a real recovery in the eurozone economic growth has them being this good in a decade experts say the blog has broken free of its sticker prices. as folks fucking deals with the deepening diesel scandal single poll puts the brakes on traffic to clear congestion and capping cash payments how china is trying to gain the upper hand over a fast moving internet company. bid fizzling let's do business the eurozone is out of the woods a source of uncertainty for so long but clear evidence today a common currency area has managed to shake off the shackles of the dick crisis the eurozone has enjoyed its best year in a decade economic growth of two and a half percent that's despite the effects of bragg's it on the block and is thanks to a resurgent france and spain. it's a colorful optimistic as madrid fashion week the message saying is that. to me only. the economy is growing last year by three point one percent despite the catalonia crisis but looks can be deceiving unemployment is still high many jobs are limited and poorly paid especially in tourism. overall the economy in the eurozone grew

the eurozone is surprising very much on the upside.id: let me cut to the chase -- well mario draghi ever preside over a rate increase? michael: good question. the bet right now is that he might get one in. he leaves in october 2019, and endsebate will be once qe and they go into 2019, when did they start raising rates question mark they are at -40 basis points so he would probably be raising it to about -25. it is a safe bet he will not have positive nominal interest rates under his presidency. david: this is what i do not quite understand. 2006, 2007, moment, 2008 never happened and we had a european economy doing what it is doing now. we would never have a central bank with this level of intervention. how do we get back to the real world? david o.: the other important thing about the eurozone is its attraction of 20 national century -- it is a collection of 20 national central banks and 19 sovereign. there is still this issue with the banking sectors of individual companies twined in with sovereign bonds, the governments in those cou

earlier this week and the pmi data from the eurozone. k, for example, at at aerman data, we are record high. across the board, america coming europe, and asia data -- everything is looking very strong indeed. and the perception that central banks are behind the curve, rightly or run. and the expectations of the fed are in the process of changing. there is a consensus among investors that bond yields look unattractive and you are seeing a further push into asset allocation at the beginning of the year into equity markets. ignore is one cannot the expectation of high growth in the u.s. based on the tax reform bill. guy: let me pull up this chart. the gap between the u.s. and the rest of the world is expanding. a -- youfore, you left have to look at 2018 and say -- and i in the u.s. or not in the u.s.? am i in the u.s. or not in the u.s.? the u.s. is where the growth is coming from. we are late cycle there. seeing late cycle euphoria. bob: you discussed earlier in the program what will happen to dollar euro. that is critical. ais year is goi

could be a lot of changes coming up very interesting story ends quarter thanks for the update the eurozone is out of the woods a source of uncertainty for so long but clear evidence today a common currency area has managed to shake off the shackles of the debt crisis the eurozone is a joy to its best year in a decade twenty seventeen economic growth of two and a half percent that's despite breaks it and is thanks to a resurgent france and spain. it's a colorful optimistic as madrid fashion week the message saying is that. the only. the economy is last year by three point one percent despite the catalonia crisis but looks can be deceiving unemployment is still high many jobs are limited and poorly paid especially in tourism. overall the economy in the euro zone grew by two point five percent in two thousand and seventeen the strongest increase in a decade even outpaced the u.s. where estimates point to growth of two point three percent. france's economy expanded by one point nine percent twice as much as in the previous year but even in the second largest economy in the eurozone off to germ

, and forget what happens in the rest of the eurozone economy. are more people entering retirement in italy than entering the job market. that is dire. it's the third largest economy in the eurozone. where are they going to find these pensions from? you have to look into what is andening below the bonnet not look at aggregate numbers that germany represents. people have been wrong in shorting the euro -- you have to bear in mind what you're looking at. mark: will the ecb stop in september? the hawkish commentary is stepping up a gear, isn't it? >> look at data wise what's happening in the eurozone, i have a view that they might stop qe in september. people are going long euro. euro strengthening is not in favor of the eurozone economy. if you look at what qe has done, it has brought our when costs down -- in italy, corporate are paying 2% what they were last year. worry about the euro. i maintain my u.s. overweight position, despite everything that's happening. mark: are we in a bond bear market? >> not a bond bear market. we have put a bottom. yi

