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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Daybreak Europe podcast, available every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Thursday, the

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Speaker 2: twenty seventh of June in London.

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Speaker 1: I'm Stephen Carroll and I'm Caroline Hepget at the City

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Speaker 1: UK's annual conference, where the finance industry tells us Britain

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Speaker 1: is in pole position to capitalize on uncertainty elsewhere. Plus,

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Speaker 1: the gathering comes as Starmer and Sunac have gone head

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Speaker 1: to head in a TV debate for the last time

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Speaker 1: before next week's UK general election, will dig into their

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Speaker 1: pitches on tax and growth.

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Speaker 2: Meanwhile, in France, former president of francois Land says he'll

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Speaker 2: help build a unity government to block the far right

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Speaker 2: from gaining power. Let's start with a rand up of

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Speaker 2: our top stories.

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Speaker 1: Britain's finance industry is well placed to benefit from growing

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Speaker 1: political uncertainty in other nations, according to the group that

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Speaker 1: represents much of the sector in the country. The bullish

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Speaker 1: sentiment comes as recent days from EY showed London still

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Speaker 1: leading European cities in attracting foreign direct investment into financial services.

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Speaker 1: The CEO of the City UK Miles Selig now says

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Speaker 1: that the capital is well placed to benefit from a

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Speaker 1: political consensus focused on delivering stable government.

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Speaker 3: You know, the UK actually looks like the politically stable

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Speaker 3: option amongst the major economies, certainly in the West. So

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Speaker 3: from our point of view, the better the relationship with

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Speaker 3: the EU, the more beneficial that tends to be in

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Speaker 3: terms of just smoothness of working, ease of working together,

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Speaker 3: a desire to do things together. What I don't expect

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Speaker 3: is any radical shift immediately.

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Speaker 1: However, The City UK's Miles Selig also warned that whoever

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Speaker 1: wins the election will need to achieve rapid growth or

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Speaker 1: face a tough choice between higher taxes or lower spending.

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Speaker 1: That's likely to prove challenging, with the Bank of England

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Speaker 1: forecasting a growth rate of just one and a quarter

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Speaker 1: percent into twenty six. Meanwhile, according to a snap pole,

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Speaker 1: Kis Starmer and Rishisunac tied the final televised leader's debates

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Speaker 1: of the UK general election campaign last night. Economic proposals

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Speaker 1: featured heavily during the BBC event, as the Labor leader

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Speaker 1: Kiirs Starmer set out his party's plans on taxation.

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Speaker 3: We have set out in our manifesto all of our plans,

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Speaker 3: but we will not be increasing income tax, national insurance

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Speaker 3: or vato.

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Speaker 1: Kis Starmer, then, who also labeled the Prime minister as

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Speaker 1: being out of touch with voters. Vishisunac meanwhile retorted by

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Speaker 1: questioning the clarity of Labour's own fiscal proposals.

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Speaker 4: I've set out my plans clearly and I appreciate actually

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Speaker 4: they're not everyone's going to agree with me. Kirs Starmer

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Speaker 4: is not being straight with you about his plans to

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Speaker 4: raise your taxes. I don't think that's leadership.

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Speaker 1: Prime Minister Rishisunac also repeated previous claims that a Labor

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Speaker 1: government would raise the tax burden, which Starmer said was false.

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Speaker 1: But despite both leaders claims, Bloomberg Economics predicts that whoever

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Speaker 1: who in the election, the next administration will need to

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Speaker 1: find twenty billion pounds in additional revenue to deliver current

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Speaker 1: spending plans.

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Speaker 2: The former French president Francoislon says he's ready to build

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Speaker 2: a coalition to govern and after the elections if the

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Speaker 2: results deliver a hung parliament. Alando is running as a

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Speaker 2: candidate for the left wing New Popular Front alliance. He

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Speaker 2: told French channel BFMTV that if neither his group nor

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Speaker 2: the fire Right win a majority, he'll help to negotiate

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Speaker 2: a unity government.

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Speaker 4: I think it's the role of figures like me, given

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Speaker 4: the position I've held, to find solutions, because we must

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Speaker 4: find solutions. If there isn't a majority under the constitution,

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Speaker 4: we can't go back to the voters for one year.

