♪ welcome to "on the move," 7:30 here in london we are you down to the european open. here is what we are watching. the yen spikes along with blood pressure at the boj. the best annual start since 1995. will portugal cling to its very last investment great rating? debttaly handle it's bad and what is next for greece? -- talkstock about about with the european

commissioner. and brexit blues, worries about heads referendums consumer confidence to its lowest level since 2014. don't miss bloomberg's all-star byxit debate, who will join leaders from both political and the business world. the question -- should i stay or should i go? that is coming up a little later. let it you caught up with everything you need first for the. david: in china, the central bank has responded to a kumble at the u.s. dollar by strengthening its currency the most since july 2005. that comes after greenback strength fell. yen was also sent surging. amazon sales and profit have topped estimates. cloud services, and the catch it

added to evidence of the e-commerce giant can make money even if it invests heavily in hardware, software, and entertainment. deutsche bank's advisory board member is stepping down two years earlier after criticism that he went too far in probing potential wrongdoing at the company. he was not isolated after he tried to examine links between board members and court cases. he has not responded to requests for comment. bank of scotland posted a deeper than expected loss in the they putrter as it some government support to receive during the financial crisis. the net loss more than doubled. rbs plans to resume dividend after warning said could miss a deadline.

guy: let's talk about what we need to know about these markets and how they will open in 27 minutes. let me show you the terminal and where we think we will go this morning. it looks like a fairly negative start. and you gettures, this fair value calculation. the cac down by about 1%, euro %,ocks around the down by .8 the dax could outperform a little bit but we look to see a fairly negative day. other assets to be aware of, brent is below this 48 line. eye on whatclose

happened in portugal today. the last main rating agency to have an investment grade rating on portugal announce its decision today if it will downgraded it would be significant for portugal and the ecb. keep an eye on south africa, we have a court case which may reinstate corruption charges against president. he wants that closely at the moment. not much moving at the moment there. dollar yen the big story. a huge start for the yen already this year. what does the boj ultimately going to do about it? that is one of the main stories. that is the week that was when it comes to the japanese yen. part of that is what the fed has done. aat has shalen u -- shaken up number of asset classes around the world. had such an't

strong start to the year since 1995. joining us now is the head of fixed income at invest tech. >> good morning. guy: was it a mistake for the boj to do nothing? >> i think it is quite right .hat they stayed back unfortunately for them, the yen is a risk of this currency when it goes up. right thing tohe hold onto. but to see what happens with fixed interest rate. guy: they get in the no impact on lending at the moment. people described this as pushing on a string. it wille questions, have to come from other areas. guy: was negative interest rates a mistake? that would seem to be the impression we get from mario draghi that they are very

different economies, but draghi has made up his mind that it is not a good idea. extent of negative interest rate policy has come to an end. if you ask a bankers and will europe and japan they would say it was a mistake. guy: the fed actually did what it did is the real story this week. not a lot, but we continue to see the dollar moving down. the impact that is having is a larger effect. of the the dollar is one most important market levels. the fact that brent is higher, that signifies and quality prices that it is on the back of weaker dollar . guy: where do you see the fed going? is this commodity run helping of the emerging markets and calming everybody down, let unwind towards the back end of the year? i think the world wants

a weaker dollar and the fed wants to raise interest rates. thisant to have one go year. they don't want to raise them too much because of the turmoil that might cause. there is a goldilocks scenario that could be one more interest rate rise. guy: u.s. treasury, what are we, 192? 182, is at the right price? darren: there is a short-term threat to treasury yields. the movement in break evens we have had this year. worry inflation is coming back into the system. longer-term there is good structural reason. back toare getting pre-70's levels where the market

didn't care about rates because they didn't move that much. that is great news. of the direction of travel here? darren: it may be. one of the big worries and that global growth can't expand the current rates and if it fall to ake quite a lot of stimulus. there are worries about economic growth and structural falls in levels of inflation. government bond prices are a value at these levels. to go further, the u.s. treasury is a high-yield and government bond market. points, in the u.s. that is really good value. guy: we'll move on to europe in just a moment. up, it is the brexit debate. given exclusive conversation on the eu and the uk's membership.

program, is the next eu crisis about to happen? is portugal already front and center? gety, portugal's debt could cut to junk. ♪