that's one of the reasons we like the eurozone. nce on the closing day of that macron trip to china? the airbus deal. 184? a lot of money on the table there if it gets finalised. a big, big symbolic thing as well for france because the macron presidency was based on making france a leader in the business world and making it more efficient for global business and if the deal goes through with china, the deal goes through with china, the leading economic fire house of the leading economic fire house of the world then that could be big. that gift of a horse has really paid off. it could be. oil prices sitting ata off. it could be. oil prices sitting at a three year high? first, we have to remember that the production has been cut. so, the reason why the oil price fell in the past few years because the producers were pumping oil into the markets and the price was pushed down by that over supply. now we have the producers pulling back a bit, we are seeing a higher oil price and some of the highest levels we have seen in the past few yea

compared to -- for theonomy, time being the dynamics are stronger for the eurozone. e impact is on the other hand on the macro picture it will take more time to defuse a high economy growth because we need a revival in the investment cycle. with interest rates as low as they have been, you don't think we have seen enough investment in corporate spending on capital expenditure? what difference will tax cuts make on that? if money is already cheap, does tax cuts move the dial? chirstophe: yes. risk asrisk, and reward if you take risk in a project, you deserve the reward. anna: do we risk overheating? goldman sachs is talking about for rate hikes. the architect of the tax cuts have no clue about the consequences on the other situation we could have, which could happen in case of stronger markets creating a revival of the phillips curve, and we could stimulate inflation. manus: if that phillips curve reawakens, do you join janus yield, 2.6%terms of in the bond market, is that a market concern? are you beginning to position for shorter bonds and higher yields? chirstophe:

we have the flip side of the dollar story more flows going back into the eurozone is a theme of 201 e big change in that story so far this year is speculation about the ecb. will they stop their quantitative easing after september? that may happen. but the market will be getting excited about the potential for interest rate hibs from the hike ecb. if the market thinks an interest rate hike in 2018 could happen, there's the possibility that the market could be disappointed that's why the tone of draghi at the ecb policy meeting will be important. we can't forget that he was more dovish than the market anticipated last month in december that could happen again next week >> in terms of just the trading ranges for where the euro is at, based on the last 12, 18 months, right at the top of that range at the moment, are we not? >> we certainly are. i must put my hand up and say whilst i did think the euro would recover last year, i didn't think it would go through this rapid recovery that we did see. i didn't think that we would at the start of last year that it would end the year as high a

unemployment has also been falling across the rest of the eurozone as the global economy continues to, so workers are in a strong position to demand higher wages. if they get them, it could prove helpfulfor meeting the european central bank's target inflation rate ofjust below 2%. they've been struggling to do that, but moving forward, it will help them unwind their stimulus programme. with me is karl brenke, an economist at the german institute for economic research — he joins us from berlin. so, if these demands are met, what do you think the impact would be on the german economy and the wider european economy? last year the great unions, we have had wage increase of about 2%. and the inflation rate in germany is nearly 2%. and therefore we have no increase in real wages. on the other hand the companies had a good business last year and therefore i think higher wages are necessary, and in my opinion, the increase must be 4% or more. and i think it is important that we have a push for the business cycle inside germany, for the domestic demand here. and how damaging do you think these

nobody is talking about taking italy out of the eurozone. that seems to be no longer an election issue, but what is is the fiscal stimulus and the degree of fiscal easing that could come on the other side of the election, assuming we have a government that could deliver. debt in italy is over 130% of gdp. the deficit itself is not that high, but the debt burden is very high and the debt dynamics are very poor. we are focused on the fiscal dynamics that come out of this election. guy: oil, brent, approaching $70 per barrel. how does that change your view? james: it is a little bit higher than our forecast for the year was. we expect there will be a supply response. we still expect oil prices to come down. 60range of sort of $50 to dollars, we think that is the goldilocks of not too high for the importers and sufficiently high for the exporters. where we are now, a little more pressure on prices and a little more inflationary in the advanced economies, but not enough to disrupt the growth story this year. guy: government shutdown in washington?

