good morning and welcome to "street signs. >> these are your headlines. >> protests in hong kong turned violent with the riot police deploying tear gas as demonstrators forced lawmakers to delay a debate on a controversial bill europe follows asia lower as it slows but consumer prices hit the highest level in 15 months putting the spring in axle

springer the german publisher offering 63 euros per share. solutions in a deal worth 5.al billi5 $5.8 billion as it looks to boost its science and we'll speak to the ceo. >> we'll hear from mario draghi and christine lagarde as it turns to southeastern europe riots in hong kong have turned increasingly violent over the last few minutes as police have tried to disperse protesters from outside government biuildings tear gas as they began to force their way in joining us from outside the hong

kong legislative council with the latest i think we have lost sherry. you can see the live pictures there from central plaza with thousands of people collecting in central hong kong a reuters witness has been talking bout chartal talking about charges. i will bring in our colleague sherry with some of the latest details of these protests. >> thank you very much as we're standing outside the legislative counsel building here for this part of the protest, it's been very much peaceful all day, but things have turned very quickly as we saw some of the protesters using bricks and the police fofficers using batons to

contain the situation, as well we're looking at big presence of riot police closing into this area and, you know, a little bit of more aggressiveness coming from the protesters, as well they are chanting, retract the bill retract the bill really, that bill is the centerpiece of this protest, of course, today. as well as what we saw over the weekend, as well the bill the hong kong government is pushing for is basically to change the law to be able to extradite hong kong residents as well as foreign residents, foreign passport holders who are residing in hong kong doing business in hong kong. we're passing through hong kong to be extradited to mainland china for trial. many of these protesters that we see. thousands of them surrounding this government complex and legislative counsel area have

camped out overnight and there to say no to that idea really showing the fear of the mainland judicial system, according to many protesters that's exactly what we heard from hong kong bar association chief last week in my interview with him, as well. just to give you a bit more color what's going on here in hong kong. a bit of a paralysis in this area not just streets are being blocked and the standoff, but we're also hearing that small businesses are closing down, as well and i think i just heard tear gas being used, as well, on protesters, as well. so, very much of a fluid developing story behind me but banks are closing their branch offices and u.s. consulate is actually calling on protesters or calling on people to avoid this area, as well.

you can see fume coming out in the backdrop behind me this just happening. this kind of aggressiveness happening just over the last hour, as well. goes to show how that one bad trigger will, you know, really have a bad effect on this peaceful, mostly peaceful demonstration against the amendment of hong kong's extradition law. guys >> thank you so much for bringing us the latest hfrom hon kong some of the company stories we're looking at today one is in regard to the system that agreed to buy the u.s. software company you can see behind me the dassault system is trading down 0.8% on the news that it agreed to buy the u.s. health care data solution in a deal with $5.8 billion.

the boards of both firms have backed a deal which closed in the last quarter of 2019 it hopes it will boost its position in the life sciences position we have bernard charles who joins us on the line goodern morning, sir. and congratulations on the deal. you are buying a u.s. software company that has a specialty in clinical trials and more focus on science why does it make sense >> create platforms that basically help to collaborate in complex sectors infrastructure a few years ago our life science because it's a highly innovative

sector that should leverage going forward the world going forward from producproduction ad manufacturing. it is the scope of what we do that we call innovation for the new industries on life science is going to go through accelerated of its own processes, basically that's the motivation for the system to buy solutions. >> but also being on the takeover trail, not just today's accusation, you combined other software companies recently. are you expanding too much too quickly? >> well, we have a strong base with our clients we serve about 300,000 enterprises in the world they use our platform for innovation

so, it creates a highly reasonable revenue flow. those clients saying this is what we need next. so, we are very client focused we expand the solution to organized transformation so, basically, that's what is happening for the life science where we have already a large number pharma ceos contact the organization in the life science and we experience innovation platform it is an answer to market demand >> that's clinent focus. >> you'll see expansion in your revenues in terms of the cost synergies you hope to see from this deal, when will investors see the benefits of those? >> in the type of business we do as a system, we don't look at