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Speaker 4: What do we do for a year let the country

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Speaker 4: fall apart. We must find solutions because decisions need to

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Speaker 4: be taken.

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Speaker 2: Franoilon, speaking through a translator. Polls show the far right

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Speaker 2: National Rally is set to take the largest number of

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Speaker 2: seats in Parliament, ahead of the left's new Popular Front

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Speaker 2: and the President Macrons group in third, but surveys also

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Speaker 2: indicated unlikely that anyone would have an absolute majority. European

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Speaker 2: Union leaders are poised to nominate Ursula vonder Lyne for

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Speaker 2: a second term as European Commission President. They're also expected

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Speaker 2: to select former Portuguese Prime Minister Antonio Costa as European

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Speaker 2: Council President and Estoni as Prime Minister Kayak Callis as

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Speaker 2: Foreign Affairs chief. Vonderlon's nomination would still need to be

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Speaker 2: confirmed by the European Parliament, where she may struggle to

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Speaker 2: win a majority of votes. In the United States, Joe

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Speaker 2: Biden and Donald Trump are set to return to the

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Speaker 2: debate stage, but their upcoming head to head could be

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Speaker 2: defined by some new guidelines. Bloomberg's Ed Baxter has more.

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Speaker 5: The rules have been drafted by CNN and agreed to

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Speaker 5: by both campaigns. First, moderators Jake Tapper, Dana Bash and

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Speaker 5: their control room will have control of the mics, and

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Speaker 5: the mics will be muted unless it is the candidate's

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Speaker 5: turn to speak. Second, there will be no law studio

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Speaker 5: audience to react to what traditionally have been called moments

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Speaker 5: in the past debates. Biden won the coin flip, meaning

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Speaker 5: he will stand at the lectern to the speaker's right,

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Speaker 5: and Trump will get the closing statement ninety minutes with

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Speaker 5: two commercial breaks. Ed Baxter, Bloomberg Radio.

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Speaker 2: The era of big paychecks for Chinese financiers is fast

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Speaker 2: coming to an end, according to exclusive reporting from Bloomberg,

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Speaker 2: as some of the industry's biggest companies imposed strict new

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Speaker 2: limits to comply with President Chejingping's Common Prosperity campaign. China's

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Speaker 2: largest financial conglomerates of our senior staff to forego deferred

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Speaker 2: bonuses and in some cases return pay from previous years

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Speaker 2: to comply with a pre tax cap. Here's our executive

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Speaker 2: editor for Greater China, John Liu.

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Speaker 6: What we know is that the cap that's been put

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Speaker 6: in place is about two point nine million un It's

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Speaker 6: about four hundred thousand US dollars on an annual basis

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Speaker 6: before tax. We know that conglomerates including China Merchants, China

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Speaker 6: Everbright Group, China CITIC, they've been telling some of their

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Speaker 6: employees that they will not be making more than that cap,

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Speaker 6: that any bonuses that they were owed over that amount

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Speaker 6: will not be paid, and some of those employees are

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Speaker 6: even being asked to return some of the pay that

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Speaker 6: was an excess of that amount from previous years.

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Speaker 2: Johnny also points out this all comes as China's economy

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Speaker 2: struggles to regain momentum in twenty twenty four, as confidence

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Speaker 2: creators among domestic consumers and international investors. Well, Caroline, you

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Speaker 2: are at the annual conference of the Financial Industry Lobby

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Speaker 2: Group the City UK. What a well timed event. This

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Speaker 2: is just a week out from the general election. Lots

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Speaker 2: to talk about.

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Speaker 1: Yeah, absolutely, Bloomberg of course, also this week hosted the

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Speaker 1: Business Debate between Kemmy bay Knock and Jonathan Reynolds. As

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Speaker 1: you say, with just a week to go until the vote.