macron was talking about integrating the eurozone. we need to get momentum back into the european union. since brexit, we have been waiting around. his idea is if you start talking about moving the european union forward again or the eurozone, we are back on track. i do not know whether that is worrying people on the street, but to go out and sell this as a great triumph for social democracy is rather naive. what role does angela merkel play in all of this? one thing is for certain, it doesn't look good for the most powerful woman in the world that she is often called that she cannot call together a coalition government. merkel's fourth term as onto a rocky start. in last september the election, support for the christian democrats fell sharply compared to 2013. then, coalition talks with the free and the greens collapsed. that was followed by talks with the social democrats. the chancellor has vowed to carry on. i i think this document represents an appropriate level of give and take. a wide range of topics important to our society. it

everybody woman who in the eu and eurozone feels capable to discuss in the name of the eurozone with secretary of state of the united the control of the european them parliament. >> what about a banking union? it certainly a priority. >> is the time for that? quite confident we can reach consensus on that. we need to complete our ideas. we have completion and resolution. if we need to have a clear backstop, so we are really strong. i want to talk about tax reforms in the u.s.. you say it's against its -- against international trade rules. why is that? >> we don't have comments to on the u.s. is reduction in tax rates. we need to watch what are the economic consequences. to long run we need to watch carefully. we have concerns or questions about to know whether it is compatible with the best processes for the antitax a fraud schemes. we also want to know if it is protectionist. could be a damage to the rule of stability. , from thent letters eu and the commission, to the secretary of the treasury. they have responded orally. we are waiting for it. we need a good relationship with the u

and the eurozone. just because donald trump is in the white house, there should be any meaningful political risk premium in u.s. equities, because i think, as we have seen over the last 12 months, we get a lot of talk, and not necessarily a lot of action on some of the more eyebrow raising policies or tweets, should we say, whereas in the eurozone, we have a partially constructed monetary union. ck of fiscal transfer, banking union, and pooling. it is a very fractious one and will require lots of electorates. there is no reason to believe that that is where domestic electorate want to go. must the reason for the politics of europe to still play a role in dampening equity performance in that region. this is the chart we have got. we are at the lowest level on the employment rate since 2000 and the debate over the weekend once again is is the phillips curve rogan? is whatever you want to call it, phillips curve, broken? are we getting -- about to see inflation happen in the u.s.? james: it's difficult to

i am talking globally, not specifically the eurozone. ook at the flatness of yield curves, risk premiums remain very low, even negative in the u.s. that is evidence of some complacency. markets wake up to that risk at some point, the curve it may steepen, risk premiums will reduce, and it is something that will happen. terms of central-bank reactions, what matters a lot is the instruments are different. as he moved away from coping with downside risk to coping with upside risk, we are moving away from conventional policies. all instruments are there. it is difficult to find tourance -- instruments fight inflation or a risk. have collateral, side effects, that we did not know. because they are sometimes too predictable. and that creates noise around the reaction. and we have lived in that very difficult environment. the we moved back to gradual policy, all the instruments are there. it is a no-brainer to deal with inflation. because all of the instruments are there. >> i do not know if there is clarity in what i am communicating, so perhap

we are exposing data out of the eurozone. for the first time in a long time i have decided to look at the korean won. this is after the central bank said they could intervene. you could see, currently at 1066. we will talk fed and risks to the global economy.. plus, we talk geopolitics with daniel tenenbaum. and we have the exclusive interview throughout the program. we bring you our conversation ermotti.io reporter: after a year marked by a disaster and snap election, theresa may is looking to enter 2018 on a stronger footing. the british from minister ended months of speculation and concern for the cabinet reshuffle. >> it is no surprise. damien green's departure means some changes have to be made in i will be making some changes. reporter: the u.s. federal reserve will need to pick up the medce as the slam rate increases occur. the administration's computer modeling of the economic effects result in interest rates that "aren't inconsistent with the fed's current guidance." travelers from around the world faced more chaos ye

mccrone is keen to see change he wants a separate budget and a single finance minister the eurozone merkel though doesn't seem so sure. over the last weeks and months and manuel mccollum has been left waiting he's eager to push on with grand plans for europe but his key partner the german chancellor has been busy with other things she's been struggling to form a new government at home. inevitably those struggles were a major issue when the two leaders face the press. marichal said she was optimistic she would soon reach a coalition with germany social democrats and i can see substantial areas of agreement notably regarding our european ambitions and i'm convinced that for that we need a stable government. cannot be realized alone and i've already said that several times they need to be accompanied by german ambitions. and those ambitions are high that's an e.u. summit last month merkel and mark kong pledged to draw up proposals for reforming the euro zone mccall has floated radical ideas a single budget a single finance minister for all member states merkel is more hesitant but on t

