♪ >> coming up on "bloomberg best," the stories that shaped the week in business around the world. barclays ceo's get into the hot water. united airlines takes heat after a shocking video. banks for fired up after the start of their earnings season. >> the main street side is not as strong. >> janet yellen says the fed is ready to change its focus. while the fed's james pollard is focused on the balance sheet. >> it is higher than anyone thinks it should be. >> christine lagarde tells bloomberg what keeps her up at night. >> who do you think will be the next french president? what will happen to germany? the terms and conditions of brexit?

>> donald trump continues to promise big reforms, but opinions differ on if and when he will pull them off. >> i do not know if it will happen. if i knew that, i would be really rich. >> to accomplish something in that area there has to be , something taken away. >> it is all straight ahead on "bloomberg best." ♪ >> hello and welcome, this is "bloomberg best," your weekly review of the most important business news from bloomberg television and around the world. with several major banks reporting earnings there is big thursday, news from the financial sector this week. they certainly did not expect the news about barclays they at came out monday. >> barclays says it's board will

issue a formal reprimand and make a significant cut to the seat egos play -- ceos pay. the bank says after he apologize, he made an error in not applying perfect governance. we know that in 2016, he tried who theout whistleblower was, and it came to the attention of the board. it seems to be a violation of rules surrounding whistleblower protection that he should have sought that person's identity. there were repeated attempts to find out the identity. that led to the action by the board, which says it stands by staley and will recommend him to the agm again. >> staley will be reprimanded, he apologized in a staff memo, saying he should have left staff compliance handle the memo. he may lose 1.3 million pounds of his bonus for last year to

show the appropriate amount of contrition. >> why is he still in the building? >> the board thinks he can survive this. they think he might be given a sympathetic hearing. >> the wells fargo accounts scandal is rearing its ugly head, after a six-month independent investigation found they shrugged off the scandal. they lay the most blame on the former head. today, she struck back, rejecting the board's conclusions, saying we strongly disagree with the board's report. >> one of their main conclusions is that the lonmin who ran the community bank, that she knew a lot of things, she was this hard person who went allow a lot of other people to make changes in the bank. they also had john stumpf, the former ceo, her boss directly. he had been slow to fire her and did not give enough guidance at that time.

>> what else are the additional consequences today? is that it for now? >> in terms of compensation, they also voted friday to call back $40 million. in terms of other firings, the board found earlier in this investigation, they did fire for ur people, some were deputies, others worked in the bank less strictly under her. >> federal reserve chairman janet yellen said the fed is no longer putting the pedal to the metal but has shifted to gains made in growth. >> what we want to make sure of is that we sustain the progress that we have achieved, and that the appropriate stance of policy now is something closer to what we call neutral. >> we all love a story, but does

the story ultimately matter? they tell us it is not timing, it is the removing of accommodation. do the words count? >> they do count when you get into the market, because the fed is still accommodative. it is putting stimulation into the economy, just less of it. what we should start to see as time goes on, the effect in the markets of rising interest rates and less juice for the stock market. we haven't seen that yet so far, which is the interesting conundrum here. michael: geopolitics continue to take center stage for business and markets today, with rex tillerson meeting with sergey lavrov. they continued saber rattling overnight for north korea. secretary lavrov is meeting with tillerson right now. what do we expect out of these meetings? >> the u.s. has pretty low expectations for these meetings. there are hoping for russia to say, we will think about it, with the u.s. proposal. which is that washington really wants moscow to reconsider its support of the syrian president,

bashar al-assad. >> the current state of u.s.-russia relations is at a low point. there is a low level of trust between the two countries. >> russia is open not only for a dialogue, but also for joint action aiming for the result in those places where it is mutually beneficial for both countries. >> there were questions about whether or not mr. lavrov and secretary tillerson would play nice politically. rhetorically speaking, they vowed to work together to remove terrorism from syria and to denuclearize north korea. but on policy there is a , difference that will shape and mold president trump's time in the white house. >> president trump says he is unlikely to brand china a currency manipulator. speaking to "the wall street journal," he also said the u.s. strong, suggesting

