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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: dayba QT podcast, available every morning on Apple, Spotify or

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Speaker 1: wherever you listen. It's Monday, the tenth of June. In London,

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Speaker 1: I'm Caroline Hepke and.

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Speaker 2: In Brussels I'm Stephen Carroll. Coming up today, As EU

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Speaker 2: voters boost their support for far right candidates in France, Germany,

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Speaker 2: Italy and beyond, we look at what it means for

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Speaker 2: the Block plus French President Emmanuel Macron calls a snap

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Speaker 2: legislative election in a bid to halt Marine le Penn's advance.

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Speaker 1: And here in the UK, labor U turns some plans

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Speaker 1: to reintroduce a tax free pension limit. As all the

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Speaker 1: political parties finalize their manifestos, let's start with a roundup

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Speaker 1: of our top stories.

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Speaker 2: Emmanuel Macron has called a snap legislative election in France

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Speaker 2: after his party came a distant second to the far

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Speaker 2: right in Sunday's European Parliament vote. Marine Leapenn's national rally

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Speaker 2: scored more than double the fourteen points six percent attributed

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Speaker 2: to the President's Renaissance Party. Speaking in an address to

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Speaker 2: the nation after polls closed, Macron said the National Assembly

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Speaker 2: election was a chance to determine France's future.

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Speaker 1: So this is young, this is a serious and weighty decision.

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Speaker 1: Above all, it is an act of trust, confidence.

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Speaker 3: You mission compatriots, the ability.

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Speaker 1: Of the French people to make the just choice and

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Speaker 1: for future generations.

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Speaker 2: Emmanuel Macron speaking there, his position as president won't be

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Speaker 2: affected by the vote. His party and their allies are

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Speaker 2: currently the largest group in the French National Assembly, but

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Speaker 2: don't hold a majority. Far right parties also make gains

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Speaker 2: elsewhere in Europe. In Germany, Chancellor Olaf Schultz Social Democrats

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Speaker 2: recorded their worst ever EU Parliament result, falling to third

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Speaker 2: place behind the far right Alternative for Germany and the

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Speaker 2: center right Christian Democrats. Meanwhile, in Italy, Prime Minister Georgia

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Speaker 2: Maloney's right wing Brothers of Italy Party one between twenty

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Speaker 2: seven and thirty one percent of the vote, compared with

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Speaker 2: just six percent in twenty nineteen. Despite these results, the

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Speaker 2: centrist alliance, which back Ursula Vandelion to become EU Commissioned President,

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Speaker 2: maintained its majority, led by her European People's Party.

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Speaker 1: We won the European elections. We are by far the

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Speaker 1: strongest party. We are the anchor of stability.

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Speaker 2: Ursulavangelion, speaking at the European Parliament after the election results,

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Speaker 2: she plans to begin talks with her allies in the

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Speaker 2: Socialist and Democrats and Centrist renew groups on securing their

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Speaker 2: support from today. The eurofell to its weakest level in

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Speaker 2: nearly a month as markets pars the results from across

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Speaker 2: Europe and assessed the risks from the snap election. In France,

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Speaker 2: currency weakened buy as much as zero point four percent

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Speaker 2: against the dollar, retreating alongside French bond futures. Traders have

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Speaker 2: also paired bets on further interest rate cuts from the

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Speaker 2: European Central Bank after data out on Friday show the

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Speaker 2: US job market holding up better than expected.

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Speaker 1: Meanwhile, let's turn to Israel, where Benny Gantz has resigned

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Speaker 1: from the emergency government and Corps for elections there, a

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Speaker 1: centrist member of Israel's three man war cabinet, gans criticized

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Speaker 1: Prime Minister Benjamin et Nyahu over his handling of the

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Speaker 1: war against Hamas, saying that a true victory puts quote

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Speaker 1: bringing home the hostages above political survival. His resignation announcement

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Speaker 1: was postponed by a day after the Israeli military freed

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Speaker 1: four hostages in an operation in central Gaza. More than

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Speaker 1: two hundred and seventy Palestinians were killed in the operation,

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Speaker 1: according to the Hamas run Health Ministry. Now, the Labor

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Speaker 1: Party has scrapped plans to cap tax free pensions gains,

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Speaker 1: leaving them with even fewer paths to raise government revenue.

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Speaker 1: The change comes as UK political parties finalize their election

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Speaker 1: manifestos this week. Boomberg's James Walcock has more.

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Speaker 4: There is an internal slogan in Labor HQ no complacency.

