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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jailey.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg You know,

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Speaker 1: I want to bring in Adam Posen right now. Adam,

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Speaker 1: I know you're one of the thirteen thousand people that

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Speaker 1: looks forward to the spring annual meeting of the International

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Speaker 1: Monetary Fund. What do you hope to learn from the

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Speaker 1: meeting this time around? Uh? Learn? Oh boy, let's see.

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Speaker 1: I hope to learn how other countries are viewing the

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Speaker 1: fiscal policy of the US. I hope to learn where

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Speaker 1: the financial leaders in the private sector see the vulnerabilities

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Speaker 1: and what they're lobbying for, essentially on financial regulation. I

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Speaker 1: hope to learn as people respond to our forecast, the

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Speaker 1: more importantly, the I m S world economic outlook, where

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Speaker 1: they are able to claim things will be better or worse.

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Speaker 1: And most of all, you hope to get some feel around,

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Speaker 1: uh the Trump administration learning that the trade conflict with

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Speaker 1: China would be pretty destructive. Well, let me just bring

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Speaker 1: in a tweet that the President just offered the public

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Speaker 1: four minutes ago. He says, quote, looks like OPEC is

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Speaker 1: at it again, with record amounts of oil all over

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Speaker 1: the place, including the fully loaded ships at see. Oil

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Speaker 1: prices are artificially very high, no good and will not

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Speaker 1: be accepted. It doesn't matter that the President has enjoined

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Speaker 1: himself to the debate over oil prices, just as he

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Speaker 1: spoke earlier in the week on Twitter about currency valuation.

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Speaker 1: It matters in the sense that I think you're rightly

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Speaker 1: implying that President should not be staking the prestige of

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Speaker 1: his office, let alone his valuable Twitter time, on the

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Speaker 1: fluctuations of global markets. It's a it's a crazy thing.

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Speaker 1: If he cares about the currency, then he's got to

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Speaker 1: have a fiscal policy that's consistent with a strong, sustainable

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Speaker 1: US dollar. If he cares about oil markets, then he

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Speaker 1: has done what he should do, which was to deregulate.

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Speaker 1: I'm not a big fan of it, but if what

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Speaker 1: he cares about his lowering oil prices, the deregulation of

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Speaker 1: energy in the US is going to have an effect

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Speaker 1: on that because it increases supply. So you know, the

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Speaker 1: chatter about it doesn't really help anything, he just sets

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Speaker 1: him up to look a little silly. Okay, but let's

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Speaker 1: let me just push back a little bit at imposing

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Speaker 1: because this is a different world. One could argue where

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Speaker 1: direct communication between leaders and the public is not only

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Speaker 1: more accessible, but perhaps even more important and can help

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Speaker 1: frame the debates than negotiations, indeed even the conversations that

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Speaker 1: will then be had in private, and that this is

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Speaker 1: just one more tool of master negotiator. I sorry, I

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Speaker 1: think that's ridiculous. Uh. The all prices set in global

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Speaker 1: markets by millions of decisions every day, by millions of

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Speaker 1: people in businesses, the President Trump's chatter has no effect

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Speaker 1: on any of those decisions. The currency. Some people will,

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Speaker 1: in the end, especially traders, will decide to take a punt,

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Speaker 1: as they used to say in the UK, on what

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Speaker 1: way the dollar is gonna fluctuate if it seems like

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Speaker 1: the Trump administration wants a weaker dollar. But again, it

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Speaker 1: has no effect on the actual intervention behavior of other countries,

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Speaker 1: let alone the federal reserve, let alone the funder medals

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Speaker 1: of economic growth. So again, if if you're trying to

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Speaker 1: day trade, I guess it matters, But we shouldn't kid

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Speaker 1: ourselves if the president is running policy by Twitter, and

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Speaker 1: that creates an uncertainty over the whole economy, if it's

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Speaker 1: contradictory to the underlying economic trend, and you start to

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Speaker 1: wonder about what the direction of policy is. Sure, that

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Speaker 1: has an effect, but it's not a master negotiator tactic.

