trump intensifies his push to reopen the country, saying americans should begin returning to their everyday lives, even if it leads to more sickness and death. the ecb stands by its inflation mandate after a german court ruling on its qe program. bond investors express concern about the central bank's stimulus. and sales surge at novo nordisk as patients snap up diabetes medication ahead of the lockdowns. the chief executive tells us about stockpiling. well, good morning, good afternoon, good evening, everyone. this is "bloomberg surveillance ." as always, tom and francine, as always, working from home. there has been movement offshore , having to do with trade tensions between the u.s. and china. still trying to figure out exactly means for the ecb, whether it is positive because they can adjust in or make something out of it, or whether it is the beginning of trouble some things ahead when it comes to possibly the pep program as well. tomorrow we look at the bank of ,ngland with andrew bailey

talking about what he sees happening in the economy. tom: it is an extra ordinary hour, folks, particularly looking at the fabric of europe and the european model. the disinflation dynamics has dramatically rolled over in the last 48 hours, clearly somewhat off the german ruling. there is no question about that. you see it expressed right now with ever stronger yen versus euro. disinflation wins, just extraordinary. yeah, on the u.k., and i would mention the chancellor yesterday suggested it would end sooner rather than later because people become addicted to it. let's get to bloomberg first word news in new york city with ritika gupta. ritika: president trump is wrapping up his push to reopen the country. he says americans should begin returning to their everyday lives even if that leads to more sickness and death from the

pandemic. the president spoke in phoenix. made the announcement with the task force. toll.k. coronavirus death has now surpassed italy, making it the worst hit country in europe. there more than 29,000 coronavirus deaths in the u.k. prime minister boris johnson ordered a national lockdown at later stages than other countries. another sign of how the coronavirus has brought the economy to a sudden halt. factory orders in germany plunged by 15.6% in march. that is the most since it a collection began almost three decades ago. germany is a manufacturing powerhouse, and it has been especially affected by factory closures, supply chain disruptions, and a lack of demand. hasice ruth bader ginsburg been hospitalized. the court says she has a benign gallbladder condition and will not be released for a day or

two. she is 87, the oldest justice on the court. she plans to take part in two arguments being conducted by telephone. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, ritika gupta. this is bloomberg. francine? tom? rithika, thank you so much. equities, bonds, currencies, commodities. weaker euro everywhere. it is fractional, but the impulse is there, really showing that slowdown. coming out indicating a -9% gdp of some of the smaller countries. the peripheral countries, if you will come in europe. equities, the show continues. up we go with the vix in. francine? i am looking at european stocks, and they are pretty much drifting. i think we have some pretty bad

economic data and some mixed corporate earnings, the dollar climbing, treasuries pretty much study. let's get to howard davies, chairman of rbs. sir howard, so many questions. unfortunately a limited amount of time. let me start with the most pressing one, which is we are in a phase one, and we will find out from the u.k. government how long the lockdown lasts. we heard from the chancellor about furloughs. when you're planning to bring your people back to work? when does the phase two start for ubs, when people will be willing to go back to work? howard: we don't yet know. we are planning for different possibilities, but we are hoping to hear something from prime minister on sunday, which will give us an idea of what we will be allowed and recommended to do. i think in our case, the working at home has worked pretty well for the most parts of the bank for, but clearly there are challenges in the trading room.

we have some people who are there, and it looks as it the trading floors will have to be .uch less well populated we are looking at using another location to add to our capacity. we have 11 plans, we are still lacking any about with the government's intentions are. until then, there contingency is not a real plan that we are going to press the button on straightaway. francine: are you confident that the government and the bank of england have done enough so far to support businesses, big ones and small ones? -- the bank of england have done what they can do. they have any more to offer tomorrow, i am not sure personally that another bout of qe beyond what is announced will be particularly useful. interest rates down to 10 basis points.

my hope they stay there. as far as the government concern, there are two things. one is the details, loan schemes, and they have done a lot there. we have this corona business interruption loan scheme come and where pushing out money rapidly on that. there is now a small business one which is more or less an guaranteed loan. the other side of it is it is fine to push this money out the people order to bridge for the other side of a recession, but the assumption is v-shapedcing a recession. no positive news about how it will be released, i think businesses will draw a rather pessimistic conclusion. i think it is that third area of giving some view of a track out of this that is now the most important priority.

