Transcripts For BLOOMBERG Bloomberg Surveillance 20200122

finance minister of saudi arabia and france. good afternoon, this is "bloomberg surveillance." into our davos coverage. -- turning into our davos coverage. we have great interviews. first, let's check on the markets. up as you look at u.s. equity futures, they are gaining a little traction. concrete steps to contain the deadly virus. this get to the bloomberg first word news. with the respiratory virus in china that is spreading, a hospitalized man was infected after a trip to china. the nation is starting nationwide screening. the cases in china have climbed to more than 400. nine other countries are confirming cases. the u.s. senate sets the rules for the impeachment trial and voted along the lines. it rejected bids to subpoena white house emails, but mitch mcconnell did agree to alter the timeline getting the prosecution and defense to make the cases rather than the initial two. governments cannot tackle climate change alone, according to blackrock's larry fink. he says it requires long-term planning, and he outlined a plan for blackrock. climate change is not going to be fixed by a central bank, and it will be fixed by an accommodation of public and private. >> global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. bloomberg. francine: thank you. let's kick off the show with a big interview from the middle east. my guest sits on the board of aramco, the world's most valued company. joining us now for exclusive interview is mohammed al-jadaan, minister of finance, saudi arabia. thank you so much for joining us. ordersay, $23 billion of , were you satisfied? .ohammed: we are satisfied saudi arabia has made it clear they are going through a strategy to the debt market. they showed clearly demand is high and healthy. we are pleased not only with this level of demand but the pricing. starts in the right way. what comes next? how much issuance can you expect? mohammed: we are considering dollars, but that will develop in the market. sentiment is positive. demand is positive. the numbers are improving. basically caching the successes. francine: when will you decide and what amount are you looking at? mohammed: internationally we are likely to go for more than $9 billion throughout the year. this will be through issuances. fundinglso talking to institutions to make sure we have our funding portfolio. francine: are you worried that will impact the real economy? governmentot at all, in aditures are reducing small way. it is about 30 billion saudi riel, a small amount. all the efficiencies over the past three years, and the private sector involvement. we have a lot of sector projects in infrastructure in the last years. francine: if you see a slowdown, could the government start spending quickly? mohammed: we are prepared. in 2017, we spent when we needed to spend. i am confident the economy is picking up. you have seen the third-quarter results. it is the highest in five years. oil gdp is growing the highest. we are confident the economy is picking up and we are seeing leading indicators say private sector confidence is back. pmi's at the highest in the last five years. francine: how much are you expecting the national development fund to spend domestically? mohammed: the national del valle and fund is mandated, their forecasts -- the national development fund is mandated. agriculture, tourism, we have a new fund for tourism. one of the sectors that is very promising. that is the national development fund. on mandate is to focus markets, they are investing in sectors that are newly opened, that requires large investment. we are investing internationally. do you expect an increase? asammed: we do not, it is planned. .e have the maximum will remain going forward. francine: if you look at saudi aramco, is it likely some of the commitments for dividends will increase compared to what was promised to shareholders? mohammed: it is a public company, i cannot comment on that, but they have made it clear they are committed for the next five years. depending on their cash flow, but i cannot comment on that. francine: are you looking at an international listing for saudi aramco? cards,d: it is in the but i do not think it will be anytime soon. francine: we had a story about phone hacking possibly by the crown prince of saudi arabia. what does that mean? does it hurt investor confidence ? you are the first saudi official we have spoken to. inammed: the embassy washington issued a statement last night saying clearly that this is absurd. they called for an open investigation so people know what happened. francine: what are investors asking? is there a problem of perception with saudi arabia? or are they focusing on the fundamentals? mohammed: i think investors are focusing on fundamentals. , and ae the growth growth in public licenses. the confidence is back in a strong way. focusing we are also on that and working with our challengersbe world and think about world solutions. see the: where do you world economy going? are we miss pricing a downturn, or are you confident the trend is here to stay? mohammed: obviously the economy goes through cycles, but i do not think there is any serious risk in 2020. i think it will be stable. withtle bit of growth trade tensions easing. that will give the markets a good kick to continue growth through the year. francine: thank you so much for joining us, mohammed al-jadaan, minister of finance, saudi arabia. coming up, plenty more from the world economic forum. in just over a week the u.k. will be out of the eu. we will have an exclusive interview with the chief executive of lloyd's. this is bloomberg. ♪ francine: economics, finance, politics, this is "bloomberg surveillance." let's get straight to the bloomberg business flash. buybackgin with a share of up to 6 billion euros launched by asml, europe's largest semiconductor maker. for both sales and profitability, 2020 will be another growth year. asml is an important supplier for samsung. says it 737 max will not be ready to fly till the middle of the eyar. -- the year. u.s. regulators will make the final decision when it flies again. for the first time, tesla's market value creeping above $100 billion. if they can sustain that level, it will trigger a massive payout for elon musk how much he would be eligible to receive the first payout performance award that could net him $350 million. that is your bloomberg business flash. francine: thank you so much. it is happening, in just over a week, the u.k. will be out of the european union. the services sector has been prepared. my next guest has the uk's biggest mortgage lender and one of the most established banking leaders. ,hank you for joining us antonio horta-osorio, ceo / exec. director, lloyds banking group. when you look at the challenges, brexit is over, we will be out of the eu come january 31. what does it mean for the u.k. economy? antonio: it is really important we finally have direction for the country. we have had clear election exiting and we are without a hard brexit. we have a transition period, and it is important for businesses and people to adapt. we have a clear sense of direction so the country can get to the best way to take this and whatn through, does the country want to be? what will be the role in the world? we have exciting times ahead of us. you expecting investment to come back? will your customers spend more and by more houses? what does it translate to? antonio: coming into the worlds inwe had two the u.k., families that were continuing to spend, employment was continuing to grow, and real wages were continuing to grow. that picture has not changed, we just have the latest results yesterday, and we have record unemployment level, 76% of people are working. that means close to 33 million , which is good for the economy. and real wages continue to be significantly higher than inflation. , we trustail sector supporting the economy that is continuing. where uncertainty was high coming into the election and confidence was going down, given we had clear results and a hard brexit is no longer a threat, now we have a working majority where the government can put through clear plans to prepare for the future. we are seeing confidence increasing, and that represents the shift on the corporate sector. there are a lot of uncertainties ahead in terms of the relationship with the eu, our largest trading partner. that is a positive inflection on the corporate sector. francine: what does it mean for the organization of lloyd's? does it change where you want to be strong? antonio: it does not really change our purpose, to help britain prosper. we are the largest commercial bank in the u.k., focused on the domestic economy and helping families, corporate's, that is what we do. this means we will continue to support our customers through this transition. we will lend 18 billion pounds to corporate's this year. we were ahead of target, and that is our purpose to help people in corporates go through this position and prosper. francine: when we spoke last time, we spent a big amount of interview talking about your technological investment. have they paid off enough, or do you need to spend more? antonio: absolutely they are paying off, we have the largest digital bank in the u.k., 10 users, around 20%. all these investors in digital where we have massively increased investment to 3 of the pounds, 40% previous plan. we have had good results, that is why we have not reduced investment in the face of brexit uncertainty. on the contrary, we have increased it. but why 20, our investment plans are just approving to go higher than the previous plan. we are happy, and i think this is a trend that will continue. people want more product, better products, cheaper. digital investments are not a one-off investment. francine: how would you grow the bank? to become bigger in asia? do you need to look at countries where you can grow and bring your brand there? antonio: our purpose is to help britain prosper. there is a huge segment of the market in the u.k. underserved of financial advice in terms of whichment and retirement, banks left many years ago. we have gone back to that segment in 2019 with a partnership with a great partner where we want to provide advice at a reasonable cost to consumers, which is a fragmented market, and where people need to think. a low interest rate environment is a growth area for us, together with the insurance business which has been doing well, and where we have market shares around 10%. francine: you are not expanding internationally? you could have clients to say, i want to go to china, and you can support them in that. would that make sense for you? antonio: our strategy is to help britain prosper. customers to export, and we have important targets as part of our help britain prosper plan. we do that with partnerships with strong local banks. francine: thank you so much, antonio horta-osorio, ceo / exec. director, lloyds banking group. i had to cut you off because we breaking news on coronavirus. hong kong has reported the first case. we will keep you up-to-date with that. this is something the world health organization was looking at globally to see if it is something they need to tackle. health officials are trying to figure out the spread of what we have seen, and what it means to try to contain it. we will have more on the coronavirus. this is bloomberg. ♪ will be a strong driver of content growth given -- francine: breaking news, more on the coronavirus outbreak. we have seen the first case in hong kong. here with market reaction is dani burger. dani: earlier in the asian trading hours, there was a rebound. stocks are up 1.3%. in active trading, european stocks are affected by this are starting to drop. travel and leisure are big ones, if travel takes a hit as the virus spreads especially into the chinese new year. luxury stocks