Imposed tariffs, that was back in 1974 and the wto rejected them. Something to keep in mind as the president arrives in davos. Tom for those of you in radio, it is a snow swept field, it really has a sense of switzerland to it. A single helicopter landing. Youve got to believe there was a little more coverage than that. I believe that is not marine one, that is the eller helicopter the president has called unilateral. This is the unilateral president. How do we get back to the lity . Gia i hope this is a learning curve we have to go through. It is difficult to dissociate rhetoric from action, but we have to. It is one thing what you say, what you intend to do the what you would like to do. It is a completely different thing what can be done or should be done. I have seen a number of actions recently that dont necessarily lead us in the past of rampant perfectionism. 1974, the wto said that as a unilateral tariff, other members can retaliate, why would this time be any different . They can come up with there is a process. They have to litigate, they have to bring it to the wto courts. They have to come to an outcome authorized by the organization. Tom i want to bring this up from january 29 of 2000. William jefferson clinton. Those who believe globalization is only about Market Economics are wrong. This goes to the wto. What will happen to a bangladeshi textile worker or a migrant from a mexican countryside without the Prospect Industry that consulted foreign as well as domestic consumers . That was one president a world ago. Does this president care about the bangladeshis and the mexicans within the wto . I think one of the big is that youave dont want trade to be a race to the bottom. It is one of the toughest conversations we can ever have. You can imagine how that would play out for the Bangladeshi Government and the Mexican Government and all the other governments. This is something that i think it is may be time to have a conversation about. What is the significance of the Chinese Market economy dispute . I think people have been a marketn that it is economy dispute. I have reservations about that. Im not sure that is exactly what it is about. I think it is about how you can apply methodologies. I dont want to get very technical, but that is what the case is. I dont think we should overemphasize the outcomes. Tom what is your response to a given nation saying those washing machines have to be more expensive than are washing machines . That is what we witnessed last week. That is the basic rules of safeguards, those are the basic rules of the organizations. This is not new. What is clearly problematic is the coincidence of those measures with the rhetoric that gives a certain message. I think that combination is what if you have a different rhetoric, those measures would go, people would think it was business as usual. Tom the helicopters in the distance, somehow i dont think even the president of the United States got here this quickly. Maybe our cameras can pick that up, as well. Francine i believe the president is in davos. Maybe his entourage and members of the cabinet tom is that the World Economic forum shuttle . You will have to wait for the next shuttle. [laughter] francine when you look at brexit and the split between the u. K. And the eu happens is expected, does it weaken the eus position to negotiate trade within the wto . I think the eu will always be a big player in the wto. Of course, the bigger the player, the heavier the hand, the easier it is to move people around, to get people around certain issues. It was a decision that was taken. I think that is now a given. I think to make sure this happens with the least disturbance possible and damage to the Global Economy even more. Francine thank you so much for joining us. That was the wto director general. Tom, it is quite exciting because a lot of people have been waiting two or three days to figure out exactly what President Trump will give in his 2 00 p. M. Speech in davos tomorrow. We have a little bit more of an idea that it will be more of the America First agenda may be accompanied with a little bit of a victory lap coming into davos were where the people most criticized him last year three days before his inauguration. They were saying, look at the stock market, look at the economy. Tom what is so important about this as Simon Kennedy said, this is an odd davos in that we are crescendoeding to the 2 00 p. M. Friday and the discourse along the way is important, as we heard from mr. Mnuchin and mr. Ross, managing the message from yesterday, is how i would put it. Francine we are just seeing that helicopter in the snow for radio listeners in london. It is a sight we see here in davos is a lot of the ceos choose to come that way, but not often do we actually take a closeup shot of that happening. Tom it is. Francine the last president of the United States to come here was in 2000. Tom and that was a davos ago. Francine lets it back to london and check in on the markets. Thanks, fran. The picture across the European Equity markets, fairly sluggish. If this is a crescendo toward President Trumps appearance in davos, we seem to be treading water a little bit. The european session entirely flat. Gold a little stronger, oil a little stronger. The weakness of the dollar has continued, down about 0. 1 on the dollar index as a whole. Lets have a look at the dollar index. Down 0. 1 . We heard on Bloomberg Radio that the u. S. Is globally encouraging the dollar lower. On the eurodollar, what will draghi say . What will he say about the weakness in the dollar . Saying dollar weakness is actually a symptom of euro strength. Lets get up to speed with the first word news. Taylor President Trump says he is open to giving citizenship to young undocumented immigrants facing deportation. An agreement on dreamers would be part of an overall deal on immigration. The white house will be negotiating with congress. The president said the citizenship process would take 1012 years. The u. S. Economy probably ended last year with the longest streak of 3 or better growth since 2005. Gdp probably expanded at an annual rate of 3 in the Fourth Quarter. The government releases Economic Data tomorrow. The former doctor for the u. S. Gymnastics team has been sentenced up to 175 years in prison for multiple sex crimes. Larry nassar spent seven days in court during more than 150 young women confront him about his abuse. When the judge imposed the sentence, she said, i just signed your death warrant. Puerto rico says it will have virtually no money for bond payments the next five years. The u. S. Commonwealth is coping with the devastation caused by Hurricane Maria pushing puerto rico into its deepest contraction in the last decade. Global news 24 hours per day, this is bloomberg. Thank you so much. Now, lets bring you our exclusive interview with the Prime Minister of the United Kingdom. She is theresa may speaking to John Mickelthwait in a very wideranging conversation. Why sheed by asking her is not regulating social media. Thank you for talking to bloomberg again. A lot has changed since we shivered on this rooftop last year, but one thing that is not changed is your disapproval of Tech Companies. Why not regulate the more directly . At the moment, they dont have to follow the same rules as news providers. P. M. May Tech Companies change peoples lives in very positive ways. We see Tech Companies in the u. K. Providing jobs, employment for people, and developing those new products. We do also need to see that an area of social responsibility, we have been working with a lot of Tech Companies on these issues of a child pornography, terrorist and extremist material on the web. We are making progress, but i progress somore that it is a force for good and not used