howard, under full to have you with us today. we have certainly seen the politicians testing the message over the last 48 hours whether -- with chancellor merkel and president trump. i want you to take your knowledge of modern history from oxford, you're 10 years at the london school of economics, and tell us what 20% unemployment means. i think it is just a number that is thrown out there now. we are going to see that on friday in the united states. what exactly to our viewers and our listeners does unemployment of that magnitude signal? have lived through periods of pretty high unemployment, perhaps not 20%. when you get unemployment above about 10%, it becomes the only preoccupation. and therefore other things , and government finances are constantly under pressure, which means

governments cannot invest in positive things. so it becomes the dominant point, and it also over time starts to threaten the social like, the, if you economies in some parts in europe where family structures are more robust. spain has managed to tolerate high levels of unappointed for a long two of time in a way that i think the u.s. avenue u.k. find extreme lee difficult. the only thing government have to focus on, and therefore it is a very wasting period, not only the effect on individuals and families -- you get more family breakups, etc. -- but also it means governments find it very difficult to do positive things because all they are focusing on is fighting unemployment. the whole ofer, obama's up a presidency was dominated by the view that he had to get unemployment down, and no one could remember anything else that he did, partly because he did not do much else because that was the only issue the country faced at

the time. francine: does this tom: does this unemployment and economic contraction threatened the european experience -- the european experiment. with draghi and now lagarde, is the european experiment threatened by this shot? howard: well, it would be foolish to say it was not threatened, though i personally chance of that is small because the prospect of that remains unattractive if you are in a single currency. some eastern countries not yet in the euro, they could conceivably go their own way, and of course there are other interesting movements in hungary and poland, which do not actually relate to the covid-19 crisis, but they could go off in a different direction. but if you ask people either in italy or greece do you like the euro, they say no, then you say

do you want to go back to the drachma or the lyric, they go,, christ no. because they know that would be pretty catastrophic. regularly you face bets of do you think there will be a crotch in the crisis or a muddling through or a solution, and the smart money has always been on muddling through, not on a firm solution or a breakup. francine: sir howard, we look at this crisis through the economic lens. is it going to be much more than that? is it going to be a redesigning of the social contract? is this crisis going to leave legacies between citizens and government and high unemployment for a very long time? howard: yes, i think there are a number of things i would forecast. one is that the previous certainties about the role of aside,te will be cast

and even this government is contemplating clearly ending up with equities stakes in companies and i think that well may happen. clearly people have realized that when times are really tough, the state, a strong state, a powerful state is absolutely crucial. so i think you will not see much in the way of rhetoric from the right of the conservative party about contracting the state, going for a small state. those things have gone out of the window. that will require redefinition because i don't think that the alternative of a long nationalization commitment is going to be a possibility either. redefining the role of the state and its interaction with the economy i think is going to be very important and crucial indeed. the second thing that worries me more probably is that i think this crisis is going to affect different parts of the population in different ways. if you just look at things like

who can work effectively at home, it tends to be the better off people, the knowledge workers, people like you and me, frankly, who can work reasonably effectively from home. number of people able to do that who are younger, particularly younger women who are lower down the pay scale is much fewer. that is where the job losses will be most felt, so i think you will get some social strains theeen income bands, relatively well-off, who will continue to do well, and age bands. i think younger people will suffer more from this crisis than others. those are going to be, i think, the most difficult and tense consequences of this crisis, and governments need to be thinking about how to deal with that. howard, thank you so much. we will get back to how you bridge the huge divide. howard davies is the chairman of

ubs. at 5:30 am in new york, 10:30 a.m. in london, our next guest. this is bloomberg. ♪

francine: this is "bloomberg surveillance." we are having a great conversation with sir howard davies, the chairman of rbs, and he is still with us. sir howard, when you look at what we heard yesterday from the german constitutional court on the legality of the qe from the

placeith what was put in with covid-19, is it a positive for the ucb -- for the ecb because they can budget, or does it hurt the ecb aura? can be i don't think it said to be a positive, because it once again throws a light on the politics behind qe, and you don't really want that at the moment. i think that as for the specifics of the ruling, which require the ecb to demonstrate the proportionality of its interventions, i imagine that they will be able to do that. i imagine that if they dug around, they would find the right kind of reassuring words anyway and they certainly can construct her future statements on that basis. i think they can solve that. what is more concerning, i think, is that you have a , thetion where the ecj court of justice supports what the ecb is doing. at than a german constitutional court disagrees with the

european court of justice, and this is an inversion of what we normally understand by the judicial hierarchy in europe. it appears the german constitutional court simply goes back to the german constitution and pays no attention to the fact that the germans have signed lots of treaties in setting up the ecb, which in an important way dominate that constitution. i think this is a significant european legal crisis really, in which the ecb, unfortunately, is the tennis ball in the middle of it. i guess they can find a way of working around it in practical terms, but it is not a healthy situation. tom coates or howard, with that said, there has to be -- in my , with that said, the has to be a way of positioning the german court, massaging it with terms and language. what is that institution?

