tom: good morning this is "bloomberg daybreak: europe". i'm tom mackenzie in london. political turmoil in south korea , as the opposition submits an impeachment proposal, after president yoon imposed and then

lifted martial law. south korean stocks lead declines in asia. authorities vowed to provide unlimited liquidity to stabilize markets. the french president says his government can survive today's no-confidence vote insisting he won't resign before his term ends. tom: martial law imposed in south korea for six hours. the first time since 1987. now of course removed. the impeachment proposal is in and market reaction continues as we focus in on the kospi, which is under pressure and leading asia lower. south korean equities continue to sell off though the korean won has seen relief today, making up some but not all the

losses yesterday on the back of that stock announcement. european futures currently flat. you have had four straight days of gains for european stocks despite challenges politically in france, talking of which, you have that vote of no confidence later today. ftse 100 futures pointing lower 0.3%. s&p futures looking to add to the gains of yesterday, geeking out a 55th record high for the year yesterday, currently pointing higher 0.2%. nasdaq 100 futures looking to add 77 points, up 0.4%. let's flip the board and look cross assets. we focus on korean stocks but also the walkable. -- the won. the kospi currently down 1.4%. the sill of continues, the challenges of the economy, and what the political unrest means for investment for domestic consumption in focus. the korean won gaining 1.1% in

the session but not making up all the losses the last one to four hours for that currency. the 10-year stateside yielding you 4.22. jay powell's comments later today. mary daly suggesting she is open to the prospect of another cut later this month. sees a neutral rate of around 3%, further cuts to come she said, though she did not commit to this month. gold 2006 under $49 on the yellow metal. currently up 0.2%. it's go over to south korea where the main opposition parties have submitted the impeachment proposals against president yoon suk yeol. this comes just hours after yoon ended short-lived martial law that prompt a troops to encircle parliament before lawmakers voted to lift it. less bring in bloomberg's ginni thomas in seoul. we have the proposal around the impeachment. what is the latest?

>> it's going to be a bit before we know what happens, which way it swings. clearly, the opposition party has control over the parliament. what they still require at least parliamentarians to vote in favor from the ruling party to make this work in their favor. it is still not a given but it is highly likely that either yo on goes by way of impeachment or there is enough pressure for him to step aside and find a new leader. it has been a chaotic 24 hours. something nobody was prepared for and reaction has been swift. we saw it playing out all night. tom: if yoon is forced out,

what is next in terms of likely leadership for south korea? what additional political uncertainty could we be looking at and what are the economic challenges of this country right now? >> either way, if yoon is out, we will have a fresh election within 60 days. that is the first thing that happens. there are a list of candidates that could be in the lead to take hold position in the next -- pole position in the next election. beyond that, what investors are worried about is how long this uncertainty lasts. korea was having challenges with slowing export growth and political uncertainty as to concern about further slowdown. moody's analytics came out with a report today which warns that if this is not resolved and further, locations emerge, there

is a risk to a negative credit outlook. those are the risks. this lf you saw in the currency yesterday was severe. it pulled back because the central bank stepped up with a limited liquidity but these to action has been severe. there are investors concerned not just about the short-term but how much toll it will take on the economy. tom: denny thomas with the latest ebersole. -- latest out of soul. we will get the market reaction in light of these remarkable times in south korea. spring in avril hong joining us out of singapore with a lens on korean assets.

we are seeing stocks down but though won seeing relief. >> quite a 24 hour andre for these korean assets. when we first heard about the shock imposition of martial law, the korean won popped to the weakest level since 2009. stocks open down on both the kospi and small-cap index. the financial assurances unlimited liquidity is helping the korean won. stocks as you say are still down because there are risks in the market that has already in the past couple of months seeing about $14 billion of outflows from stockmarket investors because of tech earnings disappointments. growth has been tepid. the bok last week surprised with a rate cut in anticipation of trump's tariffs and growth concerns. there are risks and concerns.