by those who want to do us harm. There is a wave of governments beginning to clamp down on Tech Companies. Do you see yourself as part of the general movement . P. M. May i think there is a need for us to look internationally because Tech Companies work internationally. Im seeing an increasing sense of social responsibility from the companies. We have been working with them on child pornography and the terrorist uses on the internet. Internationally, we need to say that there is more to be done. Lets work together, lets ensure that when people look at the internet and its use, they can have confidence in it and confidence that it is not being used by those who have alter your motives to do us harm. Another area like that is cryptocurrencies. They are used partly to hide money, many used in the activities you just described. Isnt that an area where you should try to clamp down too . P. M. May i think in areas like cryptocurrencies like bitcoin, we should be looking at these very seriously. Particularly the way they can be used by criminals. It is something that is developing increasingly. It is something that we do need to look at. Is this something were ontain might be much tougher Tech Companies in a postbrexit world . P. M. May when we come out of the European Union, we are going to be a will to encourage Tech Companies to come to the United Kingdom. We have already seen Tech Companies expanding in the u k and i see that expanding. I want to have a deep and special partnership with the eu, continue to have a good trading relationship, but we can also look at what relationships we can have with countries around the world. I think there is huge opportunity and relationship to Tech Companies, particularly in the area of artificial intelligence, where the u. K. Already has a leading edge. I want to see is developing that for the future. We are already an attractive place for businesses to set up. In the last three years, we have up everyw a. I. Start three weeks. This is a really exciting future. A lot has changed over the past year, but the one thing is the emergence of jeremy corbyn. People are not entirely sure where you stand on business, beyond saying, im not jeremy corbyn. What is the conservative approach to business in britain at the moment . P. M. May this conservative government that i lead recognize and understand the reports of business. It is business that provides people with jobs, it generates the taxes that fund our public services, that is why we publish the industrial strategy because im very keen that we work with business to say, what is the future of our economy . How can we make the best of the u. K. . How can we be out there as a leading country in a number of areas . We are already doing that in ai. We are doing it in electric vehicles, battery technology. There are so many opportunities for the United Kingdom. It is a great place to do business. I want to see more business coming to the u. K. , setting up in the u. K. , developing jobs in the u. K. , trading around the world. Macron effectively said yes he could imagine a deal where Financial Services could somehow be elongated, bital only if you went back on things like justice and things like that. Your red lines. Will you be prepared to trade on that to get more access to business, especially finance, which is the biggest industry we have by some measures . P. M. May the city of london is hugely important for the u. K. And hugely important for the Global Financial center. For the European Union and around the rest of the world too. Im positive about the future for the city of london. London is a really attractive place. The city has developed over a number of years. It is a whole ecosystem of support around the Financial Services industry. Would you be prepared to trade to keep that access . Would you be prepared to do what macron said, drawing back on some of those red lines to get more access . P. M. May what im working for in negotiations in december, we reached a successful negotiation on the first phase of brexit talks with the eu. What am now working on is the implementation period, that period of time that will enable businesses to adjust to our new relationship when we leave the European Union, but im very clear that we want to develop a deep and special partnership, the comprehensive Free Trade Agreement. We recognize the importance of Financial Services and we want to ensure that we can continue to see those Financial Services ensuring that the city of london retains its role as a Global Financial center. Ive been talking to Financial Services businesses in the u. K. In the last weeks and they are positive about the advantages the u. K. Has. I want to make the u. K. And even more attractive place for Financial Services to be. Would you consider paying for access to the Single Market . P. M. May one of the things that we agreed and we discussed in the first phase of negotiations and came to an agreement in december was on the financial settlement. We are now going into the second phase, which is about the basis on which we are going to trade goods and services and our future Security Partnership with the European Union. All of these areas, im positive we will be able to get a good arrangement for the future, an arrangement which is a comprehensive trade agreement for the United Kingdom with the European Union. The reason i believe we will be able to come to that good arrangement is because what is he talking to other leaders is that sense that we need to be pragmatic about this and it is to the benefit of the eu, as well as the u. K. , that we have that good arrangement in the future. Less savory part of the city of london. We had the president s dinner the other night. There is this issue of harassment, male entitlement. You have worked in both the city and westminster. For this it take misogyny, somewhat say, to change . P. M. May i was frankly appalled when i read the report of this club event. I thought that attitude of the objective occasion of women was something of the past and what that event showed is that there is still a lot more work for us to do. I will continue to work, as i have done, i will continue to work to a point where we really can say that women are respected and accepted and treated as equals. Do we need more rules . Sadly, what we saw is that this is that attitude. Women are not just objects to be used by men. Actually, we are equals. We have our own position, our own abilities and that should be respected. Ive done it in politics, ive done it in business to make sure people recognize the value women can bring to business, to politics, but that just in general that attitude that says wet women are objects, that eradicate that attitude is so important. Women need to be able to make their case as equals. Are you really sure that your Education Minister is the right man, given the fact that he attended the dinner . Surely that sends exactly the wrong message about what you have just said. P. M. May i understand that he left the dinner and was uncomfortable with what happened and left on that basis. We need to ensure that what we are doing collectively because this we focus on one event come up at this is about a wider issue in society. We thought that these sort of attitudes had changed over the years. We have made progress. I dont want to give the impression that no progress has been made, but there is still more to do. One thing on your future finally. Mpsave had some loyal calling for a bigger vision. Do you think that is something you can deliver . What is the particular idea you would like to be remembered for in that way . When i became Prime Minister, i stood on the steps of downing street and i set out that i want to develop a country that works for everybody. One of the challenges