synergy. it's the other way around. we look at the adjective aspect of things which is basically when you look at research and manufacturing and in the bio tech and the pharma sector which includes thestrategy process o clinical trial, there is no today platform that provides digital for the need evolution in the sector. it's a gigantic sector and this is why we believe that adding the two, the two platforms together is going to be more than 1.8. it's going to be more than two this is not the bet. this is what we believe will happen for the market. >> one final question for you, sir. you've been involved in several acquisitions over the past year

or two this is the first time you needed or wanted external funding. was this a particularly prized asset for you? >> we had for a long time since we introduced a company on euro next, we had a pile of cash and we did a lot of accusations very well and very small, well sized targeted in some way, relative to what we did before like in 1997 in proportion to the revenue it's very similar scale factors this time we think we could get the proper financing at very good conditions and the cash flow we have and the profitability we have we think on the dynamic of the market we think it is the right thing to do. >> thank you for joining us. that was bernard charles joining us on the phone line from france axle springer shares are trading sharply higher leading

the stock 600, in fact after kkr launched a takeover bid. the private equity group is offering 63 euros a share. that represents a 40% premium share prize. the media firm has agreed to the buyout and require a 20% acceptance from minority investors. the company that counts "rolling stone" and politico recently issued a profit warning and said adjust ed earnings next year significantly below this year's level. it's really interesting seeing how much is going on in the market space because of the threat from american side of things or because they're just chasing profit at all costs when you look at things like newspapers in terms of this particular deal what strikes me as interesting is the widow of the founder has signed up to it. >> they have a majority stake in the company.

>> but as a personal thing the idea that you would hand over the keys to your husband's company, really emotional. >> she's still maintaining 43% stake in the company for me, a couple things stand out here the sheer price you're paying for this 43% premium towards the end of may when the deal talk really emerged. they're paying up for this the second is that the advice from the widow to the minority shareholders is, look, accept it it's a great offer >> great offer. >> go ahead with this deal also because they ultimately need the financing and they need the cash put into the business so that they can fund all of their plans. what is inest the interesting a is that 70% of the revenues from springer come from the digital platform they want to continue supporting the digital platforms and the

traditional business and d traditional broad sheets the focus has to be on digital think of the big american cash private equity firms who want to get exposure to the continent and here it seems to be -- >> cash rich tech firms like a google taking these guys lunch every day. >> then you have the tradeoff between private and public private have so much cash these days it's right at the top 600. chinese shoppers say they have no apple freedom as consumer prices hit a 15-month high (osama when-- when you hear those words that you get diagnosed with cancer. (osamah) successfully treating it still remains one of the most enormous challenges facing us today. we realized that, if we developed the technology

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welcome back to "street signs. today the ecb hosts its eighth conference focused on southeastern economies really interestingly if you look at some of the numbers here. we have some of the statistics for gdp per capita posted 2.4%. that's compared to the rest of the eu at just 0.6%.

but, growth and reform progress varies widely among the quite diverse group of nations trade tensions a session to the eu joining the european union and economic reform and central bank risks are all on the agenda at the conference in frankfurt mario draghi speaking out in a few moments time and we'll hear from christine lagarde expected to start talking around 10:30 european central time. i think mr. draghi already started talking. >> we're getting a few flashes from mario draghi. he is speaking at the central europe eastern conference in frankfurt. he's saying that institutional quality is still below the euro area average and all central

eastern european economies and they need to find a way and let's hear more from the man himself. >> the european union as a whole. but there has been a clear difference in the pace of convergence. countries that have joined the eu and which are hereafter reffed to the central and european economy reached capital levels of 70% of the eu average. within this group, the countries that have joined the euro area have grown even faster reaching at almost 80% of the eu average. in contrast, catching up has been in the economies outside the eu with income levels below 40% of the average of the 28 members of the european union.