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Speaker 4: The party have a twenty point lead in the polls

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Speaker 4: three weeks ahead of an election, and yet they are

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Speaker 4: actively trying to make themselves a smaller target by ditching

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Speaker 4: difficult policies. Leader Keith Starmer has also ruled out raising

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Speaker 4: income tax, corporation tax and VAT. The Conservatives, meanwhile, have

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Speaker 4: the opposite problem. Former Defense Secrety of Liam Fox says

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Speaker 4: it's time to move on from party leader Richie Sinak's

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Speaker 4: early exit from D Day commemorations.

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Speaker 5: He apologized, he said it was wrong. Let's get over it.

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Speaker 5: People make misjudgments. Let's talk about what really matters. DD

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Speaker 5: was talking about the security of Europe. There is a

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Speaker 5: threat and I think the most important thing is keeping

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Speaker 5: our country safe.

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Speaker 4: The Tori's historically poor position in the polls means Liberal

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Speaker 4: Democrats from Reform increasingly see a chance of becoming England's

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Speaker 4: second largest party. Both announce economic policies later today in London.

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Speaker 4: James Orcock Bloomberg Radio.

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Speaker 1: In Business News. Apple's AI successes will be on display

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Speaker 1: at its developer conference later as the tecture tries to

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Speaker 1: prove its cutting edge credentials. Bloomberg has learned that the

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Speaker 1: company will lay out of suite of features that it

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Speaker 1: caused Apple Intelligence. Its new push is expected to lead

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Speaker 1: to new hardware, including a roadbot for domestic tasks, a

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Speaker 1: revamp of Siri, and camera equipped AirPods. Steven KOMORNI, you've

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Speaker 1: been in Brussels today and over the weekend, and you

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Speaker 1: were there Friday for us as well, so it's been

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Speaker 1: a really busy weekend for you. The European election results,

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Speaker 1: they've caused something of a shock wave in parts In

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Speaker 1: many parts of Europe, I mean a push truck to

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Speaker 1: the right, if not really a kind of landslide for

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Speaker 1: far right parties. How did these results do you think

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Speaker 1: will they be seen in Brussels? How were they received

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Speaker 1: last night?

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Speaker 2: Well, it was interesting watching the country by country projections

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Speaker 2: rolling in because it depended on when polls had closed.

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Speaker 2: When we heard how the picture was shaping up. Germany

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Speaker 2: was one of the earlier results or projections that we

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Speaker 2: had yesterday in the European Parliament, and immediately it was

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Speaker 2: very clear it was a very bad night for German

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Speaker 2: Chancellor Olaf Schultz. The AfD, despite the problems that they'd

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Speaker 2: had in their campaign and the controversies that had surrounded

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Speaker 2: that party, had still managed to increase their share of

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Speaker 2: the vote reasonably significantly as well. But it was clearly

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Speaker 2: bad news for Olaff Schultz. Then came the exit polls

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Speaker 2: from France, showing, in fact results that were not terribly

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Speaker 2: far from what opinion polls had been projecting, but nonetheless

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Speaker 2: putting Emmanuel Macron's Renaissance Party in a distant second to

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Speaker 2: the Party of Marrying Lupen the national rally, which came

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Speaker 2: in with just under thirty two percent of the vote.

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Speaker 2: It was clearly a very bad night for Emmanual Macron.

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Speaker 2: Then we heard that he was going to make this

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Speaker 2: national address and this shock announcement of a legislative vote

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Speaker 2: coming now at the end of this month of first

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Speaker 2: round and a second round on the seventh of July.

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Speaker 2: It's worth pointing out that in other parts of the

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Speaker 2: continent things looked better for the incumbents. Georgia Maloney's Brothers

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Speaker 2: of Italy party did extremely well in Italy as had

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Speaker 2: been expected. Pedro Sanchez and Spain his left wing his

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Speaker 2: center Left party held its position and its vote chare

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Speaker 2: in the elections. There So a contrasting picture from some

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Speaker 2: and certainly the overall picture from Europe in fact not

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Speaker 2: dramatically changed for the centrist parties, but some big shocks,

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Speaker 2: particularly in France and Germany.

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Speaker 1: Yeah, it's fascinating, isn't it. Also the interplay of the

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Speaker 1: European elections with domestic and politics. And we're worth adding,

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Speaker 1: of course that the UK not voting. This is the

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Speaker 1: first time actually the UK is not voting in these

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Speaker 1: European elections, obviously post Brexit. But very interesting, as you say,

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Speaker 1: the shock decision then for Macua to call a domestic

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Speaker 1: legislative election on the back of you know, supranational European results.

