. good morning. welcome. you're watching "street signs." i'm louisa bojesen. >> i'm carolin roth. these are your headlines. new ceo, new targets, and new records for the stock. adidas trades higher as it forecasts faster sales and profit growth in the year ahead. we'll speak to kasper rorsted, the ceo, at 12:15 cet. delivering declines. deutsche post sinks after issuing a disappointing guidance, but the ceo tellsnbc he's not concerned about protectionist talk.

what history has taught everybody is that protectionism did not help any country in the long run, so i'm optimistic that we'll see a continue ways of free trade, because politicians and countries understand this is a better recipe for success. a state-led slump. shares in edf sink to the bottom of the stoxx 600, after the french government announces a 92 million euro share sale in the energy giant. britain's upper house of parliament confounds the brexit bill, giving lawmakers the right to actually hand back some of the rules and change the final terms of the brexit deal, this as chancellor philip hammond delivers an upbeat economic assessment of the uk. good morning, everybody. welcome to the show. we're halfway through the week. a lot going on. >> it's budget day. >> exactly. >> doesn't mean much to the rest of europe, but here it's a big

deal. >> it's a huge deal. also because we've been doing so well in terms of the economic outflows that we've had or inflows since the brexit vote. so has anything changed in terms of the government support? we'll hear more about that through the show. european equity markets very mixed. we were called flat to mixed on the open an hour ago. just seeing a similar story at the moment, still very early morning trade. when it comes to main european equity markets, the ftse 100, a couple points lower. the dax a couple points higher. that's not to say we don't have some big stories. >> very busy earnings day. adidas surging after the new boss said he is forecasting faster sales and profit growth in the year ahead. the company reported a fourth quarter net loss of 10 million euros while sales rose 12.5% in line with analysts forecasts. we'll speak to kasper rorsted, the ceo of adidas at 12:cet. do you say adidas or adidas?

in germany, it's adidas. >> i say adidas. americans say adidas. >> i'm torn between the two. >> we can ask him. >> we'll see. he's danish, i don't know what his answer will be. >> let's talk about deutsche post, shares are sliding december mite saying despite earnings to rise 7% this year. the company says there is booming demand for parcel deliveries thanks to people shopping online. speaking to skaquawk earlier, t ceo said he's not concerned about protectionist talk. >> what history taught everybody is that protectionism did not help any country in particular on the long run. so i'm optimistic that we'll see a continuation of free trade, because politicians and countries understand that iscip. >> g4s reported an 18% risein

ed a j adjusted profits last year. the securities firm posted profits of 352 million pounds while also announcing it won new contracts in 2016 worth an annual value of 1.3 billion pounds. edf trading at the bottom of the stoxx 600 after the french government sold part of its stake in the company. the move comes just a day after edf launched a planned 4 billion euro capital increase. edf looking to bolster the balance sheet to fund the construction of the hinkley point nuclear plant in the uk. bond king jeffrey gundlach says he thinks the fed is about to ender an old school hiking cycle. he expects a series of rate hikes from this month and says it won't stop until something breaks, such as a u.s. recession. speaking on his latest investor

webcast, gundlach says a short position on german ten-year bonds was smarter than being long. billionaire investor peter thiel has decided low interest rates. speaking at the keynote cera week, he said people have no idea about the future and don't know what to do with their money. >> you have zero percent interest rates, people like to argue the zero percent rates are wrong and a sign that something is completely crazy with the central bankers, they lost their minds. what if the zero percent rates are right. if they're right what it implies is outside of these small pockets in texas and california, people have no idea what to do with money. >> they'll addressed his role in the trump administration, and said the new bull market may be in politics. they'll said there's always a bull market somewhere, and you just need to find it. speaking at the keynote session

from cera week he outlined that theory. >> one of the thoughts one of my colleagues has had for a while, one of the places we're having a bull market is we're in a bull market in politics. i'm not sure this is a good thing, but it is a fact that maybe politics is becoming more important. it's becoming more intense. >> right. >> the range of outcomes is becoming greater. and that we're in a world in which there is a bull market in politics. >> let's bring in tom stevenson, investment director from fidelity investment management. peter may be right there. he has a point. there's no way around politics at this point when it comes to the equity markets. can you ignore trump at this point? you can't. >> you can't ignore trump, you can't ignore politics in the rest of the world either. in europe the big story of 2017 is likely to be political uncertainty. certainly in the u.s., huge amount of uncertainty about which direction the trump regime

