♪ francine: president trump says he will deliver the state of union when the government is opened, just hours after speaker pelosi blocks them from getting the speech in the house chamber. carlos ghosn gone. france's finance minister tells us that he has resigned. >> carlos ghosn just resign last night. andnow it is time to define

put a new governance in place. , today, the most important thing is to bear the future -- prepare the future. airbus called the brexit process madness and pledges to leave the country if there is a no deal outcome. meanwhile, the eu says they need clarity from britain. statesus, european union , it is not clear what great britain wants, what kind of changes they have to have, what kind of things they want to renegotiate. week's need to use next so that great britain can't explain what it wants, then they can pick up the discussions with europe. to "bloombergome surveillance". tom keene joined me a little earlier today, tom keene does not get up for the cold, but today we had a special guest.

>> we are going to be on earlier with an important conversation on u.s. politics. pmican see the european numbers, one of the themes. right, that started on monday when the imf downgraded some growth forecasts. of course, the ecb, i saw a lot of market research saying the euro could go lower. if you look at inflation and the general mood, it is unclear what drahgi can say to lift europe. tom: what else to be have? francine: we will be talking to anthony scaramucci. later we will speak to the dutch prime minister and the swiss national bank president. first, let's get a round up of the news, bloomberg first word news in new york. president trump says he will give the state of the union address was the shutdown is over

, following house speaker nancy pelosi saying she will not let the president give the annual speech unless government agencies have reopened. the trump economic advisor is telling cnn there could be zero economic growth if the shutdown continues through the first quarter, but business leaders remain bullish. chief says it is likely there will be another five crisis but it is not his industry that will trigger it this time. he sees potential shocks from the credit market, given where risks in the system have gone since

>> clearly, there will be enormous levels of uncertainty if we do not have a more organized exit from the european union. we already feel that now, there is no question there has been an economic cost paid by the u.k. consumer and industry because the uncertainty has gone on for so long. >> airbus calls the brexit a noss a disgrace, saying deal divorce could force investment out of the u.k.. their ceo is one of the most outspoken business leaders and slams the quote madness of brexiteers but says the playmaker will not abandon britain. president trump formally recognized of venezuela's opposition leader and head of the national assembly as head of o underputting madur unprecedented pressure. the u.s. and international allies recognize juan guaido the recognized leader minutes after declaring himself head of state. brazil has promised sweeping measures to reform the economy leading presentation, cutting pensions, and a minimum retirement age. says he does not want to risk the economy turning into

a venezuelan style regime. >> the aim of cutting state presence is to eliminate corruption. many have become used to being clients of the state. even social programs have not reduced poverty. the concern was to get as many votes as possible. we have to confront this. we have to do well by purcell, otherwise the left will be back in. it could even come close to the venezuelan regime. global news, 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom: like you so much. haslinda amin join francine and i and i in a moment as we begin this fourth day. that distance will be in

washington, maybe measuring the distance between president trump and speaker policy. with us anthony scaramucci, full disclosure, i did attend his party. i had a riesling i have never tasted in my life. he has decided to wander by today to talk about this moment in american history. wonderful to have you here. >> i'm glad you came to the party. -- cap youe to are next year. listen, the economy is slowing down, it's like the president had a 20-0 lead going at halftime, now they blow the lead. tom: i want to go back to the shutdown. from long island, 14,000 federal workers on long island. you know these people, you went to school them and they can't make rent. >> it is terrible, but this is what's happening. people are looking at washington thinking it is so badly broken,

they will be doing stuff the president does not want to do. they will be conserving capital, slowing down investments to capital infrastructure. again,e hoarding cash because you can't have this level of dysfunctionality. they are arguing over $5.7 billion. for me, what i've said is that if trump was looking at president donald j smith, he would be on bloomberg and fox and other places are railing on the dysfunctionality. tom: please let the president know, we would love to have. . i'm just saying it is absolutely ridiculous. >> --. i am just saying exactly what it was. the got to knock it off. tom: how long can last? -- can it last? they have come down to a

strategy were neither can blink. francine: is it going to last for five years? what is going to break this? >> i don't know. the independent party, not really a party, but the registered in the kremlin -- registered independents are now larger. i would say the president and his staff, hey guys, knock it off. becauseto cut a deal, what you're are doing is disrupting the u.s. economy and the global economy due to your egos. i think it is very, very stupid. tom: the dysfunction of the white house is very clearly understood. as a starting point in the conversation, have you ever seen the president more alone than he is right now. he is alone and definitely understaffed. he is definitely had a lot of people who have been disloyal to him. , unfortunately,

flood the government they one. they are basically swamp creatures inside washington. they are inside the white house with the president, he is trying to disrupt and change washington , and in fact, it is gotten worse. francine: how does the president measure success? is it the stock market, and will we see the trade question shutdown result -- resolved? >> if there could be a shutdown where neither side is embarrassed, it will end. as for the trade deal, i think you'll get a deal done. and the chinese and theboth need to deal done. -- they both need to deal done. tom: does he look at the stock market as a indicator of success? >> i think he does when it is going up. he wants to focus on the economy, and he is done a great job. pro-business,

progrowth. look at the supreme court. the social issues are not going to change in the united states, but the conservative judges are would help improve the economy as they continue to deregulate. tom: we need to understand that mr. scaramucci here was codirector of mitt romney's campaign. now we have an idea of the general's leaving. mattis is gone, kelly is gone. give us the importance of the authoritarian figures with the president and. an update on your relationship. . >> i will say two things, i think these guys are trying to serve the country. they have been at odds with the president in certain areas and a wish they had had some mediator or fabric softener with a good -- where they could get along. general kelly fired me after 11

days, it was brutal and humiliating. i made a mistake, and i own it. i don't blame anybody for the firing other than myself. i reached out to general kelly and i have invited him to the conference. tom: and he accepted? >> he accept the imitation. -- accepted the invitation. tom: what are you going to talk about? general kelly is a patriot and has served this country in a political position and for 40 years as a u.s. marine. he loved the country, i want -- love the country, and i wanted to bury the hatchet. we have to send a message of unity to people in the states. we will be talking about how to fix the immigration problem, we have to fix the legislative agenda. and what we do over the next two years to improve the economy for working class and lower income people. what will mueller

find? >> i don't know. rudy -- you got to ask rudy. if i had him on russian collusion, i think this would all come out. here's the thing we all know about social media, it is pretty easy to find stuff that people are doing in a nefarious way. it is 19 or 20 months into the investigation. i was there on the campaign, had a senior role, on his executive transition team. i did not see anything related to russian collusion. the question is are they going to go after him for past business practices or things like that? i hope they don't, because he is the president. let's focus on improving the economy. that's what i really believe. francine: thank you very much, founder at sky bridge capital. we have a live show coming up on

bloomberg. we speak to the chief executive of some of bloomberg's biggest executives, including volkswagen. we also talk market volatility and the u.s. shutdown with the chief executive of the nasdaq. this is bloomberg at the world economic forum in davos. ♪

♪ francine: good afternoon if you are watching from asia, good morning if you are from europe or asia. atm with haslinda amin davos. >> is it cold today? francine: a mind trick, tell

yourself you are warm. what caught your eye? all the: -- haslinda: bad news. we heard that a financial crisis may be coming and this time, it has to come with tightened credit conditions. we're talking about slow growth and a potential financial crisis. when will that do's and -- news end? francine: he was saying and it is crisis will not be something we predicted, but in terms of the system, is so much stronger because of the regulation with now it'soing too far going over to jonathan ferro, standing by here. francine. i'm pleased to say that kick things off, she is standing by alongside me your great to see you.

have written recently that market risk is not the same as economic risk. explain that tension and what it means. >> first thing is that economics are based on data. growing, is inflation stay neutral, do we have the right interest environment? these are all hardthese are alli would say the markets take all of this into consideration. the markets are trying to predict the future. you have to look at that, there is a lot of divergent views. they may not actually be underpinned with economic facts. >> speaking about volatility, what kind did you experience in the last couple of months? was it ultimately good for you guys? >> volatility generally has short-term impact, but long-term, you have to be careful it is not a road investor trust confidence. therefore looking at longer-term

investment and try to ask capital, volatility can flesh out the uncertainty. that natural behavior in the market, you don't want it to be a sustained issue. it makes it so that investors won't be as confident. >> from the outside looking in, it is hard for me to draw a distinction from what is looking -- holding people back. can you help us out a little bit? all come into thousand 18, the u.s. markets had have 259 ideas -- 259 ipo's. they came to us, so we had a very good year last year. nasdaq,e to list on versus the beginning of this year, we actually had a 35% increase. it means that even despite the really good environment, we have even more companies looking to tap public markets.