41 minutes past the hour we get to major indicators inflation and first quarter gdp. this comes as portugal, the worst-performing bond market teeters on junk status. bloomberg senior european correspondent has the details. walk us through why this is important. jeff: if they do take the step and downgrades portugal's debt, it is not a great sign, obviously. but there are safety mechanisms in place that should mean that this doesn't lead to a meltdown or a reemergence of the sovereign debt crisis. first of all, the banks have other types of collateral. they could use to pledge for funding should they needed. ot completely reliant

on the sovereign paper. is badace of it for the government but it shouldn't cascade to a larger banking crisis. you wouldn't expect the markets desk give us a sense of what you could expect. mentioned, there are safety mechanisms in place. we do have a lot of ecb stimulus and backstops in place. even in the ela crisis last year, the market response elsewhere was relatively muted. there is no reason to think it will will be different this time around which is a smaller problem. guy: thank you for much, indeed.

youen is still with us, do agree with that? a bit more worried than that. the reason anything in the market for a downgrade in portugal today. if you look at where market reacted.e they haven't in terms of the outcome, it could put more pressure on portugal politically and may lead to a breakup of the current alliance. i am a bit more concerned in the short-term. with greece saw there was little contagion. this could be fenced in portugal, we wouldn't see this spreading? is justno, because this a portuguese issue. at what isou look happening, it is important because the ecb wouldn't be able to buy under the current qe program.

it would be in the same basket as greece. greece is would, but a special case. it is become a political issue recently. portugal'sou look at debt, it's underperforming this year. darren: most other sovereigns have had better performance. portugal has an. guy: the market is worried about something. how do you price this properly? we have government risk, economic risk. people are looking at fundamentals much more. but you want to do is price in risk of based on fundamentals. if you go back a month there were challenges between the european commission and the portuguese government. the portuguese government had to line at the end

between the hardline and fiscal prudence. guy: over expecting another summer of problems in greece? darren: you cannot rule it out. that might come back to bite us, and brexit. actually, brexit is a european issue. this is about the european project. if brexit occurs i would be worried for the levels that bonds could get it because people could argue the european project is dead. that point? get to it is all been priced into the pound and none of into the euro. : the market should be slightly concerned about that. week, so thebeen a euro should also be week. yields mayheral bond come under pressure as we get

closer to the vote. 'sy: this will make draghi job harder. figure negative is slightly worse than anticipated. we talked earlier on about the boj struggling to get the effect that it once had from policy. is can argue mario draghi having a similar problem here. maybe this will make life even more difficult for him. fundamentalist, the bounceback may be stalling. given what is going on with the banks this hasn't been helpful. inflation is a big problem in europe. we haven't hit inflation for some time. that may continue. guy: do you think he is right on the credit channel? that gets through to the real economy. at some point, people start to talk about helicopter money. guy: they already are, but the bankers are saying we have to put it back in the drawer.

if that is the case, if that is a language, it is getting pretty close to the edge of what is feasible year. that is why the talk about fiscal policy is getting more and more. does this talk about fiscal policy and they push or you? buten: less than talk helicopter money. that is a bond investment and it really worries me. fiscal in terms of addition, that is a sensible thing for countries around the world at this point. i'm not sure it would welcome it, but it would admit that it is a necessary thing. guy: i give her much, you're going to stay with us. we speak to the eu commissioner to get his take on portugal, greece, what is happening in italy right now. all of that is coming up. we are joined very shortly by

one of the stories we're watching very carefully today. ♪

guy: 8 minutes into the market open. hast-quarter earnings beaten estimates with the danish

manufacturer of wind turbines has the auto intake was at a record high. speaking to bloomberg, the company's president and ceo joins us now on the phone from copenhagen. i am interest in this operating beat you generated. you talk about the auto story, talk about what the market missed coming into your figures . >> i'm really pleased. of course, as you said, it is was recordhe intake high. we had a very big order in the quarter. part in oura big intake. guy: you're keeping the outlook fairly stable at the moment. steady as she goes in terms of the overall performance.