i am talking about the market's implied level for rates in the eurozone. that is going up. wer to the question that came in. guy: i've got the german curve here. steven: in answer to the question about the flattening we have called for. this is not a new idea. view isfication to our the bearishness at the front end of the curve. it is the upward move in the short yields that would drive the flattening. the long and will stay put. the yields will fall in the tenure plus, maybe the 30 year is the best place to focus on. our recommendation is to sell 30's.and buy it is about the implied path of the rates and that is different than saying there will be a rate hike next week. we are talking about the market getting ready for the start of normalization. the end of asset purchases matter to me because they open the door to the first rate move. yes, a purchase and doesn't matter in the flow argument. most of those are false. the real issue is the timing of the first rate move. we are coming from -40. we are coming from unconventional policy mixing forward guidance and asset personag

overall the economy in the eurozone grew by two point five percent in two thousand and seventeen the strongest increase in a decade it even outpaced the u.s. where estimates point to growth of two point three percent. france's economy expanded by one point nine percent twice as much as in the previous year but even in the second largest economy in the eurozone off to germany all that glitters is not gold france is held back by the biggest national debt in the eurozone. bring in our markets man there you are cold but the frankfurt stock exchange daniels' the euro zone's strongest economic growth in a decade or investors impressed. well not really i guess you can see it very well in the background chris so we're actually down right now with zero point six per cent yes of course those numbers are good also we had g.d.p. numbers from germany just a few weeks ago to with up to point two percent they're saying it's quite remarkable actually that mostly spain was really able to manage his political situation inside of the country well and that the economy was not really suffering at the sam

, i think we should be prepared for disappointments from the point of view from the rest of the eurozone yes there will be extra money, but we're talking more about 0.1, 0.2, perhaps 0.3% of german gdp so this is not the fiscal union that federalists in brussels have been dreaming of it's a positive development for the jerusalem in the sense there's some commitment, some further commitment for european integration. i doubt it will be a total game changer. what do you think the biggest risk is to the german economy this year? >> i think it's twofold. one is the persistent low ambition in terms of moving up the value chain, changing investment patterns, opening up for new businesses digital economy. that's the long-term risk. the second or immediate risk is as monetary policy gradually reverses its very expansionary course, we will see a correction of asset prices across germany, across the eurozone, perhaps around the globe if that is not managed well from the money trtary authorities, we could see significant changes in financial assets with financial volatility, short-term volatility, p

we talked about the eurozone and u.k. you look at negotiations, christian, what kind of template will be u.k. use? christian: at think that is the exciting debate to be had in terms of brexit in 2018. of course, the transition period is important, but it is also important how the u.k. sees itself. ownit wants to set its import tariffs, and how it imports workers in the future, so it' immigratio laws. we expect that at the moment, immigration laws will be tigt her. that is how we get to these negative economic outlooks for post brexit britain. if the u.k. were to eliminate all import tariffs, that would make goods from around the world cheaper. deregulate services, that could make them cheaper as well. so, there's a whole world of possibilities out there. this global term, brexit, where we get the regulation, lots of immigration nnd tariffs, in the long ru that would be a different scenario from the one we assume, this drawbridge of burton closing to the world. francine: christian schulz, the director of european research a

two hundred thousand a year the draftee and also commits funds to bring economic stability to the eurozone and the blueprint outlined sponsor immediately and weapons exports the countries involved in the war in yemen let's speak to david in berlin so david talk us through this progress that said ben made how big of a breakthrough s.s. . well it seems to be the end of the political limbo that germany's been suffering since the september elections a marathon session of talks for twenty four hours capping five days of negotiations between the parties and they produced this twenty eight page blueprint with some detailed areas of agreement on several policies now the most important one as you suggested is of course the one on refugees and immigration is going to be a cap on on migrants and you'll migrants up to two hundred twenty thousand is the cap that they've imposed and also more importantly they're dealing with the issue of the divided them very clearly on the family reunions for those one point two million or so refugees that came here in twenty fifteen twenty sixteen many of them are wit

if inflation doesn't pick up in the eurozone, it will be difficult to taper. hem to be data dependent. we will see. i suspect the euro zone is in good shape so that they will be able to wind it down in september. assets, theysk will do ok. there is little compensation, for the risk of everything going wrong? jim: that is certainly true in fixed income. we spent time coming up with central cases but also risk cases. in the central case, what you see is good growth, the macro backed up is supportive. the tax cut in the u.s. gives an impetus to cash flow for corporations. you look at that and say, it is too early to expect a sharp rise in defaults. they are lower this year than they were last year. that is not the necessary ingredients for a bear market in credit. that said, spreads are tight, true everywhere. you don't get the compensation for being wrong. i would watch real yields. going back to the valuation argument, very low if not negative in most markets, that has a dual effect on things like corporate bonds. default risk is low when real yields are low. no