that we have and it is something that i talked about it davos last year and that others have been talking about too is that those people in our society that feel the globalization has left them behind, that others have benefited, but not them, we need to ensure that our economies do work for everyone. That is why i believe our industrial strategy is so important. A real vision for an economy of the future ensuring that we are making the best of the advantages, skilling our people for the jobs of the future, and make sure we see the prosperity and growth across the whole of the u. K. Theresa may, thank you for talking to bloomberg. Francine that was the u. K. Prime minister theresa may speaking to our editorinchief John Micklethwait. They touched a number of subjects. I want to come back to cryptocurrencies and bitcoin. Optimistic, upbeat outlook on the future. I would suggest that investors want more details on the vision of what exactly this u. K. Eu relationship looks like postbrexit. Tom anna edwards is with us in london. You have spent so much time within the government offices of the United Kingdom. I was quite taken by her intensity. Is the Prime Minister always that intends or was she turning it on for davos . Anna maybe a bit of both. I think it is interesting that she keeps talking about deep and special, the nature of the relationship she wants with the eu. In terms of where this moves us, she says she has seen pragmatism from the eu, but i was reminded of the conversation with the Prime Minister early today. It cannot be cherry picking, if you want access to the Single Market, it comes with responsibilities. Did she leave the door open when John Micklethwait with asking her about what the u. K. Is prepared to provide in exchange for access . She sort of evaded the question and then she did leave open the question that maybe there could be money or security on the table in exchange for access. She did not answer the question, but she did not close it down entirely. Tom how will she listen, speech . , to mr. Trumps britain wants to expand the world may be more than any other country. They want a multilateral postbrexit world. Francine i think it was significant listening to Steve Mnuchin talking to reporters earlier on saying they are ready to give a special trade relationship with the u. K. Once the u. K. Is ready. The problem is the timeline. First of all, the u. K. Needs to leave the eu and it is only after that that they can start negotiating with the u. S. We dont know who the president will be at the time or what kind of administration i want, but she needs to strike a fair balance in saying not everything President Trump is ok, but we need to be close. Tom we are doing this with the spirit of the translations we will see in the next two days. Weve got our surveillance coffee and it reminds me of that time where, it is suntori no, it is trump time. Suggest theou markets do . Anna i suppose it is a really big question. How do you square a globalized agenda with America First. They seem to have convinced some bankers. Had they convinced others . Tom very good. We will continue our coverage on the World Economic forum. Lloyd blankfein joins us in a bit. The Goldman Sachs chief executive officer. This is great. Francine great coffee. Tom great coffee. Francine the whiskey is working. Tom yes, it is. Taylor this is bloomberg surveillance. Lets get the Bloomberg Business flash. Apple is moving to resolve an issue with customers on older iphones. They will let users disable a function that slows down phones to preserve a battery life. More costcutting is on the way at ford. They have reported another underwhelming profit. The new ceo says he is not satisfied. Hewlettpackard enterprise Ceo Meg Whitman is getting a new job. She will be chief executive of the new mobile Media Business founded by former Animation Studio chief jeffrey katzenberg. She is stepping down at hp next month. That is your Bloomberg Business flash. Tom thanks so much. Forum, orld economic the United States contingent, there is not only the speech tomorrow, but the big event coming. The rumors are three weeks down the pike. America will once again confront one of its greatest failures and that is infrastructure. No one knows that better than the former secretary of labor, now secretary of transportation elaine chao. I spoke to her yesterday. The government rules pertaining to acquisitions in the government slows down the whole process. When i talk about emerging technology, there is a technology on the ground. We are looking at self driving technology. Tom here is the self driving technology. March 30 of last year, they dialed 1800elainechao and they said, fix the atlantic bridge. And we did. Tom and you did. Why cant you bring that over to every Infrastructure Project in america . Whether it is a democrat or republican governor you know so well, why cant we fix the infrastructure . We need to fix the permitting. Tom tell us about that. Let me take you through this. The hoover dam was built in four years. Tom exactly. I went to alaska to give the approval for the sterling highway, which took 35 years. Tom are you going to change that with the proposed 1 trillion legislation . Have 1e going to trillion in Infrastructure Spending and also work on the permitting so that it does not take so long for the whole public Infrastructure Projects to be built. We need a partnership of the state and local governments. Tom with your heritage in washington, can you do this in a fractured washington . Nobody said it was going to be easy. Infrastructure, there should be bipartisan support. Tom with your heritage at labor, i believe we are going to create jobs. Any number out of this pending legislation . We do not. We want to be in concert with this administration. Tom i want to go other places. Im kidding. Tell me about mobility. As a former secretary of labor, im very concerned about this placement. Ultimately, there is new technology that creates new jobs , but it will be a different kind of jobs. Need toransition, we help people move from one type of job to another. We need to have technology that will respond to the jiddah meant concerns to safety, security, and privacy. Elaine chao and her boss, the president of the United States, has landed in davos, where he speaks tomorrow. Stay with us. This is bloomberg. Tom it is thursday in davos. An extraordinary thursday. The president has landed. He prepares for a speech of the assembled elite and a speech to his america. The fx vigilantes speak to secretary mnuchin. The trump weak dollar policy is not good for davos. The Prime Minister of britain leaves her kingdom of isolation. She has ascended the stairs to the ice palace. She speaks to bloomberg. On brexit. She did not bring larry the cat. There was too much know. Im tom keene. Francine lacqua with me. I thought an extraordinarily serious and terse Prime Minister may with many agendas for her today. Francine that was without a doubt the interview of the day so far. We also saw President Trump land just a couple minutes ago, about 15 minutes ago. We saw the helicopter for our radio listeners in london. Good morning to you. Davos man. Im looking for the davos man. Im seeing little women. There are several chairs. Tom it is a big shift. Movementen a gradual toward this important shift. Here we are with their conversation with madame lagarde this morning, who has provided so much leadership on women representation, with Angela Merkel coming here, it is a radically different davos among social issues and the politics this year than last year. Francine that is underlying the main concern, which is probably currencies and protectionism and tariffs and everyone awaiting what President Trump will say in his speech tomorrow i 2 00 p. M. Coming