is going. >> that brings uncertainty to investors minds. at the same time we're trading at record highs. we've seen an ipo which was several times oversubscribed, it has fallen since, but huge demand of that ipo of snap and a slew of m&a which may be defensive in nature, not necessarily aggressive in nature. what does that tell you about how you should invest in markets? >> it says investing is confusing at the moment and difficult. if you look at the way the equity market has gone since the trump election, the way the dollar has moved, initial reaction first couple of months, strengthening in the dollar, strength ing in the equity market on hopes for deregulation, infrastructure spending, for tax cuts, the markets have paused for breath. they're saying where is the delivery. the key for markets this year will be whether trump can deliver. and we're seeing worrying signs that things may be more

difficult than maybe investors hoped. seeing the trump administration getting bogged down in obama care. does that mean that tax cuts will be put on the back burner, deregulation will be put on the back burner? remains to be seen. delivery is key this year. >> the s&p 500 up 11% since trump's election. do we keep adding to positions we already have in our portfolio? do we take profits? >> i think that's extremely good question. what's driven the rally has been things like financials. now, they were starting from a low base. but they have risen extremely fast. i think, you know, you look around the world. you look at where valuations stand, and i think we are beginning to maybe find it's the time to reconsider. so the u.s. is looking very, very punchily rated at the moment. over at europe, it's quite different. the discount of european equity ratings to the global average is

actually wider now than it was two years ago. look at the economic situation in europe, it's much stronger. so we've had a synchronized upturn in pmis, yet it's not yet being reflected in the stock market. i think that we may see a bit of a rotation out of the u.s. and into european and even emerging markets. >> so if that's the case in europe, does that mean the ecb might surprise us and start tapering even more essentially this year than what they already are doing? >> that's a big question in europe. mario draghi, you know, is a dove. he doesn't want to move until he absolutely has to. but, you know, that's beginning to really worry germany. they're seeing the rise in inflation and they want to see action from the ecb. we have a meeting this week. i doubt whether we'll see anything, but increasing calls are to start acting. what about the u.s. dollar?

it had a phenomenal run with u.s. equities. do you add on to those positions as well given that we might be getting more than two or three hikes this year from the fed? if they're already hiking in march, that leaves plenty room for more hikes the rest of the year? >> it does. the dollar paused for breath a bit, but the noise is very clear. the last week or so we had clear messages from rate setters culminating in janet yellen's comments on friday when she said she felt that rate rise will be appropriate. assuming that things evolved as they expect. so i think we'll see a rate rise next week. i think we'll probably see a couple more this year. so that is going to drive the dollar higher. the dollar is paused for breath. that could get a leg up. >> tom, thank you very much for that. on a programming note, barclays

ceo, jes staley will be joining cnbc at 14:40 cet. just talking about the fed. it will be starting its two-day policy meeting a week from today where traders are now expecting the central bank to announce an interest rate hike. geoff spoke to the president of rusal, oleg deripaska and asked what impact that would have on his business. >> it will take away some opportunity, but in commodity sector it's more about discipline on supply side. demand will keep growing. we have such a delayed, you know, demand in european for seven years, look at u.s., latin america, south america, they need to start investment.

that's why in case of interest rate going higher in the short-term, i think it will just be another push for people to consider less invest mement, an create more supply discipline. iron ore, steel, copper, aluminum t will create a more healthy environment for the future. >> but you don't think rates are going up too high? >> it would be very strange. it would contradict what u.s. needs. and i can't see much inflation based on today's economic data. let's see. >> not what the u.s. needs because what? the high debt level? >> yeah. it's very difficult to maintain such a high debt level with high

interest. first it's costly. it will take away the resources from the federal and regional governments, which they provide for infrastructure. i think they should somehow synchronize it. it's important not to be decided. it's not just inflation which may undermine stability. i think it's growth which should follow such a long period of almost stagnation in the leading economy. >> how is russia doing in your interpretation of the economic data? >> russia very stable. great progress in inflation, balanced budget. you know, russian debt, foreign debt was cut tremendously. if you see public debt just 12% of gdp, it's lowest rate in the

world. i think russia is in good shape. >> all right. e-mail the show. the address is streetsignseurope@cnbc.com. you can also find us on twitter and tweet us directly @carolincnbc. >> or @louisabojesen. coming up on the show, spying on the spies. we'll bring you up to speed on what is perhaps the biggest ever leak of cia secrets. we'll tell you the details after this. find us on twitter @carolincnbc or @louisabojesen. we'll see you in a second.