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Speaker 2: Yeah, it's often these elections are often described as being

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Speaker 2: second order elections, where we do seem to see voters

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Speaker 2: vote more towards the extremes than they do in the center.

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Speaker 2: So that made it even more interesting than a man

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Speaker 2: Macron decided to make this decision to call these snap

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Speaker 2: elections for later this month. Of course, Macron himself won't

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Speaker 2: be affected by this. He'll still be president no matter

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Speaker 2: how these elections go, but it sets up for what

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Speaker 2: could be a very interesting battle for who will become

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Speaker 2: the biggest party in the National Assembly. At the moment,

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Speaker 2: Macron has the is the Macron has Allies are the

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Speaker 2: biggest group in the Parliament, but they don't currently have

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Speaker 2: a majority. Let's dig into some of the reaction in

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Speaker 2: France this morning. We've got Bloomberg's Carroling Connor with us

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Speaker 2: from Paris. Carollen, good morning. This is a big gamble

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Speaker 2: for Emmanuel Macron. Why did he do it?

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Speaker 5: You know?

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Speaker 3: Some say it's a gamble, some say it's actually pretty audacious.

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Speaker 3: Because I was reading out a quote from the forma

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Speaker 3: chief economist from the IMF for Blanche. He says, well,

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Speaker 3: if the national rally gets a majority in the next

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Speaker 3: of French Parliament. Then you get two messy years in

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Speaker 3: French politics, but you don't get My independ in twenty

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Speaker 3: twenty seven. So perhaps that's what my is trying to

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Speaker 3: do with the wake up call he's been saying over

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Speaker 3: the past a few days before even these European elections,

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Speaker 3: calling the French to wake up to face this far right,

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Speaker 3: these demagogues as he called them last night in his

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Speaker 3: speech when he announced this nap elections. Clearly there is

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Speaker 3: a high risk if you look at the European elections

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Speaker 3: results in France last night, because Jordan Vanella, the candidate

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Speaker 3: of My Independence Party, got thirty two percent, that's more

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Speaker 3: than double the score of Knew Europe, the party of

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Speaker 3: Emmanuel Macon, and actually, interestingly coming third, you got a

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Speaker 3: comeback of the Socialists with fl Gluxman at around fourteen percent.

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Speaker 3: But clearly this was seen as the only solution by many,

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Speaker 3: including the Republicans, who have been supporting the fragile majority

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Speaker 3: that Macon has got at the moment at the National Assembly.

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Speaker 2: Karlie, what would it mean for policymaker in France if

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Speaker 2: these European election results were replicated in the National Assembly,

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Speaker 2: If a Manual Macrond were to lose a big part

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Speaker 2: of his majority.

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Speaker 3: You know, Stephen, the system for the legislative elections is

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Speaker 3: quite different because it's a two round system. There was

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Speaker 3: only run round for these European elections, and usually this

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Speaker 3: two run system puts the extremes, puts the far right

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Speaker 3: at a disadvantage. So we'll see how this spans out

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Speaker 3: for these legislative elections. It really depends on the kind

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Speaker 3: of majority he is getting. Is he going to be

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Speaker 3: able to form some alliances perhaps with the Republicans again

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Speaker 3: like he did during the first part of this mandatee

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Speaker 3: in twenty twenty two, or is it going to be

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Speaker 3: a large majority of the far right. And then we

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Speaker 3: have so called coabitation, which means in France that the

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Speaker 3: Prime Minister is from a party and the president is

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Speaker 3: from a different party. As you know, this has happened

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Speaker 3: three times under the fifth through public so this could

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Speaker 3: happen again and clearly that would mean a clear shift

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Speaker 3: of policy at the European and at the French level

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Speaker 3: away from trade deals, away from climate change, and perhaps

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Speaker 3: more focus on the issues of migration, border policy, defense spending.

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Speaker 2: Karling, you've brought up one of my favorite words in

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Speaker 2: French politics, which is cohabitation, which covers good and bad

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Speaker 2: relationships between parties. But certainly very interesting to watch how

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Speaker 2: the rest of this campaign plays out. Carolyn Connau in Paris,

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Speaker 2: thank you very much for joining us this morning, Caroline.