up this hour, we have a pretty packed show for you. We will bring you the Prime Minister the netherlands, his first interview of the day. We will be talking about trade protectionism and brexit. We will be speaking with the German Defense ministeran. D minister. And we will be speaking about the angst in the market about why the German Government cannot reform. And lets not forget, there is an ecb decision today and im expecting mario draghi to field a lot of questions on euro strength. Tom paula want to know, im hearing all i want to know, im hearing in might your piece, the bells are ringing in the distance because the president has arrived. Francine they are also ringing for lunch. [laughter] francine lets get the bloomberg first word news. Taylor President Trump says he would love to special counsel robert mueller. Mueller is investigating whether anyone in the Trump Campaign colluded with russia. Mueller is said to be wrapping up one part of his probe as to whether President Trump obstructed justice. The turkishump told president not to expand his attack against u. S. Ive been armed kurdish fighters in northern u. S. Armed kurdish fighters in northern syria. South koreas economy shrank in the Fourth Quarter. The gdp fell 0. 2 . A drop in korean car exports more than offset rising exports of semi conductors. President the former da silva has had his hopes of a political comeback crushed. A corruption sentence has been upheld against him. The judge voted to increase his prison sentence to more than 12 years. Global news powered by more than 2700 journalists and analysts, im taylor riggs, this is bloomberg. Tom thanks so much. It was 17 years ago, make it 18 years ago that William Jefferson clinton attended these meetings and davos. I looked back at his speech. Extraordinarily different time. Kevin cirilli in washington covered day by day the Trump Campaign, the Trump Inauguration , and in his first year of the administration, he joins us in washington on this important day for the president. Who in america will the president be speaking to as he addresses the elite in davos . Kevin i think he is really going to be focused on two audiences domestically. First and foremost, workers, the coalition of folks that got out in states like michigan and wisconsin and western pennsylvania to put him over the edge and get him into the white house. But also, republican leadership. This administration has put the focus on trade in the past month and a half. There are a couple of new decisions he is going to have to make on nafta over the next couple weeks. In just a couple of days when he returns, he sparked new headlines about the Mueller Investigation, but he gives what is technically his first state of the Union Address early next week. Tom i was going to go to that later, but lets rip up the script, kevin. The president that comes to davos, is he a completely distracted president by those investigations of mr. Mueller . Kevin well, i think the comments he made before touching in davos are really what a lot of people are going to be focusing on and a lot of the Media Coverage this morning will be focused on how he said that he cannot wait to sit down with Robert Muellers investigators. His attorney released a statement just after that saying that he was just speaking very distance hisng to client, the president , from those comments, but it is absolutely sure that this inestigation is nearing that the back channel discussions between the president and the mueller investigators have been going on for quite some time. Francine will the Mueller Investigation only focus on the president s ties with russia or is there Something Else that is emerging . We were talking to a number of russian ceos and i asked one whether he was being invited to ,his evenings trump party where he is inviting about 150 ceos and he looked at me and said, no, i think russian ceos are toxic at the moment . [laughter] kevin i think the administration would view them theoxic, as well, given latest treasury report about some of those russian oligarchs. They are questionable to say the least. Bottom line is that in the halls of congress, republicans have been pushing for the release of a memo to try to get more information about the fbi over the past year, particularly their investigation into the Trump Campaign during the campaign and whether or not they had political allegiances to hillary clinton. You notice republicans in the past week and a half early intensifying their efforts on that front. And the president and his legal it justld like to see focused on collusion because they dont think there was any and they feel confident on that and they have been frustrated that the investigation has gone beyond. On the flipside, democrats and a certain faction of the moderate republican wing are saying just to investigate everything and see what you come up with. If you look to, the speech of President Trump tomorrow, 2 00 p. M. Davos time, is he laying the foundations for the next president ial election, saying i can brush shoulders with Global Leaders and they kind of except me, or his he talking to his base . Kevin i think tomorrow is going to be about his ability to communicate and America First thategy, but also one says, we need Global Private investment. We saw this with secretary chao and that awesome interview about how they are saying infrastructure is something the united date once United States wants to get done, but we need private investment to do it. When he arrives home back in the United States, the state of the Union Address at a time when this investigation is nearing its completion. Tom you and i can have coffee at laguardia and discussed the difference between the Zurich Airport and jfk. Secretary mnuchin made history yesterday on weak dollar policy. Did he become a lameduck treasury secretary in the eyes of the global elite . You know, yesterday at the White House Press briefing, Sarah Huckabee sanders, the Communications Director for the press secretary for president ease someed to concerns about that comment, of course coming at the time of davos sparked a lot of interest, to say the least. I still think the relationship between secretary mnuchin and President Trump has been one that has been consistently solid , unlike some of the other cabinet secretaries that we have seen, but i will leave it there and i will be in new york monday. If you guys are back from davos, i will see you back on set. Tom we are skiing for the next week. Francine not me. [laughter] francine thank you, kevin cirilli. Lets get your market check. Lets get a look at the markets with anna edwards. Anna hi, francine. Thank you. Im not sure we have the insurance for both of you to go skiing. The markets are up a little bit. Novartis leading the pharmaceutical sector a little higher. The weak dollar story is one you have covered very nicely out of davos. Mnuchin doubling down on two occasions already. He said he talked about how he was clear and consistent on what he said on the dollar and endorsing the weak Dollar Benefit trade. What will this do to currency markets more generally . The move is happening once again on the dollar. We take another leg down, but lets not overdo it. What will mario draghi have to say about this . We have an ecb Rate Decision. Nobody is expecting any change of guidance today. That could wait until march, where we might get a change in guidance. What will he has to say about the strength of the euro or the weakness in the dollar . Will he be drawn into that difficult conversation around currency markets . Stronger,a little bit up 0. 