right now in january, the reason you are not seeing ipo's is in relation to the government shutdown rather than it is to companies on the sideline. >> so the pipeline looks good. the two big names to send out our -- out are lyft and uber. have you spoken to them? >> we don't speak to any individual firms, but we have spoken to many, and all of them are excited and getting ready to go into the public markets. they're focused on making sure they are ready when the government opens and the market is receptive. >> there is an argument building on the outside and i want your reception. that for lyft and uber, the iwndow -- window is closing. >> we can't see the future, and we would say that copies go public when they are ready at the market is ready. strong companies can come to market. , we with volatile markets

have very strong companies come and do quite well. >> so if they do come in list, that will set the tone for other players. >> we are ready to have them all come our way. >> can you talk to me that revenue at the moment. you told me that the great it was 30% on volume and 70% on recurring basis -- recurring sufficient basis. has that shifted? 75% on volume. theirpartly because higher growth and also part of the acquisitions we have done on the subscription basis, so data and analytics. overall, in the first three quarters of 2018, all of our businesses grew and our volume businesses grew in direct relation. >> on the volume business, you might get some competition. some big banks have banded together to create the members exchange. what do you think? >> it is good to put it in

context. there are four large exchange groups which trades all equities, we traded new york stocks like they trade hours. -- ours. so we compete vigorously every single day. a lot of our clients are signed up to do something like mtnl, they are also our largest clients. they also have their own dark pool. this is a coalition kind of environment. we are very good at what we do and very proud but we do. this is the sixth time members have made an attempt. we feel very ready to complete. >> a gina friedman, a black belt in tae kwon do, are you going a step further there? >> i'm working on the second degree, we will how does. francine: it will be me john, the black belt.

this man has international support for a cross border tax system. he spoke with us at the world economic forum in davos. >> we need monetary support. facts,n i am looking at when you are looking at the g7, just have the question of international taxation. we have the support of u.k., of germany and italy. -- i have been discussing with steve mnuchin to convince them to go the path of new international taxation. i'm convinced that the administration is aware that in the 21st century, we do a new international taxation system to be more efficient. francine: is france ready for a no deal brexit? >> it is up to the u.k. to decide. to have anefer agreement, there is an agreement on the table. now, everything is in the hands

of the british people and the british citizen and the british politicians. it is up to the british people to know what they want. had verbale have attacks from certain politicians for the member of government. how would you describe italian-french relations? >> those statements are childish. childish. when you are looking at the situation all over the world, the rise of china, the risk of having a trade war between the u.s. and china which would jeopardize the world growth, you are looking at all citizens and more jobs, more justice, do you really think that you can perhaps have so many divisions between european nations? we need to gather the forces of european nations.

we need to speak with one voice. in a world that might be divided in a few years. and it means to show that europe remains united and will be able to defend its interests. and its values. so let's avoid those statements which are quite childish. francine: have you ever seen a europe that is more divided than now? >> frankly speaking, never. that is why i am concerned by those kind of statements. i'm also concerned about positive things, when you were looking at a new treaties signed between france and germany by emmanuel macron and angela merkel. i really think france and germany are on the right track. they are proposing new measures, new policies. we are doing all that we can to unify europe and to open a better future for all citizens. and that was the

french finance minister. now let's get back to matt miller. there.hey we are seeing gains across europe, for example, in germany, we're seeing gains of .4%. in france, a gain of .5%, the ftse unchanged. it is interesting because the pmi data we have been getting, in some cases, especially in france, is better than expected. france is in blue, germany in yellow, and the european composite in white. indeed,d is down, and in french composite pmi, and actual contraction. reason he still see market equities indexes rising in germany.

we saw a contraction of the services pmi as well even though the composite has climbed from. the economic data certainly climbing. tom: coming up, we will be speaking to the finance minister of saudi arabia. don't miss that conversation live from the world economic forum in davos next. this is bloomberg. ♪

francine: economics, finance, politics. "bloomberg surveillance." this -- this iss is

"bloomberg surveillance." viviana: president trump says he will give the state of the union address on the government shutdown is over. trump economic advisor kevin hassett telling cnn there could be zero economic growth if the shutdown continues through the first quarter. business leaders remain bullish on the u.s. economy. saying it isf likely there will be another financial crisis, but it is not his industry that will trigger it this time. banks shrink their balance sheets and a hard brexit is another risk. clearly, there will be an enormous level of uncertainty 29th of march

if we don't have a more organized brexit from the european union. we already feel that now. i think there is no question there has been an economic cost paper lite consumer and u.k. industry because this uncertainty has gone on for so long. airbus calls for no deal a disgrace. the ceo is one of the most outspoken business leaders on brexit. gohn resigned from her know -- renault. he is said to be replaced as chairman and ceo. nissan is set to formally remove gho from the boardsn. ghosn from the

board. >> he resigned last night. the most important thing is to prepare the future of renault and future of allianz. viviana: maduro under unprecedented pressure. hundreds of people taking the streets oliver venezuela. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analaysts in more than 120 oountries. this is bloomberg. haslinda: thank you so much for

the. last month, saudi arabia released its budget for 2019. when it comes to military spending, the kingdom is cutting back. saudi arabia is the world's largest exporter of oil. prices have full and recently. the country looks to diversify its economy. is one of the key architects for vision 2030. huge his spending plans when it comes to the government. plans whereidterm we have serious reserves, diversify our income.

where performing subsidies -- we are reforming subsidies. there is a very good plan to support the growth and days to come. haslinda: at what oil price would you be concerned, what is increased government spending? >> it has been volatile the last 50-70 years. the plan is to continue. we are very comfortable with the numbers that are published. a major player in the oil market. we are reasonably comfortable. francine: have covered opec for decades and it seems like last year was volatile.

do you have an idea oil price in mind? >> what we are working towards is a more stable market. we work with opec to ensure the supply demand balance. other than that, we leave it to them. view, wedget point of work with them very closely to make sure our projections are right. francine: the imf had to lower the growth forecast for saudi arabia. their growth forecast is under 2%. do you agree with that assessment? >> i have a different view in relation to what we are oil andng in terms of 2019.

however, our projection and their projection are always the same. they did not downgrade. they believe in reform we are taking, and we are continuing at have increased our this year by x; this year by 20%. we are seeing the numbers in the last year, consumer confidence going up, point-of-sale numbers are going up. that is what matters. haslinda: in terms of gdp numbers for this year and next year, what is a projection? 2017 we were minus

and in 2018 we ended up with growth, and 2019 we are likely to attempt with 2.6% growth. it is there and we are putting even more pressure that we grow more. we have allocated significant funding. increased their local content and industries more than double what it was before. you are giving us numbers independent of a global slowdown? mohammed: we're giving you numbers based on our diversification plan.

haslinda: in terms of the khashoggi case, has that impacted international deals? how confident are you? on the: -- mohammed: what .appened is very sad we set of the government, we will make sure those responsible will be brought to justice. .e are committed to reform as investments are coming said earlier in one of the sessions. we find significant transactions only in the last four or five weeks for megaprojects in health care, energy. coming.4 or

investors see opportunities in the saudi economy. francine: is 2019 the year saudi arabia issues international bonds? >> most likely, yes. we issued very successfully this month, $7.5 billion. we have a lot of confidence from the investor community across the globe. we had investors from asia, europe, the u.s. that was more than four times what we wanted. euroe planning to look at or other currencies that we want to diversify. we are likely to go for euro, but we leave that to the markets in the market condition. francine: thank you so much for speaking to us this morning. shows the finance minister for saudi arabia.

