sven: i think the bundesbank and has a cooperative safekeeping solution.ticians make size proposals, this will be stupid because it will be seen as an infringement of their independence. therefore, i will not enter into making precise proposals, but i can only say as a politician, it is needed that we settle the legal conflict when it comes to the european rule of law inside of the european -- and between the european institutions as member states. so that the euro system can continue what it needs to do to keep the euro stable in crisis. francine: what are the options of urszula vendor line right now -- of ursula von der leyen right now? sven: for my letter, i received a -- the case is clear. it will be very fast, declaring purchasingive bond program be on the competence of therefore,stem, and they will -- that is a clear case of procedure. however, it would not make sense to impose any fines. this is only to restate the legal position, finding based on the court judgment itself seen as an infringement of the independence of the highest court in germany.

must clarify that the asset buying program is not disproportion if it doesn't germany's bundesbank would be barred from participating in this deal. so what does that mean let's ask our financial correspondent conor boozman joins us from frankfurt comma will the european central bank now have to stop their huge amounts of months the acid. low get hot the asset purchases by the e.c.b. can continue at least for now that is of course the most important signal for the financial markets today and the reason why there has not been a shock reaction on the markets after the decision has come out what the german constitute constitutional court has said today though was that the bundesbank our reserve bank the national reserve bank here in germany which executes the e.c. peace asset purchases here in germany must act according to the german constitution and that this in the past has not enough been the case so is this court decision also throwing a spanner in the works of the easybeats effort to fight the massive recession caused by the coronavirus. in a way yes the european central bank in the fut

see them being accountable to parliament to have surviving in this capacity as president in the bundesbank meeting you on a regular basis explaining the poll sicks and ultimately that you have a say ultimately in what is okay and what is not okay >> caller: i think it could be a discussion that could be discussed with bundesbank. i would also do it and discuss with the ecb itself. i think we need the regular reporting and that is what they request for the bundes leg someone in the parliament that is accountable the court does not so much insist on the certain outcome. that in no way saves for the asset and bond purchases in no way it does say so requesting us to monitor and set up the process to discuss whether the limits of monetary policy and the mandates which is not something ecb has created itself but has been set up and . the mandate is kept and respected. i think process and structure is the thing we must establish now. >> are you not concerned that this move now is actually compromising the power to hide the current crisis and potentially the crisis in the future >> that may be one

complainants there are arguments was that the german constitution did not allow money from the bundesbankthat's the german federal bank to be used for such activities now the ruling from the constitutional court backs that up to a certain extent and effectively says that what the e.c.v. house done is potentially beyond the constitution of germany point about the significance of this is that it represents something in this ruling as it were for everyone because the bundy. spanks the federal bank of germany now can examine this ruling and it effectively has to decide over the course of the next 3 months whether it feels that what the e.c.b. does what the e.c.b. explanations are for the activity it's been doing are acceptable and if it believes that it is then then things can carry on as they were however the problem comes if the bundesbank the people in charge of the news bank see what the european central bank has been doing as not being acceptable is being unconstitutional well then that becomes a much greater problem for the e.u. for the euro's right i was going to ask you about the impl

in any case we will carry on buying without the bundesbank.t: it is -- vonnie: it is such a difficult time. i know you asked about reinvestment for the program as well. what did he have to say about that? paul: the pspp. , youssue is at the moment do buy debt in relation to the size of the economy, which means the bundesbank buys most of the debt under the executive purchase program. that does not make much sense. the german economy has been badly hit. a lot of money and a lot of fiscal support and german bond yields are not particularly stressed. they are stressed in italy. the question of who buys the italian debt is one that will continue to recur. by the why this argument french government is so interesting. how about germany buys less and that frees up our spending power? paul: -- matt: i noticed in the has nots that the ecb discussed abolishing the p rules. is it going to run out of debt to buy or is this something they do not need to talk about, is just something they know they will do? paul: they probably will not run out of debt to bu