2 . We spoke to Philip Hammond, the chancellor of the exchequer earlier on. He said he was happy with where the is right now. Lets get to taylor riggs with the Bloomberg Business flash. Taylor sky says firsthalf profits were worth more as customers signed up to read british regulators will decide whether sky can be acquired by 21st century fox. The deal could go ahead only if there are concessions involving sky news. There are concerns about Rupert Murdoch having too much media influence. Bet. Egas has a big fourthquarter sales in profits beat estimates. Macau morenvested in than any other operator. More costcutting is on the way at ford. The automaker has reported another underwhelming profit. Fords new ceo says he is not satisfied and that the results reinforce the need to take more costs out of the system. Hewlettpackard enterprise Ceo Meg Whitman is getting a new job. She will be the chief executive of the new mobile Media Business formed by jeffrey katzenberg. She is stepping down at hp next month. That is your Bloomberg Business flash. That to you in davos. Francine thank you so much. The world is waiting for the German Government, the spd has been given a green light to begin coalition talks. The Trump Administration has been particularly vocal and demand that germany spend more on defense. We are glad to be joined by the German Defense minister. Thank you for joining bloomberg tv right now. What do you respond to President Trump asking for more defense spending from germany . Actually, in the summit in wales, we decided on the goal to. Ave defense spending at 2 this is a goal that the Obama Administration already offered support. So he was right because europe has to carry a fair share of the burden. We have to increase our defense spending. Francine have you found a way of communicating effectively with the Trump Administration . Oh yes. We have a Strategic Dialogue. My colleague is an enormously reliable and wonderful colleague. We have a Strategic Dialogue on that. When you look at the modernization of nato over the last two years, germany has been at the forefront. Really to invest into the modernization of nato. Tom general mattis is distracted by turkey and the discussion about the kurds to read germany has a unique relationship with turkey, i would suggest, across generations. How will your nation adapt and adjust to the recent activity of the turkish government against the kurds . First of all, we have to it knowledge that it is turkeys right and duty to protect its citizens from pkk terror. Kurdsright that syrian did not clarify the distance to butpkk, but and it is a big , the reaction has to be appropriate and we call for deescalation. Im very grateful that the Security Council called for deescalation. Tom are you getting support from President Trump . Whether it is economics or germany politics, does and chancellor merkel feel more alone now because of the actions of america . Sec. Van der leyen first of all , we have very strong relations to our american friends. There is a second point. The Trump Administration once again opened our eyes that this is true. Europe has to stand up, take on and if wesibility want to deal with the problems in our neighborhood, these are our problems, we have to deal with them, so we have to get organized. Francine i want to go back to the nato outline defense spending of 2 of gdp. Your future Coalition Partners have rejected this 2 . Do you have an agreement with them on what would happen if you form a new coalition with them . Sec. Van der leyen German Armed Forces after reunification went through a period of 25 years of costcutting. Two years are not enough. Most important factor for our talks with the social democrats are if you want to send armed forces abroad on missions, they have to be equipped in a modern way and that means investment. Francine do you see them backing down on this demand and do you see this is one of the major issues in the coalition talk . Sec. Van der leyen it will be one because im convinced germany is a reliable partner with the social democrats. We are reliable. Tom you have lived this. When you are at the London School of economics, you had to go under a pseudonym because of worry about terror and your family. Changee a generational going on in germany . To a new germany where defense will be discussed differently . With this election, the struggle over coalition, is it really about a generational change . Is. Van der leyen it that this is ae historical moment for my generation to regain europe. Builthers generation europe from the horror of the wars, but my generation took it. Now we have to regain europe because we want to modern europe. Francine minister, i know you have to go, but when do you think a new government will be sworn in . Sec. Von der leyen i hope easter. [laughter] francine all right, minister, thank you so much. That was the German Defense minister. Lets head back to london to check in on your markets. Anna thanks very much, francine. The European Equity markets managing to eke out gains. That is the listing pharmaceutical sector. Ing back into positive territory on the back of some m a. We have also seeing been seeing the dollar comments having an impact. We continue to watch the news flow out of davos. Treasury secretary mnuchin continuing to talk about the dollar. The last couple minutes, he said that trump shares his relaxed view on the dollar. Will we hear anything about that when President Trump speaks at the doubles World Economic Forum Tomorrow . Markets waiting in anticipation of his speech. Keep an i on the euro. Trade rightere we now. What will he say about the strength of late in the european currency . What will he say about the weakness in the dollar . Will he be tempted by journalists who will no doubt push them in that direction . The chancellor of the exchequer has said he is happy where the pound is. It has not moved all that much. Lets go to taylor riggs. Taylor President Trump said he would love to speak under of two special counsel robert mueller. He is investigating whether anyone close to the president colluded with russia during the 2016 campaign. Mueller is said to be wrapping up one part of his probe, whether President Trump obstructed justice. President trump has issued a warning to turkey. He has told the turkish president not to expand his attacks against u. S. Armed kurdish fighters. That could lead to direct conflict with american forces, President Trump warned. In brazil, the former president da silva has had his hopes of a political comeback crushed. An Appeals Court upheld a corruption sentence. Judges also voted to increase his prison sentence to more than 12 years. Day innews 24 hours per more than 120 countries, im taylor riggs, this is bloomberg. Back to davos. Tom thanks so much. Wonderful to have you with us. Now, not only another Prime Minister, but an important Prime Minister, the Prime Minister of the netherlands. He is a piano player that happened to go into history and politics. [laughter] tom there is a piano bar down the street and we would like to see you there tonight. Francine he is actually a good singer. We would love to see you at the piano bar tonight. The president has landed. He is not yet here. Tom he is not here yet. The netherlands is in the turn of euro, trying to figure out how to listen to this president to how to respond and react this unique president of the United States. How will you approach that . Him by hisssing deeds. When we look at what he is actually doing, we can support a lot of his policies. We are not always an agreement, but we were not always an agreement with obama. The choice for the president of the United States is up to the American People and america is the leader of the free world, so we need to maintain a workable relationship. That is exactly what we are all doing. Francine . President trump has imposed tariffs on washing machines, solar panels should the eu retaliate . P. M. Rutte we should carefully