as well. asset thate another takes a hit. according to goldman sachs, what we have seen in the past during the sars epidemic, oil could plunge 3%. this is a bloomberg commodity index, here is the sars outbreak, a 5% decline. goldman says jet fuel might see weakening demand, and that will hurt oil prices. that is where we will see lasting impact come from. burger.: thank you dani up next, we will talk all things tech and regulation. we will have a full focus on the u.s. and china, we have a number of ministers coming to talk about trade. and acus in davos is esg profit sustainability. this is bloomberg. ♪ francine: coronovirus concern -- the number of cases tops 440 and spreads to the u.s. and hong kong. the world health organization will decide today whether to declare the virus an international public health emergency. the streaming wars -- netflix is facing the toughest year in its history with new competition, but the company says it is ready. investors tune in to a solid quarter of results. and, davos, day two -- president trump has breakfast with american chief executives, including apple's tim cook. we bring you all of the action and our top interviews, including the finance minister of france. well, good morning. this is "bloomberg surveillance." let's get you up to speed with bloomberg first word news in new york city. we bring you breaking news on the first case of coronovirus in hong kong, following an affection -- an infection being confirmed in the u.s. nation is beginning nationwide screening in china. there are nine fatalities. the u.s. senate is setting the rules for the impeachment trial of president donald trump. it voted along party lines. it also rejected a bid to subpoena white house emails, but majority leader mitch mcconnell did agree to alter the timeline. he is giving both the prosecution and defense three days to make their cases rather than the initial two. valley not toxi use the situation in hong kong to tighten control. this is according to carrie lam. this despite months of protests. carrie lam speaking to us at the world economic forum in davos. >> the central government has time and again made it very clear that they want hong kong -- and i higha degree of autonomy. that was made clear to me by presidency asian paying on three diff -- president xi jinping on three occasions. finding investigators digital evidence it suggests that mohammad bin salman's message was likely breached. saudi arabia says the allegations are "absurd" and it is calling for an investigation. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, viviana hurtado. this is bloomberg. you so much,nk viviana. onare getting breaking news stock used to run the exchange. he was pretty instrumental, one of the first coming out at the time when he was at the london stock exchange, saying how many job losses the u.k. will go through in case of a hard brexit. that is a case we like to keep very closely. will step down as the chief executive of the hedge. currentlyons are quite high, particularly in the tech sector. that is according to the chief executive of barclays. he said vigilance is needed in the case of a correction. i do believe there is a sense that for the next 12 months at least, maybe 24 months, we are going to have economic growth. it may be slow, or slower in places like china and germany, but there is economic oath out there, so there is reason -- economic growth out there, so there is reason, that is reason to be more optimistic than business leaders were last year. the only issue is if we are wrong. chief executives optimistic enough that given trump came here without putting extra tariffs on europe, that they are ready to put money in capex? joe: if the labor market begins to put ever greater pressure on wages and supply chains get broken and productivity slips and you start to see inflation, we have a long way to go for the central banks to correct the monetary policy in case that happens. it looks like good news, we should all be happy, but if you start to see inflation rear its head, we have a lot of correction that needs to be done to get monetary policy in the right place. following up, what do you think is the one big risk that can upend the markets right now? joe: it is always hard to predict that, and generally we do get it wrong. what i have been in this industry for some 40 years now. it generally starts with credit somewhere. there is a lot of credit. university just raised a 100-year bond at an interest rate of 2.018. if credit is that available that you can borrow for 100 years at 2%, people may get overextended. if there is a shock to interest rates, there could be quite a correction. francine: you are worried that we are created bubbles? where do you see bubbles in the market? asset valuations are quite high. we have extraordinary valuations in tech sectors, particularly in large sectors in the u.s. when you have high interest rates, you will have asset bubbles. you want to ride that wave, but keep your eye wide open for when there is a correction. francine: is that where we will see the most volatility? joe: it depends upon who is on the other slate. i think that has a lot to it. i think the two trade deals announced last week are very important, phase one with china, a long way to go. i think that is indicative of travel particularly within an election year. now let's see what the u.k. does. let's see what the u.k. does, negotiating with the european union, and what the u.k. does negotiating with the u.s. government. that he has a very solid the activend i think push to get a trade deal done -- it is in everybody's interest to get that trade deal behind us. momentum at a lot of to the british economy. francine: that was the chief of the bark -- of barclays. bym delighted to be joined our next guest, the chairman of an energy giant. thank you. as always, forgiving your time. companies serious about sustainability, and what are they doing about emissions? >> for example, we already committed to be carbon neutral on scope one and two by 2030, doing energy efficiency, renewables, being very serious on that, and now we are talking we are committed to do it. we have re-approached it, we are disclosing this to our investors and have a are investors with us. it is a difficult thing, but we want to do in and want to do it very seriously. francine: how far away is the understanding of the third type of the missions, how that will be delivered? -- of emissions, how that will be delivered? there is a lot we are doing on risk management on the governance, on the metrics on scope three we have to understand how to do it, so we are a little bit far, but the commitment is there and we want to be a forerunner -- a front runner on this point. francine: it is difficult to know what we're talking about because people define things differently. we talk a lot about harmonization. what is more important, the new technology, something that would make your life easier, or is it just harmonizing the rules and definitions? emma: i think we need a lot of things. when you harmonization metrics. we need also clear signals from the government. -- we think that if we had a carbon price all over the world or even a carbon tax all over the world, this could help us in this transition. so metrics, a lot of investment in new technology, and a clear signal from the government that is not coming. francine: are gas markets oversupply globally? what does that mean for germany specifically? emma: we need to go in this direction and we still need to -- francine: if you look at the price of oil, the world economy, how difficult is it to see where oil goes, and what does that mean operational? emma: you mean in the world? francine: in the world -- it is such a big company. you have the oil price being dictated by shale. how does it change where you are invested? emma: of course, it is difficult. we need cooperation between all the different parts. what is good for the western countries probably is not -- we need something different from africa. in africa you have one billion people without access to energy, biomassion people using to cook. many different policies on that. the price stays more or less stable, but we really need to -- we really need a global agreement on how to go. we do not see it with what we see now. francine: when you look at trading houses for a lot of the products, they have come under massive scrutiny around the world. the trading part of your business? emma: we are still thinking about what i can tell you, the next strategy we will announce, important new commitment, but we are analyzing everything. when you have to do this, you have to look at all the sectors of your company, so we will have -- we will change everything, but we will announce it in february. francine: when you look at the eni, are yous of keeping it as it is come as it will be in three or four years, or do you see further moving around? emma: what i can tell you is, as you know, we have been the first all index company moving from a traditional refinery to a green refinery. we move with this because it is working very well. waste investing a lot in fuel, so using waste to produce bio and water, we are investing a lot on this. we will look at all of our different sectors and transform them to be, you know, more close to carbon neutral. but of course kicking our capacity to make cash flow, which is also very important. many, you are italian voice of business to the world. what do chief executives need today from their own government but also from the european union? ima: from the european union, am positive with this new commission, i feel some good points with the green new deal. we will have to extend what is it, but really it is good. the idea also to have a revision on the antitrust policy, europe is something good because we have to compete with big giants all over the world. be a strong voice for multilateralism and also for free trade. i like this, and i would like them to go on with this, and also having a strong industrial policy, where you say we want to have our industrial manufacturing very strong and competitive. from italy, of course, our gdp growth is not great. we are talking about 0.2, next year 0.6. of course, we have -- we are a big exporter, so trade is not going very well now because of the tariffs. we are also interested in germany, and german gdp growth -- what we ask to our government is to go back to investments, public and private investments are very down. we need to go back to having a lot of investment. gain a better and more public administration, and we want to relate to proper source on education and research and development, which is key. this is what i would like to ask to our government. francine: we hope your government is listening. emma marcegaglia. coming up, the prime minister of jordan, the french prime minister, the u.s. transportation secretary. and the chief executives of nestle, nocera, and coca-cola. this is davos 2020. ♪ >> given climate change -- issues have become more niche issues with fundamental value drivers. >> climate change is not going to be fixed by a central bank. it is going to be fixed by a combination of public and private. >> we want to invest in clean technology. >> for every major investment, we assess that the teams look at all the climate change risks. >> we do need a real breakthrough. this is no one company that is going to do this. francine: some of the top voices here at davos, talking about climate change, the year's clearly -- key issue about the forum. one thing we have to do today is look at bloomberg's green by bloomberg. we are upping our coverage on the business and politics of climate change, multiple speakers at davos have addressed the emergency of the situation. you will notice at the bottom of the screen, we are keeping track of how many soccer -- i can say ofcer -- football pitches forest