welcome back to the show. the cia faces what could be the biggest ever leak of its secrets after wikileaks published thousands of documents claiming to show internal communication on the hacking and accesses of information on apple, android and other devices. peter alexander reports on another setback for an intel

jensz agen intelligence agency already under fire. >> reporter: wikileaks posting a giant trove of cia documents it claims reveals secret techniques in some of the most common electronic devices. all of it to spy on their owners. nearly 9,000 documents that expose software tools designed to break into iphone or android and bypass secure messaging apps lights whats app and signal. one revealing how to eavesdrop on conversations picked up by internet-connected tvs when they appear to be turned off. even a hack for microsoft windows named after a character in a popular will ferrell movie. nbc news hasn't authenticated the documents and wikileaks isn't revealing the source. tonight the cia isn't commenting. still computer experts and former intelligence officials are treating the documents as real as well as the alleged security breach. >> we have always been worried about spies inside our agencies. what's different is technology

has allowed the fruits of that spying, if you will, to be more powerful in the hands of our adversaries. >> reporter: the spying tools would have been used for foreign surveillance, but the alleged breach is raising questions about whether in the hands of cyber criminals americans could now be targeted. when you see something that is billed as internet connected, be it a car, home, light switch, whatever, just remember that also potentially means hacker connected. >> reporter: tonight some of america's top tech companies like google and microsoft say they are investigating. >> the british government has vowed to overturn proposed changes to its brexit bill when it returns to the house of commons. the pledge comes after it appears they backed an amendment which would give mps a parliamentary vote on the withdrawal from the eu. theresa may petitioned the lords against the amendment saying it would compromise the

government's negotiating power. in philip hammond address, he is set to talk about a brexit war chest. he is ignoring the chancellors not to ignore the health system. the chancellor will also urge to protect public services. steve is at westminster. the chancellor having promised to minimize tax changes this time. what should we be looking out for? >> as you quite rightly said, it's very much a wait and see budget. this is apparently 27 billion pound war chest has turned up from somewhere. i can't comment whether there's pink unicorns as well that also appeared. it looks like the government is readying itself for the enactment of article 50. jonathan reynolds joins us, the mp for stately britain hyde. >> good morning. >> what could you expect from the chancellors that you will

agree about? you want a northern hub, they want a northern transport, you do as well. sounds like you're in tune with them. >> there should be head room from the statement. for us the priority has got to be action to tackle the crisis in the health service and in social care. for the health service, it's the first parliament with a cut in health funding. for social care, even conservative colleagues would agree there's a crisis. there's not enough money for social care. we have had endless reviews, a lot of money taken out since 2010. millions of elderly people not getting the care they need. so unless there is action on those two areas, the chancellor will have failed today. >> according to the leaks, the pre-announcements, there will be over 1 billion pounds available for that. the council will get the go-ahead to raise money for local care for the elderly.

sounds like you're in tune with what the translochancellor is to do. >> from what i've seen in the papers, it doesn't sound good to me. council tax of 1% will raise much more higher amount in surrey than a place like mine. it's a national priority, a national need, so the system should be national to fund that. if you think about 5 billion pounds taken out of social care since 2010. 1 billion across two years won't touch the sides. if you look at the bigger tax cut schedule for the parliament, big tax cuts to banks, big cut to capital gains tax, inheritance tax coming down, there's about 70 billion pounds between now and 2022. we have to see priorities change. >> it is all shadow boxing at the moment. i presume you agree until we get the enactment of article 50 and the nitty gritty negotiations, it's kind of all in never-never

land. we don't know what's going on. >> the big question for the next ten years is what that brexit deal will look like. the scope for a good deal, hopefully the chancellor has an idea there is talk in the papers today of a war chest, a brexit fund being built up. the premise of that seems strange to me. if there are things that need to be done, and there are things that need to be done to prepare this country for leaving the european country which we are going to do, should we spend that money now? should we not have an election war chest for a few years time, if we need better transport, better skills training? let's do that now? it seems a strange thing to say we think it will fail. here is a failure fund, we'll spend that. the chancellor has to take the action now. >> you're not a big fan of the house of lords from our previous conversation, are you in favor of what they did yesterday, getting parliament back into the frame that they can make meaningful vote on the final terms of the deal?