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Speaker 1: Well but if if, indeed, as you describe that, it

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Speaker 1: doesn't have any effect on the price of oil, because

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Speaker 1: the price of oil is set by thousands of other independent,

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Speaker 1: millions actions, millions of other actions, then why would you

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Speaker 1: describe it as being damaging to the prestige of the

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Speaker 1: office of the president. Because it's just like if I say,

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Speaker 1: I'm going to uh lose weight if the Patriots don't

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Speaker 1: win the Super Bowls. Patriots don't win the Super Bowl unfortunately,

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Speaker 1: and I'm still fat. People start looking at you. Why that?

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Speaker 1: Do you have any self discipline? Why the hell would

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Speaker 1: you say such a stupid thing? Similarly, with the president

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Speaker 1: talking about oil prices, all right, let's move on to

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Speaker 1: another topic that I know that you're familiar with, and

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Speaker 1: this is the fiscal responsibility of the United States. Projected

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Speaker 1: deficits of one and a half trillion dollars UH that

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Speaker 1: the GDP ratios moving higher, outpacing some countries even in

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Speaker 1: your pian unions such as Italy. Disreport from the International

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Speaker 1: Monetary Fund this week. Do you believe that the United

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Speaker 1: States is headed for a perhaps a repeat of the

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Speaker 1: Japan's uh fiscal and political sort of deadlock over the

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Speaker 1: last previous decades. No, actually I don't, because the Japanese

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Speaker 1: situation is driven a lot also by really unfavorable demographics

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Speaker 1: and by a set of strange politics in a very

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Speaker 1: different direction. And their problem is not so much deadlock.

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Speaker 1: Their problem is lack of competition um in. In the

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Speaker 1: US case, though, and you're absolutely right to raise the

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Speaker 1: huge surge upward in US debt projections for the next

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Speaker 1: several years, there is a legitimate reason to be concerned

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Speaker 1: that we're wasting money that could be used for other

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Speaker 1: purposes and we're losing the buffer. Vit Or Gaspar was

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Speaker 1: on Surveillance TV on Bloomberg Racent just a couple of

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Speaker 1: hours ago. You need fiscal policy to have a buffer

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Speaker 1: in case something bad happens, and and we're throwing that away.

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Speaker 1: Speaking with Adam Posen, he is an economist. He is

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Speaker 1: also president of the Peterson Institute for International Economics, and

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Speaker 1: he is also sits on the Panel of Economic Advisors

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Speaker 1: to the U S Congressional Budget Office. If you, indeed,

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Speaker 1: you probably do have the ear of variety of central

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Speaker 1: bankers around the world. You have been an advisor to

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Speaker 1: the Bank of England and also been an advisor to

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Speaker 1: a variety of other central banks previously. What would you

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Speaker 1: what would you counsel them right now in terms of

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Speaker 1: their interest rate policy? Given the fact that you have

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Speaker 1: a relatively strong US economy, low unemployment, you also have

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Speaker 1: historically low interest rates, but you also have fiscal stimulus

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Speaker 1: in the United States. Well, um, you're very kind in

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Speaker 1: your scripture of me, but I actually was a policy

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Speaker 1: maker Bank Ofing. I don't know if I have any

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Speaker 1: influence still, Um, I think what I would counsel is

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Speaker 1: has to be very country specific. I mean that's in

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Speaker 1: the end central banker should be modest and be thinking

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Speaker 1: about the data flows in their individual countries. You're absolutely

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Speaker 1: right that a huge factor to take into account now

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Speaker 1: in the US is this fiscal stimulus on top of

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Speaker 1: low unemployment, on top of pretty good growth. I still

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Speaker 1: don't think the inflation risks are that high that the

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Speaker 1: fit has to be terribly paranoid about it. But um,

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Speaker 1: it does add to the risk of overheating, and it

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Speaker 1: does mean that the central bank has to be concerned

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Speaker 1: about what happens if we end up in another recession.