it would not be good for business. it would suggest tough trade rhetoric has faded. but what does it really mean, domestically? >> this is a very big deal and a big step for donald trump. he said he would label china a currency manipulator on day one if he were elected president. this marks a major reversal from that campaign promise. he also said in this article that a strong dollar is not good a bad thing. , and that is a real move for the u.s. as a whole. for the past several decades, presidents have consistently said a strong dollar is in the u.s.' interests. stepping back from that is pretty significant coming from , donald trump. michael: we have heard from three of the five largest u.s. banks. are there any themes consistent across the banks? >> the wall street side of the bank is doing quite well. -- boyant.boy and

citigroup had its best quarter for fixed income trading in three years. that is great, but the consumer on the main street is not as strong. loan growth is not what people would have hoped, given the ms. optimism in the market. a variety of reasons have been given. expenses are not going down sharply. some have arisen at wells fargo, for example. >> for jpmorgan, capital markets drove the equity trading, better than expected. everything else seemed to align. we saw all of the bank reserve releases this quarter, driven by energy. last year that was a big headwind for the company. they were being conservative in terms of conserving losses.

-- reserving losses. we are seeing some of that being released. the outlet has improved. -- outlook has improved. michael: still ahead as we review the week on "bloomberg best," christine lagarde assesses the big risks to the world economy in 2017 and stephen schwarzman explains why the devil is in the details for donald trump's tax plan. plus, ford ceo sees growth opportunities in china. more of the week's top business headlines, a viral video sets off a social media explosion in -- and united airlines deals with the fallout. >> economics may be that they are willing to raise the price, willing to pay passengers to get off the airplane. michael: this is bloomberg. ♪

michael: this is "bloomberg best," i am michael mckee.

let's continue our global tour top business news with a story involving a commodities giant facing a challenge from an activist shareholder. >> bhp targeted for an overhaul. the investment firm called the world's biggest mining company to unify its corporate structure, spin off assets, and improve capital returns. give us details on what holsinger is urging bhp to do. >> there are three things the hedge fund is calling on bhp to carry out. one of them is a demerger of its u.s. onshore unconventional oil assets, valued at $22 billion. he wants to see those assets bundled into a single entity on the new york stock exchange. it is also looking for bhp to simplify its complex structure. bhp, essentially two companies, one in london and one in melbourne.

that has all manner of legal complications. it also brings up quite a number of complexities in the issuing of dividends. the third thing and would not be a surprise, another investor calling for improved returns to shareholders. >> bhp says the proposal isn't worth the cost, and rejected the suggestion of an overhaul to their business. what does it mean about shareholder activism in the mining industry? what does it tell us about where we are in the cycle? >> it tells us that management of these companies need to be aware that in an environment goingcommodity prices forward seems to be stagnant, and investors will be looking at this very hard finding pockets , of value they think management should be addressing more closely. this is a perfect example of that. >> keeping u.s. manufacturing jobs onshore has been a priority of the trump administration. earlier this year toyota pledged

$10 billion in the united states, and has followed through with the first installment, a $1.3 billion investment in a substantial plan in kentucky. the president went out of his way to say this is a great investment that reflects real confidence in the economy. how long has this been in the planning stages? is this something that has happened since the election? >> the program for toyota is not brand-new, it is just an opportunity to start introducing it here in north america. there are only a couple other manufacturing platforms right -- plants and vehicles on this new platform right now. we are honored to be the first one in america to get the program. but we have been working on this camry for over three years. it is not just brand-new and picked up most recently. >> today, at&t made a deal with street path and europe's biggest publicly traded health provider

is in talks to buy the u.s. drugmaker alcorn. whoever heard of straight path? >> i think they have nine employees. they are not the biggest company in the world. this is all about 5g. at&t is trying to get ahead of where the internet is going. it's about the internet of things. sometime down the road you can use your phone and start your car before you get to it so it is warm. at&t has been very acquisitive. they bought directv and time warner. they have done these $1 million, $2 billion deals throughout the years. >> china's tech conglomerate leeco has been forced to drop its $2 billion acquisition. just the latest setback to the global expansion plans. they are facing huge challenges. part of that is the sales picture looking distinctly murky. >> absolutely, a pretty grim picture for leeco in the u.s.