this political turmoil is just piling onto that. flip the board again because i wanted to highlight what we're seeing in the rest of the asia-pacific. south korea among the worst performers in the region this year in terms of the stock market. it is worth highlighting that there was a fair bit of caution in the rest of asia. nikkei was down 0.4% earlier on. keep in mind how this is still a major economy. it's an important chink in the chain for the global supply picture. there are concerns that potentially the rest of the region watching at very closely. keep in mind as well it is at a time when investors are grappling with u.s.-china tensions. the offshore yuan just a day ago hit the weakest level in a year, so we are keeping a close watch on this. indeed this is a point that our colleague mary nicola from the mliv team is making that not just.

the u.s.-china tensions but potentially france's well given the turmoil there. global fx volatility seems to be here tuesday. tom: avril hong weaving in that market reaction for us on these historic moments in south korea, as we continue to follow the politics and the market reaction. thank you for the deep dive, the linkages across the asia region. from politics and uncertainty in south korea to of the political uncertainty closer to home in france. president macron called on french lawmakers to set aside their personal ambition and reject a vote that would topple the government. far right leader marine le pen vowed to support today's no-confidence motion called by a left-wing coalition. together the two groups have enough votes for the motion to pass. >> i hope so, and it is indeed possible, it depends on the members of the national assembly each of whom has a responsibility to the french people, the voters of their

constituency and before france too which is at a rather serious moment. tom: let's bring in bloomberg opening trade anchor kriti gupta on the ground for us in paris. macron saying the government might survive, wishful thinking, kriti? >> the odds are stacked against them but in the words of michel barnier, it is not impossible. tom, it comes down to the way parliament is broken down around this vote. french parliament is broken down into thirds at the moment. nfp, the left coalition, the right with marine le pen and national rally and emmanuel macron's party in the center. what is tricky is there could be a make or break case when it comes to the socialist party, the most interest faction when it comes to the left side of parliament. what is significant is those are the people both michel barnier and emmanuel macron targeted the

last 24 hours saying these people could vote with their conscience. could potentially make or break this vote and that is where the speculation lies that if you see enough socialists in parliament abstain from the vote, there is a slim but not impossible to is that michel barnier could make it out of this vote with his job intact. tom: that would be quite the out come. slim but not impossible as you say. talk about the debt challenges of france and whether this is a broader challenge in terms of the prospects, the risks of a broader european debt crisis? >> the comparisons have been made of this idea of french debt , the yield premium now surpassing that relative to german debt of greece, of spain and that brings back memories from 2011. although the challenges are similar, a story of deficit, unsustainable growth and spending, systemic risk is not quite the same. that is perhaps where markets

have gone too far, that is what the critics would argue around the comparisons being made. i spoke to traders here in paris in the last couple days who have made a very interesting comparison i think you'll appreciate. that is comparing it more to the likes of what we saw in silicon valley bank and the fall of that as opposed to the eurozone debt crisis. the idea simply being that the response may be more in terms of the yield move in the debt, as opposed to an actual talk to the system and that is why it has taken the likes of the euro to react more strongly to what you see in the french debt market. tom: that is a really interesting analogy. euro-dollar currently at 1.05. bloomberg opening trade anchor. thank you for the update. 6:30 a.m. u.k. time, we will be putting some of these questions are on politics of france in an exclusive interview with the cfo of the french defense and aerospace giant thales. we will talk the politics of

france and be talking about ukraine, about europe's defense opportunities and challenges, plus of course geopolitical tensions. stay tuned for that conversation 6:30 a.m. you could time in about 15 minutes' time. 8:50 a.m., u.k. france pmi's. that is u.k. time, we will get france pmi's with a touch on the health of that economy given the political challenges. 9:00 a.m. u.k. time the oecd economic outlook report will draw. at 7:00 p.m. the fed beige book, jay powell speaking later today as well, some color on the health of the u.s. economy from the beige book that's at 7:00 a.m. u.k. time. you can get a roundup of the stories to get your day going in today's edition of daybreak. terminal subscribers go to dayb . the focus is on the vote as they put it in daybreak in france, but also what is transpiring in