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Speaker 1: For other central banks like the Bank of Japan, the

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Speaker 1: European Central Bank, the issue is don't get caught up

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Speaker 1: in this talk about normalization. You need your economy to

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Speaker 1: be normal before you put your interest rates to be

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Speaker 1: in a positive realm, and Europe is on very good

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Speaker 1: course to do that, but it's coming off of some

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Speaker 1: very very large output gaps, very very large unemployment rates.

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Speaker 1: And again you're not seeing the inflation yet in Germany.

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Speaker 1: I mean just now you're just starting to see real

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Speaker 1: wage growth in Germany after many years of boom. So

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Speaker 1: I think the concerns that the central bank should have

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Speaker 1: should still be on the on the side of not

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Speaker 1: cutting off a recovery. If if you were in a

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Speaker 1: room with a group of investors and they wanted to

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Speaker 1: know Adam Posen's view of US interest rates, what would

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Speaker 1: you tell them for the next let's say twelve months, Well, um,

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Speaker 1: again you kind of ask. I would say that one

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Speaker 1: thing is don't get freaked out about this recent uh

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Speaker 1: supposed yeld curve in version. This was as as your

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Speaker 1: next guest is more capable of speaking about, this was

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Speaker 1: a standard kind of thing. Early in the tightening cycle,

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Speaker 1: you get a little bit of a flattened yeld curve.

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Speaker 1: We still have a rising long rate. I think the

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Speaker 1: investors have to worry more about the trade risk, the

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Speaker 1: US China conflict risk having a potentially very large effect

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Speaker 1: on equities um. And then finally, in terms of interest rates,

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Speaker 1: I would think that you you want to look at

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Speaker 1: the mortgage market, um, and that's actually held up pretty well,

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Speaker 1: um And and but keep your eye on that is

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Speaker 1: when the when the interest rate cycle starts really to bite.

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Speaker 1: I want to thank you very much for spending time

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Speaker 1: with us. Adam Posing He is president of the Peterson

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Speaker 1: Institute for International Economics. He is the author of such

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Speaker 1: books as Restoring Japan's Economic Growth and Inflation targeting Lessons

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Speaker 1: from the International Experience, and that the co author of

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Speaker 1: that book was none of the the other than a former

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Speaker 1: Federal Reserve chair chairman of Ben Bernankey coming up on

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Speaker 1: a Bloomberg surveillance More from the International Monetary Funds Spring

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Speaker 1: meeting in Washington, d C. With my co host and

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Speaker 1: colleague Tom Keene. Also with us is a Bell matteos Ilago,

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Speaker 1: black Rock Investment Institute, Chief Multi asset Strategists. My next

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Speaker 1: guest is no stranger to the International Monetary Fund, no

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Speaker 1: stranger to the world of international finance. Adjoining me now

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Speaker 1: is UH Well, an expert when it comes to all

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Speaker 1: things international, Isabel matteos Ilago, Black Rock Investment Institutes. A

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Speaker 1: Chief multi assets strategist, Isabel mateos Ilago. Thank you very

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Speaker 1: much for being with us. Thank you for having me.

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Speaker 1: I also, I also want to note that you are

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Speaker 1: the author of such late night reading as the Internet

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Speaker 1: internationalization of Emerging markets currencies, a balance between risks and rewards,

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Speaker 1: as well as evaluation of the I M S role

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Speaker 1: in a poverty reduction strategy. So well done to you.