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Speaker 1: There was also a big leaders debate last night on

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Speaker 1: the BBC between Starmer and So. Now, yes, it's a

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Speaker 1: fabulous hot and sunny day in Westminster, so we're right

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Speaker 1: by the Houses of Parliament, but we're talking about finance

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Speaker 1: at the City UK's annual conference. We haven't actually heard

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Speaker 1: that much from financial services or business leaders who, of course,

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Speaker 1: at the beginning of the campaign just over one hundred

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Speaker 1: of them put out a letter public letter backing labor,

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Speaker 1: so this is very timely. Currently, investors are also much

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Speaker 1: more bullish on sterling according to the CFTC data. This

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Speaker 1: also seems to be a lot more interesting, a lot

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Speaker 1: more faith in UK stocks, especially mid cap stocks. A

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Speaker 1: lot of that is to do with more instability elsewhere,

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Speaker 1: at least uncertain votes in France in the US. So

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Speaker 1: I've been speaking to the City UK CEO Miles Selick

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Speaker 1: talking about the situation here in the UK where we've

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Speaker 1: had five prime ministers in eight years, only two general elections.

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Speaker 1: Another one in a week's time. They are very reassured

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Speaker 1: by the level of engagement, higher level of engagement that

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Speaker 1: they seen from the Labor Party. I mean, he did

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Speaker 1: talk about both the main political parties reaching out a

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Speaker 1: lot to the financial services, but especially focused on labor

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Speaker 1: who are so far ahead in the polls. He was saying,

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Speaker 1: Miles that the engagement by labor has been the best

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Speaker 1: since Tony Blair in nineteen ninety seven. So they've been

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Speaker 1: reassured by that engagement and that Starmer has been adamant

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Speaker 1: that there'll be no major surprises for the industry. But

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Speaker 1: of course there is huge focus on what are the

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Speaker 1: mechanisms going to be for delivering economic growth to the UK.

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Speaker 1: Everybody wants to see that, but how is that actually

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Speaker 1: going to happen In the short term. There may be

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Speaker 1: a lot of energy, that's what Mars Slic is expecting

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Speaker 1: from the Labor Party if they were to win, let's say,

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Speaker 1: oh any new government, that there would be much more energy.

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Speaker 1: But actually it's about the medium term outlook for the UK.

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Speaker 1: This is what Marcelek had to say on that.

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Speaker 3: I think there is absolutely a question to ask here

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Speaker 3: that if the the assumptions that are made on growth

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Speaker 3: being able to deliver aren't upheld, don't actually happen? Do

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Speaker 3: we find ourselves in eighteen months twenty four months where

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Speaker 3: you have a government that is going to have to

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Speaker 3: reach to the lever marked higher taxes.

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Speaker 1: So Miles Selek there talking about what may happen further

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Speaker 1: down the line. So I think that is the issue.

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Speaker 1: If growth can't be delivered quickly, what happens then when

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Speaker 1: we all understand the limited amount of fiscal headroom that

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Speaker 1: the UK government has.

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Speaker 2: Yeah, I mean it's certainly going to be a challenging

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Speaker 2: situation for whoever wins the election as well. I mean specifically,

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Speaker 2: what does the City UK and the financial industry want

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Speaker 2: to be hearing from this new government. We talk a

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Speaker 2: lot about the quite American concept and politics of the

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Speaker 2: first one hundred days of a government. What would those

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Speaker 2: hundred days look like if the City UK got their way.

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Speaker 1: Yeah, of course, the parliamentary system in Britain does work differently.

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Speaker 1: Will Sell it was happy that both parties are signed

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Speaker 1: up to the Financial Services and Markets Bill, which is

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Speaker 1: sort of the main bit of change really in the UK. Also,

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Speaker 1: you know, he was very positive about the windsor framework

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Speaker 1: about the Edinburgh reforms that the previous or that the

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Speaker 1: Conservative government has brought in. But he pointed to a

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Speaker 1: couple of interesting issues on regulation. I think everyone here

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Speaker 1: wants to understand whether the burden of regulation is going

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Speaker 1: to be greater under the next government or whether it's

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Speaker 1: going to be reduced. And obviously people want it perhaps

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Speaker 1: not necessarily to be reduced, but least to be focused

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Speaker 1: more on allowing beneficial risk taking in the UK, i e.