the chinese conglomerate does everything from smartphones to video streaming to electric cars. they are the target of $100 million in u.s. dollars in revenue by the end of 2016. they got 15 million u.s. dollars. as a result, they are cutting jobs by 1/3. they are pulling the plug on this deal. they have pushed through to buy u.s. tv maker visio for $2 billion. that deal was going to be part of their attempts to grow a brand and get a foothold in the u.s. market. in terms of brand recognition, it is pretty weak. it speaks to the cash crunch problems facing the country knee -- company, articulated in a letter by the ceo to the employees. it seems the situation is getting worse for u.s. business. >> billionaire patrick drahi filing for an ipo of its u.s. cable tv businesses.

they are hoping to exploit stock market gains to create currency for further expansion. why now, and what can they do with this money? altice is a is a -- cable company in the u.s., formed through acquisitions, two smaller cable companies. with this ipo they can raise money for other deals in the cable space. i do not think many people are thinking they would stop at acquiring cablevision suddenly. one company they have expressed interest in is cox communications. cox has repeatedly said it was not for sale. but that is one big target for altice. >> united airlines, off by 3% as a video of united airlines personnel dragging a passenger off an overbooked plane went viral. walk me through the real issue for united, besides pr. >> all the u.s. full-service airlines are looking for ways to

make their operations more efficient. filling the airplane more makes them more efficient. we are getting close to the maximum overbooking and what we call load factors, the amount of people on the airplane. we are getting to the maximum they can put into an airplane, that is the challenge. >> if they are hitting against their max load factor, what is the mean for their bottom line? >> it means we will not get a benefit from selling the load factor even higher. the challenge is the airlines have to think about, if they will oversell their airplanes to the degree that they are right now, the economics may have to be to raise the price they are willing to pay passengers to get off the airplane so they can get priority passengers on. >> we can see it is a man of asian descent. what is the ramification in

terms of passengers in asia? there is a blowback here. >> there is a very potential blowback here. if the chinese population feels united was discriminating against this passenger, that can be a severe problem. united has the most nonstop flights to china from the u.s. among u.s. carriers. >> there is said to be in talks to combine train operations. that is according to people familiar with the matter. what is the logic? the industrial logic? does this combination makes sense? >> it absolutely makes sense. it is a capital-intense industry, requiring stock from producers. joining forces makes sense. we've seen a clear pattern over the last couple of years. two years ago, china formed the world's largest producer of its

stock. one company snapped up and italian peer. there is a clear rationale for combining those players. >> toshiba shares are slumping in tokyo after it warned it may not survive the enormous losses at its westinghouse nuclear unit. the stock down 2.7%. the warning came when it relayed delayed third-quarter reports not approved outfitters. -- auditors. how good or bad is this? >> it is a very unusual step for a company to take in japan. they have been trying to close the books on the december quarter. we are quite a few months past that. they missed two deadlines. this was their third deadline for filing financial results. they said they could not get auditors to sign off on financial statement so they did it themselves. they made the disclosure and did cite the risks. this is a big deal, stemming from the billions of dollars in

losses at their westinghouse nuclear business in the u.s. >> tesco shares lower today, after the uk's biggest supermarket kept prices low. of -- of the pressure on industry beset by shrinking profitability. adjusted operating profit rose. there are plans to pursue this resume dividend payments in the 2018 the fiscal year. >> we had beaten our expectations. we are confident that we are on track for the 3.5% to 4% operating margin goal. ♪

michael: welcome back to "bloomberg best," i am michael mckee.