south korea. as governments grapple with funding constraints, our next guest says ai can be a big part of the solution. that conversation, the report and the date is next. this is bloomberg. ♪

tom: welcome back to "bloomberg

daybreak europe." with governments around the world facing mounting financial pressures, we get reminders of that politically this week, my next guest says artificial intelligence can offer agile solutions. i am joined by schmuel chafets, cofounder and general partner of target global, european technology investment firm. thanks for coming. this is a piece of the aa story we haven't told in detail, that is why i thought it was interesting to get you to talk about this report. what were? the key findings? you have not been someone who has walked blindly into the ai optimism tunnel. you have raised critiques, you are not dismissing it by any means but you have put a critical lens on ai, no you have this report what it could mean for policing, nurses for teachers. schmuel: we have not walked blindly into ai.

it is obviously an incredible revolution but it is so easy to overestimate the short-term and underestimates the long-term. it is easy and you see it across the u.k. and europe. you see governments focusing more on the risks than on the rewards. they are focusing on how to protect people from ai and how to make sure it is safe, which is externally important, but we are missing a little bit the tech dividend that we all can get. we chose to focus on front-line workers and the people really in the edge of the system. what really came out of it is that there is a limit credible short-term opportunity. not necessarily on the mission-critical phase. not necessarily that we are advocating giving decision-making in health care or in policing to ai. i think there is more of debate needed before you do that. but the small day-to-day tasks that take up a lot of time of front-line workers can be automated and make their jobs

easier and better. it can really get them returning to their core. tom: are there some obvious examples that were flagged through this report that stand out in terms of real concrete efficiencies that could come through if this technology is implemented? schmuel: what stood out to me is we spent the last 20 years obsessed about data. about data collection, data entry and software. we brought a lot of layers of software into the governmental workforce and in the end, software is bureaucracy. we have taken the jobs of front-line workers that used to be facing a human and we put them in front of a computer for a big part of their day. that has made their job harder, and has made their job less interesting and has piled on to their workload. you can take that entire piece of their job and just automate it. you will solve not only for the shortfall in people. and we saw police forces doing it. we saw hospitals do it in

small-scale around the country. but you can also solve for the turn in those jobs. tom: when i think of government and technology, i think of a checkered history when it comes to procurement and implementation. what are the barriers to getting this in place, getting it in now and creating efficiencies at reasonable cost to the text barri -- tax payer? schmuel: the government is trying to do it top-down trying to create a ministry of ai and push this technology revolution downwards. what we advocate is something similar that happen in corporations with saas, giving the decision-making to the people at the edge. government should create guardrails, should educate because i think one of the things we saw and it was particular with teachers, people don't know enough so to educate. and let people at the edge make decisions. generative ai is extremely

customizable. the beauty of it is you don't need to be a programmer to build programs. if you push the infrastructure to the edge, people will do better than if it happens centralized from the top. tom: what are the opportunities for investors? schmuel: we did not necessarily look at this from the investor point of view. the same things that happen here are the things that happen in corporate settings. we have had some of our companies do extraordinary things by automating these types of processes. a travel company took its entire backend and revolutionize the company. we think that same opportunity exists in the public sector. i don't think necessarily by building public sector focused companies. it is by taking the same companies that work in the private sector and bringing them to the public sector but top-down. tom: you have been talking to the british government about this report. what is your level of confidence