this is, of course, also because of the historical events that have some of these countryiies. acted as a catalyst for convergence creating the institutional and economic conditions for the cee economies to adopt highly effective growth strategies their faster convergence shows with high-quality institutions in place, the eu single market can be a powerful engine of growth allowing not only the poorer countries to catch up, but also the richer countries to benefit from a larger market and opportunities. however, in order to maintain convergence and reap lasting benefits from the single market and membership, efforts to

ensure institutional quality and good governance have become all the more important given the head winds facing cesee countries. the conditions for stronger growth one of the most powerful mecicism me mechanisms in promoting the deep integration of cesee countries into euro value chains this has happened in two ways, two main ways. first, the single market led to the removal of trade barriers and the option of eu-wide standards which has considerably reduced the cost of doing business across countries. firms have unbundled their production networks and relocated production and assembly in line with the relatively lower cost of

production as a result, trade flows of intermediate inputs have increased almost three-fold from 1990 to 2015 supply chain linkages intensified at a faster pace and were more resilient during the crisis compared with supply chain linkages with countries outside the single market. second, the adoption of the, what's called a key led to a more predictable legal environment and high-quality regulatory framework which have increased investors' confidence and contributed to a rapid flow of foreign investment and technology the inflows of foreign direct investment in the region amounted to around 6% of gdp in the precrisis years compared with only 3.4 in the eu as a

whole. countries that achieved a high level of institutional quality and governance and have been able to adopt the single currency further benefited from the reduction of trade costs their participation in value chains has been consistently higher than that of other eu countries that made most progress in catching up with the average level of gdp per capita in the eu. but more importantly, the single currency's main benefit have been to provide stability in the integration process. has ensured that critical massive countries participating in the single market was insulated from exchange rate volatility during times of

economic stress. by preventing competitive developments within the block the single currency has guaranteed the single openness of the single market and strengthened the incentives for firms to increase their competitiveness through productivity gains only economies have gained from increased trade. since 1990s, intra-eu trade has risen as global economies entered the market trade, in return, has supported productivity growth. cesee countries proved to be a key ingredient in the process of convergence. ecb research shows that

technology transfers have over to european chains western eu firms say the value chain frontier contributed to 4.8 total factor productivity growth for see firms participate in wage in these economies since the crisis, however,recei investments. in the new countries, it remains the main driver of growth. but the generous low down is being felt in all economies in the region, which suggests that

despite the ongoing benefits of the single market and of the euro, the cesee shock to financial trade and financial conditions the benefits of the single market for sustained converge e convergenconvergenc thus needs to be consolidated. by implementing reforms towards a more balanced growth model that is less vulnerable to changes in external conditions, such as those that have emerged recently global trade has faced headwinds in recent years as trade restrictive measures have outpaced liberalizing ones c economies have been disproportionately affected by this for two reasons first, trade in these economies is responsible to cyclical

developments since these countries havebeen consistently open to trade over the past two decade, it is higher than in the rest of the european union in addition, the value chains in which they participate mainly involve trade in durable goods which have a high level of income elasticity. second, cesee made them to industry specific shocks in some countries, for example, vehicle exports represent nearly 30% of total manufactured exports making them vulnerable to the threat of increase -- >> we are listening to mario draghi addressing the conference in frankfurt and the focus of

today is central european countries. that is on one part of your screen on the other part of your screen you are looking at protests that are taking place in hong kong. as we were speaking earlier we were talking to our colleague sherry who was standing next to the some demonstrations that were taking place in hong kong in the last hour or so things have turned a corner and the peaceful protests have taken on a wave of violence reports in reuters have said that hong kong police have fired tear gas to disperse some of the protesters right in the heart of the financial center and that reuters is reporting that ambulances have been headed towards the rally area and this is after multiple clashes with the police you can see live images there. there is fumes, smoke. we just saw images of fprotestes wearing masks over their faces all part and parcel of their requests out of the population to remove the popsitiropositionh