the bigger thing to watch out re-ratingefully a upwards of growth for the eurozone. at pmi's, when of the business surveys, one of the indicators that lead gdp, it should be higher for the eurozone. we will be paying attention to that at the next meeting. and how long qe can go on. and the biggest thing is understanding that they seem to be separating the idea that inflation and qe purchases with info -- with an -- with interest rates. anna: the fact that the ecb is still battling low inflation will not stop them from unwinding their qe program. >> i think there is a chance they could take it down to 15 billion euros a month. we will still keep interest rates low to combat the low inflation problem. anna: thank you so much. that is it for daybreak euro. bloomberg markets, the european open is next. we have more on the u.s. federal government shutdown story and we will focus on new m&a news here in europe. ubs is out with their numbers as well. plenty of coverage from here in london and davos this week. this is bloomberg. ♪ guy: good morning, welcome to "bloomberg mark

look ahead and now would be an opportune time for the eurozone to get its house in order. yeah that's certainly one of the big question marks and the other question mark ban is really when you talk again about the monetary policy of the european central bank because many people here are again questioning what mario draghi just a few blocks from here is doing with his very strong economy we just heard from him last week that he doesn't see any reason at the moment to change his monetary policy speaking about interest rates and also speaking about the bond purchasing program yes so lots of question marks what's going to happen there and we've also got breaks that ahead the euro zone big the u.k.'s largest trading partner. yeah exactly and also reports today about a leaked a paper that was released as kind of creating a scenario how breaks it could be for the u.k. economy and those figures don't look very promising at all british prime minister trees are may now saying that this was only initial work and was never supposed to be released so yeah very interesting what is also g

talks with french president emmanuel mccraw they're trying to hammer out a series of reforms to the eurozone some of president mackerels ideas are he wants to separate budgets and the single finance minister for the eurozone german chancellor those more hesitant time to agreement seems a long way off. let's see how they're getting on max out hoffman in paris so welcome max what do these two leaders want. well the most important piece of news that came out of the press conference held here by macular micro is probably that now it's official they want a second ellie's a treaty the first of these a treaty having reached fifty five years of age and being the foundation basically for many ways of cooperating between the two countries and therefore a symbol of peace and also friendship between the two countries and they want a new one that is adapted to the twenty first century so both macro and micro confirmed that but at the same time of course they also talked about the challenges of what we call the reform of the european union you just mentioned two of those challenges but the german chancell

increase by 1%, and that is more or less in line with the core inflation of the eurozone. gher wage increases in germany ecb todeally help the get closer to its inflation target, but i think there was a consensus today that it is very difficult to get these higher wage increases in germany. mark: the economic backdrop. what about the political backdrop? there is a big vote taking place among social democratic delegates. how do you think the vote will go, how imperative isn't that a grand coalition is formed, another one? peter: i think it will be a very difficult debate among the social democrats. in party members do not see the pre-contract that has been made, do not see the social democratic handwriting, do not see a genuine project of social democrats be achieved. this was different in 2013 when in minimum wage was agreed, the coalition agreement, which was a major target of the social democrats. right now, this kind of symbol is missing. therefore, i'm not 100% convinced, i even doubt if the party members will agree to what has been agreed so far between these parties.

i oppose the eurozone. i don't believe you can run a currency from 27 countries.deral europe and never did. as foreign secretary i put to cabinet a paper that was designed to show you could be in europe without it coming a federal europe. now with the french president, very determined for a federal europe, good luck to him. if he and germany put their a cts him. if he and germany put their acts together, it is possible to see acts together, it is possible to see a fleece the eurozone countries, may bea a fleece the eurozone countries, may be a reduced number, effectively being a united states of europe and we will have good relations with them. talking about how that will work, you wrote a book about the foreign policy after brexit. someone 25 years younger than me voted remain andi 25 years younger than me voted remain and i should think this shows you can bridge the gap. that's unpicked the thoughts behind the book. you said... this is not in the book. you said... this is not in the book that something you said before the referendum itself that stuck in my mind.