the international monetary fund will hold its annual's ring meetings next week in washington, d.c. this week, francine lacqua said government the managing imf director christine lagarde lagarde to get her thoughts on the state of the global economy. >> what is the one thing we should worry about more? is protectionist measures as bad as we thought a couple months ago? >> protectionism clearly is a threat. is it was -- one that to be realized, would really be a break on growth, a break on productivity, a break on investment. we are seeing both innovation and trade are conducive to productivity. productivity is the agent for growth. and better allocation of resources. as part of the risk of that we

see, clearly, protectionism is one. the political uncertainties we see around the world, particularly in the european region, is high on our agenda. and the potential for capital flows moving from emerging-market economies to advanced economies as a result of the reinforcement of the dollar and the rise of interest rates, is the third one. those are three risks that apply to a situation which is quite positive at the moment. >> do you believe the trump administration could be less protectionist than we feared in the beginning of january? >> as always, i do not think any economy would actually prescribe limited growth, limited productivity, limited

investment, limited innovation. it policymakers, including the u.s. policymakers, one better -- want better growth more , investment, more innovation and productivity, trade is part of the solution. then you going to the question, what kind of trade? is it trade with restriction? trade with a distorted measures? i think everybody, i hope, agrees we do not want distortion, we do not want restrictions. we want trade that is open, fair, and inclusive, to facilitate. -- facilitate opportunities. >> do you worry about french politics or the greek bailout? >> i worry about the outcome of any election these days. what the economies do not like and what investors do not like is uncertainty. the track record in the last few months has been the realization of unpredictable results. that leads to a period of uncertainty now.

everybody wonders, who will be the next french president? what about the next politician in germany? what will happen to the terms and editions of brexit, vis-a-vis the rest of the european union? the sooner those results are known, the better people can actually plan their lives, their investments, the location of business, jobs going forward, and so forth. francine lacqua also asked the eu economics commissioner about his plan b if brexit negotiations fall apart. you will hear his answer later in the program. up next on "bloomberg best," an exclusive conversation about cutting down the feds considerable balance sheet. plus, businesses chomping at the bit for donald trump to deliver a tax reform plan. stephen schwarzman says, take a deep breath. >> it is complicated. if the numbers were easy, someone would have printed it.

michael: this is bloomberg. ♪ [ engine revs ]

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call today. comcast business. built for business. michael: this is "bloomberg best," i am michael mckee. janet yellen said the federal reserve should adopt a more neutral policy stance and dial back its stimulus efforts. also on the fed's to do list, trimming its $4.5 billion -- $4.5 trillion balance sheet. in an exclusive interview, they -- st. louis fed president jim need totalked about the bring that figure down. >> first of all, $4.5 trillion is higher than anyone thinks it should be, that is number one. number two, if you want to create policy space for the future and at least have the option of doing quantitative easing in the future, you should

get the balance sheet down to a reasonable size today. another aspect, all you have to do is to allow the reinvestment policy to end. then you can gradually run off some of the balance sheet size over time. also, if you think it is lumpy, if you look at the pictures of what is maturing when and what month, it does look lumpy. but we can manage that and smooth it out in such a way that it declined at a given rate. it is not a matter of doing something that would cause volatility in markets. i think it would be taken in stride by markets. i think we could get to wait lower number than a $4.5 trillion with a reasonable policy. >> what is a reasonable size, what is the number? >> that is a good question. before the crisis it was about $800 billion, almost all cash, with some reserves. post-crisis, cash is all the way

up at $1.7 trillion now. if you add some reserves to that, maybe a couple hundred billions of reserves, you could get to a balance sheet size of $2 trillion. the point is that the $4.5 trillion we have now is way above anything like the $2 trillion range. we should allow it to run off so we are making progress toward that eventual goal. the committee has not decided what it wants to do, but even if we ran policy with significant amounts of reserves, we would only need a balance sheet in the $2 trillion range. the point is not to go to $2 trillion immediately. it is just to allow the run off to occur gradually over several years. michael: there was also plenty of conversation about u.s. fiscal plans this week on bloomberg television. on tuesday, president trump welcomed more than a dozen ceos