actually the court did not say that -- sorry, the first step is to say the fed and the bundesbank cannot participate until something has changed in the next three months, and that is the top line. the crucial thing is that the european court has not properly examined whether the ecb took all potential options into account when it made its decision. that is the main charge. and i think that, frankly, relatively easy to overcome because clearly the ecb has done tons of analysis. potentially every nook and cranny in this thing. the question is whether they will be willing to say, all right, we presented analysis and we played ball and here we go. what i reckon is going to happen going forward is that it is going to be treated like an internal german problem where the bundesbank taste charge of this -- takes charge of this, and they go ahead and say that is good enough for us. that is the immediate question. adon't think it will be changed anything with the ecb here and now. tom: so you are suggesting that we are going to see a greater federalism to help europe come out of this economic cris

best clarify that the scheme is proportionate or else germany's bundesbank made no longer practice of pay the. federal prosecutors have issued an arrest warrant in connection with the cyber attack on the german parliament in 2015 lin has accused russia's g.r.u. intelligence service of hacking the bonus talks computer systems and the suspect is also wanted by u.s. authorities for interference in the 2016 presidential election turkey has begun easing coronavirus lockdown measures president out of one said interesting the travel restrictions in 7 provinces will be lifted but not in istanbul and ankara seniors and those under 20 years of age will be allowed outside for 4 hours one day a week. but as well as already say they've arrested 2 u.s. citizens among a group of alleged mercenaries involved in what caracas says was a failed invasion the government claimed a group wanted to capture venezuela's president nicolas maduro and bring down his regime. and a vice president at amazon has drizzle mind after the company fired whistle blowers who had raised concerns about 19 minutes where else i

the bundesbank would be prevented from participating in the qe program.be pretty because this is the largest economy, and the bundesbank would have a loss of voice and influence on the government counsel. there has never been a bit of love between germany and the ecb and the bundesbank. shrill,ould become more especially in a year where germany goes to the elections. i was surprised by the ecb's reaction to the ruling, which seemed to be pretty blase. ruledurt of justice has this constitutional. i think this goes much deeper than is going to be appreciated. anna: thank you so much for joining us, and thank you for sticking with us through the slight technical glitches. michala marcussen, always -- moritz kraemer, always good to speak with you. siemens scraps its forecast as they saw profits sink at all divisions. we will speak to the ceo next. this is bloomberg. ♪ anna: welcome back to the european open. 18 minutes into the trading session. remember, london is closed today. elsewhere in europe, we see plenty of trading. euro stoxx up by 0.9% at this hour.

clarify how fortunate the bond buying scheme is oil's germany's bundesbank may no longer participate in its. a vice president at amazon has resigned after the company fired whistleblowers who had raised concerns about covert 19 in its warehouses to embrace said the dismissals were quote evidence of a vein of toxicity running through the company culture a pool hundreds of amazon employees in the u.s. went on strike over conditions. india has reported its biggest daily jump so fine confirm coronavirus cases rise of almost 4000 to more than 46000 health officials said the spike was due to increased testing regional governments have started to ease the 6 week lock down and that includes allowing alcohol shops to reopen but the central government has opposed to special tax of 70 percent on liquor purchases to prevent large gatherings. going for a liquor run people in indian cities couldn't wait when they heard that certain shops were reopening police had to implement social distancing. i don't got all call shops of the shops for 40 days people are very anxious. of course we've encountered

moment here spent one trillion euros so phone supporting the economy some interesting data from the bundesbank that real time data is pointing to the possibility that the 2nd quarter decline in g.d.p. won't be as bad as many and they certainly thaws yeah i think that's pretty just too early to say but we can certainly say that this general thi seems to be important name that germany seems to be doing a little bit better than the rest of the major economies the 1st quarter numbers were better so it would make sense to me that the 2nd quarter number would be better as well though the epidemic has not been asked severe in germany which again means that the lockdowns have been lifted more quickly this month in may than in other eurozone economies the economy sense of that still thinks a little bit too early to say but it certainly suggests that the german economy is doing somewhat better in relative terms than in france and southern europe where you know the the outward loss and g.d.p. loss will be very severe and 2nd who really gets totally a class many thanks indeed for being with us on counting

the pandemic purchase which has not -- been mentioned specifically and by implication where the bundesbankincipal be able to participate further, that is the same reason the court used to criticize the implementation of qe that it may be used for pepp as well. uncertainty will likely increase from here. tom: it is jobs day in america. the struggle in europe and all the constitutional stuff that i don't understand, will europe revert with higher unemployment back to the permanence of that higher unemployment? valentin: that is one of the risks definitely. it is the case at the moment hite the crisis that has the eurozone, the biggest since the euro, there is a lack of institutional leadership to help us get to the fiscal and monetary stimulus that will help us avoid the negative outcomes you have described. carryingof a permanent , if you want to use that ,anguage, is very much there and the longer it takes for the institutions of the eurozone to arrive at a compromise, the greater that risk. it is unfortunate that the sectors of the economy, the services sector are the hardest hit, are als

