WEBVTT - Special Coverage: French Government Falls After Vote 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Lawmakers from the far left and right of France's political

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<v Speaker 2>spectrum are set to combine and topple Prime Minister Michelle

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<v Speaker 2>Barnier's government tonight in at Paris. The National Assembly set

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<v Speaker 2>to reconvene as we speak, and that is when we're

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<v Speaker 2>supposed to get the result. Covering it all is Stephen Carroll,

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<v Speaker 2>Bloomberg Radio Daybreak Europe anchor. Stephen joins us from our

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<v Speaker 2>Paris bureau. Stephen, good to see you this evening. Earlier

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<v Speaker 2>in your career, you spent a decade working for France

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<v Speaker 2>twenty four Television in Paris. You've interviewed President Emmanuel Macron,

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<v Speaker 2>Prime Minister Michelle Barnier. How did we get to where

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<v Speaker 2>we are today?

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<v Speaker 1>I mean, the short answer is that Emmanuel Macron called

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<v Speaker 1>an election in June. He wasn't happy with how his

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<v Speaker 1>party date in European Parliament elections, so he decided to

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<v Speaker 1>go to the country, dissolve the parliament, the National Assembly

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<v Speaker 1>call elections, thinking that it would reinforce his position give

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<v Speaker 1>French people the choice of who they wanted to govern.

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<v Speaker 1>And fortunately French people didn't have the same idea. And

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<v Speaker 1>what he ended up with was fewer numbers of MPs

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<v Speaker 1>in the National Assembly and a very fractured parliament. That

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<v Speaker 1>left three large groupings, the Marie Lepens National Rally on

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<v Speaker 1>the right, the far right, his Centrist group which he

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<v Speaker 1>picked up some of the center right party as well,

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<v Speaker 1>and this left wing alliance which is the biggest group

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<v Speaker 1>in the parliament as well. Nobody had a majority, nobody

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<v Speaker 1>could govern. Then he had to try and find a

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<v Speaker 1>government because his job as president he gets to nominate

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<v Speaker 1>the Prime Minister and set the agenda for policy. He

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<v Speaker 1>picked Michel Baunier, this man who has had a storied

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<v Speaker 1>fifty year career in French politics. He's been a minister,

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<v Speaker 1>He's been a European commissioner, he was the ease chief

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<v Speaker 1>negotiator on Brexit. He is a statesman. He brings with

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<v Speaker 1>him He's not from Macron's political family, so he brings

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<v Speaker 1>with him the sense of somebody who is above the

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<v Speaker 1>fray of politics. He's not currently an elected politician, so

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<v Speaker 1>got him in to try and run the government to

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<v Speaker 1>pass a budget, which was the biggest immediate concern. He

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<v Speaker 1>brought the budget to Parliament, tried to negotiate a compromise

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<v Speaker 1>with the various groups. Wasn't able to do that. Used

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<v Speaker 1>a constitutional provision that allows them to force it through parliament.

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<v Speaker 1>But unfortunately, the downside of using that provision is is

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<v Speaker 1>that the opposition can call a vote of no confidence

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<v Speaker 1>in the government. And that's where we are now, and

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<v Speaker 1>they're currently voting. After about two and a half hours

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<v Speaker 1>of debate in the French Parliament, lots of views expressed.

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<v Speaker 1>Mitelvannie got up at the end to lay out his

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<v Speaker 1>position to saying it's a moment of truth and responsibility

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<v Speaker 1>for France and we'll find out if anyone listened to

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<v Speaker 1>him in just a couple of minutes time.

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<v Speaker 3>And Stephen, what happens in the immediate aftermath if the

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<v Speaker 3>French government loses the no confidence vote.

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<v Speaker 1>So we will. The first thing that happens is the

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<v Speaker 1>government has to resign, right, so Mite Albanni and all

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<v Speaker 1>of his ministers will present their resignation to the President.

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<v Speaker 1>It then turns to the president who will have to

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<v Speaker 1>appoint the next government. But the more immediate problem, because

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<v Speaker 1>there's no deadline for when Emmanuel Macron would have to

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<v Speaker 1>pick a new prime minister to lead and form a

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<v Speaker 1>new government. The more immediate problem is is France's current

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<v Speaker 1>budget runs out at the end of the year, so

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<v Speaker 1>then we roll over into twenty twenty five and into

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<v Speaker 1>relative political unknown. There won't be a shutdown, and it's

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<v Speaker 1>actually been funny and a lot of the discourse here

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<v Speaker 1>people that keep mentioning, oh, it won't be like the

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<v Speaker 1>US government.