but the competitive landscape is starting to change. how is that going to change the world for you? aders: i mean, we are in good position. largest global geographical reach. we are the leader in revenue. that isa good strategy built on organic growth. course, we have to see what happens in the market. platformave a solid program of those two and three megawatt turbines. guy: is this business becoming more service oriented? be building big pieces of steel and sticking them up around the world or servicing that business? both businesses

are very important. we have put more focus on the service business during the last two years. a separate business within the company. we made two acquisitions. i'm confident that we will see good growth in the service business. we have set up a strategy target and are we on track of achieving that growth. in this quarter, we see that from a delivery point of view it thanually a lower quarter the surface plays a bigger role in the mix. i am confident that the market has the potential to grow even faster than the turbine market. where -- you talk about growing organically, you've made some acquisitions. two businesses,

is that when the focus is? will the consolidation be more on the service side? anders: of course, that is where we are down to. servicegthen our offering and be able to offer a wide service partnership for our customers. we had those two acquisitions recently. they may be focused to integrate those companies into the service organization. we will leave it there, congratulations on the numbers this morning thank you for taking the time to talk to us. vestas ceo joining us on the phone. we'll talk to the eu commissioner, that is next on bloomberg. we have a market that will open

very shortly in around four minutes time. by the looks of things, we're heading for a negative open. the cac will open down by over 1%. that is the story, the open is next. ♪

guy: good morning. we are right here in the city of london. moments away from the start of european trading. here is your morning brief. the yen spikes along with the blood pressure at the boj. the japanese currency is off to its best annual start since 1995. lastportugal cling to its investment grade rating? and what on earth is next for greece? brexit blues. worries about the eu referendum send u.k. consumer confidence to the lowest level since 2014. don't miss the bloomberg brexit debate.

we are joined by the leaders from lyrical and business worlds. looking forward to that conversation coming up a little bit later. let us talk about where we think those issues will take us this morning. we have a negative's heart penciled in -- a negative start penciled in. the market is starting. seen losses in asia overnight. japanese markets closed but the excludingian index japan heading for a weekly drop. looks like europe is going the same way. these are the industry groups. the worst performers are telecoms come at down almost .5%. no, that is changed now to industrials down .8% with information technology down we percent also. read across the board on industry groups. when we look at what is

happening across the indices, the euro start is down -- the ftse 100 is down .8%. better-than-expected gdp data out of france. the dax has not opened quite yet. the european equity markets towards the end of the week following the losses in asia and the u.s. yesterday. let us take a look at currency markets. the big story is dollar weakness, yanis strength. the dollar dropping to an 11 month low. this is after u.s. gdp came in weaker than forecast appeared the economy expanding at the slowest case in two years. look at what that is doing to dollar-yen. the yen on the back of the bank of japan decision. 107.14. finally, stocks to watch this morning starting with the royal

bank of scotland. taxs britain's largest lender. the deepest loss in the first quarter. it is pointing slightly higher now. astrazeneca falling 12%, down almost .3% and casino up after it agreed to sell a vietnamese grocery chain at one billion euro. european equity market is not off to the greatest art. cac's down -- 1.3%. -- u.k. consumer confidence has fallen again. the measure has dropped to the lowest reading and almost three years. what are the implications of the brexit debate that is coming up.

we have three politicians from each side of the argument. they will debate as to whether britain should stay or go on the referendum scheduled for june 23rd. let us kick around what is happening in the market surrounding the brexit story. during is still with us. -- darren is still with us. spurt to thatin was open on this visit last week -- obama's visit last week. that is an indicator of that. guy: the market has not priced in the risk as the fx market has. darren: if you go back to 2011, u.s. treasuries were nearly defaulted on in the summer, august. the best insurance against u.s. treasuries defaulting where the

u.s. treasuries. it could well be that if it is a big risk off moment, that the yields will go down and not up. guy: how will the central bank responded that -- respond to that? how do you manage that as a central bank? darren: you care less about the market and are more concerned about the economy. interest rates will likely be lower than they otherwise would be so we will have lower for longer. they will be looking at policies to stimulate the economy further. loosening the monetary policy would be the result. guy: that is a negative scenario. what is the more likely scenario? market pricing. day, after the u.k. stays

.- walk me through darren: i think it will be a risk on move is the u.k. chases tuesday. if the u.k. chooses to stay it will be risk on and yields will go up. i know that is perverse. it is very uncertain but i am more of the mind of risk on, risk off. not until sometime in 2017 at the earliest. i think inflation is coming back on the scene. a short-term thing. guy: the pound would presumably do some of the work for the central bank in that case. the pound would do some of the work. about 10%.