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Speaker 1: Growth risk taking. So mars Selix saying that you know,

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Speaker 1: maybe it's within the Labor Party's DNA to focus on

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Speaker 1: consumer regulation, but outside of things that are specifically focused

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Speaker 1: on consumers, they expect regulators to come on and a

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Speaker 1: much greater scrutiny to deliver more for Britain. Also when

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Speaker 1: it comes to Europe again seen as a major tool

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Speaker 1: or major lever that the UK could use to try

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Speaker 1: to improve growth. The mood music is better thanks to

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Speaker 1: the wins of framework. But actually Selix says that he

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Speaker 1: doesn't think that there's going to be any radical renegotiation

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Speaker 1: on the UK's position with the EU in the first

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Speaker 1: couple of weeks. There will be the European political community

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Speaker 1: meeting here in the UK. Lots of European leaders will

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Speaker 1: be here on the eighteenth of July. That may be

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Speaker 1: an important sort of moment to kind of re establish

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Speaker 1: the UK's ties with the EU, but it's not going

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Speaker 1: to mean anything radically different.

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Speaker 2: Maybe, Okay, Karlene Hepkerk live at the City UK Annual Conference,

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Speaker 2: thank you very much for joining us. But let's stay

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Speaker 2: with that European theme and European Union leaders set to

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Speaker 2: nominator as Lavander line for a second term as Commission

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Speaker 2: President when they meet later. A deal on the EU's

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Speaker 2: top jobs will also's the European Council resident's he go

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Speaker 2: to the form of Portuguese Prime Minister Antonio Costa and

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Speaker 2: Estonian Prime Minister Kaya Kanas will become the EU's High

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Speaker 2: representative for Foreign affairs on security. Let's go to Brussels

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Speaker 2: and speaks boombergs Oliver Crook for more. Oliver, how difficult

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Speaker 2: to deal was this to negotiate to get these top

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Speaker 2: jobs done?

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Speaker 7: Yeah, well, Stephen, it was a lot harder than anyone

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Speaker 7: had anticipated. I remember that. You know, we headed from

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Speaker 7: a number of sources ahead of the last week's meeting

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Speaker 7: that basically this is all set and done, and that

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Speaker 7: they were going to just sort of rubber stamp this

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Speaker 7: and was going to fly through the leaders. That obviously

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Speaker 7: did not happen, and we've heard some of the similar

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Speaker 7: things coming into the meeting today, so let's see what happens.

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Speaker 7: But as you say, you know, these top jobs, the

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Speaker 7: sort of commissioned president, the Foreign Affairs chief and the

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Speaker 7: European Council president, these are extremely crucial and everything basically

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Speaker 7: triggles down from there for the all the other commissions.

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Speaker 7: But also what they need to do today is also

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Speaker 7: hammer out the Strategic Agenda, which is basically this policy

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Speaker 7: document that sets out the sort of architecture and the

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Speaker 7: outline for the EU and its policy priorities for the

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Speaker 7: next five years under this new government. In there you'll

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Speaker 7: find all this sort of similar themes of Ukraine defense

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Speaker 7: and competitiveness. And of course Zelenski will be here as

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Speaker 7: well today.

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Speaker 2: Yeah, indeed, and that's going to be a key issue

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Speaker 2: in focus as well. But just on the mechanics, you know,

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Speaker 2: so that we're expecting the leaders to sign off on

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Speaker 2: these names today. Although I know it's your note of

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Speaker 2: caution from the expectations around the last meeting on this.

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Speaker 2: Then of course it has to go to the European

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Speaker 2: Parliament and they have to approve our SS LeVander Lyon

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Speaker 2: and the job for another five years. How difficult is

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Speaker 2: that going to be?

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Speaker 6: Well?

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Speaker 7: I think that is where kind of one of the

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Speaker 7: wild cards could could emanate. But of course let's not

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Speaker 7: forget also, Stephen, we have to sort of appoint the

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Speaker 7: formal jobs and the formal institutions of power within the EU.

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Speaker 7: There's also a lot of soft power that we need

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Speaker 7: to sort of begin to sort of worry a little

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Speaker 7: bit about. I mean, Maloney yesterday in Italian Parliament absolutely

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Speaker 7: scathing about the sort of process of how this goes.