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<v Speaker 2>Shot, yeah, that's our problem.

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<v Speaker 1>They'll still keep collecting. Yeah, they'll still keep collecting taxes.

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<v Speaker 1>Even using the word shutdown in French was quite funny.

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<v Speaker 1>But they're still going to collect taxes. Public services will

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<v Speaker 1>still run. But essentially what they'll do is they'll take

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<v Speaker 1>the twenty twenty four budget, carve it up into twelve pieces,

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<v Speaker 1>and each department will get a twelfth of their budget

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<v Speaker 1>every month. That that presents, as you might imagine, all

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<v Speaker 1>sorts of problems, because it's very difficult to run the

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<v Speaker 1>state on that sort of month to month basis. It's

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<v Speaker 1>not like working on your overdraft. And the other problem

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<v Speaker 1>is is that there were a load of measures in

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<v Speaker 1>this budget that we're going to change things, both for

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<v Speaker 1>taxpayers and for welfare recipients. So for taxpayers, the tax

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<v Speaker 1>thresholds for income tax were due to rise and line

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<v Speaker 1>with inflation. If that doesn't happen, everyone's got well not everyone,

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<v Speaker 1>but eighteen million households are going to be paying more

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<v Speaker 1>tax from January. There's good news though for pensioners. They

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<v Speaker 1>were due to get their inflation linked increase delayed after

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<v Speaker 1>January to later in the year. They actually will get

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<v Speaker 1>their inflation linked increase in January if there isn't a budget.

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<v Speaker 1>But all of this presents the same problem that France

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<v Speaker 1>has had since the middle of last year. It's budget

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<v Speaker 1>death as it is too large for EU budget rules,

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<v Speaker 1>but also to be able to convince markets, and we've

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<v Speaker 1>seen France's international borrowing costs rise as a result. Part

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<v Speaker 1>of the issue now has to be is they need

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<v Speaker 1>to come up with a credible fiscal plan for the

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<v Speaker 1>country so as to cam the fears that exist on

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<v Speaker 1>the markets. And the rise in borrowing costs has been moderate,

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<v Speaker 1>hasn't got to quite extremes yet, but it sets up

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<v Speaker 1>a huge task for whoever's going to take over after

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<v Speaker 1>Michel Bagni, if indeed he is forced to resign, to

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<v Speaker 1>whether or not they can put together the plan and

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<v Speaker 1>achieve something that a man who was legendary for his

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<v Speaker 1>negotiation skills, wasn't able.

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<v Speaker 2>To well, we are waiting to hear from the National

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<v Speaker 2>Assembly about the results of that vote. We will bring

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<v Speaker 2>that to you imminently as we do get the results. Stephen,

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<v Speaker 2>what about other names that at this point have emerged

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<v Speaker 2>to take over as prime minister? What can you tell

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<v Speaker 2>us there, Hi?

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<v Speaker 1>Michel Varnier ruled himself out in an interview on French

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<v Speaker 1>television last night, which is important because it had been

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<v Speaker 1>something that had been speculated that perhaps an annual macron

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<v Speaker 1>might just say we'll give it another go. By the way,

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<v Speaker 1>the last time this happened when the only time since

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<v Speaker 1>the current constitution has been in force in France, which

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<v Speaker 1>is since nineteen fifty eight, the only time it's happened

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<v Speaker 1>that a government has lost a vote of no confidence

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<v Speaker 1>was in nineteen sixty two.

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<v Speaker 2>Stephen, I'm sorry to cut you off. We're getting again,

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<v Speaker 2>We're getting a result right now. The French government falls

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<v Speaker 2>after no confidence vote in Parliament. The French no commindant's

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<v Speaker 2>motion passes with three hundred and thirty one votes. Two

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<v Speaker 2>hundred and eighty eight were needed, not too surprising given

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<v Speaker 2>how closely you followed this, but what's your immediate reaction.

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<v Speaker 1>I mean, look, it means there wasn't any defections. Michelle

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<v Speaker 1>Barnier's call for responsibility doesn't seem to have won over

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<v Speaker 1>any of the MPs he was hoping. He was particularly

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<v Speaker 1>targeting the center left Party, the Socialist Party, who've been

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<v Speaker 1>in government in France many times in recent history. The

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<v Speaker 1>question of whether or not some of those MPs might

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<v Speaker 1>be willing to abstain, for example, from this vote to

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<v Speaker 1>try and save the government. He doesn't seem to have

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<v Speaker 1>convinced them with this message. That's the number in and

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<v Speaker 1>around what we expected, because it's basically if you add

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<v Speaker 1>together the Left Ring Alliance and Marion Lea Penn's far

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<v Speaker 1>right National Rally, those parties put together give us that

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<v Speaker 1>total of in and around three hundred and thirty. So

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<v Speaker 1>it looks like that they didn't manage to convince anyone

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<v Speaker 1>to cross the line. It's a result that's pretty much

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<v Speaker 1>then in line with expectations, but now opens up the

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<v Speaker 1>question of what happens next. What will Emmanuel Macron do.

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<v Speaker 1>He's just landed back in France in the past few

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<v Speaker 1>minutes from visit to Saudi Arabia, where he was trying

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<v Speaker 1>to brush off a lot of these political questions at

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<v Speaker 1>home and continue on with international affairs to little avail

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<v Speaker 1>as everyone just wanted to ask him what he planned

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<v Speaker 1>to do after this vote went through. He had been

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<v Speaker 1>asked on many occasions whether or not he might resign,

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<v Speaker 1>and he says that's not an issue, it's not even

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<v Speaker 1>in question that he would do that. Of course, his

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<v Speaker 1>term runs till twenty twenty seven, so we now set

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<v Speaker 1>ourselves up for the timeline where the French President can

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<v Speaker 1>take as long as he likes to appoint a new government.

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<v Speaker 1>We don't think he's going to leave it that long,

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<v Speaker 1>but it does plunge us into a sort of political vacuum.

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<v Speaker 1>Now we'll have to have a caretaker government to keep

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<v Speaker 1>current affairs running, but it's going to make those big

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<v Speaker 1>challenges like dealing with the budget even more difficult.

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<v Speaker 3>Stephen, do we have a good idea of who would

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<v Speaker 3>likely be the next prime minister in what that new

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<v Speaker 3>government would look like.

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<v Speaker 1>We don't. There are a couple of names that have

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<v Speaker 1>been floated around, but it's not a specific list of

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<v Speaker 1>people that have been floated. You could imagine that Emmanuel

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<v Speaker 1>Macron would try and pick from, if not his own

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<v Speaker 1>political family, those who've already said that they would ally

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<v Speaker 1>with him. There had been a question before Michel Barnier

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<v Speaker 1>was picked as to whether he might be able to

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<v Speaker 1>pick a politician from the Socialist Party, that center left

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<v Speaker 1>party and thus bring them into this center alliance that

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<v Speaker 1>he was trying to create. But they couldn't agree between

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<v Speaker 1>the left wing parties on the same candidate that Emmanuel

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<v Speaker 1>Macron want wanted. That was Bonno Kaznov, who's a former

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<v Speaker 1>interior minister. He was the one who had been mentioned

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<v Speaker 1>last time around. This was in the discussions that led

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<v Speaker 1>up to Michel Barnier being picked. But the names that

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<v Speaker 1>are out there now are in the realm of speculation.

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<v Speaker 1>There's no rallied support around someone. There's no obvious candidate

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<v Speaker 1>for who would take over, because the challenge facing the

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<v Speaker 1>person who takes on that they have the same parliamentary

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<v Speaker 1>match to deal with. Michel Barnier was dealt a very

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<v Speaker 1>difficult hand. He didn't have a majority in parliament. He

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<v Speaker 1>did his best to try and build a way of working.

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<v Speaker 1>He always said that he was leaving it to parliament

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<v Speaker 1>to be able to legislate and negotiate on important matters.

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<v Speaker 1>That's failed. You have to ask who would be brave

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<v Speaker 1>enough to step into those shoes, because it's a pretty

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<v Speaker 1>nasty hand of cards to be hand them.

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<v Speaker 2>That's exactly where I want to go. We're getting some

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<v Speaker 2>commentary from France unbowed lawmaker Mattil Panaut, who says that quote,

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<v Speaker 2>finally the Barnier government has fallen along with its violent budget.

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<v Speaker 2>Today is a historic day. What does a budget look

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<v Speaker 2>like in France after this process?

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<v Speaker 1>Well, look, we go into this situation where we're going

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<v Speaker 1>to be going month to month from January. There's very

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<v Speaker 1>little hope that even if a government was formed tomorrow

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<v Speaker 1>that they would be able to resuscitate this current budget

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<v Speaker 1>plan and actually get anything in place by the end

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<v Speaker 1>of the year. So either way, when it comes to

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<v Speaker 1>the end the thirty first of December, we're rolling into

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<v Speaker 1>this suppose minimum service French state that's going to be

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<v Speaker 1>in place from January of next year, and that's going

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<v Speaker 1>to bring back in those questions around tax rises for

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<v Speaker 1>a lot of households who are paying income tax, those

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<v Speaker 1>rises for pensions as well, and there were specific things

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<v Speaker 1>like extra financial aid for farmers which now won't be

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<v Speaker 1>paid out because that won't go into the budget bill.

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<v Speaker 1>So the next immediate step is that there will be

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<v Speaker 1>a motion that will need to be passed in Parliament

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<v Speaker 1>to I suppose activate this temporary measures to keep the

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<v Speaker 1>state running the lights on, if you will. There's not

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<v Speaker 1>expected to be any major opposition to that because no

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<v Speaker 1>French politician wants to be responsible for, you know, no

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<v Speaker 1>welfare payments being paid early next year, So there's not

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<v Speaker 1>an expectation that we will have anything but this month

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<v Speaker 1>to month situation operating from January with a larger budget

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<v Speaker 1>deficit and with the pressure that's going to put on

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<v Speaker 1>France's borrowing costs and international markets as well.

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<v Speaker 2>We're speaking with Stephen Carrol, Bloomberg Radio Daybreak Europe anchor,

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<v Speaker 2>joining us from our Paris bureau. Stephen Carroll has about

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<v Speaker 2>a decade of experience covering French politics working for France

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<v Speaker 2>twenty four TV in Paris. I do also want to

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<v Speaker 2>bring in Steven Englander, global head G ten x FX

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<v Speaker 2>research at Standard Chartered Bank. He joined us from New York.

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<v Speaker 2>Steven Englander talking a little bit about the market reaction

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<v Speaker 2>here French bond future is now pairing an earlier advance.

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<v Speaker 2>After the vote result, the europaired gains to trade little

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<v Speaker 2>change that around a dollar five. How are you looking

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<v Speaker 2>at market reaction here? What's the trade?

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<v Speaker 4>Well, I don't think that there's any immediate trade. We

0:11:32.080 --> 0:11:35.719
<v Speaker 4>started seeing French freads widen around the middle of November.

0:11:37.160 --> 0:11:40.360
<v Speaker 4>The euro has probably about a percent lower than it

0:11:40.400 --> 0:11:45.400
<v Speaker 4>would have been absent you know, this issue. I think

0:11:45.440 --> 0:11:49.920
<v Speaker 4>the last few days the market has reconciled itself to

0:11:50.080 --> 0:11:53.680
<v Speaker 4>a kind of very much a caretaker government. But also

0:11:54.640 --> 0:11:57.400
<v Speaker 4>you know, with what the other Steve mentioned, which is

0:11:57.400 --> 0:12:02.000
<v Speaker 4>that the budget itself is kind of an austerity budget

0:12:02.840 --> 0:12:06.839
<v Speaker 4>because nothing's indexed in nominal terms. It's all the same

0:12:07.320 --> 0:12:10.640
<v Speaker 4>level of spending, so it's a lower real spending. So

0:12:10.800 --> 0:12:15.880
<v Speaker 4>from from a market perspective, this isn't a disaster right now.

0:12:16.720 --> 0:12:19.960
<v Speaker 4>If it does become a political crisis, like even deeper,

0:12:20.240 --> 0:12:22.840
<v Speaker 4>or if it spills over to the rest of Europe,

0:12:22.880 --> 0:12:27.199
<v Speaker 4>that would become much more intense. And you know, as

0:12:27.200 --> 0:12:30.280
<v Speaker 4>we've seen here, typically these things get resolved because one

0:12:30.320 --> 0:12:33.640
<v Speaker 4>side or another decides that it's taking a political beating

0:12:33.840 --> 0:12:38.720
<v Speaker 4>being seen as responsible for you know, whatever, checks don't

0:12:38.720 --> 0:12:39.520
<v Speaker 4>go out or whatever.

0:12:40.400 --> 0:12:42.680
<v Speaker 3>Stephn Engler I was going to follow up and ask

0:12:42.880 --> 0:12:46.760
<v Speaker 3>does this affect ECB policy at all? Is the Central

0:12:46.760 --> 0:12:49.800
<v Speaker 3>Bank thinking about kind of this uncertainty around what happens

0:12:49.840 --> 0:12:50.960
<v Speaker 3>next with the French budget.

0:12:53.000 --> 0:12:55.960
<v Speaker 4>I think the ECB is more you know, say, cognizant

0:12:55.960 --> 0:12:58.840
<v Speaker 4>of these issues right there. You know, we just hurt

0:12:58.920 --> 0:13:03.160
<v Speaker 4>Powell sort of, you know, drawing strict lines between fiscal

0:13:03.400 --> 0:13:07.640
<v Speaker 4>and and you know, government and the Central Bank. I

0:13:07.640 --> 0:13:10.360
<v Speaker 4>don't think the ECB has those strict lines going back

0:13:10.400 --> 0:13:13.760
<v Speaker 4>to the European fiscal crisis, so you know, maybe a

0:13:13.760 --> 0:13:16.720
<v Speaker 4>little more likely to cut to make things easier. But

0:13:16.800 --> 0:13:19.480
<v Speaker 4>I think initially at least their focus will be on

0:13:19.600 --> 0:13:23.760
<v Speaker 4>trying to prevent any kind of spillover into the rest

0:13:23.760 --> 0:13:26.640
<v Speaker 4>of Europe and reassure markets that they're ready to take

0:13:26.679 --> 0:13:28.040
<v Speaker 4>action if anything would happen.

0:13:28.240 --> 0:13:30.199
<v Speaker 2>Steven England or when you say spillover, do you mean

0:13:30.280 --> 0:13:33.360
<v Speaker 2>political spillover? Do you mean spillover when it comes to markets?

0:13:33.400 --> 0:13:34.040
<v Speaker 2>How do you see it?

0:13:35.120 --> 0:13:37.560
<v Speaker 4>Well? I think in the first instance, if we start

0:13:37.600 --> 0:13:41.960
<v Speaker 4>seeing Italian spreads going up, and you know, Portuguese spreads

0:13:42.000 --> 0:13:45.400
<v Speaker 4>going up, that's exactly what they don't want and what

0:13:45.440 --> 0:13:47.920
<v Speaker 4>they would react to. Initially, it's a little bit more

0:13:47.960 --> 0:13:51.959
<v Speaker 4>delicate to try and intervene on French spreads when it's

0:13:51.960 --> 0:13:54.440
<v Speaker 4>a French political crisis. But for the rest of Europe,

0:13:54.520 --> 0:13:57.000
<v Speaker 4>I think their role is unambiguous.

0:13:57.160 --> 0:13:59.400
<v Speaker 2>I want to bring back in Stephen Carroll, who's in

0:13:59.480 --> 0:14:03.760
<v Speaker 2>our pair of bureau. The far left France Unbound party

0:14:03.800 --> 0:14:07.440
<v Speaker 2>calls for Emmanuel Macron to resign. I know you've been

0:14:07.440 --> 0:14:09.760
<v Speaker 2>getting caught up just in the last few minutes, Stephen.

0:14:10.240 --> 0:14:12.560
<v Speaker 2>What sticks out to you as far as other names

0:14:12.559 --> 0:14:15.360
<v Speaker 2>that potentially have emerged, or what the political future of

0:14:15.400 --> 0:14:16.000
<v Speaker 2>Macron is.

0:14:18.040 --> 0:14:20.720
<v Speaker 1>I mean, look, Emmanuel Macron has brushed off any suggestion

0:14:20.800 --> 0:14:23.000
<v Speaker 1>that he will resign. There's no way that he can

0:14:23.040 --> 0:14:26.200
<v Speaker 1>be forced to. This vote doesn't affect his position in power,

0:14:26.280 --> 0:14:30.000
<v Speaker 1>and he's due to stay in office until twenty twenty seven.

0:14:30.040 --> 0:14:32.640
<v Speaker 1>A person who very keenly would like him to resign,

0:14:32.680 --> 0:14:34.960
<v Speaker 1>and we've seen that on the decision that she has

0:14:35.080 --> 0:14:39.240
<v Speaker 1>made in supporting this no confidence motion is Marie Lepenn,

0:14:39.480 --> 0:14:41.720
<v Speaker 1>the far right candor's course was the person who went

0:14:41.800 --> 0:14:45.320
<v Speaker 1>up against Macron the last two presidential elections. Her support

0:14:45.360 --> 0:14:49.400
<v Speaker 1>has been growing slowly and the margin by which Emmanuel

0:14:49.440 --> 0:14:52.360
<v Speaker 1>Macron defeated her in the last presidential elections, was much

0:14:52.360 --> 0:14:55.520
<v Speaker 1>smaller than in twenty seventeen. So she would very much

0:14:55.680 --> 0:14:58.320
<v Speaker 1>like for there to be an early presidential election to

0:14:58.320 --> 0:15:00.880
<v Speaker 1>get a chance for her to be a to get

0:15:00.920 --> 0:15:04.720
<v Speaker 1>a shot at the presidency. Now it's not unusual that

0:15:04.760 --> 0:15:06.720
<v Speaker 1>we'll have that same call from the far left. They're

0:15:06.760 --> 0:15:09.560
<v Speaker 1>actually one of the biggest groups in Parliament, so they

0:15:09.720 --> 0:15:12.360
<v Speaker 1>know that they have also significant support and that's been

0:15:12.800 --> 0:15:16.240
<v Speaker 1>the story of how politics has evolved under Emmanuel Macron

0:15:16.480 --> 0:15:19.400
<v Speaker 1>in poos who've seen greater support for far right and

0:15:19.560 --> 0:15:22.680
<v Speaker 1>far left parties as a result. Some of those other

0:15:22.760 --> 0:15:24.880
<v Speaker 1>names that you mentioned for prime minister, I mentioned Bernard

0:15:24.920 --> 0:15:27.160
<v Speaker 1>Casnov a minute ago, the former socialist prime minister and

0:15:27.200 --> 0:15:30.440
<v Speaker 1>Interior minister as well. Perhaps the left might be able

0:15:30.480 --> 0:15:33.160
<v Speaker 1>to agree on him perhaps forming a government and that

0:15:33.200 --> 0:15:37.320
<v Speaker 1>would open up the left side of the Parliament to

0:15:37.320 --> 0:15:41.360
<v Speaker 1>be able to perhaps form a centrist coalition. Other ones

0:15:41.400 --> 0:15:43.360
<v Speaker 1>that we have been talking about is the likes of

0:15:43.400 --> 0:15:46.040
<v Speaker 1>Francois Bairrou, who is a centrist politician and early supporter

0:15:46.080 --> 0:15:48.600
<v Speaker 1>of Emmanuel Macron way back when he ran for presidents

0:15:48.640 --> 0:15:51.240
<v Speaker 1>the first time around. As well, quite a similar profile

0:15:51.240 --> 0:15:53.280
<v Speaker 1>in some ways to Michelle Bannier. He's been around a

0:15:53.280 --> 0:15:55.520
<v Speaker 1>long time in French politics. He has a certain amount

0:15:55.520 --> 0:15:57.640
<v Speaker 1>of respect for the positions that he's had as well,

0:15:57.800 --> 0:15:59.800
<v Speaker 1>and perhaps he could be someone who could draw people

0:15:59.840 --> 0:16:02.440
<v Speaker 1>to either. But he's not really outside of the current

0:16:02.440 --> 0:16:05.280
<v Speaker 1>alliance that mac Grown's in. You think this because he's

0:16:05.280 --> 0:16:08.840
<v Speaker 1>already tried Michelle Bangiy someone who's already out of domestic politics,

0:16:08.840 --> 0:16:10.840
<v Speaker 1>that perhaps he might be looking for someone a little

0:16:10.880 --> 0:16:13.640
<v Speaker 1>bit bigger next time around that'll pull in new votes

0:16:13.640 --> 0:16:16.000
<v Speaker 1>and new supports, so that'll be able to create some

0:16:16.080 --> 0:16:17.600
<v Speaker 1>currency in parliament as well.

0:16:17.960 --> 0:16:19.720
<v Speaker 2>Stephen Carroll, we're gonna have to let you go. I

0:16:19.720 --> 0:16:21.040
<v Speaker 2>know you've got a busy night ahead of you. We

0:16:21.040 --> 0:16:22.960
<v Speaker 2>definitely appreciate you taking the time and it joining us.

0:16:22.960 --> 0:16:26.640
<v Speaker 2>That's Stephen Carroll of a Bloomberg Daybreak Europe. He's an

0:16:26.680 --> 0:16:29.880
<v Speaker 2>anchor for Bloomberg Radio, joining us from Paris. So do

0:16:29.880 --> 0:16:31.520
<v Speaker 2>you want to get back to Stephen England or Global

0:16:31.600 --> 0:16:34.680
<v Speaker 2>head g TENFX Research at Standard Charter Bank, joining us

0:16:34.800 --> 0:16:38.360
<v Speaker 2>from New York. The front French stocks closing in on

0:16:38.360 --> 0:16:41.960
<v Speaker 2>their worst year since twenty ten, although the CAC forty

0:16:41.960 --> 0:16:44.440
<v Speaker 2>today seemed to shrug off this news. It rose seven

0:16:44.480 --> 0:16:46.720
<v Speaker 2>tenths of one percent. Can you talk about the equity

0:16:46.720 --> 0:16:48.400
<v Speaker 2>market reaction around this at all?

0:16:50.680 --> 0:16:53.080
<v Speaker 4>Well, you know, I think there's just a lot of

0:16:53.160 --> 0:16:56.680
<v Speaker 4>uncertainty there, and you know, obviously there will be pockets

0:16:56.680 --> 0:17:01.320
<v Speaker 4>where maybe they were, you know, expecting some help from

0:17:01.320 --> 0:17:03.840
<v Speaker 4>the budget and that's not going to come. But I

0:17:03.880 --> 0:17:08.080
<v Speaker 4>think it's more broad macro uncertainty than there is any

0:17:08.160 --> 0:17:12.800
<v Speaker 4>you know, specific equity market risk. What we could see

0:17:12.880 --> 0:17:17.000
<v Speaker 4>is is, you know, right now the turnover budget, it's

0:17:17.000 --> 0:17:19.680
<v Speaker 4>sort of an austerity budget if it does turn out

0:17:19.720 --> 0:17:23.359
<v Speaker 4>that they say reached an agreement, but it's much more expansionary.

0:17:24.400 --> 0:17:26.679
<v Speaker 4>You know, we could see an equity market reaction, but

0:17:26.720 --> 0:17:30.000
<v Speaker 4>we could also see markets looking at the fiscal situation

0:17:30.200 --> 0:17:31.600
<v Speaker 4>and being a little concern.

0:17:32.600 --> 0:17:37.240
<v Speaker 3>What about the outlook here for US versus Europe. We've

0:17:37.240 --> 0:17:41.240
<v Speaker 3>obviously been watching europaroity. We're not there quite yet, but

0:17:41.240 --> 0:17:44.200
<v Speaker 3>there's a lot of talk about the US dollar continuing

0:17:44.240 --> 0:17:49.080
<v Speaker 3>to strengthen against other countries, other regions, including Europe. What

0:17:49.160 --> 0:17:52.040
<v Speaker 3>are you kind of watching levels wise, and does this

0:17:52.520 --> 0:17:57.280
<v Speaker 3>news in France kind of change the narrative at all?

0:17:57.440 --> 0:18:01.120
<v Speaker 4>Well, dook, I think it does put U P. I mean,

0:18:01.320 --> 0:18:04.360
<v Speaker 4>it obviously has put parody a little bit closer, if anything.

0:18:04.480 --> 0:18:08.120
<v Speaker 4>What's surprising, you know, my guess is that we saw

0:18:08.320 --> 0:18:11.080
<v Speaker 4>one percent, maybe slightly less three quarters of a percent

0:18:11.760 --> 0:18:15.000
<v Speaker 4>impact on the Euro. So the market is seeing it

0:18:15.040 --> 0:18:16.960
<v Speaker 4>as an issue. It's not really seeing it as a

0:18:17.000 --> 0:18:22.760
<v Speaker 4>market crisis. If something were to develop that really led

0:18:22.840 --> 0:18:28.080
<v Speaker 4>to prolonged political uncertainty, that would be much harsher. But

0:18:28.200 --> 0:18:30.879
<v Speaker 4>I you know, till now, the market is sort of

0:18:31.359 --> 0:18:33.440
<v Speaker 4>seeing it as a bad but not as a as

0:18:33.440 --> 0:18:34.119
<v Speaker 4>a very bad

0:18:35.040 --> 0:18:38.040
<v Speaker 2>Stephen England are global head G ten FX Research at

0:18:38.040 --> 0:18:40.520
<v Speaker 2>Standard Charter Bank, joining us from New York