i would expect to see at least half of that retraced. guy: how would continental markets respond? darren: in the peripheral bond space this could be a positive. as the u.k. chooses to leave, that comes into question. guy: that is a positive spin. we will not break up the euro. however, the market can only think about one thing at a time. at the moment, it will be focused on the brexit. it would be waking up that friday, what is next? darren: there are so many different things that would concern the market between growth, inflation, china, and the effectiveness of negative interest rates. guy: would we be focusing on greece, italy? does it refocus attention on the

problems that the eu faces? take the brexit story away, the apocalyptic scenario may have been removed and we are back to the monday. how on earth do we get this economy moving? darren: we have had those problems for the last few years. those things have not been forgotten about and yet bond yields continue to be low, it is a low growth environment. guy: when you look at what is going to happen to greece this summer, the reason i have to ask is you get through a brexit vote and the remains. people are turning to the next thing in mind. looking at the dates. there are some big payments from greece do in a few days afterwards. darren: i think greece will come back on the scene. there is a bit of brinkmanship

going on, especially on the part of the greeks. i think it will be higher up on the scale of things to worry about. the fed is thinking about brexit. darren: the fed has an interest rate meeting just ahead of it. guy: they are unlikely to do anything then. darren: i think that would be one reason but also because growth is in question at the moment in the u.s. looke rate hike does not likely but the u.k. question will also be there. guy: we will leave it there. thank you very much. great conversation. we will carry on speaking about some of these issues. we are going to speak to the eu inmissioner on the situation portugal, the negative rates, the eurozone, and we may have a few questions for him on greece as well. that is a first.

♪

guy: 11 minutes into the european trading session. the cac is down by 1.1%. let us catch you up on what you need to know. let us get started with china's central bank. they have responded to an overnight tumble with the u.s. dollar by strengthening its

equity. it comes after a gain after it -- to keep monetary policy unchanged. the yenhat has sent surging. amazon sales has topped estimates. it adds to evidence that the e-commerce giant can make money even as it invest heavily in future hardware and software. supervisory board member is stepping down two years early after criticism that he went too far in probing potential wrongdoing in the company. he was left isolated after he saw to examine legal cases starting in 2014. responded to requests for comment. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the

bloomberg at top . guy: thank you very much. we have had a raft of earnings amongst them, rbs -- net loss in the first quarter. let us bring in bloomberg's richard barton for the details. as you told me, something of a dog's breakfast. ofthere is a real mixed bag items in this set of results from rbs. pound net loss for the company. that is mainly driven by a payment to the u.k. government which they made in the quarter which haslion pounds to do with the support they received during the financial crisis, and the bailout. the numbers in that include a lot of restructuring charges,

they will take longer to pay out dividend to investors. it is not looking good. it will take some time to get some money on this. some time,l take that is the problem. a lot of time. there is an argument that continues to circulate that the government needs to sell this one. does this change if that argument? >> the argument may change as the government analyzes its stake in rbs. it has fallen considerable way. it has fallen further since then. they would take significant losses. the chancellor george osborne see certain political risks. thelso needs to cut deficit. this is perhaps something to hold onto so that it rises in time and you can get your money back that way. guy: that is the theory. we will leave that there.

on the rbs numbers. portugal gets the verdict today on its rating. is --l learn if it's that the first on bloomberg television. good morning to you commissioner. how worried are you that the dbrs will downgrade portugal? >> the european commissioner typically does not comment on a rating agencies decision. portugalortant that stays on course continuous with structural reforms and continues to it here to a responsible fiscal policy. those are the underlying factors. guy: do you worry though that such a move and the inability of the ecb to buy such debt would put that progress off course?

important say what is right now is that portugal it hears to the fiscal discipline, that it continues with structural reform measures to strengthen competitiveness. this is a more important part for portugal's economy to continue its economic recovery. guy: can i talk to you a little bit about greece. a hypothetical is aware that has arrived from greece. we need to talk about what is happening with the hypotheticals surrounding greece. the imf wants a contingency proposal. the greeks say it is not part of its constitution to allow such a move. where do you stand? >> exactly. this is the debate. upfront measures. the measures needed for greece to reach 3.5% gdp primary surplus in medium term according

to the european commission forecast. i would say those agreements are basically reached. this work is basically done. it still needs to be completely finalized and of formulae's. -- formalized. and what about the imf's scenario comes into place. of gdpdiscussing 2% contingency measures. a discussion not only of the substance of the measures but also on the legal form. we are ready to cooperate and work closely with the imf, greek authorities to find this appropriate legal form. guy: what you are talking about is what is already in place, that it is enough. do you think the imf should be satisfied? does it need legislating? institution has its own

forecast and procedures. according to european commissions forecast, if greece measures3% gdp upfront which are already basically agreed with institutions, it should be under enough for reach its primary surplus target especially taking year, itunt that last greece substantially over performed on its primary surplus target. continuing measures are needed werein case the imf's pessimistic scenario comes in and it has to be triggered by objective data meaning last year or the previous years data guy:. is this a dealbreaker? no. as i said, we are working closely with rita authorities, and the imf and looking for a

solution but on this abstinence of the measures and on the appropriate legal measures and that is a mandate that was given to us in last week's eurogroup. guy: when do you think there will be another eurogroup meeting? will we need some sort of summit? give us the lie of the land politically in terms of a timeline? >> the president of the eurogroup has announced a new eurogroup for the ninth of may. this is the timeline we are keeping in mind when negotiating with greek authorities. guy: let us move on. is atlas enough? big enough?s guy: is the fund that the uplian authorities have set