coming up, we speak to some of the biggest names in banking . all of that coming of life from the world economic forum in davos. this is bloomberg. ♪

haslinda: this is "bloomberg surveillance." germany's macro is one of europe's last conglomerates. it focused heavily on investing into each of its sectors making a transition year for the company. francine: the chief executive has promised that 2019 will sustainableiod of

growth for the company. there is a lot of talk of trade, slowdownover china, that is maybe more symptomatic of something domestic. we have brexit to deal with, whatany and the slow down. worries you the most that would impact your business ? >> there was an article this morning that was referring to davos as the world festival of concerns. we are generally optimistic when it comes to our businesses. we have health care business, a very promising pipeline, good momentum in the business in the life science field, continued demand for biologics. research is moving in the chinese government is investing heavily into research. business, mostly about -- our third business, mostly about

--hnology francine: why does the conglomerate structure work for merck? stefan: i don't think we are a conglomerate. we have three businesses that are highly -- francine: that sounds like a conglomerate. an: there is a lot of synergy between the three businesses. we don't care much about what other people think we are a conglomerate or not. you talked about sustainable growth in 2019. realistically, how soon can that come? stefan: with interface of investment. we have a very promising pipeline in our business. that have an impact on as being

very upfront and transparent about this. we haven't changed our guidance so far, which implies that we continue to be optimistic. haslinda: optimistic scum of the biggest risks to your target? stefan: one of the advantages of a conglomerate, as you call it, is that there is an adherent risk. reform willcare have an impact. chinese growth is important. brexit is an important factor. that is true for basically any business in the world. we think we have less exposure than others. francine: his life science were to be your biggest driver? stefan: life science is currently our biggest driver in terms of revenue and

profitability. within our health care business will be picking up, but we are very front of our lifestyles business. it is a business not so much in the limelight, but is really crucial for health care in the world. health careat is performance materials need to do to carry more weight? stefan: will be launching new products. to health business is entirely innovation driven and health care systems need innovation in cancer, multiple sclerosis and many other indications. there is so much medical need. companies who research products and help patients will be successful. haslinda: what are the chances he will sell your liquid crystals business? stefan: zero. it is an interval part of our performance materials business.

we obviously are very active when it comes to portfolio management. we have a market capital of about 40 billion euros. we have moved 40 billion in our portfolios.we look at this and we think we are the best owner of that business. francine: how important will semiconductors be? stefan: very important going forward. it is a major growth driver for us. i think everybody can imagine ,hat global demand for chips big memory for display materials and packaging materials will continue to increase. we will continue to invest in that sector. francine: thank you so much. did i butcher your name? we have a lot of great interviews coming. the morning, one of highlights was angela merkel's successor.

>> for us, a european union state, it is not clear what great britain wants, what changes it would like to have, what things they would like to renegotiate. so we need to use the next weeks so that great britain can and thenhat it was pick up discussions with europe. >> i think the one thing the british want is to change this agreement on the british backstop -- irish backstop. is that somewhere you would see any compromise? particularly, the question of the backstop is a crucial issue for us once we have brexit. borderill be a european

between ireland and northern ireland. we need to have an agreement which has some kind of backstop. the foreign secretary also said there is currently any room to maneuver. we need to know what great britain really wants. >> can i ask you about the relationship with america? you have this big problem with dhe north stream -- nor pipeline. do you think this is america interfering in european business? we still have very strong , andatlantic relations that is the basis for cooperation with germany and europe, but there are also specific interests within

europe, within germany. energy supply is one of these issues. 2e also know that nord stream has a political component, and because of that, it is very important that we look at the security interests of the ukraine and eastern europe, that we take these concerns seriously and we take them into consideration. >> all the same, you didn't quite answer. america, at the moment is talking about sanctions against german people who could be involved. do you think that is correct? manner in that the which the american itsnistration conducts politics with a great deal of sanctions with leaving a number ,f international agreements

this is not a good way of working with others. many think that we have achieved in the past based on the fact that we carried out negotiations. it meant that we found a compromise, and we brought set everyone at year two. it is very difficult if one of the partners is now saying they want a longer reply, and they're leaving agreements and that makes it more difficult to work together in the world. that is why chancellor merkel is right, the multilateralism is very important and we need to defend it. coming up, we speak to the chief executives of morgan ubs.ey and dullness those conversations next. -- don't miss those conversations next. this is bloomberg. ♪

>> that they as concern are political mistakes. we have the biggest debate between china and the u.s. we are a small local economy and we will be impacted as well. my hope is that the politicians that it will have a big impact on mood in sentiment and will drive business decisions and could have a negative impact. thousand yes and president speaking to francine lacqua in davos. let's take a look at which stocks are on the move this morning as equity indexes across europe rise. annmarie: let's kick it off with st micro, up more than 9%, really lifting technology stocks across europe. like bringing up others

ams more than 8%. these chipmakers, that biggest customer, apple also up. just a soft of 2% to the downside. morgan stanley saying this competitiveness is going to be weighing on adidas. the fact that the market is really underestimating how much competition is coming in. matt: thanks very much. "bloomberg surveillance" continues in the next hour. we will speak to the biggest names in banking, including morgan stanley, goldman sachs and ubs. this is bloomberg. ♪

francine: the state of the union shutdown. president trump says he will deliver of address to congress when the government is fully reopen. this just hours after speaker pelosi blocks him from giving the speech in the house chamber while agencies remain closed. chairman resigned as and chief executive of renault. germany says the eu needs clarity from britain. good morning, everyone. this is "bloomberg surveillance." tom and francine in davos. we have gone to so many panels, it actually feels like they 25 and yet there is still uncertainty in the corridors. tom: i want to congratulate you on the important panel in oceans. people are riveted to your

oceans debate. the most important person to .eet in davos today euro could follow the back of mario draghi's comments. me of their forecasts downward for germany. here is what we will be looking at this hour. aberdeen chieffe executive officer will be here, we will also speak to the founder and chief executive of .erkeley group joining us to talk russia and

alexei.s, today.lot to talk about yesterday i thought was almost a jumble of ideas. one of the things they are, there is a current of optimism among ceos really trying to push back against the global gloom. francine: i agree with that, but when you try to pin down and say because the market is putting itself in a frenzy of all of this gloominess, it is unclear what they see the real rosy spots in the world are. let's get straight to the bloomberg first word news. ghosn has quits as chairman and ceo of renault. >> carlos ghosn just resigned

last night. now, it is time to define and put a new covalent in place because what is the most important thing is to prepare the future of renault and the alliance. ghosn has been in a company that deals sales since cell since- jail november. president trump has put his state of the union address on hold until after the government shutdown. government agencies are still closed. earlier, the president said policy had canceled his speech because she didn't want to hear the truth. kim jong-un is signaling his regime anticipates sanctions relief when he meets with the president next month.

kim hailing what he called president trump's unusual determination and will for settlement of the issue.the risk of a no deal brexit appears to be receding , called for a delay to the u.k.'s exit has one powerful backing in london. the french and german governments say they will be open to extending the brexit deadline passed march 29. theresa may says president must decide whether it wants a no deal or no brexit. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analaysts in more than 120 countries. this is bloomberg. tom: thank you so much. a data check here. just one screen for me today. equities turning and the bond market turning. i would notice very quietly over the last week, the euro has ebbed a way.

the euro weakened today because we had a lot of regional economic data. we had country by country pmi's. that really adds to the attractiveness of longer-term bonds. stocks in europe moving with asian equities, investors awaiting two things, china trade , dollar climbing as well. -- no coffee. sterling, 12858. merkel's angela successor says the ball is in britain's court on brexit. she told bloomberg she sees

little to negotiate with the pay on the irish backstop. >> for us, a european union state, it is not fair what great britain wants, what kind of changes and would like to have, what things it would like to renegotiate. soneed to use the next weeks that great britain can explain what it wants and then i can figure of the discussions with europe. >> i think it is clear the one thing the british do want to change this agreement on the irish backstop and not tie everything to that. is that somewhere you would see any compromise? >> particularly, the question of the backstop is a crucial issue for us once we have brexit. european border between ireland and northern ireland. we need to have an agreement

.hich has some kind of backstop the foreign secretary also said that there is hardly any roo m to maneuver. we need to know what great britain really wants. >> can i ask you about the relationship with america? you have this big problem with pipeline withm 2 america seemingly say to germany and europe, we will put sanctions on you if you do this. do you think this is america interfering in european business? we still have very strong transatlantic relations. cooperationsis for with germany and europe, but there are also specific interests within europe, within germany. energy supply is one of these issues.