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Speaker 1: I'm based on your fifteen years at the International Monetary

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Speaker 1: Fund and now at black Rock. When you read that

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Speaker 1: there is such a level of popular discontent around the

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Speaker 1: world at a time when those who look at the

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Speaker 1: economic data point to relatively low unemployment, relatively low inflation,

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Speaker 1: as well as a rather benign UH domestic Uh I

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Speaker 1: would say social issues. I mean you you don't see

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Speaker 1: huge increases in poverty. UM, what accounts for this general discontent? Well,

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Speaker 1: I think it's clearly the fact that the impact of

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Speaker 1: the recovery in recent years has been felt much more

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Speaker 1: strongly by the upper tiers of the society than by

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Speaker 1: the than by the poorer ones. And there are we're

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Speaker 1: seeing a very fast based change in the way the

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Speaker 1: labor market is evolving. Technology is disintermediating a lot of

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Speaker 1: a lot of jobs, and people are feeling more more

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Speaker 1: more vulnerable. And I think to me, one very important

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Speaker 1: message coming out of the the IMF analysis for these UH,

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Speaker 1: for these spring meetings is that even though the near

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Speaker 1: term outlook is quite positive, quite constructive, if you look

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Speaker 1: beyond twenty nineteen, actually things are beginning to look a

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Speaker 1: bit more dire and there are some very serious long

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Speaker 1: term challenges to to address and UH and and I

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Speaker 1: think the Fund is right in a sort of ringing

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Speaker 1: the alarm that nobody seems to be focusing on on

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Speaker 1: on those challenges nearly enough. Are are the the professionals

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Speaker 1: at the International Monetary Fund? You believe that those are

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Speaker 1: the appropriate people to address these challenges or is it

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Speaker 1: something for individual governments, Well, no, clearly these issues can

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Speaker 1: only be addressed by by each govern moment are and

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Speaker 1: some of it it has to be done at a

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Speaker 1: national level, some of it a lot of it actually

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Speaker 1: needs to happen at at subnational level, which which in

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Speaker 1: some cases can be a complication. But the role of

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Speaker 1: the IMF can be to draw attention to these challenges,

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Speaker 1: which in many cases are common. Things like aging populations

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Speaker 1: is a challenge that many countries confront, things like needing

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Speaker 1: to retool a very large share of the working population

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Speaker 1: so that they can remain attached to the labor market

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Speaker 1: even as the nature of jobs is changing very fast. Again,

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Speaker 1: it's a challenge that affects pretty much every country on

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Speaker 1: the face of the of the planet, and so the

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Speaker 1: the IMF can can play a very useful role in

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Speaker 1: identifying potential remedies uh and and helping countries compare experience

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Speaker 1: in these areas. But but first and foremost, the I

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Speaker 1: think there's an important role that the fund is playing

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Speaker 1: in drawing tension to these longer term challenges that people

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Speaker 1: are not sufficiently focusing on right now. Can you point

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Speaker 1: to any specific countries where you feel that the officials

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Speaker 1: and the political class are actually making a positive contribution

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Speaker 1: to these issues. Because I know that you also have

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Speaker 1: a background of the Ministry of Finance of France. Well,

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Speaker 1: I think France, as a matter of fact, is is

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Speaker 1: definitely one country where uh, reforming the training system is

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Speaker 1: a key priority of the government in order to make

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Speaker 1: it more fit for for the future. I think it's

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Speaker 1: still early days, and you know, the government has been

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Speaker 1: in place for for just about a year, so they're

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Speaker 1: just getting started, but that they're definitely focused very strongly

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Speaker 1: on on this and realizing that the current system both

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Speaker 1: of initial education and continuous training is not is not

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Speaker 1: up to the task. Based on your experience, is there

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Speaker 1: a political event that investors are over reacting to, such

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Speaker 1: as the Italian election? No, I would say the Italian elections,

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Speaker 1: if anything, we've been surprised by the lack of a

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Speaker 1: of a market reaction, considering that the outcome which saw uh,

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Speaker 1: you know what one might say, our populist parties essentially

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Speaker 1: get the largest share of the vote. That you know,

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Speaker 1: that should have been an adverse market adverse impact, and

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Speaker 1: in reality markets barely reacted to that outcome. Now, you know,

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Speaker 1: it's still negotiations is still ongoing. We don't know what

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Speaker 1: parties are going to be part of the new government

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Speaker 1: in Italy, so right now markets are in wait and

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Speaker 1: c mode. But if anything, we've been surprised by how

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Speaker 1: subdued the the market reaction has been considering the vulnerabilities

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Speaker 1: of Italy, particularly on the on the fiscal front. But

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Speaker 1: if there's one, actually we gotta leave it there. But

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Speaker 1: I want to thank you very much. Isabel mateos Lago,

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Speaker 1: Chief a multi asset a strategist at a black Rock.