howard: the problem with eurozone for some time has been that there are things that need to be resolved in the way that euro works, which require a treaty amendment, the most obvious one setting up a robust deposit insurance scheme on a pan-european basis. but there are other things, too, related to the powers of the ecb, which is a rather strange legal base for the moment. but of course, the european leaders have balked at the idea of a treaty amendment because in a number of cases, that is to be put to a referendum in individual countries, and the experience of recent referendums on the future of europe has not been particularly positive, not just in the u.k., though they are trying to operate with a flood set legal bases, but the real solution has to be a new treaty. howard, i don't want

you to get in trouble with your chairman, but i will take a risk on it right now. are we going to see more bank consolidation out of this economic contraction? well, in some parts of europe i suspect yes. the ecb has made no secret of the fact that they believe that there is a tale of only marginally viable banks in some european countries. i do not think, however, that we will see any consolidation of that sort, except perhaps at the margins in the u.k., where we have a pretty consolidated banking system and where there would be competition problems if any of those banks got together. and i am also not sure that at this point we are going to see cross-border consolidation, which is what the ecb has dreamt about. pan-european banks have a really to competeity globally. i don't think that is going to

happen. the way the crisis has been handled makes them more difficult, with countries being inclined more to shut their borders than to open them. he is decidedly the chairman of the royal bank of scotland. howard davies, for years with the london school of economics. migrate onto an important conversation in the 11:00 hour, hugely timely on this unemployment in america, with the laureate, paul krugman. stay with us. futures higher. this is bloomberg. ♪

ritika: this is bloomberg surveillance. investors in disney got a glimpse of how bad the coronavirus outbreak will be for the world's largest entertainment company. disney said the crisis cost it $1.4 billion in lost profit last quarter, and this quarter is expected to be worse. but disney did say it's resorts in shanghai -- it's resort in shanghai will reopen next week. lowering the profit outlook for the year, it says the fallout from the coronavirus is lasting longer than expected. bmw predicts the second quarter will be worse than the first. earlier than this week, angela merkel dashed the company's hopes for immediate car buying subsidies. u.s. antitrust regulars have signed off on a $63 billion deal that has cleared the way for

twoie to -- selling products. they also gave astrazeneca the rights for a treatment to crohn's disease that is being developed. that is the bloomberg business flash tom? francine? much,ne: thank you so rithika. we had some pretty dismal figures in terms of u.k. economy and the european economy. a lot of economists are saying their very survival is at risk because of the various virus shocks and less country -- and countries. that will mean a lot more solidarity. if we look at the markets, which i will talk to you in a second, euro-dollar moving yesterday on the back of the german constitutional court decision giving the ecb three months to actually change a little bit of what they did because parts of it were not legal. that is euro-dollar, 1.07 95. we keep looking at the italian 10-year yield, 1.89,

stabilizing. i will get to that in a second, tom. as well, andigher i want to point out euro-yen, a huge litmus paper, if you will, on strong yen, weaker euro, though you do not see it expressed so much in swiss franc. this will be an extra ordinarily difficult three days for the labor economy of america, no one affected as much as the auto industry. a conversation with the cfo of general motors corporation. we do that later. stay with us. this is bloomberg. ♪

♪ everyone.morning, placel of you trying to history into this moment we are in, whether it is 15% or 20%

unemployment in america, the -- andtion of massive the pain of this pandemic, there is no question history can be a solution, and there is no one in economics who defines our historical society -- historical study like robert skidelsky. i have to look down to give you the honor of the title, "politicians in the slump" from a few years ago is robert skidelsky's look back at the great depression. this is an exceptional moment. why is this moment not the great depression? robert: it is a very different havetion, because what we as a whole lot of industry being and yet there has been

no fall in purchasing power because of the government's paying people most of their wages. wewe come out of luck down, will have high inflation. this will be a depression and orlation at the same time, an inflationary depression which is very unusual. the 1970's when we had stagflation, high unemployment and inflation at the same time because supply has fallen but demand has not fallen nearly as much. people are going to buy a lot more than they are the moment. tom: i believe you are familiar with the phrase, when the facts

change, i change. the chancellor of the exchequer in the united kingdom is looking at the constraints of government assistance for wage support, etc. would you say to prime minister johnson now to assist the people of the united kingdom? robert: i never did like or dislike boris johnson that much. the person i disliked honestly was george osborne who imposed austerity on britain for six or seven years when he was chance and that has contributed to a lack of capacity, particularly medical capacity to deal with the virus. what i would say to johnson, you have got to ease up. policiespolicy or most are driven by medical science. the medical scientists disagree,