-- will it do the job? >> it is an important step in the right direction. it is also important that this is a -- an initiative that does not involve state aid. our overall assessment is that italian authorities have made substantial progress in addressing its nonperforming issued in the banking sector through the initiatives and setting up the fund and other initiatives. guy: why is this one having to be private? this is an incredible situation where italy has come to its problem later than many did in europe. other countries were allowed to skirt the skate aid role. and find other ways to deal with

their bad debt. why do we end up in this scenario? >> we know that all member states have agreed to put in directive andvery to use the principle of -- as the main principle of dealing with problematic banks instead of banks always being bailed out at the expense of taxpayers. now, we are working within this legal framework which applies to all member states. guy: do you think the negative interest rates are making life harder for some of these banks? see that thiswe environment of low interest rates is affecting banks. this is something that needs to be addressed.

on the other hand, ecb is actively providing european banks with liquidity. so banks also have access to resources and during the last couple of years, the number of important steps have been made to improve the capitalization of the banks and to deal with nonperforming loans. hereall of that, we rely in europe on our banking sector. the ecb is doing something, some would argue some things are helping and others are not. do you think negative interest rates were a mistake? ecb to decide on its monetary policy choices. it is not something the european commissioner can comment on. it is independent. it is clear that inflation is

targettially below ecb's of close to but below 2%. that monetary response to is low and even negative interest rates. to that point of the appropriate policy response, i am wondering how frustrated you are that we are not seeing some sort of affect coming through. the bank of japan talked about negative rates taking some time to work. --ue in that camp as well are you in that camp as well? recently made its substantiallylicy more accommodative. through low interest rate policies. we are gradually seeing that crediting those real economies are finally starting to pick up.

this is a positive development. inflation, low inflation, it is a main driver. prices and low commodity prices. this is also the fact that we are not -- these are also fax we are not expecting to last forever. guy: much has been made by the on the effectment on the u.k. economy if it was to leave the eu. what would be the effect on the rest of the eu if the u.k. were to leave? preliminaryssions assessment is that economically and in many other aspects come it is much more beneficial for both the u.k. and the rest of the eu that the u.k. stays in the eu and that is our main message and scenario we are working on. guy: we sell president obama, and visit the u.k. and he made

it clear that he felt that was the case as well. he seems to have had some effect on the british view. do you think we need to see more european politicians making the same case? in theirt would happen minds if the exit vote was to take place and be successful? of the was the president united states here and not european leaders? >> we cannot talk on behalf of of heads of state and government of different eu member states but i think this message is coming across from all sides in the eu that indeed it makes much more sense for the u.k. to state in the eu. and it would be a negative signal to the u.k. also economically a negative development and also a negative

signal for the eu as a whole. guy: commissioner, thank you very much for your time. joining us out of rome. i want to tell you some breaking news. dollar-yen in the last few 107 for thek below first time since october 2014. it has not been a year that the boj has hoped for. part of this is down to what the fed has decided to do in differing an interest rate hike. but the policy decision on the seems to on this week be reverberating still around the market. look at the five-year chart. incredible reading. for the first time since october 105 -- itow have a could generate boj policy. up next, and exclusive

conversation as whether or not the u.k. should stay or go. ♪

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call or go online and switch to x1. only with xfinity. guy: welcome. 30 minutes into the trading day. friday is shaping up to be an interesting session. european equities on the downside. the dax is down by 1.5%. the yen is flying, old is sparkling. let us deal with the details. 600 downhave the stoxx 1.3% at the moment. european docs dropping the most in three weeks. we have seen this week open about half an hour into the european equity market. industry groups. it is read across the board on the stoxx eccentric industry

group. and health care is the worst performer, down 1.5% followed by industrials down 1.4%. materialsproducers are the best performance but they are still down almost .9%. a weaker open in europe following the losses we saw in asian markets excluding japan which has been closed today. a lot of action in the fx market as well. i want to show you the bloomberg dollar index and dollar-yen which is a white line. we have seen dollar-yen breakthrough windows 7 for the first time -- 107 for the first time since october of 2014. part of that is because of yen strength. the yen jumped after the bank of japan's inaction on stimulus this week that it is all about dollar weakness. dollar index dropping to an 11 month low after u.s. gdp came in weaker than forecast.