2 also know that nord stream has a political component. because of that, it is very important that we look at the security interests of the thatne and eastern europe, we take his concerns seriously and take them into consideration. all the same, you didn't quite answer. america is talking about sanctions against german people who could be involved in the. do you think that is correct? >> i think that the manner in which the american administration conducts its politics with a great deal of with leaving a number of international agreements, that this is not a good way of working with others. many think that we have achieved

in the past based on the fact that they carry that negotiations. it meant that we found a rules thatand set up everybody adheres to. it is very difficult if one of the partners is now saying these roles no longer apply and leaving the agreement makes it more difficult to work together in the world. ist is why chancellor merkel right, the multilateralism is very important and we need to defend it. francine: that was the cdu leader. joining us is bloomberg's news bureau chief and oversees all of our coverage here and coordinates us. the interview was interesting because it gave us the first glimpse into the person that will replace angela merkel as chancellor, eventually. how will she change the policies?

chad: we shouldn't expect that there will be radical changes under her. she has said before that she is a bit socially conservative. when it comes to big debates in germany, we really won't see a radical change in some ways, that is part of her problem in germany. people see her as an extension of merkel. her challenge is to show that at thenot merkel, but same time she said in our interview, a lot of the policies you look at our very much in line with one another. francine: what kind of economy will she inherit? germany is one of the countries that imf focused on. chad: a think a lot of the criticism that she will end up having is a lot of the decisions have been pushed out.

when it comes to spending on things like infrastructure, they haven't done enough in these areas. when it comes to the digital economy, they are way behind. their not the leaders when it comes to digitalization. those are the areas she is really going to have to focus on. the automobile industry as well. francine: we also spoke to the french financial minister. he said europe hasn't been this divided in decades. >> remains united. that it is able to defend its economic interests. let's avoid that kind of statement, which are quite childish. francine: have you ever seen a europe more divided than now? >> frankly speaking, never. tom: the french finance

minister. when we look at europe, and we brought this up with matter lagardem, what is the state of europe in this 2019? chad: the one thing europe can agree on is that they are divided.. you have a far right party that is now polling number 2 after merkel's party. there is a real debate going on within the party that the challenger had said they need to move further to the white. that was something merkel doesn't want to do because she case you can't win against the true populist party. 2020this feels like davos

next year. chad thomas of bloomberg news. an important conversation, but definitely for a newly minted chief executive. david is in conversation with bloomberg. stay with us from the world economic forum meetings. this is bloomberg. ♪

francine: this is "bloomberg surveillance." tom and francine throughout the week here in the swiss alps.

have been marred by uncertainty over the last few years. it has been nearly a year and a half since aberdeen asset management merged with standard life. we are delighted to be joined by the standard life aberdeen co-chief executive officer. thank you so much for joining us here. what is the next 12 months going to bring for your company? is there anything you want to buy or change in the structure? keith: think one thing that is really important since we merged with aberdeen asset management. over the summer, we sold our material life insurance book. we have a lot of heavy lifting to do to get the integration through. a think it is unlikely we will be looking at a big merger. francine: how important is scale? because of fees in the increased

path of investments? keith: i think scale is important and that is the original reason we put the merger together. that comes from the complementarity of what we do. i think the future is about active management. it is active management that we would call new active, outcome oriented, very different from the benchmark. we have had such a run for passive, but i suspect the volatility that surrounds the uncertainty actually, the last couple of months, we will see stuff turn in active. tom: how far is your are squared going to be from benchmark? rate going to be further from the benchmark? how far away is the statistic going to be? keith: a doesn't matter.

tom: it does. keith: we will be looking at outcome orientation. examples. you several if you are running money for an insurance company, events merkel be the value you have against with leaders of capital rather than an index. if you are looking to deliver income, you look at making sure you have an income target.if you're looking to deliver solutions based stuff, probably your target is some kind of risk metric. i think the benchmark stuff is -- totally.ree with you, i give you great credit for being so transparent, but what the street wants to know is how the public decided they don't want to do it benchmark plus model, how far

from that are we going to get? forward, ifnk going what we see, and i think given the issues the markets face in the volatility for the lack of liquidity, the issue is whether bear thewant to volatility. if we go back all the way to 2009, and we look at what people were saying, low interest rates, low inflation, compressed return. the first are absolutely right. equities delivered 16 point -- tom: terrible. keith: i think this easier days are over. francine: are you looking to extend some of your range and passive investors? keith: we don't really operate in that passive space.

strong a really good, three-year track record in what we would say quantum and rules-based. as aabove what is branded small beater. that is where we operate. francine: what is the chance of a no deal brexit and how would you trade it? clue. i haven't got a there are several outcomes. taken a few ofve our risk analytics are in place throughout the portfolios. we run nearly 600 billion. it isn't just one trade, it is actually putting the protections in place, making sure you can source liquidity and that liquidity is available in funds

if people want to come in or come out. and yourdinburgh gorgeous office building. your scotland is remain. speaking out to the no deal brexiteers about why edinburgh and asset management and the united kingdom need some collegial agreement between remain and leave. politics is the politics. of thing edinburgh is remain because it has been fiercely since the early 1800s. it has a real international perspective. it believes and the benefits of globalization. david, i think would be remain. francine: thank you so much.

economy showing signs of a slowdown in mind with the government's strategy executing a soft landing. .his, after the lira crashed >> thankfully, we have issued what they have promised for. we have delivered by year-end. so far, so good. the thing is, the crucial stuff over here in turkey is going to be very much in line with our quality-based growth. there has to be some slowing down. i think year-end, this is what we have planned for. 2019 will be a very much promising year for us. francine: speculation the fourth-quarter gdp will go into a technical recession. is this healthy for a rebalancing period?

berat: we will see a significant slowdown. we are pushing very hard on, it has to be soft urposes.p turkey is going to be very much in line with what we have planned for, the 2019 growth which was 2.3. it is very much on track. francine: so it will go back to the trend and happy for? -- it had before? do you worry about being impacted by world affairs, the u.s.-china trade war and things like that? berat: our initial strategy was what we need to focus on in the last couple of years, all of

this terrorism attacks and fighting internally and regionally in syria and iraq. we arrived in a new system which is straightforward and in line with -- point,ng is, from that we have been focused on these three vulnerable pieces, budget discipline, inflation and -- what we have been going through in the last six months, we have very strong execution on all of these three. 2018 was a tough one, that , it is a veryts promising one. second, inflation was a tough one, which reached around 25%. thankfully, we have reached

20.3 below that target. tom: that is the turkish finance minister. his first interview. now joining us, the auto interview of our davos. volkswagen is not the volkswagen that we know. for more than that, it is the auto company of the world. called in to straighten it out is the chief executive officer and mechanical engineer. time driving around the world economic forum in these gorgeous vw eight share vans and buses. the united states wants to keep your product, your vans, your trucks out of america. how are we going to get the advantage of what i am driving

around in davos and get more of those trucks into america? we don't exporting, export those trucks because the market was small. the next generation electric, we collect id the microbus, which was very successful in the 60's. we will bring less product 2022, 2023. do you need on tariff relief to get some of their products more into the united states? ert: today, we have very low tariffs for import to the united states. we have the manufacturing base in the united states and we are increasing that and doing everything we can to avoid tariffs. think we are making progress. we just announced an it hundred

million dollars investment in our chattanooga facility. francine: you are one of the very few european chief executive that has actually met with president trump face-to-face. herbert: i'm still optimistic because there is always a lot to lose on both sides. think the president is well aware. on the other hand, i understand his case. my background is manufacturing. the united states probably 40 or 50 years ago was really a strong manufacturing base of the world. down of this industry came and lost ground. i understand this case. building up manufacturing again is probably a valuable approach for every society. it takes time. we want to contribute. we see the u.s. is a big market

challenge. we want to grow and we think we can provide the right product for the customer. potential customers know. many have learned driving on a volkswagen. francine: i want to talk to you about china. we saw demand in general for cars under pressure because of the u.s.-china retentions. how do you see china performing this year? herbert: china is under threat. we play a very important role there. we came early to china so we are perceived like a chinese company. continuousears of growth in china. it is also a big source of income for us. last year, the second half was already declining, which is

hurting us. we could cope because we come with a lot of new product. we could increase our market share. this year will be challenging and i really hope interest in the government, that they come to an arrangements because it is a lot about the mood of the people. in the right world, the few agreements would help a lot. tom: the romance for me is i grew up on a classic vw beetle. you move from an engineering statement that standpoint forward and you have what many people feel is the elon musk killer. how are you an electric vehicles point to kill elon musk nba tesla killer?