>> there has to be a meaningful vote. the prime minister's position of no deal could be better than a bad deal, that's just political back covering. the worst position is to leave without a deal. every other parliament and regional parliaments in europe will get a say on the uk brexit deal and they'll send negotiations back if they're not happy. parliament has to have a say in this. there's left-wing leaders, right-wing leaders. >> that's just the labour party. >> not quite the same as torrey who have didn't perspectives on this. parliament has to have a say over those things. the government should be willing to listen to parliament, if you look at how divided the country is, by having that debate and listening to other people is how you put the country back together. >> i think we're all in favor of strong opposition, shadow cabinet, shadow government, do you feel labour is anywhere near with one voice at the moment?

seems you have to look at what's going wrong, and things have gone wrong, and even people like you who have 16% of the vote, you must be thinking if there was an election tomorrow, would i be in danger? >> if you look at poll tipgitic around the world, you take nothing for granted. what's wrong with the labour party where this could lose a seat like copeland? >> there was nobody in the labour movement that would cut inheritance tax at the sam time as cutting benefits for disabled people and then telling them they're not really disabled. we need better investment and need to level up the transport funding between london and the rest of the country. if we focus on things that matter to people, you ask people, should health services get more money? yes. should social care get more money? people would say they should.

>> all of you agree on the economy, do you agree on a man who would lead you into the election, do you think the top of the party is the problem? >> you can't think you would get an instant response. labour has to think about how the economy has changed, how that has changed. it's no good for people like me to say let's switch the leader and that might do it. it's got to be about what our agenda is. there's got to be more humility about how we get answers to these questions. that's what we're trying to do. a lot of people are working together to try to do that. there's no doubt that if we know ku focus on the right things, things that matter to people. >> do you expect an early election. she seems in a strong position, the prime minister. >> there is more speculation,

there's a growing movement in some quarters for an early election. she has given her word that there wouldn't be an election. to combine an election with the brexit process and what's going on in scotland and northern island, that' ireland, that's a lot to do. i'm not sure an election now is in the country's best interest. >> thank you for joining. lovely day. it is staley bridge weather. >> it is. >> that's it for the moment. we'll take a short break on "street signs." we'll be back with our guest from the cbi after a short break. plus we'll have coverage of the speech itself. we'll be live from 13:00 central european time right here on cnbc.

. welcome back. you're watching "street signs." i'm carolin roth. >> i'm louisa bojesen. getting you those headlines here. new ceo, new targets, and new records for the stock. adidas trades higher as it forecasts faster sales and profit growth in the year ahead. we'll speak to kasper rorsted, the ceo, at 12:15 cet. delivering declines. deutsche post sinks after

issuing a disappointing guidance, but the ceo tells cnbc he's not concerned about protectionist talk. >> what history has taught everybody is that protectionism did not help any country in the long run, so i'm optimistic that we'll see a continuation of free trade, because politicians and countries understand this is a better recipe for success. a state-led slump. shares in edf sink to the bottom of the stoxx 600, after the french government announces a 92 million euro share sale in the energy giant. >> we have not manipulated anything. wolfgang schauble says everything is due to the competitiveness of the german economy. good morning. if you're just tuning in, let's peek at u.s. futures. yesterday we saw another down day for the u.s. markets.

the dow and s&p were in the first consecutive session of declines in more than a month. the s&p 500 seen off by three points. the dow jones set to lose less than a point. the nasdaq seen off by 2 1/2 points. let's show you what's going on in europe. it's a fairly mixed picture. we're busy with earnings once again. you heard it in the headlines, adidas surging by 8% on better than expected forecasts for sales and profits. that is offering a bit of a lift to the xetra dax, germany trading just below the 12,000 level. cac 40 in france is suffering from pressure by edf given the share sale by the government. by in large very flat trading. when it comes to the fx markets, we're in a wait and see mood ahead of the jobs report on friday. that's why we're seeing a bit of softness in the dollar. that has stabilized somewhat.