so governments have to make their own decision and balance the harm they are doing, the lockdown is doing the economy, against the risk of higher fatalities. at the moment, perhaps we are being overcautious and should be easing up more to protect the economy, because the fatalities from the virus are a very tiny proportion of the number of people who get it. think if we gou back to the economy of it, do you think austerity globally will be repudiated and further repudiated because of this pandemic? toert: all governments have support their economies in this period, but what concerns me

exitmuch is that we don't system thatfiscal is in complete disarray. in other words, what we have to robustis that we have a fiscal system for the future. tied down byt artificial fiscal rules, but one that doesn't simply react political needs with splurges of spending. if it is at all true that this will be an inflationary recession, we have to find a way of dealing with inflation further down the line, as well as supporting the economy in the short run, so it is very complicated. francine: we need to talk about inflation. how should the u.k. pay for this rescue package? the austerity led to cuts

amongst nhs and people on the front line. as the only way now to raise taxes u.k.? robert: in the end, we will pay for it. we will pay for it in any case and the government will just print the money. in the longer run, we probably have to raise taxes or pay for it by a higher inflation rate, one way or the other. this will be paid for. what is wrong is to say we can't afford it. the government can always afford to spend what it wants to. it is the consequences of that that we have to take into account. something -- i know people find that uncomfortable but it is true. governments with their own central banks can just get enough money to spend whatever they want to. the consequences could be a rise in prices.

of course it could be. that is inflation, and inflation is a way of paying for government spending, the way other people pay for government spending, form of tax. or you can tax openly by increasing the rates of tax. that is how it will be paid for eventually. francine: how concerned are you about inflation and if it comes up all of a sudden, this could be extremely painful. robert: in the long run, by which i mean as we come out of the lock down, we don't know how long it will last, but as things get back to normal, we will have a lot of purchasing power which used to be called penta demand -- pent up demand because people have not had much to spend their money on and all of a sudden the

shops are open, and there will be lots of spending because people will over this period have been paid most of their wages, and then you will get inflation. that will start rising, but at the same time, unemployment will then be increasing so you have something we haven't had really in a big way ever, and inflationary depression -- an inflationary depression. tom: thank you so much for joining us, lord robert skidelsky. president trump is preparing for what he calls stage two of the u.s. response to the coronavirus and told a crowd in phoenix americans should start returning to their everyday lives, even if that leads to sick this. -- sickness. he is considering disbanding his

coronavirus panel. at mike pompeo, beijing says pompeo has no claim -- someone pointed out the who says the virus could not be man-made. house speaker nancy pelosi wants democrats to move when it comes to the next stimulus package and is looking for leverage against republicans. the gop is trying to put the brakes on any form of aid. the money from the next package will be for state and local government. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am reddick group to. -- ritika gupta. this is bloomberg.

tom: we will continue with lord robert skidelsky. at then, we will look international relations of the moment with ian bremmer of eurasia group, past the noon hour. three days of jobs data in america, this is bloomberg. ♪

♪ bloomberg "surveillance," good morning, everyone. shocking economic data everyday as we pick up the march and april data. we moved to jobs on friday in the united states. we are thrilled to bring you

lord robert skidelsky of warwick, and acclaimed author of many books. you wrote a jewel out of the financial crisis, "keynes: the return of the master." everybody in the foxholes is a keynesian, trying to figure out government support forward. that is great. how do we pull the government support away one year, two years, and five years down the road? how do we do that in an efficacious manner? robert: the government support should play a part in reviving the economy. that is how it works. you support the economy in the downturn and then that support helps the recovery. the government support falls away naturally. that is to say, if you think of it in terms of the deficit, at

falls away, it reduces naturally as revenues increase, as the economy recovers. that is the basic pattern. this is a very complicated case because what is happening at the moment is the government is paying millions of workers their wages to produce nothing, so you are in a situation where as the economy recovers, you will also get very high inflation rate because spending hasn't fallen. we don'tplicated and know how long the lockdown will last, so i will not go into the business of predicting things. everyone is predicting like mad and they do not know anything. tom: what will happen to currency and just as an example, what will happened to pound sterling? you lived this as you and your parents escape china -- escaped

china in world war ii. what will be the depreciation of pound sterling? i could give an estimate but i don't think it will be worth much. two things will affect pound sterling. i think written is doing slightly worse in dealing with attack than virus some other countries, particularly germany, and then there is the uncertainty of a brexit. both of those things will on the whole lead to a lower level of sterling against other currencies, one would expect, but how much, who knows? i know you don't like forecasts, but if i phrase it as what would you do, we have government programs, furloughs

where people are not working. how would you do it if you were jobs soe of securing there is not too much unemployment but making sure you wean people off the government programs? robert: i would ease the restrictions as quickly as it is safe to do, get people back into work. are nott that they working because there is no demand for their labor. there is plenty of demand for their labor. they have been stopped for working by governments for medical reasons. get as many people back to work as possible and then you will get activity rising again. that is the way i would do it and that means you can cap the subsidies that the government has been paying to people for not working.