put noise and the markets and raise questions about if the opinion would be would be thee, how bundesbankhase program evolve? but i don't expect this. tom: how japan is europe right now? there is 60,000 foot elevated talk about europe or america becoming like japan, but with a glide path and the relative glide path of disinflation identified, how close is europe to the habits and characteristics of economic japan? peter: to some extent, it is worse. i think before the covid shock, europe was a little bit in this issue about 1% growth and 1% inflation. point, but to some extent it is worse because there is a lot of rigidity in the union and that complicates the situation where you see japan as a harmonious society where you have much more internal fragmentations in europe. that complicates policymaking. the question of structural reforms in europe is a permanent thing, so the covid shock came at a bad moment and what we expect of course is that fiscal policy will continue to be quite expansionary at the international level so public that will increase by something like 20 percentage points

so i will have to look into the details, they say some aspects the ruling is applying to the bundesbankcould be some work around, that the actions of the europeank, but the central bank could continue to operate. we will have to look into details. we'd agree spreads shouldn't move much early on this until we get more detail around it. the concern remains around periphery, still relatively wide, although absolute yield levels are manageable from a sustainability perspective. the details of this will be critical, so we will need to comb through those details to see what the implications are likely to be. the situation is very fluid. the court is saying some of the ecb actions were illegal and are germany, but it the same time it appears do not violate some constitutional german rules. the ecb decisions, i know having studied law that these are complicated and probably have subsections. the market is taking it is not so positive. the german ten-year bond extended a drop, yields rising .wo basis points to -.54% as we await more clarity on the decision, could it change the way the ecb operat

former bundesbank board member tells cnbc what they have learned from the previous crisis >> caller: they do have good capital buffers. they have used the time to build up those capital buffers in a crisis like this, this is what you need. >>> no visibility on the high seas shipping group maersk warns volumes will fall as much as 25% in the second quarter. telling cnbc how the virus will hit global trade >> protectionism is a key risk and a risk that is getting bigger as part of this pandemic as countries are trying to protect their businesses there is no doubt in my mind it is the wrong strategy. >> thanks for joining us let me take you to the action. it has been a weak start we are witnessing some of these losses the german market was down 2%. limiting the selling we saw at the start of the session the uk and the italian stock market had a better session yesterday in the green still trading negative still eyeing those comments from dr. fauci warning not just about the health consequences but the he c economic consequences going right to the epicenter of the problem in wuhan investo

called on the ecb to justify its asset purchase program the court also threatened to block the bundesbank from participating if they do not comply in three months let's get to annette tensions are clearly brewing where do we go from here >> caller: i would not say tensions are brewing but between the constitutional court and the ecb. that in general is not very popular, i guess of course the ruler in the end has seen it as well to spur inflation in the eurozone. the position is awkward now. they are responding and saying they are not going to investigate anything they are not operating the rule as they are operating under the national justice. the upper national nations state such as hungry may act again saying the international law that is completely not in the interest now the situation have to come up in spite of the new approach and investigation and might send that to parliament ecb is such that they are not doing anything they are reiterating that they are willing to do more if the situation should worsen. beginning today with the speech. >> thank you for the clarification. apprecia

the bundesbank is talking to german authorities amid a standoff over a controversial court ruling.ng to the executive board member. the standard has given the strongest signal that the ecb does not plan to engage with the german court. georgina taylor from invesco asset management is still with us. when i look through your portfolio, i see that you do have a short on european equities. what is the reasoning behind that? have recently did you put that on? georgina: from the valuation perspective and the conversation of earnings recovery means europe still looks pretty expensive. that coupled with the policy paralysis, a lot of easing of policies happened before this crisis -- what can happen next? including some legal aspects. it still looks quite vulnerable. and from the growth perspective, we think that will be quite muted in europe as some of the policy stimulus fails to push through. one part that could be helpful is we believe the euro will remain weak. europelective areas in -- that could be useful. on balance though, it still looks expensive. nejra: interesting. on the euro,