first-quarter growth was at its in two years. a lot of action on dollar-yen, weakness across equity markets. take a look at individual movers. let us talk with the losers. equities are on the back foot. starting with health care. looking at astrazeneca. first-quarter earnings fell 12%. it's best selling treatment faced generic treatment and costs also rose following acquisitions. analysts were expecting $.96. as presented that by .1%. fee -- sanofi reported little change. guess what the market might be looking at is sales. sales is some of its best selling drugs brought. we saw a decline of 11% of its

best selling insulin drugs. iag also heading lower. one of the worst performers on the stoxx 600 this morning. profit jumpedg and first-quarter earnings increased by more than sixfold. still, iag declining this morning. now, on to some of the gainers. i've highlighted three. -- itng with the aztecs felt less than expected. it was a beat for that company. up almost 3.4%. heading up .7%. what we saw was first-quarter profit beating estimates and also the company pledging more pruning of its sprawling product range. we are seeing a gain on the back

of that. rbs was heading higher earlier when we had the market open. it is heading down now, 1.3%. it posted a deeper loss in the first quarter as it paid for some of the government support it received during the financial crisis. a net loss widening to 968 million pounds. more than what analysts had expected. guy: thank you very much. you the markets, now let us talk about brexit. we're going to head over to the brexit debate. francine: the implications of brexit. this is what we are discussing today. welcome to the televised debate. we will discuss the implications on trade, business, and regulation if the u.k. does decide to leave the eu. we have six panelists. three think we should remain an

three think we should leave. nigel lawson. another former u.k. chancellor. thank you so much for joining us today in the debate. first of all, to start off. i will give you each 20 seconds to state your case. we fail to give an opinion because i do not consider that making such a decision is only a u.k. decision. it has a lot of implication regarding the eu. thate been quite irritated cameron has decided to play with this fantastic, great european dream just for internal purposes

and career half. that he should put his -- that his career should not be a part of his decision. the u.k. should stay and the damage would be much bigger for the u.k. and the eu. i believe that the u.k. has --.ys been an open you can go 1000 years ago and it has always been open to the world. entrenching the u.k. mainland would be a mistake. >> my reasons for wanting to leave is what the prime minister says when he made his bloomberg's speech. he said the present situation in the eu is not satisfactory and it needed radical change.

i am sorry to say that i do not think that radical change was met. it was disappointed. given that we did not achieve what he thought was necessary then, i think on balance, that we ought to leave. i also think that the issue of self-government is extremely important. i am sorry to say that it has been excluded from the debate. it is an important aspect. speak forcbi, we thousands of businesses. we have been speaking to them for over two years since the referendum first hurt best hit the agenda. they have been telling us that the value of the single market, the access to the market, is valuable. it is valuable for jobs. for investment. for the future prosperity of our country. they tell us that they do not see any way of getting that same

market access from outside the european union. >> the u.k. needs out. we do not want to be a minor part of an economically bureaucracy. we want free trade in europe. we want friendly international relations and little else. that is the right long-term place to be. this decision is all about the future. long-term health of this proud nation. european single market has been more than anything else a british conservative party organization. prime minister thatcher and lord cofield. it is slightly paradoxical that still under the conservative might decidee u.k. to leave that huge benefit to the rest of us in europe alone.

as judging just from the point of view of the u.k., i am afraid there will be serious disadvantages for u.k. consumers , businesses, and for the u.k. as such in the case of living. for consumers, because the benefits from the single market in terms of equality, prices, , would be- varieties wiped out to some extent. for businesses, for one reason in particular -- government is including -- governments have the almost invisible temptation to play with subsidies and distort competition and through a strong competition policy, that can be played out of brussels by no means out of tiny london. to putd be impossible

the british companies on a domestic base and able to exercise a worldwide competition with the government that may subsidies. the u.k. would be losing an opportunity to be the real europeof the eu and of rather than having considered that role exclusively to the beloved germany. >> this is not about whether you like europe or not. i love europe. in france. i am flying back home tomorrow. but today, this is about the european union and british relations. an european union is clearly economic failure. this is partly because of the failure of the eurozone but it