inwhat lifted the eurozone 2017 was effectively a broad-based recovery on two fronts, all the major economiesdp growth accelerated across economy. eurozone 2006,e to go back to before the financial crisis to see something similar. my view for 2018 is that this benign combination of very high gdp growth and low inflation is going to change a little bit. i think that inflation will go up and that growth will come down a notch. the euro zone economy is doing absolutely fine. we are in the middle of a strong cyclical upturn that doesn't just end from one wit -- one day to the other. joe: we still see a pretty big divergence between the economies. spanish unemployment is down a bit, but still at 16%. canny expansion last long enough so that some of these deeply damaged peripheral economies can get back to something resembling a precrisis norm? claus: well, we have to believe that it can, joe. in and that that's what policymakers are setting themselves up for, which is exactly that. d.c., for example, doesn't care about a german economy running hot, and in my view it is definitely running hot. the

just on the currency bond as well, if we look at the eurozone, we had eurozone retail sales 1.59% on the month and 2.8% on the year as we look at the eurozone, gdp, retail starts are very strong indeed the inflation data we got last week was softer than expected. watch for the central bank the euro up .3 this morning. >> we'll take a look as bitcoin has a bit of weakness down about 8% typically we would say this is a big deal given the high price volatility we've seen, one day where bitcoin is trading down. >> a lighter week ahead. on wednesday look for december import prices. thursday, jobless claims and producer price index and friday we'll get to cpi earnings season gets underway for jpmorgan and k.b. home some stocks to watch today jana and calstrs are urging apple to curb the addiction on children they want to study the impancts on mental health the deal is structured in three parts for celgene. it's impacting the cancer drug celgene is back. know voe nordisk says ablynx has rejected its order novo says this is about 13% higher. >>> other stocks this morning, nvidia is teaming wi

>> we know we are starting to see wages taking up in a very , correlation in a limited way in the eurozone-- eure: the curve is deepening. japan's biggest cryptocurrencies says it will use its own capital to reimburse customers who lost money and a $4.5 million hack on friday. 26,000 users were impacted by the stealing of coins. japan's financial services agency says it's investigating the matter. global news 24 hours a day, powered 2700 journalists and analysts in more than 120 countries. christine harvey, this is bloomberg. >> thanks, christine. let's get back to our top story. the saudi prince to leave a hall has been freed after 40 months in detention. homeillionaire was allowed after reaching a settlement with authorities. he will remain at the help -- the helmalwaleed the helm of the company, alwaleed. this is casting a shadow on the saudi story in terms of interest of foreign investors. tell us how this played out in the latest chapter. >> we heard this earlier last week that they want to wind the whole thing down. they said 90 people have been released, and they've cut 95 further p

julien: the eurozone is interesting. for years they have lagged their recovery the u.s. s experienced. now you're finally starting to see a bit of catch-up in terms of eurozone growth being a positive contributor to the global economy. you are starting to see inflation move up slowly, albeit at a pretty gradual pace. our thought coming in was if you get this catch-up in terms of growth from the eurozone to where the u.s. is, that should be positive for the euro. we do not think that german bunds below 40 basis points make sense in the improving growth environment in the context of a global growth environment that is improving. so the spread between 10-year german rates and 10-year rates in the u.s. is about 200 basis points. pretty wide level, a multi-decade wide level. we expect that spread to converge over time as those long end rates normalize. and in our minds, it is really mispriced or the front end of the german bund curve. you have two-year rates of 70 basis points. that is a bit of a difficult market to trade because that mechanically controlled by the ecb. if we

sit in the eurozone instead during hard times even this could happen. if we still see kitchen. coming that. she made sacrifices. and sacrifice today needs austerity. nobody goes to the man for a cause very main been the economy and. yet. about the because of the you know the green light for me to defend in it because the bigger praised it will see your name soon or your you know the. boy. was the same as the child. according to census the research institute in italy national funding to the regions linked to social policies was reduced by approximately eighty percent from two thousand and seven to two thousand and fourteen. and. you're a member of the matter of the bones if we got it right it is the austerity that decides how many down should be placed in a room of five hundred dogs. this is the room. i want to be well gentle. and you'll just want to say. that it was the one huge markets. ten. channels i'll be wanting to buy i wanted more money in it wasn't it i tell. you finally and we're going to. get it going to. normal. transects and it's only just. came into inclusion. and i