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Speaker 1: David Lipton is the American representative. He has four titles here,

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Speaker 1: but usually to Madame Legard, he's the important number two.

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Speaker 1: Many of you will know John Lipsky of another time

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Speaker 1: in play serving in the same important dude, he's Dr Lipton.

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Speaker 1: Wonderful to see you again. What do you do every

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Speaker 1: day for Madame Legarde? What's the real job of the

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Speaker 1: first deputy director? To manage the staff and the work

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Speaker 1: of the staff and make sure that everybody is uh

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Speaker 1: doing what they've got to be doing. Thinking about the policy,

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Speaker 1: the strategy and the crisis situations give us the stereotype

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Speaker 1: of one PhD making the green book the Blue Book,

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Speaker 1: the Fiscal Book. Give us an example of who who

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Speaker 1: that PhD is. It's giving you your brain power. You know,

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Speaker 1: we've got people from all around the world. They're the

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Speaker 1: very well educated PhD economists. But what separates them from

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Speaker 1: others is we are clinical economics economists, meaning you have

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Speaker 1: to practice what you preach. It has to not just

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Speaker 1: work in theory, it has to work in practice. And

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Speaker 1: these are people who've been doing this around the world

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Speaker 1: in real world situations, dealing with the actual problems and

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Speaker 1: the leaders who have to bring about the changes. The

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Speaker 1: zeitgeist of the nine fifties and sixties I m F

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Speaker 1: was maybe over a week, over a quarter, maybe out

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Speaker 1: six months. The zeitgeist now is one or two days.

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Speaker 1: What do you see here within these spring meetia where

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Speaker 1: we have to be agile. What everyone is saying this week,

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Speaker 1: one way or another is very simple. Things are good,

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Speaker 1: but they're getting risky. And our message, of course, is

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Speaker 1: in that kind of setting, while things are still good,

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Speaker 1: it's time to try to prolong this recovery in ways

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Speaker 1: that will be sustainable and prepare for those risks, try

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Speaker 1: to lessen the risks and be in a better position

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Speaker 1: to deal with them if they materialize, you have a

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Speaker 1: beautiful social media effort. I can tell you that in

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Speaker 1: the bars now, maybe Arsenal football with the British continue

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Speaker 1: today will be different. But in the bars of the

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Speaker 1: I m F of cocktails, there is one video people

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Speaker 1: are looking at and it's the debt video of all

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Speaker 1: the nations with improving debt structure, and there's one nation

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Speaker 1: with a red bar, and it's the United States of America.

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Speaker 1: Is the United States of America's saving for a rainy day? Well,

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Speaker 1: there are debt issues all around the world. The key

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Speaker 1: number you're referring to is a hundred and sixty four trillion.

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Speaker 1: That's a big number. That's more than twice global GDP.

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Speaker 1: So there are a range of countries around the world

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Speaker 1: that will not have the buffers, will not have the

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Speaker 1: space and room to maneuver if something goes wrong, and

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Speaker 1: so they should be doing something about that, trying to

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Speaker 1: rebuild space. The United States is in that category. It's

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Speaker 1: important and we've been saying this years at the US

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Speaker 1: soon reduces the budget deficit and tries to get the

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Speaker 1: debt to GDP ratio to come down, because you never

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Speaker 1: know what will happen tomorrow. The arch theory for all

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Speaker 1: Americans and frankly for many in the advanced economy is

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Speaker 1: growth will solve everything within your forecast in the blue book,