-- and be a tesla killer? i take it very very seriously. to be prepared to produce all over the world, we have a chance to compete. tom: there are maybe five people like you that understand the importance and complexity of manufacturing processes. when you look at tesla in a tent, how does a manufacturer like you respond? can you get the kind of quality control you need manufacturing in a tent? herbert: this is our advantage, but we are used to scaling in every region of the world. used to scaling in every region of the world. atncine: when you look valuations, traditional car

manufacturers are not seen as the ones that will deliver the electric cars of the future. do you think the number of traditional car manufacturers needs to shrink? herbert: our industry will change a lot in the next 10 to 20 years. more of anome much economies ofhe scale on nearly everything, it'll play a major role, but there is also an advantage for us. if we can converge fast into the new age of cars, we have a good chance to outperform the starters -- the startups. they have to grow a lot and scale up. that is why i see the startups in tech companies are a bit over evaluated and we are undervalued weighted when it comes to future mobility. francine: how many carmakers are

there now? are we going to be left with five major ones in 20 years? my assumption would be there will be a consolidation process because it would become more of a tech industry. economies of scale will be even more important than today. there will be more on the car side but as many us today, probably not. francine: the french finance minister told us this morning that carlos ghosn resigned last night. how does that change automakers? carlos, i highly regard i just bought a car from him. ,e was a pillar of the industry worldwide. it is a loss, but there are many talented managers which will step in. tom: to speak of the

sensitivities that mr. ghosn is undergoing right now, the business plan here is the relationship that we have between the french and the japanese. what have you learned from this fractured relationship, and how does it rebound over to volkswagen's acquisitions, combinations and joint ventures with future companies? herbert: scale will be even more important in the future. you have to partner, not only with competitors, but with tech companies. francine: do you have to basically -- alliances of two groups complement each other where you really have synergies. herbert: let me mention we just agreed with ford.

both companies are relatively big and we have economies of scale in many segments but a salsa pregnant -- a small segment of -- combining, we will be very competitive. francine: what is the endgame? important is is that you have a business relation that is a prosperous one and a good track record. the advantage with ford is we already worked with ford for two or three decades and in latin america. we have a good track record and

it just makes sense for us. tom: in america, you were a either a ford family -- you were either a four family or a chevy family. -- ford family or a chevy family. , andomance of the moment trust me, we did not have one was the -- getting back to the -- getting back to design, we are getting back to your porsche. design is coming back. what are you going to do to develop a volkswagen ego's aesthetic -- ethos aesthetic whirlwind? -- worldwide? between the times of the beetle and the microbus to

the gulf, -- to the golf. now comes another stepe. time, thenge means in car is disrupted. anymore. evolutionary the next disruption will come end of next year with the idea to be launched, similar to the switch from beetle to golf. tom: they will you over to a small but high quality german brand. aestheticving the through the years. do you need to do that out of germany? do you need to run your global platform with a german aesthetic? company we are a global , very strong in china and jerk

-- and latin america. we have this design all over the world because we have to make the customer happy on a worldwide basis. it needs the ingredients of design which have to be clean, timeless, democratic. same ino achieve the the next generation of cars. francine: when do we fix the fic traf davos? i am driving around with lots of prototypes worldwide. a lot of investing going in there. to really see the cars performing on the road, not just being kind of hurt old and sending around. tom: you are correct there. francine: i cannot wait for driverless cars. tom: i am in the volkswagen camp. it will take time, particularly

last night at 2:00 a.m. from the piano bar. francine: that is when you need a driverless car. tom: coming up. stacy cunningham with us, with the new york stock exchange. it will be a conversation on the future of america and global wall street. this is bloomberg. ♪

francine: this is bloomberg

surveillance, live from davos. we have done so many interviews, and what is the mood like? tom: it is very different this year. there was one year in my 15 years that was a little like this. there are some financial themes struggling. to me, it is a jumble looking for a theme that is frozen due to the politics. francine: climate change filling like it is having more of an impact. let's get to the "first word news." here is viviana hurtado. viviana: -- two in the partial government shutdown. lawmakers will vote on republican and democratic proposals. the republican plan would give the president the $5.7 billion he wants for a border wall. the democratic plan would reopen the government without funding for a border wall. neither bill is expected to get

the votes needed to pass. -- to allege she was assaulted in the era of the metoo movem ent. she says she was raped in college by someone she knew and that her ex-husband physically abused her. nezuela now has does copresidents dueling for control of the country. presidentmed himself and he has the backing of the u.s., canada and brazil. tens of thousands taking to the street and this was replicated throughout the country. they are protesting the rule of maduro. the question is whether military leaders will continue to back him. turkey's economy showing signs of a slowdown but it is following the -- the government's plan following a currency crisis.

berat: for sure we are going to see significant slowdowns. close -- up. hard on softg very landing purposes because following the second quarter, not only on the basis of inflation but of normalization, turkey is going to be very much in line. viviana: global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thank you so much. this is a joy right now to speak at this -- of these international relations and economics. -- is that of washington but that barely describes her public service. across all of america and truly international economics.

i have enjoyed doing panels with her at davos. wonderful to have you here. we must turn to venezuela as a first order. -- you haveectlike encyclopedic knowledge of these international relationships and our international history. the u.s. has projected itself before, just often with failure. how does america and canada project to assist venezuela given a checkered history? >> it was interesting because with the recent news in venezuela, their bond markets were rallying, which is not what one would have typically expected. venezuela,problem in putting aside politics is the elephant in the room, that essentially oil prices have been volatile but they are not exactly very high. there are two points to look at.

one is on the very short news of the day in terms of what has happened in the last 24 hours. it is really wonderful that canada is doing what it is doing but i think the political situation even if you get to a new leader who is fine will still not solve problems. has aiss beschloss also book on natural gas. there is no washington consensus. there is no post-american world. ad is spinning. what is the theme out of washington that we can project to assist venezuela, to assist a really interesting and new brazil as well. afsaneh very different economies . one is sort of the demise of the political leadership.

what is the theory of washington right now? afsaneh: i don't think there is a clear washington theory. even they don't have a clear theory on how to deal with the short-term problem in venezuela. i think brazil is an interesting situation right now. brazil right now with its equity wellts that did relatively in their short run, it is going to probably experience a little bit less exciting equity markets probably. francine: what do investors need from the new brazilian president? given what happened in argentina, investors don't have

a very long leash. investors are coming into latin america with a person of long history, where you hope a country would have a new leader and you would solve the problem over the last 30 or 40 years and you would have a solution. that is not always happened. i think the new leader in brazil will have a very short time to demonstrate that he is going to change things in terms of corruption. crime is a big problem. i talked to people who invest for us and you hear gunshots in the best areas in brazil. francine: what is happening in latin america right now? afsaneh: we talk about impact and sustainable inch -- sustainable investing. those are some of the best areas, agriculture, food, clean energy. they have an economy that was very based on hydropower.

they are seriously looking at the marginal growth in energy and geothermal, solar and wind. they provide very interesting potential for international investors. tom: i look forward to your next job. dr. kim is stepping aside at the world bank and i am sure you are on the short list. have you spoken to ivanka trump about a new position at the world bank? afsaneh: i have not talked to her. i am happy doing what i am doing. tom: what kind of leadership does the world bank need? really: it would be important to have somebody who has a good grasp of financial markets as well as development. development,ace of which will include a lot of

collaboration between the public and the private sectors because so much capital in the future will be coming from the private sector in terms of relative share and having a leader who can talk on both sides will be important. francine: do a lot of these organizations matter? we have leaders across the world looking inward. what can someone like the world bank or imf do? afsaneh: a huge role. capital will be coming more from the private sector moving forward. the worldhe role of bank, let's just take any of the emerging markets, whether it is rwanda. when you need is huge capital markets improvements. to trade in this country is inefficient. if you wanted to invest in india today, you would have to create a mauritius and t -- mauritius

entity. these institutions could set policy and policy at the practical level and a level of pension reform. tom: this week she is at rock creek, founder and ceo. a former tenure at the world bank. thank you for being with us of the world economic forum. we will continue with good conversations through the day. the irish financial minister will join us. please stay with us. this is bloomberg. ♪

tom: it is a big topic here at the economic forum in davos. the challenges of deutsche bank and they become more challenging. but you bank confirms it has received a house financial committee inquiry that goes into various themes.