to the white house for discussion of economic initiatives and strategies. blackstone group ceo stephen schwarzman leads the president's strategic and policy forum. he leads up our roundup of interviews on politics and policy. >> did you get a general sense of the timetable for tax reform? when will we have a plan coming out of the white house? >> i am not sure about that, it is complicated. if the numbers were easy, someone would have printed it and send it to you. to accomplish something in that area, there has to be something taken away from other people to have the revenue to finance the tax cuts. there are a lot of different ideas, a lot of different people on capitol hill and the white

house. they are all thinking about what the trade-offs are. i expect a much more deliberate, logical approach, than trying to pass health care in 17 days. that is not going to happen in a tax year, which is good for everyone. i think there will be a circle back on health care. in other words, the publicity on that three weeks ago is dead and gone. it has difficulty being dead and gone. i think it is worth working on -- work going on in the house. how long that will take, i do not know. but people are talking and ultimately, they should be able to get something out of the house. whether it goes to the senate, that is your call and everybody else's. >> what about the sequencing? do they need tax reform up? they indicated that was the sequencing to follow.

>> it would be better from a scoring perspective if they could do that. i think that is in the land of the unknown. we could plan for that not to happen. if it did, it is a huge bonus and makes life easier for tax reform. >> it sounds like the president is looking at a comprehensive approach. tax reform, not just tax cuts. people say we could get tax cuts faster. i assume you would rather have comprehensive tax reform even if it takes longer. >> when you're dealing in months, that is not long. that is only long on television. it is not long in the context of the kind of legislation issues. just reducing taxes, that is a

fallback, as opposed to reform. >> is there any element of the tax reform package that you , as head of blackstone, regard as essential? that if we do not get, it is not worth doing? >> i do not look at it that way. number one, i am not charge of that world. i do not know that anyone is. we work with what comes out of the system. individuals are somewhat powerless to affect that overall outcome. >> what specifically do you see the administration getting out of congress? >> i specifically see corporate tax rate reductions. that is a key to rest parity in -- economic prosperity in the long run. we have one of the lowest revenues in the oecd. we are the only company -- country that has a global tax, not territorial tax. we have bad depreciation rules. if he can get that rate from 35 to 18 and have 100% expensing of

capital purchases, this could be one of the most explosive growth periods in u.s. history. there.e was an if in when will it happen? >> if i knew that, i would be very rich. honestly, it is going to happen. i think it's going to happen in this administration. i would expect some of the big tax cuts will not happen until next year or the year after. if you remember with reagan, the really big tax bill was 1986 when we dropped the highest rate from 50% to 28%. we cut the corporate rate from 36% to 34%. that is when we unleashed growth in the economy. it may take time and this administration but i am expecting it sooner than later. >> why should i be patient as an investor and wait for something that will take one or two years? >> because you have no choice, honestly.

it will pass for all of us. if you sell off your stocks and their inpatient and take your gains right now, someone else will get the real profits you do not have. >> do you think we could actually get the some kind of comprehensive tax reform this year? >> i think the chances of that are below 50-50. but they are below 50-50 every year for the past 30 years. it will take a concerted effort by the president to say this is what i want, this is what is good for the american middle class, this is why i came to washington, to improve economic performance. that kind of effort is necessary to get tax reform done. if you don't have that, it simply won't happen. even with that, it could be quite difficult. as you point that, just because they are republicans, does not mean they agree on the nature of the reform. we saw that in health care, we will see it in reform. enormous amount of

political capital being spent by the white house to get this done. >> deregulation is something we hear about from a lot of market leaders and financial leaders. particularly in the financial institutions area we hear that they want to cut back on dodd-frank, and they say maybe glass-steagall will come back. what do you make of that set of proposals and terms of what they would do for growth in the united states? >> glass-steagall was a 2500 page piece of legislation developed in one year in the midst of a major crisis. excuse me, dodd-frank. it is inconceivable that there shouldn't be changes made to dodd-frank. it is surely much to burden some

on a set of community banks and smaller banks. there are other provisions that are having reverse of facts. i am worried about what is happening to liquidity in the bond markets as a consequence of the changes contained therein. hopefully we can go about it in a rational, thoughtful kind of way. it was only a few years before the financial crisis that you had an administration that was doing photo ops, they would take books of regulations, and they would take saws like you use for wood, and all the major officials would be pictured taking saws to the books. that seems it to be the wrong philosophy toward financial regulation. a kind of mindless, deregulate for the sake of deregulate philosophy. that would be a grave mistake. i worry we might go back to that. ♪