are lost during the show. first of all, a fantastic product -- people should look on the website and see what it can add to the way the precision their portfolio. where the happy talk that is going on to show real action. where do you see the conversation going in a year from now? ? we heard from the video -- >> we heard from the video there is increased enthusiasm by some businesses, by some institutional investors to really take a closer look at climate change and to look at the financial risks that come from all of these things we are seeing coming down when we are looking at global warming, what are the real -- it is really interesting. one of them he's the news last year, when glencore was under tossure, investors agreed cap their coal production. that sent a real message about just how strong and how powerful this momentum is now to put pressure on companies to cut their in missions goals. but we are only at the beginning of this. when donald trump spoke yesterday to davos, that really highlighted that some companies, some banks are engaging with this. the argument has not yet been won. yesterday it was looked at this is sort of a greta versus trump kind of day. john: greta, with her incredible star power come has drawn a lot of attention to this, especially among young people around the world. we do sort of wondering, listening to trump's speech -- trump was talking about methods for growth at all cost, that we need to keep pushing on economic growth. you certainly wonder where is the davos consensus really? you have a lot of initiatives with companies like microsoft, a lot of companies really believe in this. but on the other hand, a lot of ceo's, most of them could probably -- would probably not isgn on to what greta asking for. deep down, trump's message, there is a lot of bombast, but he is probably speaking for a lot of ceo's as well when he puts the emphasis on growth over climate action. francine: to really make a difference, i know we have news about carbon technology, but we don't even have carbon pricing. what needs to come first? defining it or having the technology? john: carbon capture and carbon technology are the two big white elephants in the climate world. on the one hand we have not figured out how to put a price on carbon, and that is what happens with carbon technology, the idea that we can take carbon out of the smokestacks. but no one really knows how to do it. microsoft announced a $1 billion initiative yesterday to put research into it, but it is extremely expensive and no one has figured out how to do it at scale. solar, wind, battery technology, we have seen huge advances in the last 10 to 20 years. which is sparking a lot of the green revolution. carbon capture is one of the big ones that we have not figured out yet. francine: i have it here. i don't know if you can see it at home if you are watching on the trading floor. on the left, click and i mean, there are a lot of interactive things. it is all about data. , therehe data dashboard are eight different metrics. one of the messages of bloomberg green is that you cannot understand the climate crisis unless you understand two things -- science and data. when you dig into the data board, you will learn a lot about the carbon clock, increasing emissions, but one of our missions here is solutions. it is all about technology and politics, and there will be a huge focus on technology and there is a real time-live data point there. francine: the parts per million of co2 in the atmosphere is increasing as we speak. john: do not spend too much time looking at that one. if you want an optimistic view, one of the data points looks up in real time, live, what percentage of energy usage in ismany and the u.s. renewable. the trajectory is only going one way, but if you take a trillionrm view, $10 will be invested in renewable technology over the next 30 years. that is a huge business story, and the carbon mix is shifting toward renewables. francine: john, thank you. john fraher. go to the website and check it out. london builder berkley group is about to return one billion pounds to shareholders. more on that and the european stock movers coming up next, and this is bloomberg. ♪ francine: this is "bloomberg surveillance." in london is annmarie hordern. annmarie: i have a bunch of british names for you. one of them is berkeley group, one of the biggest gainers -- barclay group. they have amassed a huge project line that is under construction and they say those buildings and homes will such more. even on the surface, earnings looked quite well. they raised their forecast for sales. the holiday season was very well. ricardo t she, the creed the creative director. hong kong and protests are weighing on sales. and just thinking as well the fire us that the virus sweeping across asia. everything has exceeded inventory, francine. francine: annmarie hordern with the main stock movers. "bloomberg surveillance continues. in the next hour we will have more from the world economic forum in davos. we will have great conversation with the bosses of bp, all those -- also the chief executive of morgan stanley. this is bloomberg. ♪ --lue can be particularly person on the discount. francine: coronovirus concern -- the number of cases tops 440 and spreads to the u.s. and hong kong. the world health organization will decide today whether to declare the virus an international public health emergency. the streaming wars -- netflix is facing the toughest year in its history with new competition, but the company says it is ready. investors tune in to a solid quarter of results. and, davos, day two -- president trump has breakfast with american chief executives, including apple's tim cook. we bring you all of the action and analysis of this year's world economic forum. well, good morning, good afternoon, good evening, i'm francine lacqua in london. tom keene will be joining me shortly. withteresting panel newsmakers. you thejoin me to conversation with newsmakers about the world economy and the push to sustainability. it is another mega day with interviews in davos. do not miss our conversations with the prime minister of jordan, the french finest minister, -- the french finance minister. we also speak with the chief executives of nestle, nokia, and coca-cola. onlways like to keep an eye michael langer and the news that he is breaking on the panel right here. there he is, tom keene in conversation with ken rogoff and ann richards and what that means for banks in the long run. let's get to the bloomberg first word news a new york city. here is viviana hurtado. viviana: i also like to keep an eye on my anchors. after a 12 hour session, a vote senate, the senate sets rules for president donald trump's impeachment trial. mitch mcconnell holding to his plan to put off calling more witnesses. all 53 republicans voted against changes proposed by democratic leader chuck schumer. also this morning, confirmed cases of the deadly respiratory viruses have stretched to half a dozen or so locations outside mainland china. including the u.s. and hong kong. china is trying to contain the outbreak. the death toll has increased to nine. the fear is that it spreads to hundreds of millions of chinese travelers during the upcoming holiday. the corning to people from an analysis of the breach, investing finding evidence the prince's message led to hacking. call thes allegations absurd and they want an investigation. netflix says they are ready for the competition. apple, at&t comcast, and disney are all entering the streaming video market. netflix is working to keep customers loyal with a flood of shows and movies. the company plans to increase spending this year by 20%. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, viviana hurtado. this is bloomberg. francine? francine: thank you so much, viviana. president macron and president trump have agreed to a truce over texas. is the agreement lasting or delaying an in -- over taxes. is the agreement lasting or delaying an inevitability? thank you for joining us. how would you describe the current relationship between europe, france, and the u.s.? >> i think that, due to a very good relationship between president trump and president macron, we are in a good mood for negotiating and trying to find a compromise between the u.s. and france, between the u.s. and europe. i think that the choice is quite clear. i know that we go the way of having many national taxes anywhere in the world. especially in europe. you already have the french national taxation on digital activities, but you also have the british, the italian, the spanish, the austrian thinking about that possibility were having also decided the national taxation. the way of an international solution. i think this is in the interest of both the united states and europe to pave the way for compromise, to decide about international digital taxation by the end of 2020. because it will be far more efficient and it will be fairer. francine: do you think you will get an additional tax revolution , and agreement, this afternoon? and will that avoided trade war? oreither get an agreement, it will be a tough environment between the e.u. and the u.s. bruno: we are working on an agreement with steven mnuchin peered we have an excellent relationship with steven mnuchin, and i hope we can get a compromise in a few hours, because entering a trade war between the u.s. and europe would be foolish. it would be stupid from an economic point of view. everyone is trying to make a move in the direction of the other for the sake of finding a compromise, working on an international solution, and avoiding a trade war. no one wants a trade war between the u.s. and europe. to aine: has france agreed digital text by the end of the year? companies, the european or chinese ones, have to prepay in april and november 2020. we are ready to postpone the prepayment of april and november till the end of the year, with the view of finding an international solution. is there an international solution at the end of 2020? in that case, we would get rid of taxation and we would place the international taxation by the international solution. francine: is this to avoid tariffs that president trump said he would put on the european union and france? bruno: we have not decided to withdraw taxation. it would be the case if we decided to withdraw taxation. we have just decided to postpone not -- postpone the prepayment in april and november, postponing them until the end of december. clearly the purpose of having an international solution by the end of 2020. you can see that this is a fair compromise. this is a move in the direction of the u.s. concern, and this paves the way for a compromise ocd level. we would have one signal -- single taxation on all these activities instead of having many national taxation's all over the world. francine: what will it take for the u.s. to tax their companies, their tech companies early? to make clear to our american friends that the national french taxation is not against the u.s. companies, it is taxation on digital activities because the digital companies are making huge profits and seeing less taxes. -- and paying less taxes. nobody can accept that. europeancompanies, ones, and chinese ones -- this is not a discriminating option. francine: do all countries in europe need to spend more fiscally to get us out of this growth but slow growth that we are seeing, for the trend to really take off? bruno: slow growth and a ,lowdown in the euros own ofody can be satisfied with around 1.2. this is not enough. it is not enough to fight against climate change. it is not enough to ensure prosperity for our citizens and to create new jobs. so once again, i am calling to support the monetary policy by a ine ambitious fiscal policy all the countries that have the fiscal faith to do so. times i have had a -- asking germany to spend