the flows of money around the world. bank,dea, rebuilding the start -- standard chartered trying to move on, deutsche bank having trouble moving on. francine: the leadership at deutsche bank changed and you see things being put in place by the chief executive but this is legacy issues. if this keeps on coming back, then it not only distracts him, but it could change the root of how the government of germany wants deutsche bank to evolve. did a panele ago, i , no one really criticized him other than we need a german solution. that is where deutsche bank is. francine: what is their solution?

if you look at the german solution and we talked with our ?eporters, do they consolidate do they merge with commerzbank? there is appetite whether the commerzbank would be willing to entertain the idea. tom: and ending theme of almost inquisition into this banks were you want to clear the market and move on. francine: you had some really good questions on clearing the why europe in general has not clear the markets when it comes to banks. another overlay i would want to point out is slowing growth in germany which would not help out banks like deutsche bank. tom: a lot more to talk about and a number of guests coming up to give us perspective, not only in the markets but one of the highlights today, not in davos but in frankfurt.

addresshi, how he will global slowdown in a q&a. alexander stubb will join us today. tom: extended -- francine: a scandinavian perspective and some of the who wants to be president of the european commission. what he would do with brexit. tom: we will be back with a european investment advice. alexander stubb of finland. this is bloomberg. ♪

shutthis morning in union down, the civil war between president speaker pelosi continues. the civil war within the conservative party, here is the short and long of it, jeremy corbyn owns all the house of cards. the elite talk about everything but their global gilded age. this is bloomberg surveillance from the world economic forum in davos. i am tom keene. with me, francine likewise well. lacqua as well. francine: it is funny being here because you talk about the people that are not here, donald trump, emmanuel macron, they are dealing with concerns at home and there is a little bit of uneasiness which people cannot figure out.

my manager saying, the markets will be a little bit better and that nobody is really pointing to where they are seeing a lot of growth. why is the market interpreting something that could turn quite ugly? tom: many things to talk about. many years on brexit. here is the rihanna hurtado. viviana: -- has fallen from the top of the auto world. ghosn quit as chairman and ceo of renault. chart -- carlos ghosn resigned last night and now it is time to put a new -- and place because the most important --ng is to repair the future viviana: he always -- he already

quit his position at nissan and mitsubishi. hisident trump has put off state of the union address until after the partial government shutdown is over. that comes after president -- after house speaker nancy pelosi blocked him from his into the speech in the house chamber. nancy pelosi said he canceled the speech because he did not want to hear the truth. north korean leader kim jong-il and signaling his belief of sanctions relief ahead of his meeting with president trump. kim hailing what he calls president trump's unusual determination for settlement of this issue. the risk of a no deal brexit seems to be receding. backing in other eu capitals. figures in the french government say they will be open to extending the brexit deadline

passed march 28. global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. back to you. tom: thank you so much. a quick data check. sterling with a lift but overall, a little bit of green on the market and the euro grinding down. francine: there are still 12 options open. this is what happens when you are married on tv. if you look at the euro, that

seems to be what is attractive. we were looking at some of the german bonds -- german bunds overall. are we going to get more on the strength of global growth? germany's growth and angela merkel's successor. -- says she sees little scope to negotiate with the u.k. on the irish backstop. we have difficult discussions in many countries within europe. in italy, we have twice the challenge because we have populist forces in the andrnment from the right the other side of politics and that is why we find it difficult

to agree. first of all, when it comes to migration and secondly when it comes to natural policy in order to meet the criteria of the euro. we need to find answers for both of these issues and obviously we need to keep negotiating with to thend when it comes italian budget, we can see that you can make progress in small steps but we need to work hard. >> italy is a bigger challenge in the end than brexit. >> it is a challenge. i would not say it is a bigger challenge than brexit. it is a challenge of a different type. happens without a deal, as far as i am concerned,

will have greater impact on the individual european states and also on great britain. as far as i am concerned, many things are not being discussed in terms of brexit at the moment. francine: meanwhile the french finance mr. said europe has not been this divided in decades. --spoke to him earlier finance minister said europe has not been this divided in decades. we spoke to him earlier. >> we need to be united to defend economic interests and values. have you ever seen a europe more divided than now? >> frankly speaking, never. francine: that was the french finance minister. we are welcoming a lot of talk

on davos and brexit and the future of europe. with us, alexander stubb. thank you so much for coming on bloomberg surveillance. how worried are you about brexit? what are the chances of a no deal brexit? alexander: the first option is the deal on the table and that is basically brexit. the deal is not going to get any better. the second is a no deal brexit and the third is a delay or a no brexit at all through a referendum or otherwise. i would give all those a 30-30-30. francine: can europe do something with the backstop? the vote was not a backstop issue. it is the hard brexiteers understanding that brexit is a stupid proposition. it is completely senseless in the modern world.

it is like pulling the plug or leaving the internet. you can do it but why when you can influence from the inside? the deal they are getting outside is a bad one, they also say no, so that is why it is time to go back and revisit this. the end part does not have any close and it is time to wake up. finland,e minister of you move a golf ball forward. it was a hell of a program. you have a visceral understanding with william wallace of british politics. what is the path for the conservative party? this thatothing like we are seeing right now with the tories? do they need mr. corbyn? alexander: what they need to do is put country first, not party. tom: that is brilliant.

why can't that happen? alexander: it goes beyond me. you can add to the list, i am married to a britt so i should understand. it is hard to say. the u.k. has always been the reluctant bride inside the european union. tom: you had oliver cromwell in the opening. talk about a look and bride. -- a reluctant bride. alexander: the referendum was a good idea to settle the issue. i felt that the issue would be settled in another way. the date for the referendum was all over the place. now we are seeing what brexit means and people are getting second thoughts. francine: if you look at the polls, they are not that dissimilar from we had the day of the referendum. 15 out of 16 poles are now saying remain. francine: the margin is close. alexander: i remember being at

one of these debates in london three weeks after brexit and i gave this proposition. it is such a big deal to leave the european union that you need to have a vote on the new agreement versus the old agreement and then take your decision. but now got booed out, i would put the odds at a second referendum much higher because the british people are understanding this is utterly stupid. posturinge the media about that. as you look at the verbal leaders andnational of brussels, what do they need to do to convey to the united kingdom, get this done? is it just verbal? alexander: we are seeing politically what i would call old-school diplomacy. they are very careful. they're letting the brits do their thing.