employers will be able to pay them. not does not mean that quite a lot of companies and firms will have suffered in the interim. a lot will have gone bust, but others will be able to open and there will be new owners as soon as demand picks up again. i think the industry will start turning again. that is the only thing you can do. , relax what i would do the lockdown as quickly as i could. be thee: what would biggest change economically? there are certain set there's -- sectors we are assuming we go back to the way it was, but you have social distancing for entertainment and restaurants and pubs, what will be the key legacy from this crisis? robert: i think people will travel less internationally. i think the airline companies will take huge hits.

videoconferencing will become more normal. economy,sectors of the i don't know how they are going to get going again, and that is true of holidays abroad and so on. within cities and within countries, most things will reopen as before. there will be some social distancing in restaurants but that is already happening in sweden. they have kept most of the economy going. distancing, so that is a partial way gradually as the threat of infection recedes. we will be able to relax social distancing. mostly, we will get back to normal but there will be some big casualties. francine: thank you so much,

lord robert skidelsky, u.k. house of lords cross bench peer. we will hear today what the prime minister has to say, and sunday, more insight into one -- what measures he will put into place. we will speak to valdis , the executive vice president of the commission. we will ask about some regulations for banks and the europe project. this is bloomberg. ♪

♪ this is bloomberg "surveillance." cleared theon musk last hurdle to collect being the first -- he can collect stock billion,alued at $17.6 based on teslas market cap and earnings. it is the biggest pay between a corporate board and the ceo. --is staging a comeback

bitcoin is staging a comeback. gains arevers say the upcoming --e america's meat processing plants are starting to reopen. now not all workers are showing up. scaredsay employees are and more protective equipment is required. that will lead to shortages and continued high prices. that is the bloomberg business flash. francine: the covid-19 pandemic is one thing we keep talking about and it is hitting the music industry, with reduction being canceled or postponed, -- production being canceled or postponed. we spoke to the spotify chief

executive about how the crisis is changing the way we listen to music. >> the crazy thing is how global the business is. we are in close to 80 countries around the world, so we are dealing with various stages of the pandemic. asia is making a near recovery. epicenterright in the and was in the epicenter since march. the u.s. is right now in the middle of the epicenter and you have latin which will enter the epicenter shortly. -- all in different stages of this epidemic, and what is fascinating for me and seeing how that consumption habits have shifted overnight. i don't think we have seen anything like this since the inception of the company, just how people changed habits,

changed what they are listening to, how they engage with that content. just really responding to this new reality we are living in, while at the same time making it culturally appropriate. users inve 286 million 79 markets. how do you expect listening to shift over the next few months? of newave seen an influx users to the service, which we are happy about, old users returning to the platform. my guess will be as good as anyone's about when this will change and how quickly things can turn back to normal. specifically, the big thing is around the commute so to the point when people are starting to return back to their their place of work, i

suspect we will see something that looks more like normalcy. the second thing for us is the gym. people are listening to music a lot while they are working out. people are working out at going to the gym so much and that is impacting the type of music people listen to was well. we are seeing places of work opening up and jim's opening up, -- gyms opening up, i think we will be better off. >> there have not been live concerts, john legend during selename concerts and gomez livestreaming her home studio. how will this change the industry? >> it will be massive. if you look at an artist, 80% of

income comes from touring so the fact that they cannot tour and will not be able to tour for much of the summer, which is one of the greatest points for concerts, will impact many musicians a lot. and not just that, we are talking about the roadies and everyone who makes these concerts happen. it is a big thing and something that we as a company are focused on, and why we created the covid-19 relief fund where we want to match donations towards the music industry. ♪

♪ tom: this morning, the bears are

fit to be tied as global stocks towardsand repriced valentine's day valuations. inflation beckons. strong yen.usts, three days of grim reports of millions unemployed in america. the president and a trip to arizona says the virus will pass "with or without a vaccine." thep economists suggest virus will disappear in the vicinity of two weeks. oh, do they? i am tom keene in new york, francine lacqua in london. the headlines push us aside of all good conversation, an extraordinary headline out of china. francine: an extraordinary he o