ya against the euro. >> 1.0550. against the pound, 1.2161. >> philip hammond is poised to deliver the uk's first full budget since britain voted to leave the eu in june of last year. in his address he is expected to announce the creation of a brexit war chest. up to 60 billion pounds will be poured into the fund, which is designed to ability as a buffer against potential economic shocks as the uk withdraws from the european union. steve is still at westminster. all these measures that the government is taking to try to ensure this smooth brexit scenario. >> doing absolutely everything they can. but we don't know what negotiations will look like. let's get a view on the economic ramifications. we have the chief economist from the cbi. let's talk about this war chest. 27 billion pound figure, which i

keep hearing about. where does this money come from? >> one thing that we've seen is better growth in the economy, so that means that the obr is likely to forecast better growth for this year and that's translating into tax receipts, particularly from corporations. that is adding to 10 billion pounds per year that the chancellor will have to play with over this parliament relative to where we were in the autumn statement. i think we are expecting him to bank some of that, save it maybe for a rainy day, which is a sensible thing to do, given where we are. he will have some leeway, maybe 2 billion, 3 billion pounds to look at priority areas for spending. we would like to see some of that used to relieve some of the rising burden from business rates in particular. we were also pleased to see that the chancellor will prioritize technical education. >> the business rates.

why is this such a clumsy situation that so many companies all of a sudden are seeing enormous rises in tax bills on the business rates? you said it could be up to 50% for some companies. >> one of the problems at the moment is that it's been seven years since we did a proper reevaluation of the rates that businesses should be paying. we'd like to see that happen much more frequently. if we were doing that every three years, we would avoid some of these situations where properties in london and southeast could see an increase in the main tax bill by nearly 50% next year. and other businesses it would be a long time before they saw the benefits of lower interest rates. >> we hear technical colleges will be set up, more of them, a t level, which is a technical level? >> i think one area that has not

been prioritized in terms of education is technical skills, particularly young people aged 16 to 18. we know it's important to get that right. but the chancellor said he will spend up to 500 million by the end of this parliament in improving our technical education. with the changing world of tech nol jish technology, it's important that we give our children a good chance. >> the old debate about whether the schools should train them for workplace or the companies. are your members investing enough in young people? they very much, from what i've seen, blame the schools for not preparing the right kids to come into the workplace. >> i don't think it's about blame. it's about working in partnership. businesses are investing over 48 billion pounds a year in training people across the economy. we want to work with the government to ensure kids are leaving school with the right skills, right focus on technical and digital skills in

particular. business will play their part in training throughout their lives to be ready. >> how has brexit been? the froth assessment will be updated to 2%. has the cbi, business, those who lobbied to stay in the european union been too pessimistic and this could be an interesting year for the united kingdom? >> the economy has proven to be resilient. household spending is a reason we're seeing that resilience. that will continue. i think we can see the challenges coming down the track. inflation is back. it's set to rise by over 2.5% over the course of this year. that's going to make things tougher for households. i think there is still a lot of uncertainty about what our relationship with the eu will be. that makes it harder for businesses to invest for the long-term. >> if the inflation comes back, that goes back into wage

inflation as well. that means households and the economy, which is based 60%, 70% on the consumer, households will have more money to spend. so maybe less corporate profits but more money for consumers. >> i think you're right in we see an increase in pay which keeps up with the increase in inflation. but actually what we'd like to see is growth in real pay of around 2%. that's what households are used to over the long-term. i think if we look at what is expected to happen over the next couple of years, that's not the situation that households are going to be in. we know that household savings rates at the moment are quite low. one thing that will be crucial is that we have the opportunities for businesses to invest, grow the economy and create those jobs for consumers. >> fantastic. amazing in the world where the uk consumer has about 5,000 pounds of cash savings, we will get up to 20,000 pounds a limit per person, so for a couple,

40,000. extraordinary amount of money. rain newton-smith, thank you. lunch time, 13:25 cet, we'll break in from u.s. programming, we'll tell you what to expect from the chancellor, we'll hear from the chancellor and talk about it afterwards, then hand it back to u.s. coverage. that's from 13:25 cet. >> thank you very much for that. make sure you do stay dry in the meantime it looks to be a wet english day out there. >> as is typical. three days after president trump claimed president obama tapped his phones, the white house stood its ground saying there was no problem with the claim. hallie jackson has more.