look into what he is doing. If necessary, we have to take steps, but not all of a sudden. Everything has to be done in a stepbystep approach. I think the most crucial thing with donald trump is the necessity of an International World order in which we have a strong u. N. , in which we have a strong wto, that we have a legal base under what we are doing worldwide, for example, on free trade, which is also in american interest. Francine we have brexit, we have the specter of currency wars, protectionism, we have many other challenges, defense spending. If you were to give me two priorities for the eu in 2018, what would they be . P. M. Rutte first of all, hope to do with brexit. The u. K. Leaving, we will lose the most important voice in terms of the liberal economy. Free trade agreements. Ive always found that theresa may and David Cameron were fighting with me and others to do that. The netherlands will not be the biggest country, we are four times smaller than the u. K. In terms of our economy, but we are the biggest one in terms of completing completely supporting that agenda. We are working to maintain that voice of liberalism. That is crucial. There is an impact on the u. K. With them leaving, they are now the slowest growing economy in the g7, but it will also impact the eu. Secondly, how do we maintain the necessity of reforms within the eu and within the eurozone . My worry is that with low Interest Rates at the moment, there is not enough incentive to do this. Then we can talk about all kinds of new structures. The most important thing now is that everybody is doing what they as a country need to do in , stimulus,scal making sure that their economy gets back on a growth path. Tom there is no other nation in the western world that has had to do with the environment like the netherlands. Water always a threat. You have been at the forefront of Climate Change for decades and even centuries. How do you adapt to a part of america that just says it is not true, there is not climate of the it is a scam people of the netherlands are the people of germany and on and on and on, how do you adapt to that within the policy that you need from america . P. M. Rutte first of all, by keeping the dialogue going with donald trump and his and ministration and by working with those parts of the United States that are still very much supporting the paris climate agreement, like california, like many big cities, like other states within the u. S. Who collectively still are among the 10 biggest economies in the world. There is still a big force in the u. S. To maintain support and even practical support in implementation come on the implementation site for the paris agreement. You are right. The netherlands, half of our country is below sea level. Tom i look at the heritage of the dutch flag of new york city and i realized that the way we are going, two thirds of dutch new york city will be submerged. P. M. Rutte the city of new york, the netherlands is very much involved. The things happening in the last 10 years with Environmental Impact on new york city, you are working with the mayor, with his team, our best experts from water management, to make sure that the people of new york will keep their feet dry also in the future and there was a strong commitment from the local and regional politicians. Francine on brexit, you said this was one of the main challenges for 2018, what does this mean for the budget . We know you met with the eu commissioner for budget. You tweeted saying that the bloc budget must be reduced when the e u. K. Leaves the eu. P. M. Rutte we feel strongly that the budget has to be cut by the size the u. K. Is now supplying to the budget. It makes sense, otherwise we will have an inflated budget. I very much believe that the eu needs to focus on where it adds value, internal markets, border patrol, migration. Francine you want to reform the eu . With the eu, stronger . Would the eu, stronger . Workrutte we need to make the internal markets. My joke about the internal markets is that it would be a good idea. Economyut 30 of the eu is internal markets. We know we can add twice the to the. 3 trillion euros overall eu economy if we implement this. Optimal euroyour level . I believe there is a meeting in frankfurt today were mr. Draghi will move forward with his great monetary challenge and centralbank challenge, but at the heart of it, it is the political economics of the optimum level of the euro. Stay with me. Level that the euro works for the different people of the netherlands . P. M. Rutte if i would have that, i would not tell you. I strongly believe that we need an independent European Central bank. Try to getliticians our hands on the policymaking of the European Central bank, it hurts the overall standing of the euro. Tom but this is critical. So much of the Great Research on this by the academics of the region, the euro level for the netherlands and germany is not the same optimal euro level for italy or greece. Will that be attention as we unwind this monetary experiment . P. M. Rutte in the eurozone, you. Annot devaluate what needs to happen is reforms and by making sure that your government budget is within the frame and your deficit is not more than 3 . By doing all of that the idea behind the eu by doing all of this, collectively, we will move to a higher level of Wealth Creation and overall success for the eurozone. We are not delivering on that basic promise at the moment. Because we are not, we then have debates about optimal ways of pinpointing the euro, but these are rolled debates which come out of the fact that we are not at this moment doing what we promised each other to do in 1991. Francine Prime Minister, last year in davos, it was president xi giving a speech about globalization, forward investment. How much does that impact your country and what can you do to attract more Chinese Investment . P. M. Rutte we are in very close contact with the chinese and we are in absolute terms the number five in the world in terms of exports. Tom to china . P. M. Rutte overall. Tom i did not know that. That is unbelievable. P. M. Rutte when we look at direct investment, we are also in the top league with respect to china. , investmentstrade from china to us and from us to china is crucial. That is why we have Strong Political relations with the Prime Minister, the president , very minutes to an from. Thats very many visits to and from. Francine can that relationship actually be further entrenched given that President Trump is slapping tariffs on some of their goods . Does it mean that chinese money hard tote it is very say, because there have always been debates between the u. S. , European Union, and china on tariffs and free trades. I would be always for free trade, to have as few barriers as possible to make sure that free trade is working. We are at this moment negotiating worldwide with argentina and brazil. The trade agreement which is potentially even bigger than the one with canada, so it is crucial for our future. To get these things moving, we need to get rid as much as possible of these barriers. Francine Prime Minister, thank you for joining us. Lets head back to london and check in on the markets with anna edwards. Anna lets have a quick look at the markets, trading a little bit higher across europe but lacking energy for the session as we wait for President Trump twos week in davos. To speak in davos. After we saw developments on monday, many global elite are questioning what we know and what we will see in the future around trade from the United States. Will there be more levies . . Ill we get clues on that that is keeping us in a Holding Pattern on european equities. We are waiting for the ecb and the press conference that goes along with the Rate Decision for mario draghi and the team. No change in Interest Rates or guidance are expected. Could we get a change in guidance in march, and what could he have say about the euro and the weakness in the dollar . Business confidence in germany improving. The euro maintained its stance against the dollar, 1. 