♪ >> tesla hit a new milestone after surpassed general motors to become america's most valuable auto company. $51 billion in terms of market capitalization. >> this is more of a symbolic moment where tesla crossed the line of being more valuable than gm and ford. but you have to wonder why. investors seek tesla as a future dominator of electric cars, maybe a leader in autonomous vehicles maybe a leader in , electric storage. you have a lot of businesses with potential. that is what it is playing for, and that is a long-term play.

michael: you are watching "bloomberg best," i am michael mckee. let's look at more of the weeks most compelling conversations with business and policymakers. we caught up with the ford ceo shanghai andin talked about the automaker's ambitions in china. >> there are huge, enormous mutual ties between the two countries from a trade standpoint and we have to tread carefully because the economic relationship is the basis of the overall relationship. i am glad to see both leaders early -- meeting early on in their 10 years. tenures. >> the auto area is one area where china could level the playing field in terms of tariffs. is that something you think is possible now? >> for u.s. businesses, china is an important market. tangible reforms and openings are needed. how do you make sure you

decrease policy uncertainty, boost business confidence and at the same time, create equal opportunities for each nation? i sit on the manufacturing council and we all share the same objective. we want a very healthy and vibrant u.s. economy. >> what are the opportunities in china in terms of sales and how much will that be reliant on a relaxation? -- relaxation of the rules that we see in china? >> if you look at the chinese market, less than 2% of the market here is pickup trucks. even with that, it is the fourth largest in the world. the government is thinking about potentially changing some of the restrictions, which we think would grow that customer appeal for pickup trucks. a couple provinces have done

that already. the research we have done, the initial orders on our f-150 raptor, is a huge opportunity to grow our business in china. >> how will brexit go? let's say there's no deal. what industries in europe and what countries will suffer the most because of this? >> i refuse to speak about no deal. if you start talking about plan b, it means you do not believe in plan a. i am convinced we can make it. if we negotiate on principles -- what are the principles? it has to be about citizens, the freedom and movement of citizens. there are 4 million people from the e.u., they are working in the u.k. london is among the biggest. there is the financial aspect, and discussing the future of our relationship, which needs to be very close.

this must include a trade deal and other items such as the fight against climate change. it is not that i am optimistic. >> you are optimistic, you believe in plan a. but reassure me there is a plan b if it does not work. >> we would need time to think about it. but here, everyone is energized and mobilized to succeed. it will be difficult at times, obviously. it is a complicated divorce, and we have so many links together and so many interests there. but everybody is mobilized to succeed. we want a clean brexit and a strong relationship with the u.k. >> let's talk about the presidential election in france. you have the far left candidate

gaining in the polls, catching up with republican fillon. melechon, where is he getting the most support from? >> we are doing a happy campaign, that is why it is working. we are far from the pessimistic pictures that some of the candidates are giving. this is a very grassroots movement we are trying to install in france, far away from the traditional political party stuff. >> you talk of melechon not wanting to leave the single currency or the e.u. straightaway, but wanting the e.u. to change. is melechon's ambition to propose france leave that the e.u.? is that his ultimate ambition? >> absolutely not. our ambition is to change europe

for the better, for better cooperation between our people. but also because we all agree, left or right, from different parties, citizens, we all agree on one thing, the current e.u. is not working. what we want is plan a to rebuild a different europe, and plan b if that does not work, we want to new tactics for cooperation to join forces with brussels. >> what is the top issue for melechon? crystallize what he wants changed first and foremost for the year. -- eu. >> he wants to bring back democracy. that's in a nutshell what i would say. >> treasuries have rallied. president trump says he likes the fed's low rate policy and is open to the possibility of re-nominating janet yellen as fed chair.