more money because they do have the fiscal space. veryfrance is taking difficult decisions to improve its economic situation and to improve its economic model, i think that also is a fair and balanced deal. on the one hand, those that have the fiscal space should invest more. and france has to introduce strong reforms and we are going to introduce very strong reforms. francine: when you speak to german officials, they say we are already doing a lot in green bonds, so they feel at this point they have done enough. bruno: i fully recognize that they have done more and i take that into account. the german government has decided to spend some more money , and i am deeply convinced that it would be better for growth with germany and better growth for the euros own. we are not talking with the ceo's of german companies peered i think the ceo's, many of them, are waiting also for more investment from the german government. francine: when you look at europe and france, and a lot of international investors will get the strikes that are going on. once the pension reform is 100% dealt with, what comes next? france is not ready to be fully reformed. worried.am not i think we are on the right track. we are facing difficulties, but we are facing difficulties because we are introducing strong reforms. we have already reformed the taxation and france with a total of the whole of the french taxation system for the sake of having more money for innovation and investment. we have also introduced important reform on the labor market, and now it is time to a full reform of the french pension system. we will stick to that reform and stick to that willingness because this is a matter of justice. you know, n.l. reform, all the people that are -- in our reform, all the people that are paid have less pensions. we are facing social difficulties, we are facing strikes, but, you know, we will to convince the french people, but this reform is fair and necessary. francine: can france benefit from brexit? retraction ofa talent? bruno: france is already benefiting from its reforms. we have one of the best levels of growth. we are quitting jobs. this is a very good reason, taken by emmanuel macron. as far as the brexit is concerned, we want to keep a strong and positive relationship with u.k., with the decision by the u.k. to go out of the e.u. what on one very specific point, finance, for strategy purpose, is to become within the euros on the first financial center. we want to be very attractive, and when you are looking at the last decision of many important banks, like jp morgan, the fact that they are putting some new morgan, it isjp very good news for france. francine: what if the u.k. do not follow the european regulation? if you have huge competition -- bruno: rules are rules, and i have been explaining that. we have once again a very good relationship. we want to meet in a positive manner,- in a positive between the u.k. and europe, but everyone can understand that the single markets rules will remain the single markets rules. we do not want to make any kind of decision that would jeopardize or weaken the rules of the single markets. francine: thank you for your analysis. we will talk more about what europe needs to kickstart this economy. we will also talk about the investment that may be coming from elsewhere. in the meantime, tom keene hosting a panel on negative interest rates. an interesting conversation that a lot of making chief executive's will be listening in. ands listen to tom keene, richards, and ken rogoff. tom: for that matter, japan to escape for decades. >> it is very difficult to get out of this situation. the danger with what we are discussing here is not having sessiontary risk if the happens and losing that, too. i am not the ultimate expert, but i don't see nominal rates in europe going up in any significant way anytime soon. ♪ francine: welcome back, everybody. i am francine lacqua at the world economic forum in davos, 2020. we had a great conversation with the french finance minister, bruno le maire. we were talking about tariffs and also germany, whether they will spend more fiscally to maybe kickstart and jumpstart the european growth. we continue our conversation with the minister. when you look at the things that we have talked about in davos, it is a lot about sustainable investment. we had a new commission ,resident, ursula von der leyen talking about the green new deal. are you worried there is not enough money being put into this? bruno: i think it is not a question of money. i think that the right decision at the right time -- this is not the question of money. bank investments. we have decided to transform the european bank of investments. fight against climate change. and we have a lot of money on to fight against climate change and investment in renewable energy. now it is a question of willingness, of political willingness, to make the right decisions, to invest more, to have also. also -- to also have support for green decisions and fighting against climate change. francine: france was really ahead of that. one of the spearheaders in -- in tacklinge climate change. goodwillrry that the on climate change will be thrown out the window? is -- there is no issue about climate change and nothing has been done. i think there is a possible third way, and the possible third way should be opened by europe and by the new green deal presented by ursula von der leyen. i mean the process that would change our behaviors, change the way we are living in our societies, changing investment, changing the finance, changing also the capitalism as a whole to have a sustainable economic model. i really believe that between greta thunberg and donald trump, there is a way for the european way of thinking about climate change, and that is exactly what emmanuel macron has been proposing for many years, and i hope that we will be successful because the right level is europe. let's take the example of a electric car batteries. we all support that idea and we are aware that it is better to electric.with it would have been totally impossible to put that in place without having the european process and support. aancine: will europe find harmonized way of defining? at the moment we have a leg which problem at defining what is sustainable and what is not come and we don't even have a price for carbon. not, and we don't even have a price for carbon. that: we need to make sure it is taxed at the right level, to awise we will reduce suitable level in the borders of ofope, but this question including the mechanism at the open borders is absolutely key. that is the second point. the third one is to have more transparency, more information about the investments that can be considered as green investment. we do not want any kind of -- we want clean, effective, green investments, and that key of transparency is key to ensure that we are right. francine: how is the relation between japan and france, with what we saw last month with carlos ghosn's escape? been: president macron has on many state visits to japan, -- they willingness to reinforce the alliance renaultnissan and remains the same. we want to have the alliance being one of the best automotive industries in the world. i think that we are on the right direction, and we will stick to that strategy. as a ministero me of economics and finance is to have the alliance being successful. that is it. francine: thank you so much for your time today. that was the french finance minister, bruno le maire. we will focus on more sustainability with the banking sector. this is bloomberg. ♪ dani: i have a data check with the latest assets affected by the virus outbreak in china. the latest we heard, a hong kong case was reported there, according to cable tv. you can see the hong kong close, it ended up rebounding. today might be a different story once the index opens up again. looking at the european markets affected, travel and leisure, luxury goods, they are bouncing back to it initially we had a knee-jerk reaction that saw these falls as much as .2%. crude is falling, according to goldman sachs, if we get a sars repeat, oil could fall by as much as three dollars, prompted by weighing to that -- by waning demand for jet fuel. who later will decide whether international an health emergency, so that certainly might change. more "surveillance" live from davos, coming up. ♪ good morning! oh no, here comes the neighbor probably to brag about how amazing his xfinity customer service is. i'm mike, i'm so busy. good thing xfinity has two-hour appointment windows. they have night and weekend appointments too. he's here. bill? karolyn? nope! no, just a couple of rocks. download the my account app to manage your appointments making today's xfinity customer service simple, easy, awesome. i'll pass. ♪ this is bloomberg "surveillance," tom and francine at the world economic forum in davos. tom just got back. with annesation richards and ken rogoff on negative rates, what was the verdict? tom: for global wall street and for those in london, it was ken rogoff surrounded by the long fidelity andhes of the short-term of citigroup trying to keep it going. you had dynamic answers as to what to do about negative interest rates. and il be live-streamed will put it out on social. it was extraordinary. francine: let's get straight to the bloomberg first word news. viviana: we begin with the first day of president donald trump's impeachment trial that ended early this morning and last 12 hours -- lasted 12 hours. they stuck with senate majority leader mitch mcconnell plan to put off calling more witnesses. the trial could end as soon as next week. the republican majority is all but certain to acquit. u.s. officials and to expand screenings at u.s. airports after authorities confirmed a washington state man confirmed -- contracted the virus. he was in the chinese province where the outbreak began. not thatand china have a timetable for the next phase of trade negotiations. according to a chinese official, the focus is now implementing the phase one deal. to start the next round of talks, president trump said he would travel to beijing but no date was announced. of seek u.s. is stepping down -- cqs is stepping down. the abrupt departure coming as it grows its asset under management. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. francine: thank you so much. a greatelighted to have conversation about the future of the u.k. and trade, brexit, and u.s.