2413. The pound trades higher, the strongest in 19 months against the u. S. Dollar. We have some very upbeat comments coming from the u. K. Chancellor. Here is taylor riggs. Taylor President Trump says he would love to speak under oath to robert mueller. Is investigating whether anyone close to the president colluded with russia during the 2016 campaign. Youll learn is said to be wrapping up one part of his probe, whether President Trump obstructed justice. Trump says he is open to giving citizenship to young undocumented immigrants facing deportation. An agreement would be part of an overall deal on immigration but the white house will be negotiating with congress. The president says the citizenship process would take 10 to 12 years. South koreas economy shrank in the Fourth Quarter. 1 . Fell 2 10 of a drop in korean car exports offset exports of semiconductors. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Back to davos. Francine thank you so much. Theresa may says she is optimistic about the city of london. The u. K. Prime minister wants to make sure the Financial Hub retained its global appeal and status after britain leaves that you that e. U. The Prime Minister spoke exclusively to editorinchief John Micklethwait. Of london is obviously hugely important for the u. K. And hugely important to the Global Financial center for the European Union, and around the rest of the worlds, and i am positive about the future for the city of london. London is a really attractive place. The city has developed over a number of years. Thee is a whole, people use word ecosystem around the Financial Services industry in the United Kingdom. John would you be prepared to trade to keep that access, to do what macron said, with draw on some of the jurisdiction of european courts to get more access . P. M. May when i am working for decemberations, and in we reached a successful negotiation of the first phase of our brexit talks. When im now working for is looking at the implementation period that will enable businesses to adjust after we have left the European Union. I am clear we want to develop a deep and special partnership, comprehensive Free Trade Agreement. Ofrecognize the importance Financial Services and we want to win sure that we continue to see Financial Services ensuring that the city of london retains its role as a Global Financial center. In the last few weeks ive been talking to Financial Services businesses in the u. K. , and they are positive about the advantages the u. K. Has. I want to build on those to make the u. K. And even more attractive place for Financial Services. John would you consider paying for access to the Single Market . Pay a bit more and get more access for Financial Services . The things weof agreed and discussed in the first phase of negotiations was on the financial sediment of the uks withdrawal from the European Union. We are going into the second phase which is about the basis on which we are going to be able services,n goods and and a future Security Partnership with the European Union. In all of these areas, i am positively will be able to get a good arrangement for the future, an arrangement which is a comprehensive trade agreement for the United Kingdom with the European Union. Be reason i believe we will able to come to that arrangement is because what i see talking to a desk talking to other leaders is the sense that we must be pragmatic. It is for the benefit of the e. U. As well as the u. K. P. M. May the less savory john the less savory part of london, we had the president s club dinner. The issue of harassment, male entitlement. You have worked in both the city and westminster. For this it take misogyny, some would say, to change . P. M. May i was appalled when i read the report of the president s club event. I thought that attitude, the objective vacation of women was something in the past that we managed to overcome. Sadly, that event showed there is still a lot more work for us to do. I will continue to work, and i have done during my time in politics, i will continue to work to a point where we can say women are respected and accepted and treated as equals. The u. K. That was Prime Minister theresa may speaking to editor in chief John Mickelthwait. It is the only interview she is doing here at the economic world forum. They talked about trade. They talked about what the Prime Minister needs to achieve, the balance of keeping President Trump close but not too close, given some of the things he has said. We also have a little bit of pound surging. Coming up, we speak with larry fink, the chairman and ceo of blackrock. We will talk to him about passive investing in the future of Financial Services. Tom may be the president of the United States. Francine this is bloomberg. Morning, everyone, i am tom keene with Francine Lacqua at the World Economic forum. It used to be three days and then it was four days, and now we are here monday through friday on this important day. 8 00 a. M. In new york is the time conversion. Staley ofjes barclays. We had an extended conversation he had an extended conversation with Erik Schatzker francine and me. Tom excuse me, i did not know that. I cannot keep track of all the different interviews we are doing. Andinterview was on brexit tax reform. Jes i think there was a consensus around the Major Economies of the world that we needed to reregulate the Financial Markets, and do it in a way that we maintain parity across those markets, so that no institution could arbitrage one regulator against the other. I think a lot of good was done and a lot of important regulation was brought into the Financial System over the last 10 years. I have consistently supported a more regulatory environment. Now there is a new equation. It seems as if the u. S. Is willing to be very much on the front foot in terms of making the u. S. Market competitive. Barclays Business Strategy is a transatlantic bank, so 40 of our revenues are generated in the United States, and all of a sudden the u. S. Has become one of the lowest Tax Jurisdictions. That is a significant phenomenon we have to recognize. Erik the big u. S. Banks were already the worlds most profitable and best capitalize before tax reform, and before what may happen in the way of deregulation. As you mentioned, barclays get some benefit out of that, but 60 of your business does not. How do european and u. K. Banks thatte with american banks now have the ability to price so much more aggressively . Jes we are a major u. S. Bank in our own right, but we are a british bank dedicated to the United Kingdom and Great Britain. I think the British Government is mindful of having to remain competitive. We have a very open discussion with them. This is very new. What is coming in the United States is new for all of us, but we think the United Kingdom has tremendous asset. We like what bar say barclays does. We are a british bank, so we will be fine. It helps us relative to our european competitors. Erik does it make you want to shift shift may be the wrong word but given that the dynamics of the American Market are more appealing, do you want to do more business there relative to what you have been doing . We have had this transatlantic strategy that we set out in march 2016 and we will stick with that. Our roots are in the u. K. , and we have a tremendous business in britain and europe. We want to stay a global institution. We will see a desk see how they respond. Francine have you started moving the 150 jobs to dublin . Jes