is a failure in other ways. a miserably slow rate of growth. it has very high unemployment. it is behind most of the european union including italy. high youth unemployment. it is not just economic venture. it is a political venture. it always has been. shucked dolor -- delors was always clear that this was a political venture. the purpose is to have a political union. that is not disreputable. but it is not something we wish to be part of. this is crazy to be linked into and tied into a political project which we do not want to be part of and we do not agree

with the objective. and something that is an economic failure. we will do far better with a free zone outside european union. francine: if you look at all of it geopolitical concerns be china, the south asia see, and russia, are we not stronger political as a block -- politically as a block? >> you are right that we should look at the global picture and britain does. i know this well from conversations i have had as chancellor. they look at things purely in the european context. haveontext and perspective always been global. there is no country in the world that has more global links than we do. there is no city in the world that is more international than london.

we have a global perspective. and that is what is important. looking at it both politically and economically. to the little europeans, they do not for the most part have that perspective. printing: would london -- itscine: would london lose status as the center of europe? eu it willays in the -- allgingly eroded with of this kind of stuff which you roads the cities position -- erodes the cities position. staying in has a risk. coming out has a risk. but actually come at different

internationally in the financial markets can be a tremendous advantage. look how london propelled itself in the 1980's when hurtling past new york. that is because it was different. not because it was cramped in under a bunch of bureaucrats. i am confident that no one else is on this platform that has read the economic directives that have come out of europe. there is a risk of staying in and a risk of coming out. negotiateyou can editor if you were at the table. >> no. francine: he was there. he has seen it. >> i was there to eliminate many regulations. it is true that there are too many and too detailed regulations. and that we learned from the

brits that there is a name for this which is silver plating which is an upside your terminology to indicate that on top of the original proposal by the commission, the council, and the parliament, each member state, the u.k. i am afraid in the first place at the moment of transposing, because i tried to become creek, there are nostalgic spirits which is a nice thing, but i try to become creek. transposing aof directive into national legislation, there is sudden slightly protectionist driven business inspired perfectionism which complicates the directive more and more. comment on a proposition that i in principle admire of the lord.

indeed the country that has the greatest a global wordective but i think the leadership slipped into your language. is a nostalgict element of it because the u.k. is extremely helpful to all of had forse it has centuries a global perspective. but the global perspective would held by ad if it was fairly small, highly distinguished, it insular country which for example in deployedre you have global leadership like trade policies, like the fight against climate change, like competition policies. can you imagine the deeply respected u.k. competition

what the to do european commission for all of its bureaucrats did, namely to years ge and honeywell 80 ago, no, sorry, you cannot make this merger. the market would suffer too much including in europe. company's network most grateful for that brussels intervention was rolls-royce, the british company which felt that its role as a producer of aircraft engines would have been paralyzed by a combination of ge and honeywell. -- can a mention, again you imagine, and authority out of london to block the merger that had already been authorized by the justice department in the u.s. and had the strong backing of president george w. bush?

francine: president obama also spoke on trade forcibly arguing that the u.k. should stay in the eu. if the u.k. were to leave come it would take 10 years to have some sort of trade deal. >> when of the really important is not a falseit twice between being global and in the eu. many companies are slightly baffled. consumers million that you can trade with with no barriers enables you to be more successful globally. we have 55 trade deals internationally. president obama was making an important point. the world is increasingly trading in regional blocs. the idea of there being 5-10 years of uncertainty is backed up in many quarters.

it is understandable why the president took the position he that the u.s.ea is negotiating several deals simultaneously. it always has negotiated several deals simultaneously. the idea that we would be deliberately put at the back end of the queue is not right and president obama will not be in office when it happens. can i go back to something you said earlier to nigel. that we would be weaker globally because of the cumulative power of the eu. the eu may be good at trade policy but it is a geopolitical player and it is quite hopeless. they cannot agree on almost any foreign-policy question whether it be syria, iraq, the recognition of kosovo. the idea that the eu is a geopolitical player is an

illusion fostered in brussels. it is unreal. the whole problem with the eu is the ponderous way in which decisions are made. we would be more effective making decisions on our own more quickly rather than going through this laborious process of trying to get the consensus of a very large unit. including the french politicians want to reform the eu. the the u.k. wants to reform the eu and the rest of the european politicians are ok the way -- with the way that it is. it is putting a light on all of the issues that the eu has. i think we should not believe that the eu is perfect. the eu has a lot of drawbacks and issues. we should address those issues and clearly there is a lot of red tape and regulations.