francine: really question -- really? alexander: the problem is the brits don't know if it is a cricket ball, a tennis ball or a runway ball. theresa may said exit means brexit but exit means somebody different things -- brexit means brexit but brexit means so many different things. are things ine the remain camp -- the 29th ofome march, we will see what actually happens. we are in uncharted territory. it does scare me because they will be no winners out of a hard brexit. tom: the former prime minister of finland. visiting helsinki, president trump and pleasant -- and president putin. alexander stubb, we will

continue with him as well. coming up, we have much more at the world economic forum. an important conversation. the new chief executive officer at goldman sachs. david solomon. look for the conversation, where else? this is bloomberg. ♪

francine: we are in davos at the world economic forum. this is bloomberg surveillance. let's get to monetary policy and bank governoronal says his biggest concern for 2019 is political mistakes, which he says can have an impact on the global --

he also said the current monetary policy is the right one and will continue with it. >> we followed that very closely. for us, the biggest risk would be a no deal brexit. it would have an impact on european economic policy. it would also be negative for switzerland and would have an impact on financial markets. francine: the economy is slowing and a lot of countries including switzerland that has -- has interest rates that are incredibly low. do you not have enough tools to deal with the economic downturn? rates ande interest the willingness and readiness to intervene if necessary. these tools are sufficient in order to deal with more volatility. francine: how difficult is it to get away from negative interest rates? so far, there is no necessity

to change our monetary policy. the fertility of the market is still here -- the fragility of the market is still here. francine: interest rate futures so no s&p action this year. does the market have a good grip on your message? >> it is clear there is no reason to change our monetary policy. monetary conditions are appropriate to the current situation. inflation is low. no risk of overheating. the current monetary policy is the right one and we will continue with it. francine: what is your biggest concern for 2019 when setting interest rates? >> the biggest percent -- the bait -- the biggest concern is the goal mistakes. they trade dispute could have a big impact on the global economy. we will be impacted as well. then of course you have brexit and the european situation. my focus is that -- my hope is

that the politicians realize the impacts will drive business decisions and could have a negative impact. tom: thomas jordan of the swiss national bank stepping carefully through the monetary debris of 2019. with us here at davos, alexander stubb the former prime minister of finland. mention mario draghi to him, i will end up in a field with reindeer. if he mentions mario draghi, he will end up there as well. let's go to the immediacy of china and the u.s.. it is also china and europe isn't it? that language does not get media play. alexander: there are three big players trying to fill the power vacuum left by the united states. they are the united states themselves, the european union and china. , i way in which i look at it would like to see the

relationship between the u.s. and the eu to continue as warm and value-based as possible. areas. some pragmatic with china, we need to be careful. china is expanding all the time. roadlk about the build which is a great project but there are strategic implications with it. tom: go ahead. i am looking at reindeer in finland. francine: what does that mean? alexander: it means the belt and road has about 3000 different types of projects. many of them are legitimate. they have to do with infrastructure, economic power and wealth as well. i think europeans need to start thinking about the type of organization where we can look at some of the acquisitions happening from the chinese side.

we should not be naive about our economic competitiveness? tom: we spoke to -- as a transatlantist. andss all of america particularly across president trump's area, that culture and geography, there is a distrust and there has been ally breaking. how do we repair that ally relationship after mr. trump? alexander: we should keep on nurturing the relationship even during mr. trump. there are lots of pro-americans and anti-americans in europe who understand we are not any permanent state of disruption between the u.s. and eu. we need to do two things. we need to have some concrete projects. i mentioned artificial intelligence, digitize asian. the other one is to stick to our common values. someone after trump has to continue defending

multilateralism. tom: i did not make the trip, i regret this immensely. deutsche bank took the ferry to estonia. how big is the money laundering we don't know in europe? i don't want you to comment on deutsche bank and get yourself in trouble, but are there going to be more of these money laundering scandals in europe? alexander: i assume there might be a few others, but i would not know. technology will at the end of the day be the big revelation and i think transparency, i actually think that blockchain can help. cash used to be the old money laundering fashion. now we need to make sure it does not happen anymore. we are moving toward a more transparent world where that type of money laundering will be more difficult. that is why we need european institutions and others.

francine: alexander stubb, thank you so much. the european investment bank vice president. coming up next, alexey mordashov. we will talk to him about his russia, his industry and sanctions. this is bloomberg. ♪

francine: tensions between the u.s. and russia cymer into the new year. beensanctions have

floated, potentially hurting more russian businesses. -- is the largest -- is the country's largest steel company. it is majority owned by millionaire alexey mordashov. how do you prepare for fresh sanctions if they were to come? is there a strategy? it is: i don't think possible to prepare yourself for sanctions. we try our best to be flexible as much as we can in case it happens. is nothing you can do? to emphasizey have some measures to be more flexible. as a natural disaster. of course you could prepare

yourself to a certain degree, but we believe we should operate , focusing not on sanctions put on our competitiveness, our customers and i hope that common sense will prevail and i don't think the sanctions help anybody. i hope people understand it. francine: the sanctions lead to more isolated russia, does that -- if the sanctions lead to a more isolated russia, does that bother you? alexey: yes. all, it affects me for sure. the sanctions are becoming more -- largelyecific but

exposed to the economy. the sanctions have become more and more personal against businesses which makes it more remarkable. we are great survivalists. we will survive and we learned how to survive. sanctions bring a lot of unpredictability to the business environment and in russia specifically. it is not good for the world. eventually, if sanctions will be addressed against russia, it is in -- which long-term is very bad for the rush -- for russia and for our relationship with the west. [indiscernible] francine: alexey mordashov, give

me an idea of where you are investing. where do you invest? we plan to invest -- we believe in the long-term future and it is a strategic investment. .e also invest dividends we have many businesses in machine building, services, .nline education we definitely will continue to invest in industrial futures. francine: will you still keep dividends? alexey: yes.

francine: you can invest, increase cap x and do dividends. alexey: yes. globally we are doing quite well , probably better than average. francine: looking at some of the investments, could it even be bigger than 1.4 billion if we have no sanctions? sanctions undermine the people's willingness to invest, obviously and it undermines business in general. we are doing quite well. you could see russia has demonstrated good reviews but it is not about survival, it is about value unfortunately value creation is undermined because of sanctions. francine: do you worried about -- do you worry about china and

the impact the slowdown could have? could it tip the balance to a recession? alexey: difficult to say. china is the largest player in the steel industry. of course any substantial slowdown in the chinese economy will undermine steel consumption and we will have a ripple effect. difficult to say but china is very important. -- lesson for us is not to but to be more competitive in terms of acquisition, ,nvestments and improvement which is the key to -- francine: where are you investing it?

is it making a better product? more and more, we invest in downstream to provide better services for customers, better products and we try to enter -- trying to innovate as much as we can -- try to integrate as much as we can -- to innovate as much as we can. innovation so much and excitement. -- at the time they were saying maybe they could -- given the uncertainty in the economy and brexit. is that less likely? should we believe we stay prepared and look for momentum.

difficult to say when momentum will occur. we believe steel could be a good option for us but when we will go with -- is difficult to predict. francine: could a no deal brexit be beneficial to russia, first because they have more control of equity markets if there is a no deal brexit that and have to abide by what the eu says and maybe a newly found relationship between the u.k. and russia? alexey: it is far from my area of expertise to comment on. i don't know enough to comment about brexit but in my view, predictability is better. to have ane, inclusive u.k. and have a more predictable movement is better for everybody in general because

it brings more stability for people and business. up to the british people and europeans to decide what is the best way for them to move forward. francine: you have been to dallas for 19 years. how has it changed -- two davos for 19 years -- to davos for 19 years, how has it changed? alexey: overall pressure on society is growing. competitive pressure is growing. we live in much more dynamic and volatile world than before. you see much more risks, technological, geopolitical which probably exerts more pressure on the participants. it became bigger and more multifaceted. i think it provides an

opportunity for people to listen and also pick up some ideas. francine: if you had to choose between whether you were worried about politics or the economy, which would it be? alexey: the economy. i am far from politics. francine: it seems it is a lot of psychological impact from markets or consumers worrying about politics. alexey: it is true. you mean what is the risk factor? francine: what is your biggest risk? alexey: i would focus on the economy. i see growing geopolitical risks for the economy and geopolitics is becoming more tense and with more problems which is not good. geopolitics has become a bit of a wildcard for the economy.

i hope that common sense will prevail. i do believe in the smartness of people. francine: common sense from leaders or businesses? alexey: from leaders and businesses. political leaders, business leaders. francine: if we have a resolution between the u.s. and china, does that make a difference to how you view the strength of the world economy? alexey: i don't feel immediate -- but in general, it would be very positive because it would underpin global growth which is dependent on a -- relationship. i hope that people will find a way to move forward in the economy will continue to grow. francine: alexey mordashov, thank you for joining us.

coming up on bloomberg, live from the economic forum, we speak to the new york stock exchange president, stacy cunningham. don't miss the conversation live from davos. this is bloomberg. ♪

francine: this is bloomberg surveillance. i am trying to hide my waffle. tom is too hungry to hide his.