-china and how it will affect world growth. almost january 31. we are delighted to be joined by carolyn fairburn and also joining us, vivian hunt. -- carolyn fairbairn and also joining us, vivian hunt. i am not sure where we are on brexit. the u.k. the give trade deal it wants? carolyn: discussions are ongoing and we can do more on trade with the u.s. this time last year, it is always a good point to take stock, there was so much uncertainty around brexit. has been a lifting of some uncertainty and right now it will be about the trade deals and how we get trade deals that work for the economy, that really work in terms of everything. francine: what are you focused on? how much are the conversations about getting things done and focusing on the right things to do, and how much is the world economy which frankly this group often gets wrong? vivian: there is no question the geopolitical environment from the perspective of our u.k. based clients are very clear and they are focused on how they continue to invest in an environment that drives high returns. both optimism and pragmatism about the u.k. environment, now that the timetable toward negotiation with european optimism that as the president from we will hear tomorrow the chancellor, and openness to investing. i chaired the british-american business council and members are optimistic that britain and its major partners are open for business. francine: what do businesses in the u.k. need from boris johnson? we need to go to the conference center below us. we understand president trump is on the move and will address reporters shortly. tom: here is the president. mr. trump: we are working on the military, isis. we have a whole host of very difficult things to discuss and some very positive things also. we have been friends and the relationship is very good and i want to thank you very much. >> it is an important opportunity to make president trump to talk about things in our neighborhood. ande are challenging times i look for fruitful and candid conversation with the president. we have had an enduring the unitedp in states has been a partner to iraq. i believe you and i share the same mission of a stable iraq and peace. mr. trump: thank you very much. >> what is the plan for the u.s. and iraq? mr. trump: we are talking about a lot of different things. andike what they are doing i will only speak for my administration. we have a very good relationship , and we are down to a very low number, down to 5000, historically low. >> are you still considering sanctions against iraq? mr. trump: we will see what happens. >> we have a lot of common interests, to fight against extremism, a sovereign iraq that , and friends with the united states. mr. trump: we are involved with them in their oil business and that has always been important from their standpoint and from our standpoint, so we have a lot of positive things to talk about. we are down to a low number and we have been there for quite a while. we will make a determination. thank you all very much. thank you. president of the united states, careful comments on a rock, and we will have much more on this -- iraq, much more on this. we continue with carolyn fairbairn and vivian hunt is with us. i am told we are going back to the president who continues. mr. trump: i will see you in a little while. it is pretty good, i will tell you. go, with color to the screen. progress --ith professor rogoff and it is interesting the change in the buzz versus years ago. we are anticipating a widely anticipated press conference, as the president comes a bit distracted. francine: distracted is a good word. he did confirm he will give a press conference that we think may be today. it may be delayed. it was interesting to walk around the conference center after the inaugural speech, at the time the impeachment trial has started. tom: should we go back to our guests? i am the foreigner in london. how many people do you have in london? vivian: london is one of our larger offices and we have just under 2000. and the0 smart people only job they have is to say to the remain industry, pick up the pieces. what is the best opportunity to move forward? vivian: the days of labels like leave and remain our past us. most businesses are focused on modernizing their business through digital and analytics transformation. brings on a ceos mind, their u.k. business forward. the impact of technology is issue number one. there will be a wide range of scenarios from the trade negotiations come forward, but we have a timeframe and that is a more certain planning environment. a lot of businesses are more optimistic. francine: is it about chief executives wanting to grow or about the fear of getting disrupted? i can imagine the mental frame would be two different approaches. vivian: both things are true so you have to figure out how to i continue to drive the earnings and at the same time modernize fast enough to deal with the competitive environment we are in relative to asia and alternatives? u.k., quite ahe lot of power. when we get a trade deal, do you see animal spirits picking up? carolyn: i really do. it is interesting, the appetite now for getting back to the issues that count. strongly --ome back the conversation has gone right back to that and we have seen investment continuing and productivity intact. -- you tech. -- in tech. now they want productivity and action because we have been in gridlock. if that is the real opportunity we have got, some of the uncertainty is lifted. francine: do they worry about the trade relationship the u.k. and you will have? does the prime minister know what he wants? carolyn: they do worry about aboutbut vivian's point -- how can we work with the government to get the best possible deal? there will be a balance of diversions and alignment. yes, they are thinking about it, but it is amazing how much they are wanting to move on with it now and think about other issues. tom: prime minister johnson wants to sell to the north to perpetuate his government. for fiscal best way government and business investment to sustain jobs? what is the best action plan for him to do that? carolyn: the biggest drivers of invest ability in the north are skills and construction. his commitment around schools, we have a patchy school environment. caseges, making a strong for the north to do business. a lot of businesses are interested in moving and investing. that case is made loudly and clearly, and it is the first place he went after he won the election, to the north. tom: thank you so much, really appreciate it with your comments . we are going to continue, ursula von der leyen delivering a special address. let's listen in. >> you want to be the world's first climate neutral continent by 2050 and will do whatever it takes to unlock the investment, the innovation, and the creativity that is needed. decade, thet european budget will mobilize one trillion euros of invest. it is going to be european money, national cofinancing ♪ you are watching bloomberg's "surveillance." we begin with the british grocer, ceo mike koop is stepping down and will be replaced by simon roberts. the move coming a year after sainsbury's purchase of walmart collapsed. withhave struggled discount providers. over $100 billion, a threshold that will issue a huge payoff for elon musk if he can sustain. he would be worth about $346 million. problems for boeing with the troubled 737 max, the plane will not be cleared to fly until the middle of this year, six months later than previously anticipated. there was a software flaw that would require more work and an audit found some wiring problems. that is your bloomberg business flash. tom: thank you so much, greatly appreciated. it has become an annual visit at davos i am going to say -- davos. the president is scheduled to hour in the new york 6:00 but i'm told that may be delayed because elaine chao has to get back. thank you for joining us. we have a three hour conversation we will cram in. we will speak on your timeline. you are the great voice. boeing, theioning reality i and all americans saw, major u.s. newspaper, small little article, i will pick on american airlines, the flight attendants are afraid to get on a 737 max. it because they did not realize that emotion in that newspaper? sec. chao: our concern at the department of transportation's safety. safety is number one. when this plane was grounded on march 13, the faa is a databased organization, and their data showed that it was necessary to ground that plane. to restore un-grounding rights to this plane requires a great deal of preparation. for us at the department of transportation and the faa, there is no timetable. the first and foremost concern is safety. what you mentioned is very important. if the consuming public, if the passenger does not have confidence in this plane, they will not go on the plane. let me just finish. tom: see how she is doing this? continue. sec. chao: this is important. this needs to be a collaborative effort. we are working with international aviation authorities. if other aviation authorities don't have the confidence and don't allow the boeing 737s to .ly, we cannot fly tom: did boeing misjudge the american public? sec. chao: i think it is always important to understand your customer. again, i am just going to say from our point of view, safety is number one. there is no timetable. we want this plane to be safe and the issue is safety. sayinge: we have the faa the plane will be ready to fly. sec. chao: the faa has never said that. we have a new faa administrator who has just come on board august 12 of this year. he is a very experienced pilot and he ran aviation operations for major airlines. francine: let me rephrase. there are countries who came out and said if the faa says this plane can fly, they may not follow suit. have the faa lost credibility? sec. chao: i hope not. the faa worked very hard to remain the gold standard of aviation safety. the faa has traditions as a leader and through its practices, lifted up the record and standard for aviation safety throughout the world. they are very cognizant of their leadership role, and we want to we meaning the u.s. department of transportation and faa, want to work with our international partners because their trust is critical. francine: has the faa become too deferential to manufacturers? sec. chao: i don't think so. if you look at the emails that have come out, quite disturbing, quite uncomplimentary, they show a derisive factor, a disdain for the regulators. tom: i don't want to talk about the dinner table of the senate majority leader, but what you are hearing from our legislators about giving up the great american franchise of engineering, which is boeing, whether they should have moved she chicago. -- chicago. are we at risk of losing trust to airbus? sec. chao: absolutely not. most airliners would like to have one -- more than one airline manufacturer, number one. fullr two, airbus has a backlog of orders. you would have to wait for years. the backlog -- four years. the backlog is extensive. we are working with the aviation authorities and communities. chao toant secretary make sure we never get rid of the boeing 730. maxcine: how close the 737 -- when a bullet be cleared to fly again? -- when will it be cleared to fly again? making anywe are not timetables because safety is number one, and the families of those who lost loved ones deserve that. francine: have you spoken to elon musk about his projects? sec. chao: i have talked to him about many other projects. he is interesting. he talked about flying cars. he is so pressured and so prescient and so farsighted, he is talking about a vision i cannot imagine. the hyperloop is very important. tom: we are going to come back and talk about so many important topics. we will go to break, and i want to come back and talk about transportation, the railroads, and what we see in china. she is secretary chao and she continues with us. this is bloomberg. ♪ , thegood morning, everyone meetings of the world economic forum. we welcome all of you worldwide. we speak to the u.s. secretary of transportation, elaine chao, addressing the immediate issues of boeing. she has been on does articulate. does articulate. -- articulate. front and center is innovation. francine: innovation is something we focus on. what is regulation and where are we in terms of regulation to make sure innovation is safe? sec. chao: the department in conjunction with the white house came out with a new document the avsically harmonizes philosophy and approach, and what the government role should be across 38 different federal agencies. if you are an innovator, you will have to deal with 38 different agencies, so this document ,av 4.0 harmonizes all onthat and we will focus safety, security, consistent regulation, and innovation. francine: well this innovation come quicker than we think? sec. chao: i think a lot of people thought it would come faster, but there is hesitancy on the part of passengers, so this will continue. consumer acceptance will be the constraint. tom: to me, the constraint is insurance. sec. chao: i think insurance will be ok because it is handled on a state-by-state level. insurance companies understand these are issues they have got to deal with so i think they will be prepared. tom: secretary chao, thank you so much for joining us at davos. francine: we are expecting president trump to talk to reporters in davos. we have many reporters from around the world and it will be interesting to see some of the questioning. we have a camera that follows president trump around the conference center and he spoke about 20 minutes ago with the iraqi president and he spoke about trade yesterday. we are tracking the president. this is bloomberg. ♪ ♪ tom: good morning, everyone, from davos, switzerland, the 50th meetings of the world economic forum. maybe because of the topic of global warming and climate change. good morning in the early united states morning. i just did a panel and usually it is packed. it was not packed because somebody else in davos was doing his panel. francine: the u.s. president. we had a great conversation looking at negative rates and what that means for banking. i had a spirited conversation with the finance minister of france and we were talking about a digital tax, is europe giving a deal to the u.s. so that the u.s. does not impose tariffs? with steveng mnuchin later on to find a path forward. tom: a magical part of the day at 6:00 a.m. in new york. going backchurch many centuries, the bells ringing in the background. there are any number of moments, including the presidential press conference coming up. ursula von der leyen giving a press conference. tell us about the e.u. commission president and who is she speaking to. francine: she is speaking to a lot of constituents. she has the member states of the e.u., china, the u.s. we spoke to her on monday and she said on tariffs, they have been allies of the u.s. but they need to make sure there are no longer trade wars. let's get straight to new york city to the bloomberg first word news. session after a 12 hour , the u.s. senate cleared the path for a more relaxed timeline as the senate set the rules for donald trump's impeachment trial. mitch mcconnell holding to his plan to hold off calling witnesses. morning, confirmed cases of the deadly coronavirus have stretched to a half dozen locations outside mainland china including the u.s. and hong kong. china is trying to contain the virus outbreak. the death toll has increased to nine. the fear is that the disease will spread. hundreds of thousands of chinese travel during the lunar new year holiday. hacked.os's phone was that is according to people familiar with an analysis of the breach. message led to the hacking. the saudis calling this absurd. netflix says they are ready for competition. keepix is working to customers loyal with a flood of shows and movies. they plan to boost spending by 20%. for the fourth quarter, netflix deliver generally upbeat results. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thank you so much. day,s been an interesting speaking to trump administration officials, elaine chao just with us, a spirited conversation on boeing. we spoke to the national economic council director lawrence kudlow on trade. phase one is about breaking down trade barriers. that is a market oriented approach. if we can get those exports in the next year and year after that, that is a big growth factor for the united states. tom: an important part of the discussion on not the imports coming in, but the exports going out. a conversation with our colleague jon ferro. on the exports going out, he is a gentleman in davos who is not visible. they are a private company and as i always have to do, we have to describe cargo, because it is gail --ible -- kerr explain the scope and scale of the export business you do. david: we deal with farmers and buy their corn and soybeans and wheat for domestic consumption or somewhere else. we are an exporter of soybeans from the american midwest, so an important part of our agricultural supply chain. tom: you have a pulse on this. i think warren buffett would listen to you. how many empty railcars are there because the president messed this up trying to get back to a phase one trade deal? dave: they are not necessarily empty, they are just still in the yard. tom: excuse me, they are full but they are sitting there. dave: they are not moving, and as i listened to mr. kudlow, it is a good first step -- step china and the u.s. -- step. china and the u.s. have talked but the tariffs are still in place so i'm still concerned about the farmer and the ag economy. francine: what do you worry about, that this will never come to for russian? does that mean a fate -- fruition? does that mean a phase two deal will not come about? dave: i am waiting for specifics on what the chinese will buy. it is still short on details so until i can see it, we can stay cautiously optimistic. francine: will china stick to its part of the deal? dave: i choose to assume they will. they have not articulated that one of the mechanisms for enforcement is something if either party were not to stick to it. tom: last week, china was a currency manipulator. his switzerland a currency manipulator? -- is switzerland a currency manipulator? a currency manipulator? i say that in just. -- jest. who is manipulating who? dave: we do nothing with regards to manipulation of anything, let alone currency. tom: there is a feeling of so many americans that there is a game going on. dave: i think our perspective is that markets take care of himself. we are not smart enough to hedge currency exposure and we have enough of a diversified portfolio between countries, so in over 70 countries worldwide, all kinds of commodities which are dollar based, and there tends to be a national -- natural hedge. tom: i look at the public disasters, the initial public offering of cargill public would be a glorious thing. can we look for that in 2020? dave: no, because our shareholders are proud of their company. we are seventh generation and have been family owned since 1865, coming up on 165 years. they are very invested in the company emotionally and financially. francine: will you divest? dynamic, wertfolio are always looking for new opportunities. food, consumption is changing quick the so we will always continue to add and subtract from the portfolio. tom: i will editorialize and suggest to my family from the midwest, it is a visceral thing about the heritage of the northern midwest. it is visceral. dave maclennan, thank you so much, the chief executive officer of cargill. for aent trump, we await press conference, delicate things to be discussed. this is bloomberg. ♪ ♪ the biggest risk for markets are two types of things, one is u.s. domestic politics and the second is the black swan effects that can happen. >> it wouldn't be a surprise if we saw markets that tax during 2020 -- market setbacks during 2020. >> what could derail the markets would be a dramatic change in monetary policy or external event that could trigger disruption. >> we just had an incident in iraq. i was watching television. almost everyone was declaring world war iii starting. >> i have one concern, which is iraq. >> the more divide you have, not just in the u.s. but around the world and political parties, the more uncertainty you have. >> does not feel like the pieces are in place for a substantial market correction. francine: some of the big names that we have been talking to at the world economic forum, davos 2020, tom and francine. it was expected a little bit, certainly within circles of the insiders of the government, the italian foreign minister has quit as the leader of the five-star party. buto not have confirmation, we were hearing rumors to start with. this means they will probably look for another leader. the coalition, which was always quite uneasy, has in the last had some months really stumbling blocks. the foreign minister has come among scrutiny and even attacks for things in the past. quitting reshapes the dynamics. tom: the headline is perfect. the fragility of this coalition, is there any guidance with all your years of expertise, any guidance toward government stability in italy? francine: i don't even know if italy could function with government stability. the italians have had 60 governments over the last 54 whether the right cartels to the left. tom: we await the president of the united states. coeure, one of the great minds of france. a tour of duty on the ecb and he ur full daysor fo is -- bif.f it it is the central bank to the central bankers and he is taking on innovation. .hat is a squishy name what is the task of innovation? benoit: i am very glad to be here with you today. innovation has been a theme in davos for years, but this year, a lot about innovation and how it can improve financial market. that discussion in the private sector, it should, and is migrating to the public sector. it is new and exciting, and the bif wants to leave that discussion on how innovation can improve the way we do policy, and may the way we issue money. francine: you are helping design the future of finance. where does one start and all of this? benoit: it is not a new task. boardnancial stability has been focusing on fintech and how it changes the structure of global central markets. in the central banking community, we have seen upgrading of systems and have been moving to real-time. our next steps are how this will change the phase of money, the discussion on digital currency, and how big data, machine learning, artificial intelligence can help do our job. tom: can the politicians get on board? i just did a panel with ken rogoff. the idea of fintech and cashless societies, where are we in the continuum of a few getting out front on this? do you sense the politicians wanting to catch up with the courage of sweden? benoit: they have been spurred by private-sector innovation, so the libra discussion which has many facets, has been a wake-up call. there is an understanding we need to get our act together and decide what we want to do and how to do it. this will go in different spaces, so don't expect it to happen the same way as the ecb, etc.. that is essentially a political discussion. at the end, we send it back to politicians to decide. francine: the g7 presented a report to guide regulators and technology but libra has been declared a failure, and there is less public debate. has it moved the question of urgency away? benoit: there are lots of good aspects of libra, but we want to leverage and it is up to them to come back to us and address our concerns. where do you see the biggest advantage? benoit: it is about having a tech knology that could surpass borders and cut costs, and improve speed of cross-border payments, which everyone agrees are too slow. the top priority for the global bdcunity is not about see -- cbdc. it will come in due course. increaseity is to cross-border transactions. it is a matter of growth for the economy. tom: you cannot speak about ecb policy, but broaden the conversation to innovation in europe. there is a conversation in europe about why they cannot have the same tone that we have in america. i will go to france talking about jumpstarting french innovation. how do we get an innovation spirit in europe akin to what we see in entrepreneurial america? benoit: it is happening. if you focus on fintech, it is very lively in berlin and paris. that we need to reconnect us with the top priority of the european commission and the european council. i am sure they will be leaving it. innovation has to get to the core of priorities. francine: experiments in central banks, bitcoin and digital currencies, is there a fear that your that's left behind? -- europe gets left behind? benoit: we want to make sure -- we want to make sure there is no more fragmentation. we want to avoid a new discussion. francine: what if china were to be the global benchmark? -- is: is that a concern not a concern and how do you address that? benoit: china is a benchmark. we will see what is good and what can be used for good purposes outside of china. i am sure they will be doing it as well. we want to make sure whatever is done is done in a consistent way. tom: away from monetary policy and theory, i must ask your thoughts on a new non-multilateral world. what is the urgency to get people at davos back to a multilateral structure? can we survive or do we need to get back to what we knew? asoit: from my background former g20 deputy and formal central banker, we need a set of framework. i don't think it is coming back and that is a matter of concern. i see quite a lot of complacency about trade in davos it is less of an issue -- davos. it is less of an issue this year than it was last year. coming from you see emerging markets a thirst for displacing the dollar as international reserve currency, or a possibility that stable coin could replace it? benoit: i don't think stable coins will replace the dollar. it is good for improvement and payments but it will never be a currency. currencies have to be public and adopted by a central banker and governors. tom: did i behave myself? francine: pretty much. tom: nothing on negative interest rates. benoit: thank you for that. francine: president trump due to have -- hold a press conference before departing davos. the timing is fluted, but we have a camera tracking the president's movement. this is bloomberg. ♪ ♪ timentral government has and again made it clear they want hong kong to succeed under one country, two systems and a high degree of autonomy. that was made very clear to me by president xi jinping on three occasions when i met him. tom: in the evening of yesterday, carrie lam of hong kong, and exceptionally interesting and delicate interview with our haslinda amin. did a superblinda job of tiptoeing through all that we have seen and felt about hong kong. francine: and she actually got news. it is a great interview, one of my highlights. go back and watch it. idea of what it is like to be chief executive hong kong given all we have seen on the streets since last june. in davos, oil chiefs are debating tougher cuts as pressures are mounting, not only from the financial sector, but from people protesting in the street. tom: we await the president of the united states. stay with us from davos this is bloomberg -- davos. this is bloomberg. ♪ ♪ these issues have moved swiftly from the corporate social responsibility issues to fundamental value drivers i think we are seeing -- drivers. i think we are seeing a fundamental reshaping of the financial system. francine: mark speaking about climate change, the governor -- mark carney speaking about climate change, the governor of the bank of england doing a lot. if you capture harmonization and can define what we are talking about, that is helpful for financial institutions. to talk about all of this, the way the world will go in the next five years, is a man who is our boss, john mickelthwait. i had to mention it because it is always high risk so viewers tune in more. congratulations on bloomberg green, a new vertical. i don't know if people can see it because of the reflection of the light. this is the new thing bloomberg has done. why the need for this? john: last march i was looking at the different things that happened around the world and whenever you have a big geopolitical shift, you have a media brand that is somehow associated. a big cultural or geopolitical shift. you look at climate change, you have a lot of great journalism but you do not have anybody that covers all the aspects of it around the world, partly because it is so difficult. what happens in the arctic effects silicon valley affects places like the margot robbie as well -- other places as well. we have to look at tech. we will not shy away from the terrible numbers about what is happening to the planet and what man is doing to the planet. there is increasingly a big about, people changing their behavior. davos,junk condition at no question things have changed. you can say this with a group of worldwide,eporters the wildfires in australia, the heat in milan, this ice moving assess a jump condition? john: you look at coming into davos, yesterday we had a they camelunch, and in with big letters saying, we are going to change behavior. a billion dollars for microsoft going into a fund and promising to be carbon negative by 20 -- and paying for all the costs of what microsoft has done to the environment, blackrock doing the same thing. on the corporate side there is a change partly being driven by the people they want to hire. people like oil companies, they want to hire young people. francine: how can we quicken the transition? is it technology? john: technology is part of it, and there is a wide array of technologies that people are betting on. people are looking at end and different varieties -- wind and different varieties. tom: how do you pull that incentive in and get the venn diagram of the public world to fold into the private world? john: it used to feel as if this was something politician spoke about a lot and the corporate world resisted it. the corporate world has strangely jumped ahead, not least because america is behind on the federal level. francine: president trump just addressing reporters in davos. >> good afternoon. we have had a tremendous two days here. we will be heading back right after this conference, and i just concluded some additional meetings. we have had a lot of them, and davos has treated us beautifully, and it has been a tremendous success. everyone is talking about america's unprecedented economic successes, is the talk of the town, so to speak. since my election, america has gained over 7 million new jobs and the unemployment rate is the lowest in half a century. the average unemployment rate for my administration is the lowest for any u.s. president in recorded history. we have some good ones and some bad ones. unemployment rates among african-american, hispanic american, asian americans has reached a record low in the history of our country. african-american youth unemployment has reached the lowest in our history. african-american poverty numbers have plummeted to their lowest rate ever recorded, doing really well. unemployment rate for women has reached the lowest level in almost 70 years. the veterans' unemployment rate dropped to a record low. unemployment rate for disabled americans has reached its all-time record low as well. these are incredible numbers. workers without a high school diploma have received and achieved the lowest unemployment rate ever in recorded history. that is so important. diploma, high school we have a lot of great people who do not have a high school diploma and we have record low unemployment. a record number of young americans are employed. we have the highest number of people working in our country than we have ever had before. we are almost up to 160 million and we have lifted 10 million people off of welfare. you know about food stamps, we talk about it all the time. millions and millions do not need food stamps anymore. they have jobs. they are doing really well. the u.s. stock markets have soared and they have reached the highest point they have ever had. least $19 trillion in terms of wealth creation for our country beyond the stock markets. we are now by far the biggest economy in the world. china would have caught us. they were getting very close. 2019 --nticipated in this was for many years -- that by 2019, china would become the largest economy in the world and we are much larger. chinae a great deal with and our best relationship with china we have ever had on top of everything else. we are starting phase two. phase one ended up being much bigger than we had talked about because we have intellectual property, financial deals in aspects of the financial deals we wanted, we got done, and other things. in addition to the farmers, we have the total and complete package for the farmers. we estimate that will be between $40 billion and $50 billion. the number i think we'll be closer to $50 billion. -- will be closer to $50 billion. jobs, factories, companies are pouring back into the united states. one of the reasons i have been in davos as we have had conversations leaders of other countries where we have had potentially tremendous deficits and had to move factories and plants back. they took a lot of them and now they are coming back. understand we need to balance out our trade and we are doing incredibly well. one of the people who was important for me to meet was from the wto, a highly respected man. he happens to be this gentleman here. the wto, i have had a dispute with them for quite a while because our country has not been treated fairly. china is viewed as a developing nation and india is viewed as a developing nation. we are a developing nation too. they got tremendous advantages developing.sidered we are talking about a whole new structure for the deal, or we will have to do something. the wto has been very unfair to the united states for many years. without it, china would not be china. that was the vehicle they used, and i give them great credit. i do not give the people in my position great credit because they let that happen. wto, and wewas the have a tremendous relationship. we will do something i think will be very dramatic. he will be coming with a lot of his representatives to washington, and we will start working on it. i would like to introduce briefly, roberto, say a few words on behalf of the wto, and then i will introduce larry kudlow to say where we are in terms of our economy. roberto: thank you, mr. president, and i think it is fair to say that we have been saying for quite some time that the wto is to deliver and perform, it has to be changed and reformed. this is an agenda squarely before members. i don't think anybody in geneva misses the point. i think they understand the system has not been functioning properly in many areas. that is something we are trying to address. i am very happy in the conversation with president trump, this is something that has to change. we are committed to effect those changes, and this is something we are serious about. i am going to be, together with president trump as soon as possible, discussing what needs to change, discussing what needs to be effected in the wto, and we are committed to doing that. i will be talking to the other wto members making sure they understand this is serious, this is a path we have to be on together if we want to make the wto relevant and performing to today's requirements. thank you very much, mr. president. it was an honor to be with you and everybody else. >> larry kudlow? kudlow: i think we are coming into the new year with positive momentum in the economy, and i want to repeat the president's speech yesterday, transformational policies, lower tax rates, energy independence, and breaking down trade barriers for better deals for exporting. we have seen all the confidence surveys are strong, consumer confidence, business confidence, is ae stock market rally sign of consumer and business confidence, and predicting a stronger economy in 2020. housing markets are very strong. we have seen huge numbers in new housing starts and new home sales. that is a great omen, a leading indicator. even with softness in manufacturing last year, we are seeing the ihs market surveys for pmi manufacturing up four straight months in the u.s. i think the president's trade deals have inspired confidence among large and small businesses and will add at least half a point to gdp this year. i think we will be moving into the 3% zone. we still have to cope with the slow down in boeing and we will see how that plays out. usmca and china deals will add growth this year and in the years ahead. the great part about this for me is when you look inside, look under the hood in this growth unemployment and virtually no inflation, which itself is a remarkable development, the american middle class, the american blue-collar middle-class, they have the fastest wage growth and in fact the lower wage folks are getting ,he fastest wage increases exceeding significantly from what their managers are making. as the president has indicated, in the stock market rally it is commonplace to say it just helps a few rich people. that is not true. almost half the households in this country own shares. and theyat the numbers just published a great slide book on this, the bottom 50% has had a 47% increase in their net ,ealth, consumer net wealth between home prices and share prices. that is a booster rocket to this economy. it gives them confidence and serious spending power. consumer spending numbers bear it out, so ours is an optimistic message, and i think the president carried the day in his speech yesterday. >> thank you very much. when you think that soon, it will start pretty soon -- already started, to a certain extent -- china will be purchasing more than $250 billion worth of goods from our country. numberse no bars -- nobody has ever heard of before, and it can grow with time, will grow substantially i predict. , massivethe usmca numbers we are talking about. we made a deal with japan, $40 billion, and we made a deal with south korea. it was a horrible deal and we turned it into a really good deal. it is really something. davos, we met with various world leaders including the president of the european commission, who we are going to start negotiating a trade deal with because the european commission was in many ways tougher than china. i say that respectfully, but that is the way it is. they have taken advantage for a long time so we will have a deal, i suspect we will make a deal, or else we will have to do something else. they have not wanted to negotiate with past presidents but they want to negotiate with me. the president of the swiss federation, the president of kurdistan, we had a tremendous -- along with the president of --q, prime minister erdogan and we metistan, with many business leaders at breakfast today and lunch and dinner yesterday. many of you were at those meeting. tremendous numbers of jobs will be coming into the united states. inspirational.s these companies are really going to expand, and it was a request of mine. we have been very good to them and they are all doing very well. we have companies from europe and asia coming to the united states. that is where the action is. it has really been great. we will be leaving and going back to washington. president, do you want to hear witnesses in the impeachment trial? >> i will tell you the way i look at it. it is a total hoax. it is a disgrace. they talked about their tremendous case and they have no case. it is all a hoax. it is a con job. a crook. i will have to leave that to the senate. witchhunt. greatest this started from the day i came down with the future first lady, the day we came down the escalator this started. they have been driven crazy. you know what halves driven them credit -- what has driven them crazy? record numbers on unemployment, african-american, asian american, hispanic american, numbers no one is believing. they are looking at this tremendous success, the likes of which they have never seen before in this country, and it has driven the democrats crazy. as congressman al green said, as congressman greene said, we got to beat him by impeachment because we cannot beat him in the election. i hope that is true, because they cannot beat me in the election. i don't think i can. i know what i will be running against one way or another. it will be one of them and we will do very well. nobody has done in the first three years -- less than three years because a lot of these numbers were taken from two months ago -- in less than three years nobody has done the kind of numbers we have done. i am going to head back and i will be watching it, but it is up to the senate. president, you were the keynote speaker and you shared some of the spotlight with a scandinavian teenager, greta thunberg, who you said needs to work on her anger. >> i didn't say anger, i said anger management. >> she had some strong words that the united states and industrialized countries need to do more. do you still feel that you are doing enough? >> how old is she? >> she is 70. -- 17. from other world leaders and business leaders who say they think she has a message? >> i would have loved to have seen her speak. i did not. it, i thinkcts of that some people are -- they put it out a level that is unrealistic to a point you can't live your lives. we want to have the cleanest water and air on earth. our numbers, we had record numbers come out recently. our numbers are very good, our environmental numbers. our water numbers, our numbers on the air are tremendous. we have to do something about other continents and other countries. when we are clean and beautiful and everything is good, but you have another continent where the fumes are rising at levels you cannot believe, greta ought to focus on those places. than we everbetter have in terms of cleanliness and numbers. we have a beautiful ocean called the pacific ocean where thousands of tons of garbage flows towards us, put there by other countries so greta needs to work on them. congratulations on your show. they made a wise decision. >> we invite you for an interview whenever you are available. can i ask you to be clear and for future presidents -- is abuse of power and impeachable offense? >> i will tell you, there is nothing here. i had a very innocent conversation with a fine gentleman from the ukraine. people do not even want to talk about the conversation. i got to watch glimpses between these meetings, glimpses of what is taking place, wasting time in washington. they don't talk about my conversation or my transcripts. when adam schiff made up the phony story and repeated it, then i released the transcript, there was supposed to be a second whistleblower. wait --otherwise i won't do your show. there was supposed to be an informer and all these people disappeared. they went ahead because they were already there, because they had a phony concocted story made up. here is the story, did nothing wrong, it was a perfect conversation. it was totally appropriate. the best lawyers in the world have looked at it. the department of justice has looked at it, given it a sign off. there was nothing wrong. they did not think we would release the conversation. they probably did not think we had transcribedrs to transcribe -- transcribers to transcribe the tape. when we released it, all hell broke out the democrats because it was very difficult -- different than what shifty schiff said. we have all the material. >> alan dershowitz says the preventwould not impeachment on structured -- is it abuse of power and impeachable offense? what depends, and from people tell me, all i do is i am honest. i make great deals. i made great deals for our country. i am working with the wto. there has been a long abusive situation with the u.s. transcriptionthe -- and by the way, it wasn't one call, it was two calls. nobody wants to talk about that. there was one call which was perfect and another call a couple months later which was perfect. the president of ukraine said it was perfect. the foreign minister of you that it was perfect -- ukraine said it was perfect. they got their money long before schedule, got all their money. what nobody says is very important to me, why isn't u.k.ny paying, why isn't and france paying? why aren't the european nations paying? thats it always the sucker is the united states, that is one? corruption, we do that too. this was a perfect call and we are doing very well. >> the china trade deal, we expect a deal for human rights to be part of this. >> we are discussing that and would like to do something. we are doing a trade deal and it is a very big deal. phase one is done in phase two is being addressed -- and phase two is being addressed. clarify, we know the senate will set the rules for witnesses, but what do you want? at one point you demanded witnesses? >> i tell you what i think. it is such a hoax and it is so bad for our country when we have the head of the wto and he has to listen to this nonsense about a call that was perfect. i never see them talking about the transcription. i never see them talking about the call because there is nothing to say. someone should just sit there and read it and everyone will say, that is an impeachable event? lyndon johnson would've had to leave office on his first day. kennedy would have had to leave office on his first day. it is a hoax. you understand this better than anybody. initially you said repeatedly to americans after iran retaliated for the solemani strike, no americans were injured. we know at least 11 servicemen were airlifted from iraq. can you explain the discrepancy? >> i heard they had headaches and a couple of other things, but i would say i can report it is not very serious. >> you don't consider a potential traumatic brain injury serious? >> they told me about it for numerous days. no, i don't consider them serious injuries relative to other injuries i have seen. i have seen what iran has done with their roadside bombs. i have seen people with no legs and no arms and people that were horribly injured in that area, that war. bombs but, there was there by solemani. i consider them to be really bad injuries. no, i do not consider that to be bad injuries. >> the timeline for that, and if you don't hit that, are you automatically going to go to -- or is there another avenue? >> i don't have a timeline but maybe i do in my own line. -- mind. i have to move relatively quick, but they have to treat us fairly. the european union was formed for this reason. there airplane company does nicely and is doing better than ever because boeing has not had a good time of it. they better start recovering fast. i hope they do. they have great people in the company and good people leading it now. i know i have a date in my mind, and it is a fairly quick date. if we are unable to make a deal, we will do even better. they haven't treated us right the united states -- right. the united states has been withg 150 billion or more the european union. they have trade barriers where you can't trade, tariffs all over the place. they make it impossible and they are frankly more difficult to do business with and china. we have a great relationship with china. we had some testy moments, beyond testy, worse than a lot of people would understand, but we got it done and phase two will go nicely. with the european union, i wanted to wait until i finished china before i went to work on, respectfully, europe. europe is so beautiful and a lot of us come indirectly from europe. they are more difficult to do business within china. all you have to do is ask boris. i think boris is going to do ok and will come out great. he has a lot of guts and is in a terrific position, which they never would have been able to do before boris. i have a specific date in my mind. >> reporter: [indiscernible] president trump: i think before. i'm not saying it from strength or weakness. i'm just saying they have to do it. they wanted to make a deal. our nation, our country wanted to make a deal under president obama. the e.u. refused to talk to him. and then they said no, no, we like it the way it is. of course they like it the way it is the they're making $150 billion-plus. as you know, president bush was desperate to make a deal. they wouldn't even talk to him. me, they're talking to. and we'll have a deal. we don't have a deal, we'll do even better. reporter: is it true that you're considering extending the travel ban and if so, to which countries? president trump: yes. we had a travel ban, it's a very powerful ban. a lot of -- i heard a reporter recently say, he lost the ban in court. they

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