million people in wuhan as it looks to contain the spread of the coronavirus. stocks take a big hit. kicks off its strategic review today. officials plan a two-part approach to break down the central bank inflation targets. and opening arguments. u.s. democrats present the case for president trumps removal. fromar exclusively secretary of state mike pompeo. >> our policy with respect to ukraine has been set on the fundamental principles of reducing the footprint of corruption and helping the ukrainian people filled a democracy while under threat from the russians. matt: just under one hour away from the start of cash trading. that's take a look at futures. -- let's take a look at futures. they have a 3% drop in the csi 300 index in china. they drops in asia leading to lower futures numbers here in european equity indexes. if you take a look at u.s. equity indexes, you see futures heading down. you can see it could be a risk anna.y at once again, anna: that's whatanna: the futures are suggesting. a look at the gmm function. chinese stocks are closing 2.7% lower in the worst ever end to the lunar new year. we are seeing a downside as we head towards the holiday. if you wanted to get positions closed for that long break in the market, then you are going to need to do that. that will be seen in the shanghai composite. that's what we are seeing over in china. hong kong market is down. the philippines goes its own way and we had growth data out of the philippines. the australian dollar is doing well. as we are worried about the growth story coming out of china because of the read across from the coronavirus, that is the dominant narrative. at the same time, underlying data is picking up a little bit. we saw that out of australia. three ofck in for day the annual gathering. lacqua is in the swiss alps for us with a guest. dapo'se: day three in -- davose delighted and we are delighted to be of kaiser.he ceo >> good morning. francine: when you look at trade issues and globalization around the world, have we reached peak globalization or is it more talking tough and still doing trade? >> we better not have reached the peak of globalization. all things are connected, so how could you connect all sheens if you don't have free flow or data? we had better find a way, otherwise the industrial revolution. . is not really happening. we have decoupling instead at go back to the stone age of productivity. francine: if you look at the trademark of we have signed the phase one. is the economy on better footing? that siemensews is is incredibly strong in both countries. could tell you are in the storm on one hand, and on the other hand you are localizing quite a lot. in the economy already and it helps us a lot to deal with the key economic issues. francine: you want to spin off the energy business. once that's done, what is that mean for the company? don't do something if you believe it will be better? what i have been doing is i wanted to prepare this company for the next decade. we have been ipo in health care. did not really make more money than it used to, so how come? it was a re-rating for european play. today, we were active in consolidating the market. that, it does not have much to do with each other. in both areas week, -- both areas, we have massive industrial asian -- industrialization. you had better have a focused company that is not being diluted with all kinds of interest. -- francine: you think you will be better set for 10 years? >> absolutely. i expect the industrial software to get a re-rating. there's no point of having a weaker multiple than our competitors. that's exactly what we needed to get. from what i hear from all top analysts is have us at a buy and that's what they expect us to do your -- to do. francine: you're still holding onto 85%. when will that go down? capf you look at the market , it's the 11th biggest market cap. i'm saying that they deserve to be an accelerated company and we are aware this is not going to bypen with 85% being owned siemens. we have time because the priorities are making a good spinoff and i will take it from there. francine: nothing this year? said, september is the time we are playing the spinoff. ask me again next year. francine: when you look at and theindustries change of the world around us. how quickly will the pace of technology change? industriesat digital , you need to look sector by sector. the car industry will face the biggest transformation. but not from traditional motors and mobility. but the car of the future is an operating system on wheels. francine: owned by who? a car with an operating system on top. that is the trillion dollar question for the traditional car industry. customers, i think they got the point in the meantime and they are scrambling to get this done. it's a challenge, because the value chain is shorter. now, theyot the point have been heard, and i believe the race is not over. francine: are you considering buying a stake in the spinoff? >> says who? francine: neither denied nor confirmed. >> we own 59%. we have an important binary shareholder to his both a customer and a shareholder. the good news is, if you are a customer and a shareholder, you share interest. the other thing is that a conflict is always hard to deal with. he is not our only customer. we have others, and they wonder you have our competitor on our board, what's wrong with that? so we need to balance our interests. it is the first time consolidating a very new industry. it's only the beginning. renewable energy is the future. we have started consolidation and we continue to consolidate. in a good we are space because we hauled the whole value chain. what else could you ask for to get started? presidentrancine: trump was here, i don't know whether chuck but trader the real economy. >> i was invited to dinner with president trump. it was a different setting this time than two years ago, which was more of a german-european thing. leaders about global and it took members of his staff. they had a good conversation. he is a businessman and is very comfortable in that setting, ugly more comfortable than talking to others, so it was a very good meeting. everybody was trying to get the .oint across something. i have three things i want to tell you. i got the company, the request, and the wish. request, and, the the wish. haveomplement was that you been strengthening the american economy, a message he liked. request was that you have thousands of americans in the u.s. indirectly employing a number 80,000. i want to be treated as a u.s. a company that u.s. company if it ands to rebuilding rectification projects. he said that was fair. he said, what is your wish? , you arer. president in the most relevant office in the world. more attention to the youth and their strife for climate? the reason i say that is because they may not able to help us because the young people have a problem they don't know how to solve. i think we bring them to the table. that was the wish. francine: and he said? , but ivankahank you is picking it up. she said she was doing education training anyway and doing a very good job at that. she said, maybe we should look at that. i think it was a good meeting. francine: thank you so much for joining us. chief executive of siemens. with that, back to you in berlin. matt: interesting stuff there about his talk with president trump and ivanka. we've also got another interesting figure in germany speaking. thomas has just had a chance to sit down with the head of the christian democrats here in germany. she has told them a couple of interesting things. one, she