joe: we talk so much about whether they want the risks pulling out of the eurozone, that seems unlikelyy is doing decent, unemployment at its lowest since 2011, but is there a perception that there are heavy lifts to go? nina: i think there is, especially when it comes to cleaning up the banks and the banking union in the eurozone, but i think what will end up happening is there will be some ,ind of -- extend and pretend some kind of crisis, but i don't think you will see with the italian election a real moment of crisis like we saw in the greek crisis where italy will be leaving the eurozone's. i think investors fears will be allayed by that at least. thank you very much. nina schick, rasmus glue global -- rasmus global. ford is partnering with post mates, teaming up on a pilot program to explore how self experiences --y joining us is executive vice president, marcy clayborn. my first question to you, on the heels of the presentation you gave, why is ford focusing on driverless delivery with self driving vehicles? >> could you repeat the last part, please? why are you focusing on drive

of the 27 and the eurozone? low interest rates at the moment there is not , enough incentive to do that. then we get talk about all sorts of new structures. but the most important thing now is that everybody is doing what they, as a country, need to do in terms of fiscal sides, the stimulus in terms of making sure that their economy gets back on a growth course. >> how worried should people be, businesspeople be about that? , are they someone who could take it out of the e.u.? risk out ofhat the the eurozone, not only for italy, we should be very cautious to disrupt and derail the mechanism. that in the last years, it brought us almost in all relevant economic areas of the world, to a dynamic of growth. so the issue in italy is we are on the right track. we have to continue in fiscal responsibility, and gradual decreasing of our public debt, and we have to face our social and environmental challenges. the real mission and commitment of the government now is to try to continue to have the confidence of the voters

they are trying to hammer out a series of reforms to the eurozone. macron is keen to see change. he wants a separate budget and single finance minister for the euro zone. but merkel is not so sure. reporter: over the last weeks and months, emmanuel macron has been left waiting. he is eager to push on with grand plans for europe, but his key partner, the german chancellor, has been busy with other things. she has been struggling to form a new government at home. inevitably, those struggles were a major issue when it the 2 leaders face to the press. merkel said she was optimistic she would soon reach a coalition with germany's social democrats. chancellor merkel: i can see substantial a race of agreement, notably regarding our european ambitions, and i am convinced for that we need a stable government. reporter: "our ambitions cannot be realized alone, and i have already said it several times, they needed to be accompanied by german ambitions." and those ambitions are high. added eu summit last month, merkel and macron pledged to draw up her proposals for reforming the eurozone. mac

in the eurozone instead during hard times even this could happen. if. she made sacrifices. and sacrifice today sterrett is. reported to be. a cause. very mean big economy and. the big you know the queen i mean and then in a pickle to make. your do you know the. oil that. was the same. according to census researchers. drouet in italy national funding to the regions linked to social policies was reduced by approximately eighty percent from two thousand and seven to two thousand and fourteen. and. you're a member of the matter of the bones if we got it right it is the austerity that decides how many banks should be placed in a room of five hundred dogs. this is the robot. mission i want it to be well on his watch until it is. and you listen i want to say you need to be honored by that he will see when you departs and. cocktail. channels all you want to please send him to i wanted money in a voice message that i asked to take. you by the way out of town it will disappoint don't. it could never be heard of it or you don't incomplete but here i get it into the innocent. norton. tr

there are other things, refugees, the crisis in the eurozone, that could come back. 's the question of defence. there is a question of foreigners first and all that. at the moment it is all blocked, the main country is blocked politically. there is urgency for a government in germany. whether it is weak or strong, it doesn't matter. you called for a strong one, that is the point, i don't think you will see one emerge in the nearfuture. it will be viable in certain functions, economic and otherwise, but it won't be in a position to really represent the country as a whole because there is such a wrangling going on between the two main parties. this could be called kielinger's paradox, suggesting germans want change but they don't want any change. they want politicians to suggest change without any reality of change, because actually their lives are fairly good. the danger for europe and for others out of germany in the last 30 years has essentially not been any kind of extremism but has been a retreat by germany into parochialism. stop the world, i want to get off! yeah

block in december was the highest level since the survey began in the late ninety's as a whole the eurozone economy outpaced its peers last year it's going so well that the european central bank plans to begin throttling back its stimulus program this month. let's go over to our financial correspondent in frankfurt and that's a buy spot to get more on this. it sounds like the manufacturers are hard at work. yeah they are work i think we're more or less at least for germany talking about the potential of labor as gary city at least for some patches of the economy i think we're very close to the natural rate of unemployment which means that they're not a lot of people left on the market but let me talk about the booming economy in europe mainly it's france and germany really powering ahead and that's the good message because france was kind of. is sort of in danger of the from the president all along but now there's new wind of change also for a bad economy and that's very positive the only economy which is doing too well actually even declined a little bit in its economic activity is italy a