we are making investments in dublin to be prepared to use to irish subsidiary redomiciling our european branches as branches of that bank. We are continuing to be prepared so that no matter what happens with brexit, we will be able to prosecute our business across europe tomorrow as we do today. Francine that was the barclays chief executive officer jes staley speaking to erik and i. We talked about some of the ongoing investigations by the doj and the sca. Francine it tom it will be amazing, the next 12 months for barclays. It is a unique banking story. Francine you could say jes staley has had a tough time, to say the least. Lets check in on your market. Anna European Equity markets keeping their head above water, waiting for trump and his administration to hold forth on the subject of America First, and how that squares with globalization. Markets looking for clues. We continue to trade around the dollar story. Comments from Steven Mnuchin, the treasury secretary, he expanded today saying that he thinks the President Trump shares his relaxed view on the dollar. The dollar down as a result for the fourth day. 1 10 of a percent stronger on the stocks. Stockpiles of u. S. Crude decreased for a record 10th week. Materialshas the raw at the highest since 2015. The dollar story having a lot of impact and moving parts attached to the broader asset universe. The euro is at 1. 2405, almost entirely flat. We are keeping and that as we head to the ecb decision. Lets go to taylor riggs. Taylor european paytv company sky saw profits rise as more customers signed up. They will decide whether it can be acquired by 21st century fox. The deal could go ahead only if there are concessions involving sky news. They are concerned about murdoch having too much media influence. A big bet onds has macau and he keeps paying off. The largest casino operator reported fourthquarter sales and profits that beat estimates. Sans has invested more in macau than any other gaming operator. Sheldon adelson plans to spend 1. 1 billion more remodeling one of his casinos. More costcutting on the way at ford. The automaker has reported another underwhelming profit. The new ceo says he is not satisfied and that the results reinforce the need to take more cost out of the system. Hewlettpackard enterprises Ceo Meg Whitman is getting a new job. She will be chief executive of the new mobile Media Business founded by jeffrey katzenberg. She is stepping down from hp next month. That is your Bloomberg Business flash. Back to davos. Tom thank you so much. We are thrilled that you are with us this thursday, with the president speaking tomorrow. It is a different meeting of the World Economic forum, this year decidedly a different davos. Stay with us on bloomberg television, radio, and digital video worldwide. Anna you are watching bloomberg surveillance. Lets get a market update. This is what things look like, 1 10 of a percent for the stoxx 600. Not going anywhere very fast. The dollar story dominant in davos and dominates the market themes as well. The oil price going 7 10 of a percent higher, part of that is a weak dollar story and part of that has to do with stockpiles in the United States. The dollar is down for a fourth day in a row, the weakness persists but not to a great extent. Its get back to davos. Francine thank you so much. Joining us is the owner of sever stall, alexey mordashov. Man. Also russias richest. Hank you for joining us the u. S. State department is preparing a list of russian billionaires close to putin or the kremlin. Could you be on that list . Do you worry about being on that list . Alexey who is going to be on this list, i do not know. It is probably better to ask the u. S. Department of state. I do not know what i can do. I believe that i am a private entrepreneur, nothing to do with government. As a good citizen, i have to interact with the government of russia. I have 90,000 people in my company. And of course i have to be responsible and interact with the government in this way, but not more than that youd we do not have government versus a patient. We did per dissipation. We do not give the government money. Francine we are trying to figure out and trying to find sources that the state department, but if you were on the list and sanctioned, how would it impact your investments . How would it impact severstal . Alexey it would impacted substantially, because as far as i know, the process itself does not matter much. It is just an indication of the names of the person who might be the subject of sanctions. What kind of sanctions when it be, nobody knows. These outcomes depend very much upon the details. Invest. Not help me to tom President Trump has joined us in davos. I do not believe you are scheduled to have a cup of coffee with the president. If you would, what would you tell him about russian capitalism . Alexey it does exist. There are things to bear in mind. I would say, mr. President , just be aware that the free market economy does exist in russia, in spite of the Business Climate and all the areas of improvement which we identify yearly. It does exist. Business. Ible to do you have freedom of doing business internationally. It is very important to bear in mind, it is a huge prerequisite of the Property Development for our country. What we see now, see a lot of talented russians, young russians. We have roughly 5 million millennials in the country. In 2030, we expect 35 million millennials, and the Market Opportunity creates an opportunity for them to flourish. Of why is mr. Putin afraid an opposition in the next election . If we have russian capitalism, why cant we have a more transparent Russian Election . Alexey i am very far from political. I am not prepared to answer this question. Tom that is fair. Alexey i do not feel that russians are really afraid of the opposition, the freedom of speech youd freedom of speech. One point two mr. Trump. I would also like to say to mr. Trump, mr. President , i would like to remind you about a very well known fact which unfortunately is ignored very often. Americans, million 500 million europeans, 50 million ukrainians, and 100 filion 150 million russians will live together on this planet, and it is up to us on whether we will help each other or hurt each other. Francine what is your take on the Steel Industry . Will it continue to recover . [indiscernible] the market is in good recovery right now. The chinese are quite good and cutting off capacities, optimizing production. I believe the future of steel is in a Value Creation for customers. ,hey are continuing to do this also embracing modern technologies. Digitalization is a big thing for us to show our customers to cut higher costs, and we have to continue the market quite conducive for this. I am moderately optimistic here it optimistic. Tom thank you for visiting with us. Much more coming up, particularly on the linkage of finance and economics and politics. Andence fink will join us Lloyd Blankfein of Goldman Sachs. From davos, this is bloomberg. David draghi gets interesting. The ecb is not expected to change monetary policy, but what will he say about the rapid rise in the euro . Christine lagarde one some clarity on u. S. Dollar policy. Treasury secretary Steve Mnuchin says he has been clear and consistent. President trump has landed in says he willhe bring investment back to the United States and tell leaders that America First is good for the world. Occam to bloomberg daybreak. I am david westin along with lisa abramowicz. Lisa lets get you caught up on the action across the board. S p futures up a little bit. Ftse sort of flat. The euro is weakening slightly before the key mario draghi speech. High, thehing another highest level since december 4, 2014. David we have time for a very short daybreak first