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Speaker 2: This is of course one part of the broader picture

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Speaker 2: here in the European Union. As to how this plays

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Speaker 2: out from here, it's interesting if you do look at

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Speaker 2: what happens next at an EU level, because that process

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Speaker 2: will continue no matter what's happening in France. We are

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Speaker 2: seeing those centrist parties, that alliance that backed Ursula Vonderline

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Speaker 2: having the majority, which would normally allow them to move

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Speaker 2: forward to be a to nominate or to support her

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Speaker 2: in a second term as EU Commissioned President. But the

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Speaker 2: nomination power does lie with European leaders, so it will

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Speaker 2: have to be their choice to nominate Erslavandeline for another

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Speaker 2: term as European Commission President. The matts in the Parliament

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Speaker 2: look good, so it does look like that they're going

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Speaker 2: into these negotiations in a position of strength. That was

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Speaker 2: certainly the message that we heard from Urcelavangeline last night,

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Speaker 2: underlining and actually when I spoke to Manfred Weber, who's

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Speaker 2: the president of the European People's Party. He also made

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Speaker 2: the point that they won the election, they gained seats,

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Speaker 2: which actually was a very good performance for them in

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Speaker 2: this as well. So they're going into a position now

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Speaker 2: where they're going to start talks today with their partners,

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Speaker 2: the Socialist and Democrats and the Centrist for Anew group

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Speaker 2: as well, to draw up what they suppose their program

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Speaker 2: of support is preparing for that European parliamentary vote. And

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Speaker 2: then we'll have the leaders start to discuss who is

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Speaker 2: they're going to put forward. Will it be erslavanderline or

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Speaker 2: could there be a surprise there as well, And those

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Speaker 2: discussions will start at a dinner this day now next

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Speaker 2: week and informal dinner where those discussions will start too.

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Speaker 2: But lots of other interesting parts of this election to

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Speaker 2: dig into as well.

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Speaker 1: Yeah, no, indeed, And I found it very interesting that

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Speaker 1: Carolyne Connan talked about how it was an audacious move

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Speaker 1: by Emmanuel Macaw. I mean, also quite a risky one

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Speaker 1: in terms of a sylvonderline though, you know, perhaps the

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Speaker 1: most recognizable face of European politics, you know, outside of Europe,

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Speaker 1: what chance is there that she will now continue in

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Speaker 1: her role. What else might von Delane want to do

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Speaker 1: in terms of the agenda that she will have You know,

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Speaker 1: for Europe.

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Speaker 2: It looks good and her party is very much pushing

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Speaker 2: that she should be the name that goes forward to

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Speaker 2: the European Parliament for a vote. But even though they

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Speaker 2: do still have a majority, which is important, it's worth

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Speaker 2: remembering the last time around there was also talks with

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Speaker 2: the Greens about getting them on board. We spoke to

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Speaker 2: the Green one of the Green's lead candidates last night

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Speaker 2: as well, who told us that they would be open

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Speaker 2: to discussions with Arslavanderline and her party over supporting her

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Speaker 2: in that vote in the European Parliament, but they would

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Speaker 2: want to see unsurprisingly, climate policies put centrally into the

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Speaker 2: program for the next five years for the European Commission.

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Speaker 2: I put that to Manfred Weber actually, who was the

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Speaker 2: president of the the EPP, and he said, actually, the

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Speaker 2: Greens have some convincing to do on their side as well,

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Speaker 2: because they haven't supported some of the key measures up

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Speaker 2: utt Low as well. So there is some horse trading

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Speaker 2: that's going to happen behind the scenes. There's been a

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Speaker 2: lot of talk before this election about how the Arslavangeline

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Speaker 2: might seek support from some of those further right parties

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Speaker 2: as well, particularly in the European Conservative and reformist groups.

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Speaker 2: There was lots of talk around Arslvangeline forming alliances with

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Speaker 2: Georgia Maloney's party as well. It doesn't look at this

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Speaker 2: stage like that's going to be necessary, but all of

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Speaker 2: that horse trading still has to play out, and we

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Speaker 2: may see some parties switch groups as well. So the

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Speaker 2: matt isn't entirely clear, but certainly the position from here

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Speaker 2: looks good for them. Also, it's worth pointing out, Caroline,

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Speaker 2: the number of politicians I spoke to last night who

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Speaker 2: talked about having to reflect on what these results mean,

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Speaker 2: this increase in far right representation, what does it mean

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Speaker 2: about what they're going to have to address. Looking at

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Speaker 2: the opinion polls out of France yesterday in after the

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Speaker 2: European election vote as well, the question of immigration very

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Speaker 2: high for voters, The question of inflation and purchasing power

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Speaker 2: also very key as well, the environment, health systems falling

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Speaker 2: down the list there of priorities for voters that's going

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Speaker 2: to be in the minds of politicians as they seek

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Speaker 2: to assemble this governing coalition or this governing alliance. From

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Speaker 2: here on, this is Bloomberg Daybreak Europe, your morning brief

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Speaker 2: on the stories making news from London to Wall Street

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Speaker 2: and beyond.

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