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Speaker 1: your world Economic Outlook. Thank you, Marie Sobsfeld. Can you

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Speaker 1: yank it over to the brown book the fiscal space

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Speaker 1: and say the growth will be there for every unique story,

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Speaker 1: including the United States. Well, we would like to see people, countries,

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Speaker 1: all of our member countries try to take steps to

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Speaker 1: improve growth in the medium term, because this is a

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Speaker 1: cycle and you have to look over the crest of

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Speaker 1: the hill and see what's going to come. And we

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Speaker 1: believe that actually potential growth will be somewhat lower in

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Speaker 1: the future uh than it's been in the past, So

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Speaker 1: they will have to be affirmative steps through infrastructure and

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Speaker 1: structure reforms to improve the growth prospects. But I would

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Speaker 1: say that there are there are there are new wild

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Speaker 1: cards on the horizons. I think example, well, the three

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Speaker 1: subjects non traditional subjects in a sense, that are on

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Speaker 1: everyone's minds this week are the three t s, Trade, technology,

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Speaker 1: and trust. Trade as a semi traditional subject because it

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Speaker 1: used to be a big deal, but everyone's been in

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Speaker 1: agreement for years that there should be liberal trade. We

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Speaker 1: need to on trade. We need to pivot from where

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Speaker 1: we are. Two countries that have gained from globalization and

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Speaker 1: know their future is linked to globalization, but are now

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Speaker 1: big enough to matter. They need to be thinking about

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Speaker 1: opening up their own economies. And at the same time,

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Speaker 1: the United States needs to be letting go of uh

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Speaker 1: unilateral pressures to achieve its goals. Here at the here,

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Speaker 1: at these meetings, people are really now talking about all

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Speaker 1: together trying to find ways to shift to more market access,

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Speaker 1: more competition. Countries are now strong enough to open themselves

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Speaker 1: up to competition. They will all gain the template. This

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Speaker 1: is so important, David. The template here is a multilateral

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Speaker 1: effort in this idea of trust butter stuff against an

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Speaker 1: America with the president who is to be kind bilateral,

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Speaker 1: maybe unilateral, or maybe my way or the highway. How

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Speaker 1: do you draw the present administration into a more successful

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Speaker 1: trust relationship. I think that they're political. I think the

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Speaker 1: breakdown and trust is very is very broad in the

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Speaker 1: United States, in Europe. In many places, trust is um

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Speaker 1: between international partners. Trust in national institutions is diminished, and

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Speaker 1: I think that's a problem. The way it has to

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Speaker 1: work is that people cooperate and show that cooperation leads

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Speaker 1: to gains, and then you start to rebuild sense that

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Speaker 1: there is something to be achieved together. I was talking

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Speaker 1: to Jason Furman about the wonderful economist Robert Barrow and

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Speaker 1: the trust over time are we destroying within your study

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Speaker 1: of trust at the IMF, I did a panel on this,

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Speaker 1: and Dr Lipton will do a panel on this as well.

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Speaker 1: Do large deficits, do burgeoning debt over the long term,

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Speaker 1: they must destroy institutional and societal trust. I think the

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Speaker 1: globalization and dislocation, the financial crisis, technology, all of those

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Speaker 1: things have led to an erosion of trust. People don't

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Speaker 1: believe that institutions government has taken care of them, and

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Speaker 1: so there's globalization. Uh, you know, we've been saying this

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Speaker 1: for years. Globalization has to be managed in a way

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Speaker 1: that it is going to be durable. You have to

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Speaker 1: deal with the dislocations that come from globalization, and I think,

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Speaker 1: as you're saying, you have to make sure that you

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Speaker 1: maintain stability. Because the financial crisis was the biggest destroyer

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Speaker 1: of trust. We've not really we've recovered in the sense

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Speaker 1: that people trust financial institutions because we did a huge

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Speaker 1: reform to make banks safe again. But more broadly, it's

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Speaker 1: very important to maintain uh stability of public finances in

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Speaker 1: order to that people will trust in their governments. Within

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Speaker 1: this is China and within this is a trade This

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Speaker 1: has been a wonderful discussion centered on the United States,

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Speaker 1: but there are changes in the Pacific room. There changes

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Speaker 1: in China, and maybe the dialogue into May is about

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Speaker 1: t p P. The President swings back and forth. Who

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Speaker 1: knows where the president will be on t p P review.