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Speaker 7: The job appointments has gone. Unfortunately for her, she does

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Speaker 7: not actually have a voice in appointing the top jobs directly,

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Speaker 7: but where she could have some influences in exactly what

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Speaker 7: you're talking about when it gets to the European Parliament,

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Speaker 7: because as you know, these are secret. This goes in

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Speaker 7: front of all of the members of Parliament and you

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Speaker 7: need a majority there and maybe you have maybe not

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Speaker 7: everybody in line on the S and D side supporting bonderline,

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Speaker 7: and if you don't have that support from Maloney, or

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Speaker 7: you have a sort of a block going there, you

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Speaker 7: could have a serious problem for getting that through the Parliament.

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Speaker 2: Yeah, indeed, that's going to be the next policy or

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Speaker 2: the next hurdle I suppose for this process to overcome

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Speaker 2: and talk us through. Then you mentioned Vladimir Zelenski. The

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Speaker 2: issue of how the EU approaches Ukraine in the future now,

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Speaker 2: things like defense and security. What should we be expecting.

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Speaker 7: I mean, there's going to be very big questions. Let's

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Speaker 7: not also forget that the EU presidency now goes to

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Speaker 7: Orbon and Hungary on July the first, which obviously hangs

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Speaker 7: over all of this. Orbon who's been blocking a lot

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Speaker 7: of the sort of EU funds that are supposed to

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Speaker 7: be going to Ukraine. But the expectation for today is

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Speaker 7: Alenski will begin the sort of meeting with the EU leaders.

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Speaker 7: We're expecting a sort of formal security pledge from the EU,

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Speaker 7: kind of formalizing some of the things they've really agreed

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Speaker 7: to for the time to go forward. There's, of course

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Speaker 7: also the question of the frozen Russian assets. I mean,

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Speaker 7: from that G seven agreement it's still an IOU. They

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Speaker 7: need to work out the mechanics of that. But let's

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Speaker 7: also not forget something else that happened this week which

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Speaker 7: was pretty crucial is the beginning of formal accession negotiations

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Speaker 7: of Ukraine joining the EU that began earlier this week,

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Speaker 7: and that will be a topic in front of everybody

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Speaker 7: here in the EU. And it's sort of very significant

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Speaker 7: symbolically because of course, this whole war with Russia which

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Speaker 7: began back in twenty fourteen, was really on that very

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Speaker 7: subject of the Ukrainians kicking out the sort of Russian

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Speaker 7: leaning president and trying to move more towards the EU.

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Speaker 7: And so that will begin. Of course, though that is

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Speaker 7: nothing there's nothing really concrete that comes to that, and

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Speaker 7: there's all these questions about whether the ammunition and all

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Speaker 7: that stuff is actually making it to Ukraine. But from

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Speaker 7: a symbolic perspective, this will be a sort of very

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Speaker 7: significant conversation happening in Brussels today.

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Speaker 2: Well, alongside those conversations, the backdrop, of course is there's

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Speaker 2: an election looming in France as well. How does that

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Speaker 2: fit into the dynamic and Brussels.

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Speaker 7: Yeah, Seve, and I mean this is really the elephant

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Speaker 7: in the room. My Colin really has been ever since

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Speaker 7: those EU elections, and you know it will mean that

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Speaker 7: basically a lot of his sort of priorities, his sort

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Speaker 7: of initiatives, will fall down the ladder. I mean, he's

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Speaker 7: been one of the most vocal advocates about joint debt

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Speaker 7: and to build out European defense. But there's obviously also

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Speaker 7: a consequence of what kind of government we get out

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Speaker 7: of France and what that will mean for the EU,

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Speaker 7: and both on the left and on the right there

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Speaker 7: it's going to create some problems for the EU. From

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Speaker 7: the left already, we know the fiscal situation in France

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Speaker 7: is very strained, violating the EU's budget rules. So if

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Speaker 7: the Left comes in there's much more deficit spending that

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Speaker 7: could be a problem. La Mayor was sort of, you know,

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Speaker 7: saying that there are concerns around Forrexit, and on the

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Speaker 7: right we heard it for this week from Jordan Burdella,

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Speaker 7: you know, in the debate that they basically want to

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Speaker 7: fund a lot of their initiatives within France by cutting

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Speaker 7: their contributions to the EU budget. So all of this

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Speaker 7: will bear in Brussels.

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