-- just between us -- as to whether this government will act in a meaningful way on this opportunity? schmuel: there is definitely a willingness to act that this requires real change in the way government looks at technology adoption. it requires a real step change and we are talking to the government here, the government in places we are active in trying to help them make that change. tom: an important report by you and the team at target global on what the adoption of ai could mean for frontline public sector workers, police, nurses and teachers and of the challenges there. schmuel chafets, cofounder and general partner of target global venture capital firm. some redheads crossing the screen right now around the supermarkets conglomerate that is seven & i. it is weighing an ipo of its u.s. assets as part of a management buyout. this is the holding company which oversees a number of

different convenience stores, supermarkets and department stores. seven shares erasing their losses, they are gaining on this news as the holding company is apparently looking at ipo anchor their u.s. assets. coming up, georgia's constitutional court rejected a challenge to the results of octobers parliamentary elections. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak europe." georgia's coast additional court rejected a kelly to the results of october's parliamentary elections after violent clashes in the capital sparked by the ruling party's decision to delay e.u. membership talks until 2028. the president spoke to us about the court's decision. >> that's a below. it is a blow to the political process, a political way out that would have been easy. and would have brought back the whole situation in a constitutional framework.

recognizing that the elections had been rigged on two major constitutional points. which was the secrecy of the vote. the situation is not linked to the first i don't have to resign. i have a mandate which goes until the new president is inaugurated. their president is going to be inaugurated by the end of the month. it is not an election that is recognized by the population. i will continue to represent the voice of the people that want their quarterback. -- vote back. tom: that was the president of georgia speaking to bloomberg's francine lacqua. let's check back on korean assets. the won has gained but after a significant drop yesterday, the currency paring heavier losses. korean stocks as they edge closer to the close of the day,

remained under pressure, korean stocks down 1.3%. the impeachment proposal has been submitted by opposition parties. you can see live pictures right now problem the main plenary hall of south korean parliament after president yoon came out with that bombshell announcement that martial law was being imposed. that only lasted six hours. now the president faces impeachment. the country faces political uncertainty. we will have an exclusive conversation with the cfo of thales on france's ♪ ♪ with so much great entertainment out there... wouldn't it be easier if you could find what you want, all in one place? my favorites.

get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month.

♪ >>[indiscernible] i'm tom

mackenzie in london. political turmoil in south korea after the president yoon lifted marshall lohr. unlimited liquidity and emmanuel macron says the government can survive and he will not resign, 55th record of the year, the

kospi down as they had for the close. the korean yuan reverses losses, data load from the u.s. and durable goods crossing later, gold dating, the yellow metal.

aniline of their but says -- bearber made remarks ahead of nato ministers, focus will be on speeding up military aid rather than a possible peace process. i'm joined by someone who has deep expertise, pascal, ceo of a french aerospace firm. is the sector ramping up supplies to ukraine?

>> good morning, ukraine represents less than 1% of revenues and will not be affected. it is true we see defense spending growing in it is one of the markets where we enjoyed strong demand with cyber and digital, i mean aerospace. what we see is a decade of goals regardless of ukraine. david: what -- what -- what

level of spending are you modeling? >> you know, we have seen most countries growing their spendings, meeting the requirements of nato, 2% of gdp and we will see nato countries rising their spendings. pwojection is five and a half percent of goals and defense spending, so quite a good level, but once again spot is more

important. not just 2025, considering the geopolitical tensions, we believe in front of us we will see growing demands for defense. tom: ok. do you expect the trump administration will be a catalyst for spending? pascal it is likely, mr. trump has been quite clear, asking them to take their fair share of spending and u.s. spends more in

term of proportion of gdp and i think it's fair nato countries continue to wise their spending. this is what we will take advantage of, as we serve most nato countries from our industrial base in many countries and also the case in germany, netherlands, italy, u.k. where we have police long -- pretty strong base. with all european countries investing more on defense. tom: is the -- is the political uncertainty and france leading

you to delay it estimates -- delay investments? >> no, we need a broad perspective, in front of us 10 years growth, defense, aerospace business, the level of backlog. we will take advantage. to invest in order to accelerate delivery, demands have never been so high. tom: do you -- do you have a message for lawmakers? >> no, once again we need to

distinguish between the situation from what we see longer-term, active and fast-growing, much more important. tom: um, i need to talk about the -- the investigation as -- as well. as a result of these, uh, claims, how long have you known about this investigation? pascal: we confirmed the initiation of investigation, relating to asia, we deny

allegations and cooperate and would like to confirm we complied with all regulations. it is quite difficult to comment and consider how long those investigations will last, too early to be more vocal. >> k. leonardo reports a joint venture to compete with elon musk, how far along is that? >> let me come back on the situation of space.