dominic: it is what the bundesbank is allowed to do, effectively, the german central bank. , there might be a way around that technically, whether one of the other central banks can step in and by german bonds. who knows? but i think the point here for the fx market is it creates that uncertainty and shines a light, and even bigger light, on those differences of opinion and differences of approach, and really suggests it is going to be very hard really for europe to come together and figure this out. at some point in the future, we would expect the european union, the euro zone to get there in some way. it may not come up with an everlasting solution, but it should be able to kick the can down the road. we have seen that time and time again. in 2012, in 2015, and this would be another example where the market has to start pricing in the risk of some kind of eurozone breakup, even if we never actually get there. that is the challenge. vonnie: the timing couldn't be worse really with this pandemic to deal with, and the ecb expanding its toolbox and the programs it is putting in place. does

purchases could continue under the court's ruling, but the german bundesbank might not be able to participatef the year as it closed its parks, cancelled movie releases and reduced advertising sales. every part of its business was affected by coronavirus, nearly wiping out profits for the quarter. disney chairman bob iger said the firm was facing "unprecedented" challenges but he was confident of recovery. a first sign of this — the firm is already planning to open its shanghai theme park on 11 may. let's talk through their results. joining me now is guy bisson, research director at ampere analysis. thank you for being on the programme. what you make of disney's results? it was bound to be hit extremely hard given its theme parks, that side of its theme parks, that side of its business. absolutely. we we re its business. absolutely. we were expecting this, and as you say, theme parks account for about 40% of its income. that 1.4 billion hit that you mention, 1 billion of that was from theme parks, so that is a very significant hit on the business, and of course every other area that they are

he also addressed the issue of continuing quantitative easing without the help of the bundesbank.ad to say. >> with respect to the pandemic emergency program, what they have to say is that it is going a temporary emergency program. so far, you have seen that the evolution of markets has been positive. >> so far. >> so far, so far. >> are you open to abolishing the capital key? >> it was discussed in the governing council. capital key is a reference. , we haveously flexibility and we have it in the short-term, not only in terms of the assets we purchase but also in terms of the timing of the purchases. i think that sometimes is much more relevant. the evolution of sovereign markets is much more quiet and calm now. >> it is now but we do not know if we will get a second wave over the summer. there is always the chance of a surprise. one thing you have not yet announced for the public for the pepe is reinvestment. doesn't have to happen -- reinvestments. does it have to happen? >> theoretically, the program mass until your end -- the end -- lasts until your year end. we have time. >>

lawmakers on the german court decision that urged the ecb to come up with changes in order for the bundesbankremain a part of that program. same as what we are talking about right now, but it has a lot of similarities and therefore you could see some fallout from the german court decision from the ecb's upcoming action or current action and that is what lawmakers may be focused on today. anna? anna: that is the ecb conversation. let's put questions around that. what is your latest thinking on the ecb and its ability to do more to support the eurozone economy? the ecb needs to do a little bit more and yet they find themselves challenged by national courts, and this case germany. of this, is that getting limiting to the ecb? hugh: absolutely. i think this is an unhelpful distraction. the ecb's focus has been in trying to convince the market that they can be a backstop to prices. so, we saw the volatility a couple of months ago when christine lagarde was speaking saying the ecb were not there to andstop peripheral spreads then having to clarify that message. i think the ecb will have to do more.

bundesbank it receive seems to be taking a support roll wit the e.c.b. taking the lead.will be interesting. ♪ >> minutes away, just under 20 from the open now. up next we are going to get your stocks to watch, including allianz after pinco clinets pool almost $50 billion. this is bloomberg. ♪ anna: welcome back to "bloomberg markets." we are still 15 minutes away from the start of the trading day for this tuesday here in europe. let's get some of the stocks we are watching. we have been looking at the details of the earnings season. it seems to be calming down a little bit. we are getting some earnings and other announcements from businesses. let's get to danny. she is a run-double play. >> starting with allianz here, the asset manager seeing massage outflow from its manager, pimco. they oversee a lot of bonds, famous for seeing about $46 billion of outflow over the past quarter. they are also dealing with being an insurer, more people taking claims as the coronavirus impact hits people, less people working. last week they did give their dividend, but still their buy-bac