talks about the tinderbox issue of german luke perry action. she is talk about iraq and libya. talked to him about room for improvement in the german cabinet. it looks like she may want to clean house a little bit as far as the cabinet is concerned. we will bring you that later on. this is bloomberg. matt: looking back to "bloomberg markets: europe." to gos the -- 45 minutes until the start of cash trading. we are looking at futures down. we want to get back to switzerland in the world economic forum. haslinda and i are delighted. joined theo be international monetary fund managing director. we have so much to talk about. you have lowered forecasts in the markets are in a limbo state. if you look at risks, what are your top three? >> there's this uncertainty at the top of the list. it can because by many factors. trade tensions were last year's number one. we have seen that from the start of the year, we got climate shocks in australia with the fires. we had tensions in the middle east and now there is concern about the virus. we have to recognize this is the new normal. we are also keen to see governments stepping up on the policy front. wellary policy has service but cannot be the only savior of global growth. we want to see how the consequences of prolonged interest rates may play out. 2020, youcoming into talked about how the global economy is in a precarious position. given the coronavirus is it possible you have to relook at the numbers? me first say that at the start of the year, we are in a better place than we were in october when precarious was the word we used. why are we in a better place? recededtrade tensions with the u.s. china deal. monetary policy has done a decent job. 49 central banks cutting interest rates 71 time in a synchronized manner. that has boosted global growth by half a percentage point. we also are seeing signs that trade and industrial output may be bottoming out. you've rightly said that we have downgraded our forecast. it was really two things. india that abruptly slowdown in a couple of countries experiencing unrest. overall, the forecast for the is a bit better than it was in october. have tong said, we do accept, in a fast warming world that is so interconnected, that we are more shock-prone. therefore, a big task for business governments, and citizens is to adjust to that new normal. francine: could a market correction provided shock -- provide a shock? >> we do not expect anything else when we have prolonged times of low interest rates. we do see investment in equity going up. whether or not this is a moment we might see some movement is to be seen not to be predicted. i don't want to talk about it one way or the other. haslinda: we are seeing record debt right now. at what point should central banks be concerned? bubble,said there is no but are we concerned central bank is adopting such an attitude? >> to be fair, the consensus at the moment is that it would be low for longer. the world of central banks is predicting accommodative policy. there are low interest rates. the danger is lower. but there are two things i've been speaking about loud and clear. one, the buildup of debt is reaching the point that it could present a present danger. example, 43% of low income countries are already at or close to that interest. borrowing at higher rates should be concerned and be very careful. secondly, we need to recognize that low interest rates mean high appetites for yields. high appetite for yield is high appetite for risk. so yes, we need to be more focused on that. ratesncine: low interest mean that potentially central banks don't have the tools to deal with the next downturn. are they exhausted? >> some are and some aren't. the people's bank of china has space. that areof countries doing better in terms of growth have space. but many are already at negative territory, of course. importanty it is very to turn and look at other instruments. we have two messages. one, we ought to be looking more seriously today. francine: but will then? -- they? >> some are making good moves. self -- south korea has had some good stimulus. stimuluscoming up with . germany came up with a plan to increase spending. thisvery hopeful that with whole conversation around climate, we will see an ambition to invest in climate resilience. there is no shortage of things to invest into, but they do not translate into viable project. we may have to say, no time to waste, concentrate on growth. haslinda: you talk about countries with the capacity to move, but countries like italy much how much can they move -- italy, how much can they move? >> it is true that countries with more narrow fiscal space space more difficulties. even in these countries, they can do a careful review of policies. they can do a redirection of public spending to be more conducive to stimulating growth. we all have to recognize the need to build buffers. we have been saying this for the last two years. build buffers, you will need it. longer-term, in a more uncertain world, there is going to be a missed step in the future. bridgewater believes that because of the central-bank action they have ended the boom bust cycle. how difficult is it to understand where we are in the cycle and could everything be out of whack? talking about scenarios and probabilities, there is always the risk that we end up with an overlay of factors that are creating a much --e significant if goldie difficulty. i don't see that. what i see now is that there is increased awareness among policymakers that they have to take action. you and i talking about that, hopefully people are listening. todayon what you can do to provide more stability for the economy and better conditions for growth. --actually work defining work on defining the status of the economy. we have a million more questions for we are running out of time we will have to do it again. >> i would be happy to. francine: back to you in berlin. anna: indonesia has left its repo rate unchanged at 5%. we have plenty to come from the banking sector at the world of global trade. all of that coming up from dabo's today. -- davos today/ . -- today. this is bloomberg. ♪ matt: welcome back to bloomberg markets. we are 30 minutes away from the start of cash equity trading. also looking at headlines from french finance minister bruno le maire. he says france will do no trade deal with the country, denying climate problems. -- country denying climate problems. the question is, is that aimed at president trump? again, they will do no trade deal with a country denying climate problems. they say things are out of proportion when it comes to the climate issue. has is standing by with a guest. sustainability. is our guest. the so much conversation about how the markets could be stretched. >> good morning. good to be with you again. which part of that would you like me to comment on? haslinda: do you agree the markets are stretched? >> the underlying growth fundamentals are not bad. yes, global growth is slowing down, but not dramatically. we have accommodative monetary policy. there are areas which concerned me specifically. there are trillions of negative yielding debt of which one trillion is negative corporate debt. we need to ask ourselves, how do we feel about leaving our money with corporations? haslinda: and the repercussions ?f that, what do you see anshu: they will be beyond the obvious ones. of greater concern for me are the replications from pension funds and secure economies. haslinda: are there risks of a recession at all? anshu: sessions, no. but this may lead to a significant mark down and create its own impact on global growth. how do you price in climate change in your investment? i'm asking because if you take a look at australia, they are looking at a stark reality. when bushfires are destroying the country, how do you factor it in? anshu: this time, we have crossed the rubicon. the world's biggest asset manager coming out and making the statement he did will have big repercussions. but blackrock has said is that we care, we are monitoring companies not just based on earnings what their esg scorecard. let's follow that through. that means the cost of equity and debt for companies that have a good scorecard will outperform those that don't. what we don't have are clear established metrics. imagine a world where you have dating -- the agencies assigning scores. havenk that will significant consequent is for the way companies think about their business models. in some ways, i think we have crossed a major line. which markets could be repriced in climate change? anshu: we could look at it along country or industry lines. i think there are consequences for everyone. no doubt, policy on this will get challenged significantly. is on the scorecards which have to be followed. haslinda: since you have gotten to cantor fitzgerald, you have made several high-level hirings. what is the environment in wall street allowing you to do that? anshu: we have spent a lot of time thinking about what we want to do. biotech excites us and we have built a nice business focused on tech. yes, we have been able to attract some exciting young talent. haslinda: where do you see yourselves being able to compete best? anshu: we are not buzz bracket. we are focused. we think about the niche. taking a look at the environment, what do you view as the biggest risk? anshu: tech evaluations. we talked about that earlier and it's very hard environment to be defensive in. if you asked me where we are one month from now, i would say higher. i was a equity markets are likely to be higher. yes, the asymmetry in devaluations is one which worries me as well. haslinda: thank you for your insight today. they're coming to you live from the world economic forum in davos.-- davis.-- anna: back to switzerland. ministeran finance joins us next. lots to talk about when it comes to italian politics. this is bloomberg. ♪ matt: welcome back to the european open. we are 20 minutes away from the start of cash trading. you can see we are looking at drops in terms of futures here on the continent. news int to first word london. china is locking down a city of 11 million people to stop the spread of the coronavirus. officials have stopped outbound flights, rail, and bus services. the world health organization is expected to decide on whether to declare a public emergency. the death toll has risen to 17. , its the u.k. leave the eu first priority will be a deal with brussels. that's according to the chancellor. this came as a surprise to the u.s.. davos, secretary mnuchin said he was quote disappointed. and the impeachment trial president trump continues. his team is confident of acquittal, saying there is no question trump will continue in office. but how the saga is hitting his image abroad, mike pompeo says it barely comes up. >> it has not come up, it almost never comes up. there are too many important things going on in the world. we have such good friends and allies. they hear the noise in washington, but it's not something that's an issue we would raise. >> global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna: thanks very much. withe in davos all week the climate is the top theme of the meeting. nestle's ceo highlighted his key areas of focus. lacqua, he francine added he sees a robust economy in the u.s. and good growth in europe. >> the two key themes are entire wastes where the industry is making significant efforts. we have made a commitment to make all of our packaging recyclable and have to solve the problem that has been created on plastic waste. the longer running problem is co2 emissions and there we are having our 2050 commitment. a more be issuing detailed roadmap on how we intend to get there. when we are seeing is larger consumer interest and more interest from financial markets. that's a good thing and means you will be rewarded for their efforts in that space. roberto: looking at the world there a danger our initiatives are left behind? >> the momentum that has been reached is such that it is here to stay. point is already here and i think will stay with us. it should not be something that is cyclical. having said that, i'm not too worried about that. you are almost the perfect a barometer for growth and demands. we are seeing a robust economy in the united states. it's the message the president is giving us here and we are also seeing good volume growth in europe. for the rest of the world and , a robust, strong showing. matt: that was the ceo of nestle speaking to bloomberg. speaking, we will be to the stellar lineup of top executives. the ceo of maersk, standard charter, the boss of goldman sachs, the royal bank of canada, and here on bloomberg television , don't miss our conversation with the greek pride minister in the u.s. commerce secretary wilbur ross. that's all live on demo's. -- davos. anna: welcome back to the european open. 15 minutes to go until we see the start of the european equity trade. some of the futures are unchanged, and elsewhere, we see the downside risk spilling over coming through for asia. we will hear from the world health organization a little later on today. firing theagarde is starting gun on the strategic review. we are here with the details. christine lagarde is poised to make her mark with her biggest ever strategy review. almost 90% of responses in a survey predict they will alter the strategy for too low and too high inflation. concerns are that the wording is just too vague. it's the legacy of an era where the only worry is too much inflation. the central bank currency relies on negative rates and quantitative easing. one item expected to feature prominently is climate change. movesne of the boldest since two these could be so-called green bonds, quantitative easing, or discouraging bonds. this is widely resisted by many colleagues and certainly want to watch. finally, some officials doubt lagarde's schedule, noting how long the fed has taken. matt: thanks very much for that. let's get to our bloomberg business flash. deutsche bank is zeroing in on its management bonus cuts. that is after taking an ax to discretionary pay. they'll have the biggest annual loss in the options range from no bonuses top management. boeing expects to restart production of the 737 max within months. output, they will return to a normal rate of production. is not likely to be cleared until the middle of the year. boeing is considering selling -- to funde fund expansion. a fund is being considered but we've learned an ipo is the most likely option. that is your bloomberg business flash. a number ofe got stocks you need to watch. let's have a look at the stocks in focus. sd micro is in focus. we have had a great deal of news flow coming in from chip suppliers chip equipment. today, st micro passed out and growth margins in above the highest estimates. it sets the stage for something decent in terms of moves. what stocks are you watching out for? matt: this is another one we have to watch out for today it's a better than expected four month sales driven by black friday. it is probably better than competitors. it's 20% up and that beats the percent estimates. out, we areto point getting a new headline on the novo virus. china is reporting it looks like eight more deaths due to the virus. it has led to a global route in stocks. futures downwe see here and futures trading in the u.s. as well. china is reporting eight more deaths on the coronavirus. germany needs to speed up the process of spending government funds, according to the german defense mr. at cdu leader. -- minister and cdu leader. if we look at our current we seeand investment, there is no problem as far as money is concerned. there is a problem when it comes to procedures. not enough is being invested. interview, sheme was also asked about german presidents in iraq. >> the country is very much affected by the confrontation between the united states and iran. toause of that, they need work on the basic conflict if we were to stay with troops in iraq. it depends upon the iraqi government. that was the german defense minister and cdu leader speaking to us at dapo's -- dapo's -- davos. to hear more as we speak thekaka -- akk about possibility of germany military deployment in libya. it is, of course, a big issue. chinese officials have locked to trye city of wuhan and stop the coronavirus from spreading. they have halted public transport and told a population of 11 million people not to leave the city. obviously, it is a challenge, but if there's any country in the world that can deal with this kind of challenge, it must -- china.ired we have people able to deal with it in a timely and effective manner. whatever damage it will have on the economy will be limited. matt: for more, selena wong joins us from beijing. you have the death toll pretty much doubling from the numbers yesterday with hundreds and affected. some say that number could actually be in the thousands. you have the second case confirmed in macau. they are canceling lunar new year activities from the central area of wuhan back to other parts of china. you have china setting up this nationwide screening to catch cases of this virus which has been complicated as millions have already started travel for chinese new year you do have lockdown, banning outbound travel by rail. they're also banning domestic travel, so the only way out is by car. i also want to point out that the detection issue is in china and we have learned that some of the deaths of people never even had a fever. temperature is the way to monitor for infection, but if that is not an indicator, that is certainly a big problem. anna: you have talked about the kind of reaction we are seeing. what about the response from international organizations? fourth -- health organization has delayed their decision. >> that's right. they said they need more information in this complex, evolving case. that out have enough information to decide if this qualifies as a public emergency. have does, they could restrictions. there is more detail around the government response. yesterday had this press briefing, which is detailed in terms of the press meeting. china was praised for sharing the genetic sequencing of this case so that other countries can more quickly identify the causes. they are complaining about the lack of transparency and you do have government officials responding to that of the highest level of government. will be severely reprimanded and there needs to be constant medication so the government has now set up this daily communication across the country. i do have high levels of awareness and escalating fears even here in eugene where you have officers monitoring temperatures and passing out masks. matt: all right. thanks for joining us. bloomberg's selina wang in beijing, talking about the coronavirus. we have been reporting that 17 people have died from the coronavirus and it looks like those eight additional viruses reported were reported earlier. >> we are minutes away from the start of cash equity trading in europe. lunar new year lockdown. china bans travel for 11 million people in wuhan. stocks take a hit. the e.c.b. kicks off its strategic review today. first since 2003. approach a two-pronged to break down the inflation target. we'll hear from secretary of state mike pompeo shortly. matt: we are just about 20 seconds away from the open and we are looking at futures that are pointing lower. also looking at mike pompeo. shatzker erik interviewed him. futures are lower in london. they are fairly flat. the open of european stocks is now. anna, what do you see coming out of the gate? anna: the early trade coming through from london. fairly flat. the futures were pointing to a flat start to the trading day. u think about weaker oil prices, some some are under pressure today. more downside forecasts through the futures market for german and french stocks. the tensions and the nervousness around what we're dealing with here in the coronavirus seems to be making its way into the european psyche and investor session. we'll wait to see where those markets steady. uro stoxx is down. moving to the downside. let's think about where we are from from a separate perspective. the chinese equity market down 3%. 3% on the shanghai composite. a little more on the c.s.i. it is the last trading day before the lunar new year holiday. that negativity did spread across the asian sector. interesting to see basic material stocks are looking mixed. i.t. systems looking pretty mixed. looking for energy. we see a weaker oil price, also as a result of what it is that the coronavirus does to travel year holiday in china. what do you see with the individual movers? matt: a lot of stocks down first off. 00 plus are falling. only about 160 are gaining. in terms of the individual names, after that positive news, t micro rising more than 5%. otherwise you don't see big movers to the upside. on the downside, a lot lot more stocks of course. you see the big heaths weighing in on the index. lvmh, rio tinto all down 1% or more. let's get back to the world economic forum in. francine lacqua is standing by with a guest. francine: thank you. thank you for joining us as the e.u. commissioner. congratulations on the fairly new appointment. you talked about digital tax akseation and the relationship between -- taxation and the relationship between europe and the u.s. >> first of all, rather happy of detaunt taking place between france and the u.s. i think this opens a window of opportunity. not a long window because it will be for some months this year. we need a global solution in this year 2020. this is the problem. to se we are not avoiding realign our digital taxation system to the new digital era, we will do it but we want to do it at the global level. francine: we can't even agree in europe how to do it. how can we agree -- >> i think we made good progress to this global agreement. if there is political will on all sides and for sure there is this political will from europe, we can reach a first agreement next week on the first part of global deal. i would be clear, if there is no global agreements, we will have an e.u. proposal at the end of the year. francine: the u.s. has taken it personally. president trump says it discriminates against u.s. companies and will retaliate with tariffs. how can europe defend itself from the u.s. tariffs. does this discriminate against u.s. companies? >> no, i don't think at all it discriminates against u.s. companies. we have a taxation system with two problems. one, it is not aligned to the digital economy. two, we allow aggressiveness in taxation which is unfair and we need minimal taxation globally. i think it is clearly also in the u.s. interests because u.s. are interested in having certainty in the global taxation system and they are interested in having minimum taxation and avoid tax avoidance and so on. it is not a european problem. it is a global problem that we have to solve globally. francine: it is fair to say the u.s. won't see it that way. will they retaliate with tariffs? >> i don't like the idea of an escalation. some european countries putting taxes -- the u.s. retaliating. i think we should all stay at the global agreement but we have to be serious in this agreement. opportunity to have a -- we have to be clear this is a post. it is not that we are avoiding the issue. we will realign our taxation system to the digital era. we are saying ok, no to national lows if there is a global agreement and this will take some months but not many years. we don't have many years. and i think the u.s. are interested in a quick solution to this problem. i don't think they want to go along. francine: if there is a carbon border tax, how will that, you know, how will the u.s. be taking that? >> well, i don't think that this s another problem and -- europe-u.s. i understand that china could ave higher problems with a carbon border tax coming from europe. you know, we are taking a erious commitment on this. with an enormous effort to have carbon neutrality in 2050 and we can't do that if this is only giving advantages to our region of the world. so yes, europe will leave carbon emissions in 2050 but at the same time we have to protect our economies from carbon leakages. so i think this is understandable. we will do this within the w.t.o. rules and nobody has to be -- to consider this like a threat to their economy. francine: european growth has been sluggish. do you worry about a recession, a real recession hitting europeny or italy? >> no, i think nothing is at the moments forecasting a investigation but for sure, we are slowing our growth so to say. especially on manufacturing. services are still in good shape. manufacturing is very weak in this moment. what should we do. i think we should have fiscal policies strengthening our growth. in europe. and this could come one, from this green deal, green all thents, innovation, things we need for the green deal are useful, also for growth and second, we'll have new rules facile taking it investments but we strongly need to strengthen our investments. francine: economicser, thank you so much. e.u. commissioner for the economy. form italian prime minister. back to you in london. we'll have more from davos 2020. anna: thank you very much. francine lacqua there in davos. coming up from the world economic forum, we'll be speaking with a stellar lineup of exis. standard chartered, goldman sachs. don't miss our conversation with the greek prime minister and u.s. commerce secretary live from davos on bloomberg tv. this is bloomberg. ♪ ♪ anna: welcome back to the european open. 12 minutes into the european trading day on the equity cash market. weakness coming through, .4%. no surprise, oil and gas and basic resources are two lagging sectors we're seeing today. weaker oil prices and equity on crrn about the corona virus. let's go back to davos. francine lacqua has an update for us. francine: we're joined by the italian finance minister. thank you for joining us. in the last 24 hours actually quite a lot has happened with the government. investors concerned about the stability over the italian government. will this government survive? >> yes, it will. i think there is misperception. i saw some in the press because what happened is actually only a change in the leadership of the party. which is not changing its osition with the government. they have already said they are strongly committed. nothing will change. francine: can the prime minister survive? >> of course. ho would be worst off. the candidate for the far right is -- everybody knows -- politicize ze the election. it will not change anything at a national level. francine: i understand you think there is a problem of perception but actually changing leadership of the coalition partner is always dangerous because it weakens that partner. do you not think? >> no, because the change in the leader produces a change this the line to have party. actually the change in the leadership is likely to have a stronger commitment to the government. hat's what happened. e was committed there. i work very well with him. i'm happy he remained foreign minister. there is an toppings change lines. what we can have is a continuation of this alliance or a strengthening of the alliance. if you look at the numbers of the parliament we are having, just a few days ago, one of the -- supposed to be contentious. very -- majority. we have very strong numbers in the parliament in both chambers and the government will continue at the end of the term. francine: italy is probably -- has been stagnant for over 20 years. how will you counter this? >> this is really one of the big structure problems of of italy. we have to address the productivity. we are addressing -- the demographic issues. work with some very specific measures we already adopted. we want to -- boosting investment in particular in innovation and sustainability to have our companies public and prior investment and with a partnership between public and private partners to boost the capacity of our manufacturer sector. it performed very well. to get the opportunity of the ost industrial revolution. this kind of artificial intelligence, our ambition to be the one who'll respect the new targets of carbon reduction. an opportunity to improve our productivity. that is our challenge. francine: this government seems to be much more interventionist. what message does that give to investors? do you get a lot of questions from them on this? >> no, we are simply deploying all of the policy tools to support growth for investment. we want to do this in a closed partnership with business sector. we want to listen from them. where and how we can use the tools we have in order to support growth and productivity. we avoid a lot of investments in the way to mobilize private investment. industry 4.0. we need to find -- it is -- that is to mobilize, to have private investment. crowding. we are also discussing with them, with all the stake holders like the stake holder philosophy in davos line of action, do more growth, more jobs, more innovation. francine: on trying to help private companies, can italy afford this? do you have the money for this? we want to support a policy opportunity. that is the era where we are focused. of course there is a situation of crisis. the market solution. we wanted to have the private owners of the company onboard. we are negotiateing with them. we want to remain a private company with a private majority. francine: how many questions do you get about -- italy is also thinking about removing licenses. >> we have to restore a situation which is up to tional standards and also to it. that is a unique situation. it is very complex. it will take too long. but of course we are looking for a balanced solution. francine: ok. which would look like what? spent this amount of money to regenerate. do they keep the licenses? the thinking is everything is open at the moment or has the italian government made up its mind? >> it is finalizing its assessment and is really a technical procedure so we will wait for the conclusion but whatever will be the scenario, we will also ensure a balance. francine: do you worry about a recession taking hold of italy in the next two years? >> no, we are confident. we have been very good in the forecast. we're between 0.2 and 0.3. last year, 2019. we think we will get our forecast at 0.6 in 20. of course we want to do better. our fiscal numbers are getting better than expected so our fiscal rev lewis in increasing. i am confident that we are sufficient to receive also, to ake opportunity of growth. it depends on a number of conditions. we strongly believe that the level is important also. on the fiscal side to be supportive to growth, we support the monetary stance by the e.c.b. it to be conducive to growth. francine: thank you. the italian finance minister. with that, back to you in london and berlin. we'll have plenty more from davos. matt: francine, thanks very much for that. up next, the stocks on the move. so far this morning 2,1 minutes into the session, the shares jump after four month sales beat estimates. this is bloomberg. ♪ ♪ anna: welcome back to the european open. 23 minutes into a negative trading day. not all to have european equity markets. we see an uptick in italy. u.s. futures looking fairly flat. let's get back to the world economic forum in davos where francine lacqua has another guest. francine? here as: he is actually oil minister. minister, great to have you on bloomberg. there is so much to talk about, oil price and production. how is the oil market looking now? is it oversupplied? >> i think we're ok. right now. we're quite optimistic with what is going on between the u.s. and china. with a trade deal and we see a lot of optimism in the market. the growth and demand. francine: minister, is it enough to avoid oversupply? >> yeah, enough to avoid oversupply. we'll look again in march. if we see that we need to cut, we will be able to do the cut. francine: will the cuts have to be phased out or will we have to impose extra cuts? >> we will have to see. we will have time to review. political tensions in the middle east region continue, then we will see there may be need for further cuts. if things relax leabt and we see trend ere is a down ward we will definitely make deeper cuts. francine: talk to me about nigeria hitting its cuts target. has it been difficult? >> it was initially. we have met our target now. last month we did exactly what -- and we are ready to comply completely. francine: are you complying now? >> we have complied and we are going to comply from now onwards. we will not have those issues anymore. francine: why was it difficult at the start? was the start, our budget based on certain projections and in the middle of the budget we said we had to make some cuts and make some adjustments. that is why it is easier for us now, 2020. francine: are the oil markets a little bit sfrange? we had the big hit on saudi facilities in 2019. the market it is flared up a little bit and came back down really quickly. >> the saudis actually did a good job. they were able to get back to -- get back the facilities repaired ery quickly. all the projection. there was no need for -- that was why the markets actually didn't react that much. the market wasn't really affected very badly. francine: we were talking about a possible, you know, war in iraq with iran and the markets kept quite cool. is that a good thing or does it mean that we're not pricing risk correctly? >> i think the markets are changing. that is what is clear to us now. opec is actually -- and the mood studying what the market is looking at these days. we go back in march and look at the issues. a lot of the issues that previously would have taken the market upwards really have removed the market. a lot of new things are -- because of what's happening also in the u.s. with shell. i think they are able to always fill in that gap. so we're going to look at all of that. francine: will the oil prices stay in this range? i tried to get you to me your ideal oil price when we were in london last time. i didn't get it. >> we always said we would like it to be between the 60's and upper 60's. maybe up to 70. that's where we always want it to be. opec, never want the oil price to be overly raised and we don't want it to be lower. francine: if you look at the world economy for u.s.-china, we have phase one deal. things are looking maybe a little bit smoother but then you have the transition to more sustainability. if you look at 2020, where do the biggest risks to the oil market come from? >> with the u.s.-china deal. if we're able to -- if the u.s. and china are able to consummate a good deal, we expect not too much problems in 2020. of course there will always be issues of geopolitical tensions and you can predict that really. it can happen anywhere. right now we cannot say for now where we are expecting problems. francine: in geopolitical, would it be iraq? they have five million barrels. >> you can't predict because you know, sometimes you expect the problem. look at libya. resulting in issues. iraq of course would have tensions there. you never really know how they are going to come together to resolve those issues. for us in nigeria, we never base our projections on what is going to happen geopolitically somewhere else. we try to be as focused on the fundamentals as possible. francine: a lot of progress here is on sustainability climate change. does it impact the relationship you have with the oil companies? >> no, i think climate change is not really a big issue for us. we have always said that in nigeria, it is not really a race gainst renewables. it is a race against carbon emission. for us, we are really moving towards gas this year. as our solution. that's where we're going. francine: minister, thank you so much for your time. i know you have been braving the cold. thank you so much. at was nigerian minister for petrol yusm resources. back to you in london. anna: thank you very much. that's our first guest with no coat from davos. up next , back out to the slopes conversation. we'll have plenty more on european finance and the state of the eurozone economy no doubt. this is bloomberg. ♪ matt: welcome back to bloomberg markets. this is the european open. a little over a half-hour into the trading session. we're seeing a little bit of mixed markets. the ftse, the dax and the cac are all down. we see the ftse in milan actually gaining now. let's get our top stock stories. ann marie? >> good morning, matt. a lot of different corporates to digest this morning. s.t. micro up. the chip maker saw a lot of demand for their chips for telephones and that is what is pushing them up. up more than 10%. coming inew companies likely able to linger and project that growth throughout the year. one of the biggest losers down more than 8%. they came out with an impairment charge put pressure on the stock. helping to icro lift the ftse. a standout performance in the upside in today's session. let's get back out to the world economic forum in davos. francine lacqua joining us. francine: thank you. joining us is the e.u. commission vice president. thank you for regular updates to understand the new commissions and the role they will play in the green new deal but i want to start on euro and the currency and what role it will play in terms of reserve currency and how will that relationship evolve over your term as vice president? >> good morning. if you look at the international role of the euro, this is one of the priorities of the new european commission. so we intend to work to strengthen the international role. the euro is the world's second biggest currency in terms of most reserves and payments. we are currently looking how we can strengthen in different sectors, in payments, in international trade. euro as a reserve curn is going to be on our agenda. francine: what exactly needs to be done to strengthen, the possibility that euro can compete with the dollar as a reserve currency and how quickly could that happen? >> first of all, we see that international role of the euro in come back a little bit e eurozone crisis and is not where it was in precrisis time. i would say there is some lost ground. of course a number of things we need to do in practical terms to improve the attractiveness of the of the euro. that's why we are looking for example in terms of payments in make euro more attractive as a payments urrency, in terms of reserves, looking at our obstacles in terms of reserves, international trade, why different currencies are used in trade, where we can come in more. so we are looking from the angle how to remove some obstacles for business because at the end of the day, it is for a business to choose the currency. francine: what kind of trades can the e.u. offer the u.s.? >> well, a broader trade agenda, you mean? in terms of trade, e.u. and u.s. are the biggest -- each other's trading partners. this transatlantic trade relationship is very important i would say also globally. from that point of view, the approach of e.u. has been very clear. we -- for multilateral rules based system. we are allocating the role of the world trade organization and the forum, also the world trade organization and and to refrain unilateral measures from u.s. or other areas. francine: do you worry that the u.s. is recognizing tariffs to counter initiatives they don't like such as the carbon tax. >> currently more digit tax. francine: and both. >> on carbon tax, first of all, we have our emissions scheme is up and running. it is -- they are now discussing when we move to the carbon neutral economy we need to move away free allowances in terms of emissions, in terms of industry but then we need to offset it by , imports taxing energy . but i would say this is something that currently we're assessing how to best do it and how to do it in a w.t.o. compatible way. this is something we're planning for 2021. francine: what about a carbon border tax? >> currently we're talking about the carbon border adjustment mechanism. we need to see whether it is tax or customs tariff it is or what prevent s -- you can carbon leakage in two ways. we move away from free allowances which we intend to do. we want to move to carbon neutrality, with this bored adjustment mechanism, if environmental standards in cruns lowered. francine: the clear focusor to commission was also the president was more sustainability in europe. are governments behind the initiative. will they put money or is it only talk? >> ffrl, the european green deal in a sense is already agreed and also political ambition of rope to move to carbon neutrality by 2050 is agreed. all of these elements are already in place. with the european green deal, the next step will be coming with climate law, basically making this goal of carbon neutrality by 2050 legally binding. we want to strengthen it. of course there is lots of investment. that's why last week we adopted a sustainable europe investment plan. aiming to mobilize at least one trillion euros over the next decade but we will also be combining this with an updated sustainable finance action plan. the bulk of the finance willing need to come from the private sector and for this you also need clear rules. francine: you confident that will become legally binding? >> that is our it is a commission will be coming forward with this proposal. we see lots of momentum also among e.u. member states. francine: as always, thank you so much for your time. the e.u. commission vice president. back to you in london. matt: francine, thank you very much. francine lacqua there in davos. chinese officials have banned the city of 11 million people from traveling as they work to contain the coronavirus. public transport has been halted to and from wuhan and residents have been told not to leave the city. 17 people have been killed by the virus and there are more than 500 confirmed cases. for more rachel chang joins us from hong kong. what is the latest? >> hi. tensions in china rilingte right now are extremely high. the big new year holiday actually begins just tomorrow. hundreds of millions of people chris crossing the country to reunite with their families and celebrate the holiday. the virus son the loose at this time. that's why china took the step of sealing off the entire city. a city with 11 million people, more people than new york. you can imagine the anxiety and stress that is happening now as we try to contain the virus. the count is still rising. anna: what about the reaction across china? the people in china believe officials will be able to contain the virus that they ever done enough at an early stage and they have the tools available to them? 7 >> right. i mean obviously right now the information is at a very early stage. the chinese government has said they still do not a full understanding of this virus and of course there is still the memory of what happened with sars 17 years ago where china initially tried to cover up the extent to situation and 800 people ultimately died. so that is causing a lot of questions about the information flow. the chinese government is trying to prove to its own people which is actually putting the most pressure on them and globally that it has learned from its mistakes. it is committing todayly information updates and there is a free exchange on social media telling people to wear masks and wash their hands regularly. it is really just emerging really. not many people know what is going on. it is a developing situation. anna: thanks very much. rachel chang. you can see nervousness around the situation in china. certainly having an effect on the asian equities session and to some extent into europe as well. coming up, we will talk about our conversation with mike pompeo. he accuses iran of spreading terrorism around the globe. we bring you more of our exclusive interview. this is bloomberg. ♪ matt: welcome back to bloomberg markets. this is the european market open. we are 47 minutes into the trading day now and looking at for the most part red arrows although you see the index in milan gaining. right now we want to get back to the world economic forum in davos where francine lacqua is joined by a guest. francine? francine: thanks a lot. we're joined by a facebook vice president. thank you for joining us on loomberg tech is always at the forefront of everything we talk about, about disruption, doing right thing. what is the mood like at the moment. do you feel like facebook is doing enough to counter all the criticism we have had? >> i think the mood is different and the reason it is different is because there is a much more thoughtful conversation going on now about how globally governments can be working together with the tech companies. i also think there is an acknowledgment of the investment that facebook has been making across so many different areas that you know, we have had a lot of scrutiny and sometimes that scrutiny has been deserved and so i think it has been good. there has also been a lot of economic impact. what is the economic impact of the companies? there has been a lot of positive restopings that. there was research that just came out, a report by copenhagen economics specifically looking at facebook, something that we commissioned. it talked about the fact that in europe, we can see small businesses, the 25 million small businesses out there utilizing our platforms, that it has been responsible for generating over 200 