>> reporter: president trump tonight struggling to shake off a tweet so explosive it won't go away. after he accused president obama of ordering trump tower be wiretapped. republicans forced to respond. >> have you seen any evidence of that? >> i haven't. >> i have not seen that evidence. >> i think the president of the united states, who has stated categorically that trump tower was wiretapped, that he should come forward with the information that led him to that conclusion. >> reporter: even though the president said saturday, he just found out about the alleged spying, the white house still won't say where he actually found it. kicking it to congress to investigate instead. >> he made it clear they have the staff, resources and process. i think that's the appropriate place for this to handle. >> why would the president want congress to investigate for information he has? >> i think there's a separation of power. >> why expend the resources if the president has it? >> i think there's a difference between directing the department of justice which may be involved in an ongoing investigation and asking congress as a separate body to look into something and

add credibility to the look. >> reporter: on capitol hill. >> no president can unilaterally say wiretap that american citizen. >> reporter: questions about the unproven claim directed to rob rosenstein. up for the number two job at the department of justice. he would lead the investigation into ties between russia and the 2016 campaign, after his boss, attorney general jeff sessions, recused himself. today rosenstein not committing to a special prosecutor like democrats had demanded. >> every investigation conducted by the department of justice is an independent investigation. >> incredible. the more you hear, the more incredible it gets. >> some very good questions during the press conference. >> great question. you just found out about the wiretapping, why do we need to go investigate? congressional investigations into ties between president trump's campaign and the russian officials are ramping up as u.s. lawmakers review classified evidence on the matter. the cia is providing raw intelligence documents to house

and senate committee members, some of whom made the trip to langley to review the information. the senate intelligence committee will start questioning witnesses associated with the probe behyind closed doors. china posted its first trade deficit in dollar terms since the start of 2014. exports denominated in yuan rose 4.2% in february from the same period last year, imports rose over 44%, producing a trade balance of minus 60 billion yuan for the month. china called for north korea to suspend tests of missile and nuclear technology. in exchange it says the u.s. and south korea should halt the annual joint military drills as a first step towards easing the tensions. eunice yoon has the latest on this. >> thank you very much. china's foreign minister said he hopes the suspensions will lay the ground work for a denuclearization on the korean

peninsula. he hopes that will restart talks and at a press conference at the national peoples congress he also said that peace is within our grasp. but at the same time he also took the opportunity to condemn north korea for its missile test and also at the same time he was quick to criticize south korea and the u.s. for conducting military drills. and also for the deployment of the u.s. anti-missile defense system called f.a.d. which arrived in south korea this week. he described the tensions on the korean peninsula saying the two are like accelerating trains, coming towards each other with neither side willing to give way. the question is, he asked, are the two sighs really ready for a head-on collision? now, china is north korea's closest ally, very likely beijing will be asked by washington to do its part to prevent that head-on collision. the u.s. secretary of state, rex tillerson, will be coming out to

this part of the world next week. he is expected to visit tokyo, seoul and arrive in beijing next saturday, march 18th. the foreign minister also said it is these types of exchanges that are helping to pave the way for a summit between president xi jinping and president trump. he said the february phone call set the stage for the two countries to overcome their differences. >> translator: we hope china and the united states can rise above the outdated concepts, broaden visions, and move towards more steady, mature relationships as it turns 40, so we can put the minds of two peoples and the rest of the world at ease. >> the chinese foreign minister praised his u.s. counter part s saying from his meetings with him he believed rex tillerson was a good lyistener, good communicator and the two would have a good working relationship. coming up on the show,

strengthening europe post brexit. we will hear from the german finance minister after this short break.