satellite operators have been facing disruptions which means top priority putting in place the adaptations and competitiveness. potential collaborations at this point let me just say we -- we -- we -- we are having exploratory discussions to see whether or not it makes sense to consider further collaborations but wants agains our top

priority is to restore profitability, quite ambitious plan that will allow us to we cover and we are pragmatic, we will consider whether collaborations makes sense for this overall uh sector. tom: a key provider of cybersecurity in france, are you interested in the assets? pascal: overall we made it clear we are not interested, not interested in bds.

if some assets are for sales wheel aiding to defense we will look at it but it is not a priority. tom: pascal on returning to profitability in space units, indeed. getting back to korea the market is closed, because closing down a little ova 1.4%. some pairing of losses of yesterday but korean stocks fall , proposal to impeach the president after marshall lohr is now in and working its way through korea but political risk

heightened, a story we continue uh to follow. out of france we get new details on... ramifications of disruptions and a view of the fed and the u.k.. this is bloomberg. ♪

♪♪

♪♪ the black friday sale is now on. visit sandals.com or call 1-800-sandals tom: president micron called on lawmakers to topple the government. where do things stand? >> today it is a make or break

day, cautiously optimistic but what people are asking is what happens next and that is where things get interesting, a budget is in the balance, if the flow passes goes back to emmanuel macron who can install a government or go from the starting board. that puts france in limbo and legislation comes in handy, the special law carries over the budget, the problem is it

includes restrictions and spending, more austerity than expected, cutting defense spending, major priority in europe, but things like tax cuts, pension reform, hang in the balance, coming down to his desk by the end of the week. tom: ok. kriti gupta monitoring france and we will be talking to a vice president and socialist party

member of parliament. i'm joined by janet and wreaked on politics and the ecb, if the government fools, pretty good dirt explained it to us. how does that impact your forecast? >> europe has a strict set of rules and france is excessive deficits though the budget would entail austerity, narrowing the deficit and while there may be limits if they freeze the budget

also some tax measures, if the budget is frozen you get less tightening france will be required under the procedure so in terms of the outlook, more uncertainty when we think about investment it is certainty about future demand. companies don't like uncertain tom: yeah, does that tie in to

the ecb reaction? guest: just since the election and we've had the market scaling back and rate cuts across europe , weaker growth, it does not mean inflation follows. we go back before the crisis germany had a week growth, prospects are not great but they have higher inflation than elsewhere so if it brings lower

inflation the ecb will cut but think they will stop short and do not see them going lower than that. growth has been negative, not positive. longer adjustment going toward target. >> it's very interesting. we had jobs date are on friday, additional dater out today, do they go -- do they go they cut in december? guest: fed made its policy-setting clear, policy is

restrictive, they want to remove restrictions but our data dependent. we think they will cut but prospects are growing that they pause or slow down, ongoing rate cuts even if they take a pause but we expect december rate cuts. tom: janet enry on the prospects of a fed cut and not seeing rates below 2%. this is bloomberg.

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tom: bombshell around marshall law, here's how it reflected, pledge of quiddity from bank of korea and then the president confirmed he would lift martial law. the reminder given the trade

front, blue bug saying it could sap the energy of this economy. in france underperformance versus the stoxx 600, down since he called the election. opening trade is next, stay with us. ♪

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>> i'm anner edwards along side kriti gupter and guy johnson, here's what you need to know. emmanuel macron