lacqua,e and francine having conversations and trying not to freeze to death. we will talk about that posts and some of the great interviews we have but first, save us viviana hurtado with "first word news." yorkna: no waffles in new but the senate steps off the sidelines to try to end the partial government shutdown. lawmakers will vote on republican and democratic proposals. republican plan would give president trump the $5.7 billion he wants for the wall. the democratic plan would fund the government without money for a wall. neither measure is expected to get the votes to pass. republican senator joni ernst is one of the highest profile women to tell her story in the metoo movement. she says her ex-husband physically abused her. her ex-husband has not commented on the accusation.

venezuela now has two presidents dueling for control of the country. the head of the national assembly claiming himself president. he has the backing of the u.s., canada and brazil and tens of thousands of people. this scene replicated throughout venezuela. they are protesting the rule of maduro. he still has control of the security forces, military and the treasury. turkey's economy showing signs of a slowdown but it is following the government economic plan to combat a currency prices -- a currency crisis. the finance minister speaking with bloomberg and diverse -- in davos. berat: we will see economic slowdowns. we will close the following gap. very -- wes, we are are pushing very hard to be in a soft landing purposes.

turkey is going to be very much in line with what we had planned for. viviana: global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i am to the on her tonto, this is bloomberg -- i am viviana hurtado, this is bloomberg. tom: brexit and washington. we spoke this morning with anthony scaramucci. his claim to fame is 10 days of the white house. trump,ramucci with mr. you must speak of the senate -- of the shutdown. anthony: they're going to start doing what the president does not want them to do. conserving capital, slowing down investments into capital infrastructure and start hoarding cash because you can't have this level of

dysfunctionality in the government. tom: anthony scaramucci of sky bridge capital. we will advance this conversation. kevin cirilli in washington but today, -- running a little international government coverage and our executive editor, simon kennedy. the two of you together with us. simon, let me start with you on the shutdown. what is the reporting from the economic team in washington about what it really does to gdp? simon: some good forecasts last week that extended through march. it will shave a percentage point off of growth. tom: what if it extends to the fed meeting? simon: it is something the fed will have to take into consideration. that forecast last week is not as bearish as the one morning from the white house last night and in davos, morgan stanley.

a 1.56 -- a 1.5% statistic. -- on government and policy, we have dueling letters back and forth. i believe it was last night in davos. is that what are going to see each and every day? >> yes. between nancyt pelosi and donald trump is getting worse. she basically said you cannot come in and give your state of the union address. he said i will give it somewhere else but then changed his mind. that is showing how bogged down things are. no one expects a breakthrough on these boats today. nobody wants to seem to be blinking first. federal workers are going to miss their second paycheck tomorrow. the state of the union is postponed. does that mean the president

will try to find a solution sooner? rosalind: it does not necessarily signal that. it may signal he has awareness about his own position. we have polling that shows his popularity, people saying he is doing a good job, has declined to 34%. arerly people in america serving to question the shutdown, the longer it goes and his handling on it. he might be aware of the optics of standing up somewhere in washington or elsewhere in the country saying the state of the union is wonderful when the government is still shot. tom: let's go to the polling within the white house. kevin is the chairman of the president's council of economic advisers. cnn yesterday on low growth. >> could we get zero growth? >> we could. yes we could. if it extended for the whole quarter and given the fact that

the first quarter tends to be residual -- we could have a number close to zero. tom: a real difference between -- and mr. kudlow. simon kennedy, it is amazing how you get three or four different economic views. page,ey all on the same that growth is going to weaken? that you are going to see a quote, unquote boomlet afterwards? simon: after the government reopens, you could expect to see this boom. -- how people who are working for the government are actually looking for other jobs. if you look at the website that people can register their interest for jobs, increasingly looking for other work and manpower. there is a good chance people

will go and find jobs elsewhere. that might provide support for the government -- for the economy. does somebody need to blink? how long can the shutdown actually last? rosalind: nobody expects a breakthrough today. the bills they are putting forward our cut. the bill the republicans are putting forward puts funding for the wall. the democrats are supporting a bill that says funding for the government but not for the wall. how you can have a compromise between the fundamental issue of one side wanting the wall and the other side not wanting a wall. there is simply no way through that at the moment. no cycling -- seems willing to blink first. tom: how does this spill over to the global economy? what is the effect of this shutdown, even on the margin and the rest of the world? rosalind: the rest of the world

as you can see, ceos and leaders are watching with concern. that because workers are not being paid but because the business of the u.s. government , embassies,e advocacy work, discussing key issues and taking the lead on things like syria. trump's absence from davos this week and his delegation, a missed opportunity to talk about trade for example. interview, mr. kennedy will be taking the surveillance over to frankfurt for the important ecb meeting as well. i don't buy the fact that it is another ecb meeting. i get your team will put up the headline but that press conference, things are going to be said. what should we listen for? simon: you should look for any

sign from mario draghi that he is less bullish that he was at the start of the year. tom: is he a lame-duck? there is no lame-duck in this. simon: there is no lame-duck setting monetary policy. we saw terrible data out this morning, factories lower. what i have seen this week is this concern among policymakers and investors. the outlook on the european economy, you have artie seen the fed with jerome powell bringing the fed outlook in line with the markets. whether you will see the same from mario draghi remains to be seen. mario draghi has basically said no rate hikes through the summer. there is no real pressure on him to throw that message out but at the same time, he wanted to talk about the end of the year. tom: very good. simon kennedy, thank you very

much. rosalind, thank you so much. i look forward to seeing you tuesday for the -- in london for the 14th vote for brexit or whatever it is. the chief executive officer of morgan stanley james gorman will do the calculus on the state of global wall street. look for that conversation here at the world economic forum in davos. this is bloomberg. ♪

tom: good morning. from a perfect day and davos, meetings of the world at the economic forum. francine: a perfect day? tom: italy has never looked better. francine: a perfect day for skiing. tom: a perfect day for conversation as well. up next, jonathan ferro. jonathan: i am really trying to work it out. communicating to most

people that things are not as bad as you think. tom: on message? jonathan: as expected. it was interesting to look -- to listen to erik schatzker's interview with the ceo of bridgewater. that is a man worth listening to. take a listen. >> people have certainly diminished their growth expectations. in davos, we don't think they have done it enough. earnings expectations in the u.s. are too high and generally the fed and other policymakers are expecting stronger growth. jonathan: here is the problem. you can have great near-term visit villa the -- visibility. the market is going to move first, trying to understand whether we are decelerating, but to what degree and that seems to be the debate throughout the week. most people are telling us it is not as bad as you think. francine: you have spoken to a

ceos in europe and they say a fractured world is starting to impact their outlook. dividends,ng on whether the happy talk is depending on what kind of company you have but region you come from. jonathan: the policy response is important. following up to erik, he is worried to -- he is worried about europe. how do you follow up with policy? remember that mr. -- is a piñata on his economics call and he looked billion in october and even more brilliant in december. i thought his interviews here were great. it all comes back to nominal gdp and animal spirits. the number-one one thing for me with mr. draghi and january 30 with chairman powell is nominal

gdp just is not there. jonathan: think about the last 10 years, whether it is the federal reserve, the ecb, the bank of japan or the chinese for that matter. what i see is policy exhausted. the federal reserve can back away but how much can they do besides just backing away? tom: the interview today, the akk is going to take over for merkel. francine: -- tom: she internation have the potential for a 2.5% topline gdp. the elite in davos cannot work with that. jonathan: did you hear the prime minister early on? this is not a region that wants to -- anytime soon. [indiscernible] jonathan: this is not a region that wants to do fiscal stimulus anytime soon.

draghi has to analogy was wrong in q3. he says the weakness -- he said though weakness in -- he said the weakness in q3 would be tempered. francine: he was the anti-austerity guy. jonathan: he wants governments to do structural reforms, etc.. we have been told again and again that these central banks are data dependent. what is happening in europe right now? how does manchester united lose? jonathan: really? francine: at least let's talk ice hockey. this is bloomberg surveillance. james gorman up next.

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jonathan: live from the economic forum in davos, this is bloomberg surveillance, alongside tom keene, i'm jonathan ferro. tom: are we on speaking terms? ok. jonathan: you are not excited? tom: i am excited. pretending we are still on speaking terms. jonathan: we get along. tom: we have mario draghi in this hour. the conversation coming up, including goldman sachs, david solomon and james gorman. this is the heart of american wall street. jonathan: night and day, the experience of wall