it is not by getting out of the eu that you will be better off and it will not help you or the eu. i believe your role as a very important, highly respected country would be much better off inside the eu transforming the eu and helping it rather than outside the eu. >> we do more trade with the rest of the world and we do with the eu. the difference is growing. the proportion of trade that we do with the european union is declining. the world is our oyster. the problem, one of the problems itthe european union is that has a democratic deficit and a bureaucratic surplus and neither of those things are good.

as the british people are concerned, the democratic deficit is serious. this links with the regulation problem. there is far too much regulation which burns small and medium-sized enterprises in this country enormously. do not these enterprises have anything to do with trade with the european union that they are still burdened with this regulation. it is true that national governments also introduce regulations. in get to entangled with them. that wedifference is can get rid of bad regulations if they are british regulations. that is what the thatcher government did. economylt was a british doing far better. but if it is a european regulation coming you are stuck. you cannot do anything about it. and the influence within the

european union has declined considerably as a result of a decision we took not to be a member of the eurozone. everyone said we would be mad and that we must go into the euro. we decided that we did not want to. i think even the cbi admits it was a big mistake to advocate that britain should join the euro. what this means now is that there is a eurozone caucus within the european union. we pay of praise. the eurozone caucus has an inbuilt qualified majority and the ability of the united kingdom to influence decisions in brussels has greatly diminished as a result of our decision which i think was

correct not to be a part of the eurozone. politics,ack to the economically we will do fine. fortunately, we live in a relatively free trading world policed by the of yukio. -- wto. we will do much better outside beit and we do not wish to part of this political project for a political union, the united states of europe. since we do not want to be part -- hat project don't believe the political union is a necessity. not in the short or medium term.

are going for. don't want to be part of it. a mythologyhere is about the single market. it is widely received -- believed that you have to be part of it to sell to it. that it gives you access. the fact is that many countries sell to the eu without being members. america actually sells more to the eu than we do. switzerland, put cap at a sells more to the eu than we do. even when you look at services, the intra-trade in services within the eu is growing less quickly than eu was services to the rest of the world. as nigel said, our trade with 10% which dropped by

is a dramatic drop and illustrates that the ease -- that the eu is a slow growth region. someone said it is like a walled garden. they should have added that it is a walled garden in which of the trees and plants desperately need some water. >> they are saying that the big -- the businesses are saying that they do value no terrorists barriers within europe. it has enabled them to trade more effectively with the world. rules, some of our most important industries like the car industries -- >> do you really believe that germany, whose largest market for cars is -- and weeed to be clear have to understand what the process of leaving would look like. not up to germany.

there would be 27 countries. all of whom would have a veto. it is worth reading article 50. there are veto powers that every one of those 27 countries have. >> article 50 is not in the least frightening. the amazing thing about it is it says that for two years, everything remains exactly as it is an britain participates in all decisions. the clock may be ticking. two two years, -- for years, everything is the same. call is difficult to authoritative british citizens to a bit of pragmatism but i do. know ourc deficits, we democratic systems throughout western democracies are in deep

crisis. if a british prime minister decides to a point a cabinet minister, maybe even a cabinet minister not having been elected as a member of parliament, what sort of democratic scrutiny has that person to go through before taking office? none, if i am informed. the equivalent of a minister, european commissioner, cannot be appointed by the president of the commission or at least the appointment may not -- will not be real and valued before there is an approval by the european parliament which with all due respect is also a parliament. and oralsis of written examination conducted in total

transparency throughout europe. also, pragmatism -- please -- we can always renegotiate with the u.s., etc.. let us not lose perspective here. enteredn the world have a phase in which the appetite for old business, trade liberalism, etc. has plummeted down and down. do not delude yourself that with quites. for example, apart from the cucumber you will get an easier, nicer, solidarity spirit because the u.s. is turning like the rest of the world to closer and protectionism. the european union has the protectionist tendency i am afraid. this is one of the main reasons why president obama wants us to

stay because he thinks it is in america's interest that we stay because we will be a liberalizing influence. within the european union. are understandably concerned about protectionism in the united aboutre also concerned the degree of anti-americanism which there is in the european union, though less in france, for example. he wants us to be trying to reduce the significance of that. that is in america's interest. what is in our interest? francine: that would mean the u.k. is a stronger and more valuable trading partner for the u.s. whatam talking about not is in the interest of the united states. that is