it was a spectacular day when it comes to the treasuries market action that we saw. do you expected this story, this trump and china story to continue driving these moves? >> it is the only thing that is. there is no reason why yields in the u.s. or rest of the world are as low as they are. the reflation trade going on well before trump is embedded for at least another year. the geopolitics is the driver right now. every time we get back to that level, it does not hold. that would be the key important level. >> what breaks it out of that range? >> we need to see the employment side of things coming through, wages more than anything else, in the u.s. we have to shift from monetary

to fiscal. we need to see demand push and lift inflation and treasuries to get upside. the downside from yields, more military action here in asia will drive people into more and more safe havens over the next few weeks. it seems that is a major script we are looking at the moment. >> what would you touch? french bonds, 10 days away from the presidential election there? that is spread between german growth and french bond. pretty wide. >> it is pretty wide. the things i worry about the french election, there are a lot of undecided voters. every poll, you see le pen, or maybe melechon coming up. the digital outcome you get with these elections, at least you

get a second attempt. i will not be chasing french spreads at the moment. there are enough for returns elsewhere you do not need to get extra return over germany that france gives you. it has gotten wider, but it is not enough to offset the volatility you will get if you have le pen and melechon go through the first rein. that would be a very volatile period for france. ♪

♪ >> check out what we have seen. when it comes to m&a on your , terminal, orange line, average premiums have been higher. white line will be deals count moving lower. >> there are about 30,000 functions on the bloomberg and we always enjoy showing you our favorites. maybe they will become your favorites.

it was another you will find useful. q uic go. it will lead you to our quick takes where you can get , important context into timely topics. here is one from this week. >> europe's common currency, the euro, has been chasing debt for years. now with the u.k. heading for a european exit, greece in perpetual crisis, and discontent fueling nationalism across the continent, can the the euro, the world's most ambitious financial experiment, survive? here's the situation. voters are fed up with the economic failings of some e.u. countries and the loss of control to brussels. withdrawal from the euro has become a rallying cry for the nationalist movement, including italy's five-star movement and marine le pen's national front in france. meanwhile, the greek tragedy continues.

the government is struggling to meet creditors' demands to keep the bailouts slowing. germany's insistence on austerity leaves the lingering sense that greece may have to leave the currency union sooner or later. adding to the problem is a euro area slow recovery from its worst ever recession. unemployment for people under 25 has been stuck above 40% in greece and spain, causing what some call a lost generation of european youth. here's the argument. the global financial crisis exposed the flaws in the common territory. -- currency. when it was created by 11 countries in 1999, they agreed to a central bank and set interest rates, but only a limited unified approach to government spending or bank regulations. when banks began to wobble and countries like greece and spain were pushed to the brink, the common currency meant they were tied to the euro, which meant they could do nothing but except -- accept massive government

bailouts in the euro area. germany, the biggest economy, pays the lions share. since then, euro area leaders say they are strengthening it to -- strengthened the rulebook to make the common currency more resilient. they argue even if greece falls out of the block, the euro will survive. european leaders have shown they will do what it takes to keep the currency going. and then there is the politics. the euro, unlike other currencies, is a symbol of europe's aspiration to unite in peace and prosperity. but some business leaders, analysts, and politicians suggest the deficiencies mean s its demise is just a matter of time. michael: that was just one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com, along with all the business news and analysis 24 hours a day. that is all for "bloomberg best," this week.

thanks for watching. i am michael mckee. this is bloomberg. ♪

>> welcome to "bloomberg businessweek." we are coming to you from inside the magazine's headquarters in new york. the satirical newspaper striking fear into the hearts of french politicians. and what the maker of post-its is doing in the market for government issued ankle bracelets. and finally, what could be the most expensive mistake for the u.s. military. ♪ anchor: we are here with the editor and chief. so many stories this week. we want to talk about something in technology.