the flows of money between two countries in the eurozone is a source of complexity. ime being, have the benefits of the new constructions. banks, whether there are more synergies, the markets will and we willgrated, have some benefits of this new framework. francine: will 2018 be the year we say european banks are losing out to u.s. banks? it seems the investment banks in the u.s. are eating our lunch. >> i am positive. i do not believe in a world were investment banking is concentrated in five u.s. banks. the amount of risk in the system would mean over concentration. clients do not want that either. it is a world where in each region, five or six big players, and they will connect so that companies can have between 10 and 15 core banks so that large investment firms can have 10 providers of services, liquidity, etc.. i am optimistic in the long-term. it might take some some time. go,cine: how did mifid ii and how is brexit going? worried, it did not happen at all. with the introduction of the new regulation, brexit same thing. about the divorce settlement. i would s

sit in the eurozone instead during hard times even this could happen. if. she made sacrifices. and sacrifice today sterrett is. not going to go the. cause. remains been the economy and. then because of the you know the queen that i mean to defend then. your you know they counted. for you know it. was the same. according to census researchers. drouet in italy national funding to the regions linked to social policies was reduced by approximately eighty percent from two thousand and seven to two thousand and fourteen. and. you're a member of the matter of the bones if we got it right it is the austerity that decides how many bone should be placed in a room of one hundred dogs. this is the rope but. no one got to do well on his watch until it is. in ulysses i want to say you need to be obviated by that he will see when you departs and. cocktail. chances are you wanting the incentive i wanted more for his method of action k. . for you finally out of his will disappoint don't. be told it or you can. only get it going to the innocent. normal. girl. and it sets an image so it is that al

. >> germany together with its partners needs to deliver two .hing we are trying to make the eurozoneore resilient to shocks. we need to combine these two things. in germany, there is a lot of complacency about that. the government thinks it has to do nothing because the economy is growing all right. but that is not right. a great message to end on, but i wanted to add one more. do we move closer to the banking in? it will only tackle it if it is combined with structural changes towards more market discipline. it is very much about depositing health insurance. so, many are afraid of that and hadthey are lacking better payment for private investigators. thank you for your time this fuest., clemens january 24th.u on tom: watch burberry, asml;, watch the car stocks. this is bloomberg. ♪ guy: one minute to go until the start of trading in europe. we are having a look at the czech republic. until this was not expected, but a possibility. the euro-dollar is trading south. we arelar has a bid, watching them. oil is down, but not by much. the contract for brent. the nikkei closed down by 0.3%

the eurozone went into a deep recession and came out of it and went back into it. a lot of pent-up demand. on the one hand, merkel and micron -- macron and i you have italy, who knows where they are going. and the middle european countries pressing in a different direction. david o: at the end of the day, it would be interesting with the u.k. leaving the e.u. whether that forces integration within the -- also the u.k. leaving changes the mix of the e.u. level. companies -- countries like poland -- particularly germany, france, italy, and spain. levele voting at the e.u. once the u.k. leaves will be more driven by the very large countries and poland coming into the mix will have quite a big say in a you development. at the end of the e.u. 27 should come together and form a block and there should be a move to more of sort of a single european market. alix: is back on to lead to inflation? david o: at the end of the day, the ecb remember is changing -- its focus has moved away from inflation in a way. super coreot inflation, which in germany did touch 2% in the summer

maybe in the next months and years so between them germany and france control roughly half of the eurozone budget max what do they disagree on. they won't say it openly they're really striving to be very united publicly but of course we know that some of the suggestions that in one room i call the french president made in the past have already been struck down by the germans for example zone a euro zone budget we already have a budget for the european union but macross suggested there be another budget just for the euro zone countries because not every e.u. country actually has the euro and is in the euro zone same thing for european finance minister but they're on the same page for example for founding own european monetary fund just like the international monetary fund that we have in washington d.c. but up until now it's not entirely clear where the to do align on those big projects you touched on it's a brief when you first. chancellor merkel of course having problems domestically a putting together a new government how has that affected her position in a new policies. well first of al