billion sales inst in the last year. when they look at that and model that out, that is over 3 million jobs that have been created. francine: do ministers ask you about how to use the data what happened your purpose is. is your force for good? >> yeah, we have a lot of conversations about regulation. that is something mark zuckerberg has been calling for for a long time now. it is what we have been doing with a number of different governments around the world looking at the different yovers regulation. be clear we already have regulation. francine: how has that changed facebook? >> it has changed things a lot. we put in a whole new -- in terms of making sure that people were aware of the information that was being collected from them. who they were sharing it with. giving them options as to what they wanted to do. that is something we're continuing to evolve with as well. we didn't just do it in europe where it was regulated. we thought it was very -- a way of thinking about things. we built a lot of that out around the world as well. francine: we're in a political election year, mainly in the u.s. has facebook changed the way some of these things get pushed around? >> definitely. i would say we changed fundamentally in the way we approach electionses. thinking back to the 2016 election, the threats were very different to what we understand and could have imagined back then. governments around the world missed it. intelligence agency around the world missed that threat. what we have done is the investment swress made, we had probably over 100 different elections around the would and every time we're increasing the scrutiny. come this 2020 election, it will feel very different and the reason being is the things that we have introduced the fact that political parties have to authorize with us. we're not run from political parties. all of those ads sit in an ads library and you can have a look. anybody can go and look and see the different messages that the different parties are put out. francine: how can we be sure there is no manipulation to interference from another side? >> one of the other things that we're looking at and we're not just waiting for elections. we're looking at behavior that is coming from big networks. back in 2016 we took down none. in the last year, 50. we saw see these different netted works out there. we stay vigilant. it is a race to make sure when we feel that we have a better control that there is other things that can happen, we're alert to the risk that can be there. francine: what is the potential for ads on what'sapp? >> it is still early days. still making sure that we're actually -- the way that people are using the splample the most important thing. it has grown nicely from that side. francine: what would make you decide? do you worry about people in office? what are you trying to figure out in what time frame? >> we were just looking at the moment in different ways. we test all the time. one of the things you'll see is the tech companies. we're always looking at different ways to evolve. we do it in a way that works both for the businesses and the people that use the platforms as well. francine: how is facebook doing in india? what is the biggest hurdle? very >> very nicely in india. a huge number of people are using a number of our different platforms out there. actually one of the things i'm often asked is what is different about country x and country y? the countries are similar in terms that people are similar. people want to connect with family and friends and businesses want to connect with the people that matter to them. most of those are doing that for free. that's wonderful because that can empower a family, it can empower a community to reach more customers in the old days, you could only reach a customer in your city or town orvilleage. now you can reach anyone, anywhere. francine: what are your top three priorities for 2020? is it regulation or trying to figure out how the monetize things or something else? >> the things that we think about and the things that i'm thinking about, i'm always thinking about first and foremost from a business perspective how we can actually continue to help our partners to grow and the businesses to grow and if that happens we will grow as a result with them. with people, we're a company to make sure they are delighted by the different apps and services that we have. we have the most extraordinary people to share the things that matter the most to them and then as i think about what the excitement is coming up for this year, virtual reality over the next year or so. that will be something that we'll see across the whole of the next decade as well. francine: is virtual reality used in health or gaming or, you know what is the next? >> you name it. all the things. it is still thinking about the world where we are in terms of gaming and small applications and how people are playing with it. the potential that is out there is extraordinary. it will be limited by our imagination. francine: hall of fame time do you spend with regulators? do they understand your business? >> we're spending a lot of time with regulators all over the world. i'm not sure we have done a good job of explaining all of the different parts of our considering the -- of the organization. it is something we take seriously obviously. francine: we were talking yesterday and we spoke to the saudi finance minister. he said he never heard the story whatsapphow jeff bezos was hacked by the saudi leader. are you investigating it? do you take it seriously? >> of course we're going to take any allegations very seriously and into it but i'm not going to comment on any individual story. one of the things that it highlights is some of the potential underlying vulnerabilities that exist on the actual operating systems. what a whats app perspective, a facebook perspective, we care about making sure that the information people have with us is safe and secure. francine: thank you so much for joining us today. that was facebook's vice president. back to you, to berlin and london. anna: thanks very much. francine lacqua in davos with a collective mix of guests this morning. fantastic there. let's talk about what is going on in the markets. he stoxx 600 down .4%. from the market perspective what it does to the economy in china, how much it limits mobility around the chinese lunar new year. he ftse up .3 .3%. matt: with better than expected results, stmicroelectronics hoping to boost the whole index. that does it for our program. coming up, more from the world economic forum. we'll be speaking to the stellar line of top executives that you would expect. the c.e.o.'s of standard charter, goldman sachs, royal bank of canada here on bloomberg television. don't miss our conversations with the greek prime minister and the u.s. commerce secretary all live from davos. on bloomberg television and on bloomberg radio. tune in. ♪ sometimes your small screen is your big screen. and with the xfinity stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. download your dvr'd shows and movies on the fly. even record from right where you are. whether you're travelling around the country or around the house, keep what you watch with you. download the xfinity stream app and watch all the shows you love. china bans travel for people in wuhan as it contains the threat for the coronavirus. the ecb takes office strategic review, its first since 2003. officials plan a two part approach. we bring you all the action from davos. plus the chief executive of novartis. welcome to "bloomberg surveillance."