good morning. welcome back. in france, francois fill season fighting new allegations about an undeclared loan from a businessman. fillon may have received the interest-free loan of 50,000 euros in 2013. the paper alleges that fillon explained to investigators that he forgot to mention the loan in his declaration. fillon held a rally last night in an attempt to put his candidacy back on track. he appeared to centrist allies who deserted him over the corruption allegations to return

and help him win the spring presidential election. the latest polls are showing the independent centrist, emanuel macron on par with marine le pen. while macron remains the clear winner in the two-way runoff. germany alone cannot hold the region together. speaking at a news conference yesterday, the german finance minister told annette he was confident french voters would make the right decision in the upcoming election. >> translator: i'm closely watching what happens in france. i'm convinced france and the french people will make a responsible decision at the elections. i have deep respect of the intelligence of the french voter, which has been backed by the outcome of regional elections. >> schauble said the country's trade surplus was down to the competitiveness of the economy.

the german finance minister conceded the central bank faced the difficult task to implement one monetary policy to fit all members. >> i understand the european currency union is based on different situations within the 18 members of the currency union. that's why the problem of the ecb is they have to conduct one monetary policy for 18 member states, which partially have different economic situations. netherlands and germany have a different situation than portugal. one monetary policy for all is not easy. >> we're joined by the president of the epo institute for economic research and joins us from berlin. usually we talk to you about your index, now we want to talk more about the wave of populism that is sweeping through europe who is to blame for this? is it the incumbents, the establishments who were asleep at the wheel and have been ignoring the will of the people?

>> i think there are two factors here. one clearly is immigration. this is an issue in northern europe. there are concerns about the refugee wave. concern generally about immigration and populists use this. and the other reason is the economic situation in southern europe. we've been spending ten years now, first with the financial crisis and then the euro crisis, and if you look at italy for instance, the per capita income in italy is 7% below the level of the year 2000. that leads people to lose confidence and to lose trust in established political parties and populists can exploit this situation and, you know, argue they have simple solutions for this complex issue. i think these are the two factors at the moment. >> you wrote an opinion piece in which you attacked the economic

populism that's been put forward by many candidates. that may often be the case, economic populism doesn't lead anywhere, that it destroys economic growth. but look at what trump is proposing. look at the business confidence. this is obviously an indicateder that you are familiar with. look at what the stock market is doing. how do you still stick with your view? . i think there are different elements here in trump's policy. part of this is clearly populism, arguing that the establishment is exploiting the people, arguing that globalization is bad, protectionism will hurt this is one part. but then other things like his plans to invest more in infrastructure, this is reasonable. reforming the u.s. tax system is reasonable and will help many companies. that explains the positive development in the stock exchange. now depends on what trump does. is he leaning more towards

protectionism or will he focus on meaningful tax reform and better infrastructure investment and depending on where he leans the stock market may continue to grow or may decline. >> clemens, good morning. what is a populist economic policy? what does that look like? >> populist economic policy is normally expansionary, ir irrespective of the economic situation, so it goes against globalization for economic difficulties, that's why it's protectionist. it rejects international organizations like the wto or the european union. it exaggerates the negative impact of immigration and generally blames foreigners. populistic policy doesn't

discuss trade-offs. most economic policies have pros and kcons. a good decision represents trade-offs. populists don't think in terms of compromise. >> i hear you, yet a lot of people would disagree with you and would say the issue is we've gone too far in this global movement, and we end up looking at scenarios where countries that have been smart this terms of social structure, healthcare, planning for the future, they carry the burden for countries that vent been. they have a point. >> criticizing globalization is not populist per se, but it's populist to say the simple solution is to stop international trade, introduce tariffs, cut off trade links. that would be populist. it's reasonable to discuss whether globalization has had a

negative impact on certain groups of the population, and what can we do to address that. that's important. generally populists often raise relevant issues. the trouble is the answers they give are normally simplistic and recipes don't work. >> klemmenclemens, thank you ve. in the u.s., we're setting ourselves up for trade, still 4 1/2 hours away, relatively flat implied open at the moment. here in europe, we're slightly higher now for most of the european equity markets. that's it for today's show. i'm louisa bojesen. >> i'm carolin roth. "worldwide exchange" is up next.

good morning. china posts its first trade deficit in more than three years. and the uk finance minister set to deliver the first full budget since britain voted to leave the eu. a live report from parliament coming up. plus it's the era of globalization, but is it over? peter thiel thinks so. we'll tell you why. it's wednesday, march 8, 2017. "worldwide exchange" begins right now. ♪