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Speaker 1: The I m F stands on the efficacy the benefits

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Speaker 1: that all can see from TPP even a China potentially

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Speaker 1: excluded from it. I mean at the root is the

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Speaker 1: proposition that we still can gain from more interconnectedness and

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Speaker 1: that that's key to the future of the of the

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Speaker 1: Asia Pacific region UM and I think that that there's

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Speaker 1: there's certainly having high standard trade agreements where there can

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Speaker 1: be a deepening of links and countries can open themselves

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Speaker 1: up to competition and everyone gains from competition. It's a positive.

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Speaker 1: Some game is important. It's been a shame that the

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Speaker 1: United States hasn't found yet found a way to participate

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Speaker 1: in that because the United States could be a real

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Speaker 1: driver of growth. David Lipton, thank you for this spirited

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Speaker 1: conversation today, of course with the International Monetary Fund. Karen,

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Speaker 1: thank you so much. It's real pleasure right now, uh

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Speaker 1: here at the meetings of the International Monetary Fund pim

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Speaker 1: Fox in New York. Obviously joining me Fransie Lucas as

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Speaker 1: well for a very important of view. It is on Europe,

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Speaker 1: it is on trade, and it's on dead but it's

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Speaker 1: also on the fact that France scene was to move

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Speaker 1: to the l Garb and that new five thousand square

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Speaker 1: foot unit. You've got right, I mean, why does everybody

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Speaker 1: want to move to port If I was a little

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Speaker 1: bit older thought, I mean, you caught my attention because

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Speaker 1: there is the sun. But of course they're incentives being

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Speaker 1: put by Portugal to attract pensioners that would then receive

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Speaker 1: the money tax free in Portugal. So it is in

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Speaker 1: the free conversation time we are about to have. He

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Speaker 1: is both the Finance Minister of Portugal and the europe

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Speaker 1: Group President. He is Mario Santana. Thank you so much.

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Speaker 1: Thank you. Portugally is a great country and it's a

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Speaker 1: very safe place business exactly. Not all of your European

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Speaker 1: counterparts are actually happy about these tax incentives. What would

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Speaker 1: you say to them? And it's it's it's quite marginal

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Speaker 1: in any sense. And Portugal enjoy is a very good

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Speaker 1: economic perspective. We are in a safe harbor in terms

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Speaker 1: of the fiscal position. We are committed with European Project,

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Speaker 1: so we are a very faithful member of the group

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Speaker 1: and we work together with all those countries to clear

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Speaker 1: this subject. But on the tax incentives and the tax

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Speaker 1: cuts in certain parts, or the tax in centers offered

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Speaker 1: the pensures, what kind of impact doesn't have on real estate?

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Speaker 1: I mean, as I mentioned to you, it's it's it's

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Speaker 1: really marginal at this stage, it's not the country is

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Speaker 1: improving very much in terms of its economic condition. We

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Speaker 1: have been committed with an adjustment program that really is

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Speaker 1: paying off in terms of the results. The country is

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Speaker 1: now in an inclusive growth trajectory. It's very important to

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Speaker 1: count on everybody. Mr. Where's your appropriate value for the

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Speaker 1: Europe We follow every day, each country, each story you

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Speaker 1: straddle not only your responsibilities for Portugal, but really for

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Speaker 1: the rest of Europe as well. In your head, do

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Speaker 1: you have a right value for the Euro. We really

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Speaker 1: believe on the on that that the value of the

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Speaker 1: euro reflects the fundamentals the economics behind it, and we

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Speaker 1: do see that as in the present situation to occur

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Speaker 1: so in terms of trade, and we believe in multi corporation.