bill being put forward who are not refusing to back down. those are live images and we'll continue to monitor images at this time i would like to bring in louis head of rate strategy at citi and we were talking about mario draghi addressing the room in frankfurt and focused on central europe. about 30% of growth from central eastern european countries can be pointed back to the structural transfers out of the eu and, yet, some of the biggest nationalest movements are coming from the likes of hungary, poland, romania, et cetera how do you put the two together? >> this is probably the one stumping block for romania is the fact that, yes, they still

depend and still rely a lot on the structural fronts. and they have a lot of absorption in order to keep the growth untouched and going upwards. in the environment where external trade is becoming a little bit more wobbly and we talk about potential new tariffs on autos now so, it's very difficult. on the one hand, they do go against new policy in terms of budget and in terms of institutional framework and in terms of dealing with the media and human rights on the other side, they have to comply because at end the of the day, this guy will be paying for a part of my bill. >> let's go back to the eu structural funds transfer. we just had european elections and this will lead to change of composition of the european commission what does that mean for the outlook of the transfers that

will take place from brussels to some of the central european countries that are heavily reliant on the transfers >> we are projecting a decent in the coming cycle which starts in '21 and '22 we predict a drop. not massive but going into the median term we expect the transfers as a contributor to growth in the block. this is going to be a very important catalyst and foreign politics for this country. >> thanks so much for being with us this morning. head of fx 10:30 in frankfurt and 9:30 here in london. >> i'm joumanna bercetche. demonstrators force lawmakers to delay a debate on a

controversial extradition bill europe follows asia lower as china's factory inflation slows but consumer prices hit their highest level in 15 months putting the spring in axle springer kkr makes a bid for the german publisher offering 63 euros a share. acquires u.s. health in a deal worth $5.8 billion as it looks to boost its life sciences unit well, we were listening to what mario draghi had to say in frankfurt and christine lagarde is speaking at that same conference >> what is bringing together and

keepal togeth aing together the countries from economic trade and financial point of view. by the way, often, we have a slightly different definition of the cesee in the rest of my remarks, i will say cesee, if it's okay with you when we study that part of the world, we tend to be a little bit larger whenever you see the publications we release on cesee, you have to be mindful sometimes it includes a couple of other countries that are not necessarily in the room today. so, we believe that it's appropriate for this conference that brings you altogether for the whole day which is the eighth conference, as i understand it. it's particularly appropriate because clearly we all have to focus on navigating the changing trade and financial landscape that we are facing

and this is so because the region's success story is very much linked as president draghi indicated throughout global markets. over the past three decades, integration has been the driver of cesee's economic growth and acceleration that helped dramatically raise living standards and the region's success has, in turn, fueled the success of the eu more broadly now, if you paid very close attention to what i just said, you will have noted that i have used driver, acceleration and fuel none of that is predicated on the desire that we all have to actually attend the formula one german grand prix next month no, it is because the cesee economies are like a very powerful engine and one that in our view is about to be put to the test we meet at the moment when

support for global corporation and multilateral solutions is waning global growth has been subdued for more than six years and the largest economies in the world are putting up or threatening to put up new trade barriers. and this might be the beginning of something else, which might affect us in a more broad way. so, this develop will create headwind for all but certainly for the cesee growth model that has relied on openness this morning what i would like to look at is under the hood and discuss how the region's powerful economic engine was built. i would like to very briefly touch on a few findings that recent research paper that we are publishing today has actually identified and i would

love to actually flag the paper for you, except i don't have it right away with me but it's a piece of research that we are launching today. and then i would like to identify three areas of reforms that the countries in the region could actually focus on in order to test this engine and see whether a little refitting might be helpful so, let's first look at this powerful engine and where it has driven all of us when the berlin wall fell, central and eastern europe embarked from capitalism to democracy. few could have imagined the r remarkable journey to where it is today since the mid'90s per capita

growth in cesee three quarter percent almost triple the growth rate on a per capita basis standards have rapidly increased and some approached western europe the region gdp per capita in purchasing power has more than doubled. in the baltic states, per capita income has tripled by the same measurements we all recognize that the journey is far from complete in the western balkans, per capita remains less than-third and economic region in the rest of the world has slowed since the global financial crisis. and the reality is that convergence is not a given as the cesee demonstrates,

convergence is an economic engine propelled by tireless policy efforts and supported by international integration and cooperation. how is the region economic engine built the most important driver of growth was the hold and sweeping reforms undertaken to shake of the legacy of nearly half a century of central planning. democratically elected governments and liberalized prices and public finances, and privatized state assets, not all of them, and built new institutional and governeance frameworks economic integration played an important role, as well. the right policies enabled cesee countries to attract foreign capital and integrate themselves deeply into cross border supply chains more on that later

economic and financial integration in turn accelerated growth allowed countries to provide in more economic and transfer the knowledge. if you look at numbers, since 1995, exports from cesee grew at an average pace of over 8.5% per year by 2014, more than three-quarters of cesee exports were linked to supply chains compared to two-thirds of exports from other eu countries. so, much more integration and supply chains than others. the auto industry is perhaps the best example of how one sector has been able to leverage combination of geographic location, skilled labor force and cost advantages. so, you see i'm saying exactly what president draghi was saying

but relates quite well to my introduction about the cars. over the past 20 years, the region quadrupled its share of world gross exports of car and car parts from less than 2.5% in 1997 to over 10% in 2017 slovakia is now the second largest producer of cars per manufacturing worker in the eu >> we are listening to the mif managing director christine lagarde to southeastern europe growth potential flagging much of the same issues that were flagged earlier by mario draghi. talking about some of the challenges facing that particular region. that is on one part of your screen on the other part of the screen, we continue to take live images from the demonstrations in hong kong and you can see it appears

that the police seem to be aggregating around the center. earlier on we had pictures of demonstrators walking around with masks on their faces that tear gas had been deployed and there are some of the images we will be speaking to our colleague shortly about some of the developments that are taking place in hong kong but as you can see in the last hour or so, the peaceful demonstrations have largely turned violent we'll talk about that shortly. going back to louis who is the head of rate strategy and coming back to the conference, we talked a lot about the potential for growth in central european countries but the big elephant in the room is what has been happening within europe. last week we had the meeting and the markets perhaps are hoping for something a little more dubbish out of the outgoing mr. draghi didn't quite get it how do you fit in the whole growth picture and the context

of what is happening in connental europe right now >> probably sound deeply concerned with european growth this is absolutely obvious, right. it is interesting that lagarde is, obviously given the content of the conference there, focused on the auto industry this is the main growth driver for the region i have to say that draghi sounded neutralish in the context of ecb that is preparing for a new dovish stance. i think it is limited and that is where the markets become very nervous. the fact that if we actually take, if we actually lead down in growth, what is the weaponry you have available, with respect, with compared to the u.s. that is actually, you know, coming from a long period here of normalization of policy so, i do believe that over the next 6 to 12 months, we will be

tug of war in the markets, especially if china continues on the downtrend. >> repeatedly, before his election and since we heard d n donald trump talk about german cars what he may not know a lot about is in hungary it is a huge driver growth. those are economies significant hit by auto tariffs. let's talk about tariffs president trump in theory meeting with xi jinping in china and how do you expmeect that to go how do you trade around that >> in our view there is no doubt the trump administration will go back to tariffs. i think it is amazing. investors they seem to be. obviously, we have so much on our plates now that i mean sometimes in a way we started to

trade and question the china/u.s. deal when we forgot about the auto tariffs. >>s like the u.s. administration forgot about it, as well. >> look at trump's tweet one of his last statements saying that you're going to learn the full scope of the mexican deal down the road and that has to do with the manufacturing cycle. the manufacturing sector so, to me, there's no doubt whatsoever by the way, the pressure of the white house is putting in europe in terms of getting tougher with china, as well >> what you'll have to deal with >> you either join me or going to be against me if you're against me, that could be implications. >> worry because what we found out the last couple weeks they postponed a decision another six months you think it will come back to bite what about to the upcoming

meeting between president trump and xi are you expecting anything out of it? should markets expect anything out of it? >> nothing groundbreaking out of it 15% probability we don't even know the meeting will happen the last official statement coming from china said we are still to confirm that they will be meeting during the g-20 but i think there will be a meeting. i don't think there will be anything groundbreaks in terms of persuading investors of becoming more positive when it comes to the china trade deal. 15% probability and they say, okay, channels of communications are back and eventually we'll put china on probation and extend the period until the next hike i would say 10%, 15% probability. which is quite interesting the, mat s&p and the likes, there has been a little bit of a

reflation over the past trading sessions >> actually, the best month for the s&p since october 2011 >> because of fed. >> yeah. >> not because of trade deal >> let's talk about this the relationship here between what may or may not happen and what the federal reserve will then do. i want to nail down on your proposition here in terms of what happens next. >> the proposition is that there will be no deal. the markets will become more uncomfortable with growth risk and that eventually even though one month ago i wouldn't believe so, the fed would eventually be known to cut rates here and it can be july, september i do believe that there will be a little bit of fight back from the fed in our pushback in terms of releasing monetary policy over the summer. but, yes you know, in the absence of a deal and i think the fed will probably choose to follow the markets, which is quite sad.

but follow the markets rather than leading the markets >> which is at least what the fed are doing. not giving the markets what they want the fed, i was just looking at what is priced in. the market is pricing in 84% of the july meeting 2.5 cuts by the end of this year they're really putting the fed against the wall here. you are an emerging market specialist we always talk about the fed, the dollar let's talk about what is going on on the other side of the equation people talk about it being a key psychological level. the weakest level ever in years for the china currency if the authorities allow the dollar to break through that seven handle, what kind of effect is that going to have on other emerging market currencie even in a market where the fed have turned dubbish. >> it is absolutely clear if you look very recently over the past two or three weeks

it clearly shows this is not going to be the first line of resort even to respond to, you know, shocks with the white house. but -- >> maybe that is in anticipation of the g20 coming up prior to potential g20 meeting they had a lot to appreciate >> even if you x china trade noise, i mean, we know it's not. we know the experience from 2014, 2015 when we create in global markets i'm not going to say this is going to breach. the chinese economy the way it is now is set up for remaining weaker but i do think that they will probably allow this to float away and the dollar may be higher and may be weaker in a very gradual pace rather than a sharp move but, nevertheless, i think that cannot be positive especially in

asia >> i want to make a bit of a leap from there to talk about u.s. allegations of beijing interference in hong kong. we'll take you back live to hong kong where thousands of protesters are on the street in the center of the island protesting against an extradition bill a law that has been laid before the legislature to allow those visiting hong kong to be extradited to mainland china that is the main point of contention driving these protests what has been happening in the last half an hour or so since we last spoke to you? >> tensions have been high all morning and, in fact, all day. and, you know, even with some of the initial protesters actually have gathered overnight early last night, as well. but it was peaceful demonstration against this amendment for the most part. but over the last hour or two,

the police officers of hong kong really tried to clear out the streets of hong kong and i think they are still in the process of that what you see behind me is really the street just outside of the entrance of the hong kong legislative council where the legislative debate was to happen today. which has been delayed because of the protests and it looks pretty, you qknow, cleared out. not a lot of protesters inside that you see behind me that is really the development in the last hour or two. we actually had a statement out from hong kong police chief said that the protesters used violence and using bricks or metal bars at the police and that is what the police chief is saying to explain this kind of police action. in terms of the reaction that we're getting from the legislative council as i said. the legislative debate has been

delayed. we don't know whether it's going to be rescheduled or when the rescheduling is happening. we have no reaction from the chief executive of hong kong at this point, but as of yesterday, hong kong government is not budging and it is going ahead with this amendment of hong kong's extradition law to add mainland china to its extradition list by the way, she happens to have, you know, strong backing from mainland chinese government, as well just over the last hour or so, china's foreign affairs ministry actually had a statement out with the spokesperson saying that it fully supports this amendment of hong kong's extradition law. you know, this is something that, of course, that is happening here in hong kong. complete paralysis with a lot of

businesses being affected, as well as i said in the last hour or so, some of the small businesses going on a strike or two really show their support, as well but it really goes to show how there is really this growing level of discomfort among hong kong people and we're looking at one of the biggest civil action since 1997 handover to the mainland chinese role. guys, back to you. >> excellent thank you for keeping an eye on the developments out there in hong kong as things seemed to have turned a violent corner in the last hour or so. let's look at how european markets are fairing. a bit of a different picture from the activity we had yesterday. all the majors are trading in red territory. ftse down about 0.6% and cac and the ftse may come under a little

scrutiny today we'll talk about that in just a few minutes. as the european commission had published a report with regard to the public finances it sets in motion the steps towards a potential deficit procedure. italian assets are coming under a little bit of pressure this morning. switching over to foreign exchange let's take a look here the dollar is trading very close to an 11-week low. we were just talking about this on the show. a lot of that is on the back of fed rate cuts and july is priced for an 80% cut sending some weakness into the dollar versus the dollar, the euro is trading firmer today we are seeing quality for the yen and equities are trading off overnight. but cable also back up at 1.2714 we scaled a full point in the currency in the last 24 hours. remember yesterday we had stronger wage growth out of the uk and right in the middle of

the leadership boris johnson will be putting forward proposals. that is a picture for european markets. not so pretty this morning. representatives have backed the eu commission recommendation that italy should face disciplinary over its rising debt played down the decision and he said it's up to finance ministers to make a final judgment they'll be meeting later this week the government will try to reach a compromise with brussels to avoid any sanctions. head of fx rate strategy let's talk about italy brief rb and what affect as a whole the ongoing conflict between rome and brussels leads italy as the outliar and i wonder if that's something that is still in your view matters for the

euro zone's long-term future >> absolutely. matters. italy has become the poster child of this dilemma between getting out of the growth hole and at the same time abiding by new budget law and i think we have seen now there is a lot more volatility downward volatility and the government coalition in italy. we know that has been pushing for, you know, more structural growth measures. and it's going to be difficult in an environment where the euro block is under pressure, once again. especially the manufacturing sector i do believe this is going to be an ongoing point of noise for risk luckily, it's not, it's untrue to talk about the europeans

because portugal is doing quite well and spain another level of fiscal dynamics, as well supported by growth. italy has become pretty much the one central point. >> the way the narrative is that of a political problem but people are forgetting that fundamentally it is an economic problem. growth for this year is close to 0% for italy. it was just technically in a recession. a need to promote growth especially at a time where ecb, as you mentioned, don't have a lot of tools to stimulate the economy. what can be done to boost growth, if not spend it? >> you said it all in times of massive renewal in european parliaments which will most likely become let's see how policy goes and restricted, fiscally restricted.

it's structural reforms and 's t and it will be difficult to come out of this hole without fiscal le leniency >> the dream for europe. thank you for being with us the last hour or so. quick look at u.s. futures before we head out a risk off day for europe. u.s. futures look as though it will be a risk off day, as well. all eyes on cpi data this afternoon. but that is it for today's show "worldwide exchange" coming up in just a few moments time.

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it is 5:00 a.m. where tens of thousands or more protesters taking to the streets. the police firing tear gas opposition of proposed ext extradition bill with the mainland we're live on the ground no lucky seven for stocks. they snap the biggest and futures are down right now the big, beautiful defense deal under fire new calls for united technologies to scrap its mega merger with raytheon kinning our