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Speaker 1: We think it's very important to keep it at that level.

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Speaker 1: Europe is a very open economy. It's from the among

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Speaker 1: the largest economies in the world. It's a more open one.

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Speaker 1: So we really believe in this value. I know Forsting

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Speaker 1: wants to talk about with that question, the major themes

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Speaker 1: here are the two teas for me, trade and trust.

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Speaker 1: But your virture gas are of Portugal has provided real

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Speaker 1: leadership to all of the world with this fiscal reports

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Speaker 1: here at the I m L. How do you perceive

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Speaker 1: the neutralion dollar deficits of America? The report is essentially

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Speaker 1: scathing to the United States. Is well, it's um, it's

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Speaker 1: a it's an issue in the United States. You know,

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Speaker 1: the text policy and the fiscal policy in the US

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Speaker 1: has been quite active lately. We think Europe as a

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Speaker 1: different stance. We have an almost on average balanced budget.

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Speaker 1: Most countries in Europe have also very strong fiscal positions.

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Speaker 1: We are quite coordinated at the European Union level. That's

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Speaker 1: very important for US. UH. Taking the all countries into

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Speaker 1: into skill policies that are sustainable is very important. Okay.

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Speaker 1: But if if you're suggesting that actually the US is

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Speaker 1: not sustainable like many cons are, what is the ramification

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Speaker 1: for your What impact does that have on your Again,

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Speaker 1: the Europe is in a very strong position economically, we

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Speaker 1: are growing. The coordination of business cycles in Europe today

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Speaker 1: is at a high level. We need to make our

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Speaker 1: own job at home, reform the euro Area, having our

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Speaker 1: competitiveness increased, this is our focus. We need to to

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Speaker 1: do that in coordination with other countries in a multi

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Speaker 1: as setting. This is true for trade, this is also

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Speaker 1: true for our fistal policy. But we are quite confident

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Speaker 1: on our trajectory. Minister, do you think that the Eurogroup

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Speaker 1: or Europe as a whole can actually get exemption from

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Speaker 1: terroriffs imposed by the US forever? This is a major

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Speaker 1: of concern, I must say, and that's why the European

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Speaker 1: Commission is in close contact with the US administration to

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Speaker 1: make sure that the temporary exemption is indeed permanent. We

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Speaker 1: want to against stress the role of multirat local cooperation.

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Speaker 1: It's very very important to keep that at that level.

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Speaker 1: How do you respond to the United States idea of

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Speaker 1: a new bilateral discourse worldwide? This is a multilateral institution.

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Speaker 1: Portugal has led a multilateral debate in Europe for years,

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Speaker 1: if not for centuries. How do you react to a

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Speaker 1: bilateral my way or the highway? Trump administration again reaffirming

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Speaker 1: the importance and the evidence that more stilateral cooperation takes

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Speaker 1: us much uh h further in the invetter, in the

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Speaker 1: in the in the in the future, and in economic

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Speaker 1: terms than simply bilateralism. But what do you worry about

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Speaker 1: the European economy? But I mean is it trade or

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Speaker 1: is it also high euro You mean in terms of

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Speaker 1: the growth of their economy? Where is you about GDP?

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Speaker 1: To be to my focus now as president of the

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Speaker 1: Group is to improve the institutional capacity of the euro

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Speaker 1: We implemented very important reforms lately. This need to be

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Speaker 1: complemented by as I mentioned yesterday, going the next mile.

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Speaker 1: We know that we need to do that and this

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Speaker 1: is our main focus. Minister, thank you so much for

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Speaker 1: joining us, and well, of course, so you're your president

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Speaker 1: administer a finance of port Gold Mario something don't. Thanks

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00:32:13,800 --> 00:32:18,000
Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen

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00:32:18,280 --> 00:32:23,600
Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform

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Speaker 1: you prefer. I'm on Twitter at Tom Keene before the podcast.

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Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio