1 00:00:00,080 --> 00:00:13,040 Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane 2 00:00:13,480 --> 00:00:17,560 Speaker 1: jay Ley. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:34,159 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Now 5 00:00:34,240 --> 00:00:36,600 Speaker 1: joining us, I'm gonna just say this flat out the 6 00:00:36,640 --> 00:00:39,519 Speaker 1: Auto interview of our Davos and that is because I'm 7 00:00:39,560 --> 00:00:41,800 Speaker 1: sure I can speak for those in early morning America. 8 00:00:42,200 --> 00:00:45,440 Speaker 1: Volkswagen is not the Volkswagon that we know. Far more 9 00:00:45,479 --> 00:00:47,960 Speaker 1: than that, it is the auto company of the world, 10 00:00:48,320 --> 00:00:52,160 Speaker 1: path breaking and so many things, including this regulatory mess 11 00:00:52,200 --> 00:00:56,560 Speaker 1: and that regulatory mess called into strained out Herbert's Volkswagen 12 00:00:56,640 --> 00:01:00,840 Speaker 1: chief executive officer and a mechanical engineer from Munich says, uh, 13 00:01:00,920 --> 00:01:04,680 Speaker 1: this morning, I am driving around the World Economic Forum 14 00:01:04,760 --> 00:01:09,600 Speaker 1: in these gorgeous v W eight share vans and busses 15 00:01:10,400 --> 00:01:13,920 Speaker 1: on terrofs to the United States. The United States wants 16 00:01:13,959 --> 00:01:18,759 Speaker 1: to keep your product, your vans, your trucks out of America. 17 00:01:18,840 --> 00:01:20,880 Speaker 1: How are we going to get the advantage of what 18 00:01:20,959 --> 00:01:24,959 Speaker 1: I'm driving around in davoson get more of those trucks 19 00:01:25,080 --> 00:01:28,280 Speaker 1: into America. No, you all, you have all those advantages 20 00:01:28,360 --> 00:01:31,039 Speaker 1: we are exporting. We don't exploit those trucks because the 21 00:01:31,080 --> 00:01:35,800 Speaker 1: market was small. But the next generation electric we call 22 00:01:35,880 --> 00:01:40,240 Speaker 1: it bus I d bus. It goes back to the microbus, 23 00:01:40,440 --> 00:01:43,480 Speaker 1: which was very successful in the sixties, and so we 24 00:01:43,560 --> 00:01:47,800 Speaker 1: were bringing that product coming two thousand, twenty two, twenty three, 25 00:01:48,840 --> 00:01:51,520 Speaker 1: and then you will have a much nicer car than 26 00:01:51,640 --> 00:01:53,360 Speaker 1: than the cars. What do you need from the United 27 00:01:53,400 --> 00:01:56,280 Speaker 1: States on terror relief to get some of your products 28 00:01:56,320 --> 00:01:59,160 Speaker 1: more into the United States. We're still optimistic today. We 29 00:01:59,200 --> 00:02:03,960 Speaker 1: have we have very very low tariffs for for import 30 00:02:04,040 --> 00:02:07,240 Speaker 1: to the United States. We have a manufacturing base in 31 00:02:07,240 --> 00:02:10,800 Speaker 1: the United States, and we are increasing that manufacturing case, 32 00:02:10,880 --> 00:02:13,840 Speaker 1: and we are doing everything to avoid tariffs for importing 33 00:02:13,840 --> 00:02:16,240 Speaker 1: our cars to the US. Even as if we're making progress, 34 00:02:16,280 --> 00:02:19,600 Speaker 1: which has announced a eight hundred million dollar investment in 35 00:02:19,639 --> 00:02:23,959 Speaker 1: our Chattanooga factory. We received a positive tweet from the President, 36 00:02:24,040 --> 00:02:25,760 Speaker 1: so we think we are in the right way. And 37 00:02:25,760 --> 00:02:28,360 Speaker 1: you're one of the very few European chief executives that 38 00:02:28,400 --> 00:02:30,880 Speaker 1: has actually met with President face to face. Do you 39 00:02:30,919 --> 00:02:34,920 Speaker 1: think we'll see more political friction between countries and twenty 40 00:02:35,000 --> 00:02:40,240 Speaker 1: nineteen or less, You know, I don't hope, you know. 41 00:02:40,320 --> 00:02:43,639 Speaker 1: And I'm still optimistic because there is always a lot 42 00:02:43,720 --> 00:02:46,000 Speaker 1: to lose on both sides. And I think the President 43 00:02:46,120 --> 00:02:49,680 Speaker 1: is well. On the other hand, I understand his case, 44 00:02:49,800 --> 00:02:53,280 Speaker 1: you know. And my background is manufacturing, and the United States, 45 00:02:53,320 --> 00:02:58,080 Speaker 1: probably forty fifty years ago was really a strong manufacturing 46 00:02:58,120 --> 00:03:00,520 Speaker 1: base of the world. This machine to linn the streets, 47 00:03:00,560 --> 00:03:04,000 Speaker 1: and a lot of of of this industry came down 48 00:03:04,160 --> 00:03:07,320 Speaker 1: and and and lost ground. So I understand this case 49 00:03:08,000 --> 00:03:12,600 Speaker 1: and building up manufacturing again it is probably a valuable 50 00:03:12,639 --> 00:03:15,680 Speaker 1: approject for every society. So I understand the case, but 51 00:03:15,720 --> 00:03:18,360 Speaker 1: it takes time, and but we want to contribute. We 52 00:03:18,400 --> 00:03:21,480 Speaker 1: see the US as a big market chance. We have 53 00:03:21,520 --> 00:03:24,239 Speaker 1: a small market share with our brands. Still we want 54 00:03:24,280 --> 00:03:26,560 Speaker 1: to grow. We think we can provide the right product 55 00:03:26,560 --> 00:03:28,720 Speaker 1: for the customer. We have a nice heritage in the 56 00:03:29,280 --> 00:03:31,880 Speaker 1: in the United States. Most of the of our potential 57 00:03:31,960 --> 00:03:35,760 Speaker 1: customers know us, know many many have written, have learned 58 00:03:35,840 --> 00:03:38,400 Speaker 1: driving on the folks bag and so Mr He'll talk, 59 00:03:38,440 --> 00:03:40,040 Speaker 1: He'll talk to you about the heritage in a second. 60 00:03:40,040 --> 00:03:41,880 Speaker 1: But I want to ask about China. This is a huge, 61 00:03:42,000 --> 00:03:44,760 Speaker 1: huge market for you, and we saw demand in general 62 00:03:44,800 --> 00:03:47,520 Speaker 1: for cars under pressure also because of the US China 63 00:03:47,560 --> 00:03:50,840 Speaker 1: trade tensions. How do you see China performing this year. No, 64 00:03:51,040 --> 00:03:54,200 Speaker 1: China is for sure is under sread as a market, 65 00:03:54,320 --> 00:03:57,160 Speaker 1: we play a very important role there. We have eighteen 66 00:03:57,200 --> 00:03:59,560 Speaker 1: percent market share with all our brands. We are we 67 00:04:00,160 --> 00:04:02,840 Speaker 1: early to China, so we have perceived kind in the 68 00:04:03,000 --> 00:04:08,720 Speaker 1: country like like a Chinese company grows. We had twenty 69 00:04:08,800 --> 00:04:12,240 Speaker 1: seven years of continuous growth in China. It's also a 70 00:04:12,320 --> 00:04:14,760 Speaker 1: big source of income for US. We're financing a lot 71 00:04:14,800 --> 00:04:18,720 Speaker 1: of investment in future technologies out of China, so it's 72 00:04:18,760 --> 00:04:21,880 Speaker 1: really important. Last year, already, the second half of last 73 00:04:21,960 --> 00:04:25,919 Speaker 1: year was already declining, which is hurting US. We could 74 00:04:25,960 --> 00:04:28,560 Speaker 1: cope because we come with a lot of new products, 75 00:04:28,640 --> 00:04:31,280 Speaker 1: so we could increase our market here. We had a 76 00:04:31,320 --> 00:04:35,520 Speaker 1: slight growth still, but this year will be challenging. And 77 00:04:35,560 --> 00:04:38,839 Speaker 1: I really hope and and trust in the governments that 78 00:04:39,000 --> 00:04:42,160 Speaker 1: they come to arrangements because it's it's a lot, you know, 79 00:04:43,120 --> 00:04:46,039 Speaker 1: economics is a lot about mood of the people, and 80 00:04:46,040 --> 00:04:49,359 Speaker 1: and fegure and and in the right words, and the 81 00:04:49,480 --> 00:04:51,760 Speaker 1: and the few agreements would would help a lot. The 82 00:04:51,839 --> 00:04:54,239 Speaker 1: romance for me is I grew up on a VW Beetle, 83 00:04:54,360 --> 00:04:56,680 Speaker 1: just like in the classic Madman episode, which is the 84 00:04:56,680 --> 00:04:59,920 Speaker 1: first car I learned a drive on. You've moved technologically 85 00:05:00,000 --> 00:05:02,960 Speaker 1: from an engineering standpoint a little bit forward, and you 86 00:05:03,080 --> 00:05:06,279 Speaker 1: have what many in America feel is the Elon Musk killer. 87 00:05:06,520 --> 00:05:09,600 Speaker 1: You've got a tortue automobile. I haven't seen when driving 88 00:05:09,600 --> 00:05:12,159 Speaker 1: around here, is there a tan? Is it coming? Is 89 00:05:12,160 --> 00:05:14,080 Speaker 1: it's coming? It's not up here yet, and it'll be 90 00:05:14,120 --> 00:05:16,240 Speaker 1: here next year in the valley. How are you in 91 00:05:16,360 --> 00:05:20,520 Speaker 1: electric vehicles can kill Ellen Musk and be a Tusla killer. Yeah, 92 00:05:21,120 --> 00:05:24,720 Speaker 1: we really appreciate what what Ellen Musk has been achieving 93 00:05:24,760 --> 00:05:28,520 Speaker 1: and doing and pushing the industry and really promoting electric costs. 94 00:05:28,560 --> 00:05:30,920 Speaker 1: I take him very seriously. Not it's a it's a 95 00:05:30,960 --> 00:05:35,240 Speaker 1: good team, very aggressive team. Uh. But we're seeing when 96 00:05:35,279 --> 00:05:38,839 Speaker 1: it really comes to scaling to exactly to produce all 97 00:05:38,839 --> 00:05:41,240 Speaker 1: over the world, we have a chance to compete. There's 98 00:05:41,240 --> 00:05:43,840 Speaker 1: maybe five people like you have, even put Mary Barr 99 00:05:43,839 --> 00:05:47,120 Speaker 1: in this category that really understand the importance and complexity 100 00:05:47,200 --> 00:05:50,920 Speaker 1: of manufacturing processes. When you look at Tesla in a tent, 101 00:05:51,320 --> 00:05:54,640 Speaker 1: how does a pro manufacturer like you respond, Can you 102 00:05:54,760 --> 00:05:58,839 Speaker 1: get the kind of quality control you need manufacturing in 103 00:05:58,839 --> 00:06:02,320 Speaker 1: a tent. You know, I think this is probably our 104 00:06:02,360 --> 00:06:05,240 Speaker 1: advantage that we are used to scale up plants in 105 00:06:05,320 --> 00:06:07,719 Speaker 1: every other region of the world. We are strong in 106 00:06:07,800 --> 00:06:11,440 Speaker 1: lettin America, strong in China. We can do that. This 107 00:06:11,480 --> 00:06:13,679 Speaker 1: is our advantage that makes us a little bit slower. 108 00:06:14,080 --> 00:06:17,840 Speaker 1: But when we decide when it can become strongly this 109 00:06:17,920 --> 00:06:21,800 Speaker 1: when you look at evaluations, the traditional car manufacturers are 110 00:06:21,920 --> 00:06:23,920 Speaker 1: maybe not seen as the ones that will really deliver 111 00:06:23,960 --> 00:06:25,880 Speaker 1: the electric cars of the future. So do you think 112 00:06:25,920 --> 00:06:31,200 Speaker 1: the number of traditional car manufacturers need to shrink? I 113 00:06:31,240 --> 00:06:34,480 Speaker 1: think all in all, our let's say our industry will 114 00:06:34,640 --> 00:06:37,320 Speaker 1: change a lot in the next ten to twenty years, 115 00:06:37,360 --> 00:06:40,040 Speaker 1: and yes, it will become much more of a let's say, 116 00:06:40,560 --> 00:06:43,920 Speaker 1: it will become more of an Internet logic. No where 117 00:06:43,920 --> 00:06:46,960 Speaker 1: you have let's say, the economies of scale are nearly 118 00:06:47,040 --> 00:06:51,120 Speaker 1: everything because it's all about software computers. So economies of 119 00:06:51,160 --> 00:06:52,960 Speaker 1: scale we play a mat sure all but that is 120 00:06:53,120 --> 00:06:55,560 Speaker 1: that is also an advantage for us because we are 121 00:06:55,600 --> 00:06:59,200 Speaker 1: already big. If we can converge fast into the new 122 00:06:59,240 --> 00:07:02,640 Speaker 1: age of ours, we have a good chance to outperform 123 00:07:02,680 --> 00:07:06,120 Speaker 1: the startups because the startups also have to grow a lot. 124 00:07:06,200 --> 00:07:07,800 Speaker 1: Now they have to invest a lot, they have to 125 00:07:07,839 --> 00:07:11,440 Speaker 1: scale up, and that's why I see that probably the 126 00:07:11,480 --> 00:07:15,960 Speaker 1: startups and and and tech companies are a bit over evaluated, 127 00:07:16,080 --> 00:07:19,520 Speaker 1: and we're probably been unevaluated when it comes to future mobility. 128 00:07:19,600 --> 00:07:22,360 Speaker 1: But doesn't mean I mean how many carmakers are there 129 00:07:22,360 --> 00:07:24,000 Speaker 1: now thirty in the world. Are we going to be 130 00:07:24,080 --> 00:07:27,640 Speaker 1: left for five major ones probably in twenty years. My 131 00:07:27,840 --> 00:07:30,800 Speaker 1: assumption would be that there would be a consolidation process 132 00:07:30,920 --> 00:07:37,080 Speaker 1: because we become more of a let's say tech uh industry. 133 00:07:37,200 --> 00:07:40,080 Speaker 1: Now the economies of scale are even more important than 134 00:07:40,160 --> 00:07:42,480 Speaker 1: to day. In the smartphone world, you have probably four 135 00:07:42,560 --> 00:07:45,760 Speaker 1: or five manufacturers. Now will there be more on the 136 00:07:45,800 --> 00:07:49,880 Speaker 1: car sideeas but as many as today? Probably not. The 137 00:07:49,880 --> 00:07:53,280 Speaker 1: French finance minister told us this morning a Bloomberg exclusive 138 00:07:53,400 --> 00:07:55,680 Speaker 1: we had at first that was going to resigned last night. 139 00:07:55,680 --> 00:08:00,600 Speaker 1: How does that change the automakers? You know how regard 140 00:08:01,200 --> 00:08:04,800 Speaker 1: Carlos I just bought a car from him, uh and 141 00:08:04,800 --> 00:08:07,960 Speaker 1: and he really was a pillar of the industry and 142 00:08:08,000 --> 00:08:11,800 Speaker 1: shape the industry also worldwide, not only the European industry. 143 00:08:12,120 --> 00:08:14,880 Speaker 1: So for sure he's a loss, But there are many 144 00:08:14,920 --> 00:08:19,560 Speaker 1: talented managers which which will probably step in now to 145 00:08:19,600 --> 00:08:22,160 Speaker 1: speak of the sensitivities that Mr Ghan is going under 146 00:08:22,280 --> 00:08:26,400 Speaker 1: right now, the business plan here is the JV the 147 00:08:26,480 --> 00:08:29,760 Speaker 1: relationship that we have between the French and the Japanese. 148 00:08:30,200 --> 00:08:34,439 Speaker 1: What do you learn from this fractured relationship and how 149 00:08:34,480 --> 00:08:40,400 Speaker 1: does it redound over to Volkswagens acquisitions, combinations and joint 150 00:08:40,480 --> 00:08:44,280 Speaker 1: ventures with future companies. I think scale will be even 151 00:08:44,320 --> 00:08:46,240 Speaker 1: more important in the future than it is today, that 152 00:08:46,720 --> 00:08:50,120 Speaker 1: that you have to partner with and you're not only 153 00:08:50,120 --> 00:08:53,000 Speaker 1: have to partner with competitor us, you also you have 154 00:08:53,080 --> 00:08:56,440 Speaker 1: to partner with tech companies and managing such kind of 155 00:08:56,520 --> 00:08:59,040 Speaker 1: network is one of the key skills we need in 156 00:08:59,080 --> 00:09:01,280 Speaker 1: the industry. Are we going to see many more of 157 00:09:01,320 --> 00:09:04,600 Speaker 1: these alliances? I think so? Between what is the truck maker, 158 00:09:04,679 --> 00:09:06,800 Speaker 1: I mean, is it do you have to basically, you know, 159 00:09:06,840 --> 00:09:10,320 Speaker 1: our alliances of two groups that actually you know, complement 160 00:09:10,400 --> 00:09:14,360 Speaker 1: each other or that where you really have synergies. Let 161 00:09:14,360 --> 00:09:17,880 Speaker 1: me just mention what we just agreed with Ford. Now 162 00:09:17,920 --> 00:09:21,880 Speaker 1: we we be partner in the light commercial vehicles segment. 163 00:09:21,960 --> 00:09:24,520 Speaker 1: Now both companies are relatively big. Now we are we 164 00:09:24,600 --> 00:09:27,600 Speaker 1: have enough economies of scale in many segments, but in 165 00:09:27,679 --> 00:09:32,760 Speaker 1: this small segment of commercial light commercial vehicles. We we 166 00:09:32,480 --> 00:09:36,080 Speaker 1: we're not having the enough economies of scale each so 167 00:09:36,240 --> 00:09:39,560 Speaker 1: combining we will be very competitive. And this uh you know, 168 00:09:39,640 --> 00:09:42,280 Speaker 1: this is this is industry, how it works worldwide, a 169 00:09:42,320 --> 00:09:46,040 Speaker 1: global industry, and so partnering makes sense. Where do you 170 00:09:46,080 --> 00:09:47,959 Speaker 1: see that going? I mean, if you look at the 171 00:09:47,960 --> 00:09:52,120 Speaker 1: partnership with Forward, what exactly is the end game? Yeah, 172 00:09:52,600 --> 00:09:55,560 Speaker 1: we know we are we are together with Forward in 173 00:09:55,600 --> 00:09:59,679 Speaker 1: that area to compete against other partnerships. This is an 174 00:09:59,679 --> 00:10:04,080 Speaker 1: open game. Important is that you have, let's add business relation, 175 00:10:04,160 --> 00:10:06,720 Speaker 1: which is a trustful one. Do you have a good 176 00:10:07,360 --> 00:10:11,280 Speaker 1: track record? The advantage of Ford is that we already 177 00:10:11,280 --> 00:10:14,520 Speaker 1: worked with Ford some two or three decades ago in 178 00:10:14,559 --> 00:10:18,880 Speaker 1: Europe together and in Latin America out of Latino. So 179 00:10:19,000 --> 00:10:22,320 Speaker 1: we have a good track record and it just made 180 00:10:22,320 --> 00:10:24,400 Speaker 1: sense for us for Post company in America. When you 181 00:10:24,440 --> 00:10:26,440 Speaker 1: grew up as a kid, you were a Ford family 182 00:10:26,559 --> 00:10:29,840 Speaker 1: or a Chevy family. There was no other day about it. 183 00:10:29,920 --> 00:10:34,920 Speaker 1: Mario Barbs, Marie Bars, trust me, the edgy families at 184 00:10:34,920 --> 00:10:37,080 Speaker 1: a VW beet or with no heat in it for 185 00:10:37,160 --> 00:10:40,520 Speaker 1: the first fifty miles, the romance of the moment and 186 00:10:40,520 --> 00:10:43,760 Speaker 1: trust me, folks we didn't have one was the curming gear. 187 00:10:43,920 --> 00:10:48,240 Speaker 1: It was the definitive design idea. Now now we're getting 188 00:10:48,240 --> 00:10:50,760 Speaker 1: back to design. Now your Porsche product. I'm gonna do 189 00:10:50,760 --> 00:10:53,640 Speaker 1: a shout out to Bentley. It's wonderful to drive down 190 00:10:53,640 --> 00:11:00,480 Speaker 1: Fifth Avenue yesterday. But design is coming back. What are 191 00:11:00,520 --> 00:11:04,360 Speaker 1: you going to do to develop a Volkswagen ethos aesthetic 192 00:11:04,559 --> 00:11:08,280 Speaker 1: worldwide in design as you had with Carmen gear years ago. 193 00:11:08,840 --> 00:11:12,560 Speaker 1: I think we we folks weng remained with an iconic design. 194 00:11:12,559 --> 00:11:14,880 Speaker 1: Now we had that step change between the area of 195 00:11:15,920 --> 00:11:19,520 Speaker 1: the times of people and microbus and then to the golf. 196 00:11:19,640 --> 00:11:23,120 Speaker 1: Golf is is world by our most relevant product, but 197 00:11:23,320 --> 00:11:27,880 Speaker 1: all the design language, all the technical technical package was 198 00:11:27,960 --> 00:11:30,240 Speaker 1: driven by the golf. And now comes another step change, 199 00:11:30,480 --> 00:11:34,320 Speaker 1: the electric change. A step change means that the entire 200 00:11:34,360 --> 00:11:37,600 Speaker 1: design of the car is disrupted. Not from a people 201 00:11:37,679 --> 00:11:39,960 Speaker 1: to a golf. There is a disruption you can see 202 00:11:40,000 --> 00:11:43,920 Speaker 1: that's not evolutionary anymore. And the next disruption will come 203 00:11:44,000 --> 00:11:47,040 Speaker 1: now next year, and of next year we see the 204 00:11:47,080 --> 00:11:49,640 Speaker 1: idea to be launched. It will be similar to the 205 00:11:49,720 --> 00:11:53,480 Speaker 1: disruption from golf, from people to golf. Now it's from 206 00:11:53,480 --> 00:11:55,800 Speaker 1: golf to idea couldn't take it over like it, which 207 00:11:55,840 --> 00:11:58,120 Speaker 1: is a small but highest quality brand of Germany. I 208 00:11:58,160 --> 00:12:00,240 Speaker 1: mean you look at it like a camera, and the 209 00:12:00,320 --> 00:12:04,719 Speaker 1: idea is there's an evolving aesthetic of like through the 210 00:12:04,800 --> 00:12:06,560 Speaker 1: years they got the new fancy one which is all 211 00:12:06,600 --> 00:12:08,960 Speaker 1: stripped down and that do you need to do that 212 00:12:09,040 --> 00:12:11,360 Speaker 1: out of Germany? Do you need to run your global 213 00:12:11,520 --> 00:12:16,040 Speaker 1: platform with the German aesthetic? You know we have Meanwhile, 214 00:12:16,520 --> 00:12:19,760 Speaker 1: and we are a global company means while we're very 215 00:12:19,760 --> 00:12:22,400 Speaker 1: strong in China, very strong Latin America, a bit weaker 216 00:12:22,440 --> 00:12:26,280 Speaker 1: in the U S. Still, but we have design offices 217 00:12:26,320 --> 00:12:28,760 Speaker 1: all over the world because we have to make customer 218 00:12:28,840 --> 00:12:32,840 Speaker 1: happy on the world bad basis, but still it needs 219 00:12:32,840 --> 00:12:35,520 Speaker 1: the ingredients of folks walking design, which has to be 220 00:12:35,559 --> 00:12:39,560 Speaker 1: a bit clean, a bit timeless, not a bit class less, democratic, 221 00:12:39,960 --> 00:12:42,079 Speaker 1: And we're trying to achieve the save in the next 222 00:12:42,120 --> 00:12:44,960 Speaker 1: generation of cars. What are we going to fix Devil's traffic? 223 00:12:44,960 --> 00:12:47,800 Speaker 1: What's the first driverless car coming to Devils. I'm a 224 00:12:47,800 --> 00:12:51,520 Speaker 1: bit conservative on on this. Now I'm driving around with 225 00:12:51,720 --> 00:12:55,800 Speaker 1: lots of prototypes worldwide. There's a lot of investment going 226 00:12:55,840 --> 00:13:00,000 Speaker 1: in there, but really to see their cars then perform 227 00:13:00,080 --> 00:13:02,840 Speaker 1: armbing on the road, not not just being kind of 228 00:13:03,800 --> 00:13:07,600 Speaker 1: a hurdle and and standing around and take time. You 229 00:13:07,720 --> 00:13:12,199 Speaker 1: were correct in that I'm metatoralizing here was a Volkswagen ceo. 230 00:13:13,600 --> 00:13:19,560 Speaker 1: You yeah, I'm in the Volkswagen camp. Will take time. 231 00:13:19,600 --> 00:13:24,160 Speaker 1: Particularly last night at two am outside the piano bar, 232 00:13:38,320 --> 00:13:41,400 Speaker 1: joining us is Jason Board off of Columbia University, out 233 00:13:41,400 --> 00:13:44,440 Speaker 1: of Brown University, long agoing far away. The cool people 234 00:13:44,960 --> 00:13:48,520 Speaker 1: carried Daniel Jurgen's a Prize around campus. And as I've 235 00:13:48,559 --> 00:13:52,000 Speaker 1: told Dr Jurgen, but three people read it at Brown 236 00:13:52,080 --> 00:13:54,240 Speaker 1: University at that time. The only one that read it 237 00:13:54,280 --> 00:13:57,920 Speaker 1: cover to cover was Jason. How big that book? You know, 238 00:13:58,320 --> 00:14:00,200 Speaker 1: I've read it a few times coming. Well, you read 239 00:14:00,240 --> 00:14:02,160 Speaker 1: it cover to cover and you move on from Urgans 240 00:14:02,200 --> 00:14:04,600 Speaker 1: the prize to the Quest, and then you move on 241 00:14:04,640 --> 00:14:07,840 Speaker 1: to the now what for big oil and for national 242 00:14:07,960 --> 00:14:11,480 Speaker 1: and international energy policy? You've got to write the Prize, 243 00:14:11,520 --> 00:14:14,840 Speaker 1: the Quest Volume three. Where are we right now as 244 00:14:14,880 --> 00:14:17,680 Speaker 1: we look forward to the prize? Well that's the conversation 245 00:14:17,760 --> 00:14:20,520 Speaker 1: here in Davos. I think you know, extreme weather, climate 246 00:14:20,640 --> 00:14:22,480 Speaker 1: change top the list of concerns. There's a lot of 247 00:14:22,480 --> 00:14:25,520 Speaker 1: discussion among corporate leaders and abroad recognition of realism in 248 00:14:25,560 --> 00:14:27,280 Speaker 1: a sense that maybe is a little bit new this 249 00:14:27,360 --> 00:14:30,560 Speaker 1: year about just how far away we are, despite the 250 00:14:30,640 --> 00:14:34,280 Speaker 1: tremendous progress and renewable energy, tremendous growth and electric vehicles, 251 00:14:34,280 --> 00:14:36,800 Speaker 1: how far away we are from taking global goals like 252 00:14:36,840 --> 00:14:39,880 Speaker 1: the Paris Agreement to degree target. Seriously, how far away 253 00:14:39,920 --> 00:14:43,960 Speaker 1: we are from achieved is x on here? I am 254 00:14:44,040 --> 00:14:47,360 Speaker 1: sure I'm using many of the big oil here. Yeah, 255 00:14:47,400 --> 00:14:49,760 Speaker 1: of course they're big oils here. But what is their 256 00:14:49,880 --> 00:14:52,240 Speaker 1: future given all that we see? Are they like, yeah, 257 00:14:52,360 --> 00:14:55,280 Speaker 1: climate change go or do it? Forget about it? Or 258 00:14:55,280 --> 00:14:59,160 Speaker 1: are they really listening to corporate leaders and government officials. 259 00:14:59,320 --> 00:15:02,320 Speaker 1: There's a lot of variants within the oil and gas industry, 260 00:15:02,360 --> 00:15:04,560 Speaker 1: but I think at the same time that there's a 261 00:15:04,560 --> 00:15:06,920 Speaker 1: broader recognition we need to move much faster towards clean 262 00:15:07,000 --> 00:15:09,960 Speaker 1: energy transition. There's also a realistic recognition that we are 263 00:15:09,960 --> 00:15:11,640 Speaker 1: going to be using oil and gas for a long time. 264 00:15:11,680 --> 00:15:13,680 Speaker 1: People are paying close attention today to what's happening in 265 00:15:13,680 --> 00:15:16,520 Speaker 1: oil markets, whether it's geopolitical risk like Venezuela or possible 266 00:15:16,560 --> 00:15:18,800 Speaker 1: trade war with China that could slow down growth and 267 00:15:18,800 --> 00:15:21,760 Speaker 1: put put pressure on prices. So companies are thinking about 268 00:15:21,800 --> 00:15:24,600 Speaker 1: what it looks like to transition over time. And they're 269 00:15:24,640 --> 00:15:27,560 Speaker 1: also investing in things like the Oil and Gas Climate Initiative, 270 00:15:27,560 --> 00:15:29,320 Speaker 1: which is meeting here, trying to do things like lower 271 00:15:29,360 --> 00:15:32,680 Speaker 1: the methane emissions profile of oil and gas to try 272 00:15:32,720 --> 00:15:35,040 Speaker 1: to try to start moving it more in the right direction. Jason, 273 00:15:35,120 --> 00:15:36,440 Speaker 1: let me know what you think of this argument. A 274 00:15:36,520 --> 00:15:38,440 Speaker 1: number of years ago, maybe ten years ago, you could 275 00:15:38,480 --> 00:15:40,800 Speaker 1: make an argument that America needs to shift away from 276 00:15:40,840 --> 00:15:43,440 Speaker 1: fossil fuels because we were so dependent on fossil fuels 277 00:15:43,440 --> 00:15:47,480 Speaker 1: from abroad. Ten years later, America becomes the biggest oil producer. 278 00:15:47,760 --> 00:15:49,520 Speaker 1: Does it get harder to make the argument that you 279 00:15:49,560 --> 00:15:51,840 Speaker 1: need to move away from something that you are the 280 00:15:51,920 --> 00:15:54,640 Speaker 1: leader in producing. I think it's harder to build consensus 281 00:15:54,720 --> 00:15:56,320 Speaker 1: towards that now. And so a good example of this 282 00:15:56,400 --> 00:15:58,000 Speaker 1: is the fuel economy standards. When I was in the 283 00:15:58,000 --> 00:16:00,600 Speaker 1: Obama White House, we doubled fuel economy standards. The Trump 284 00:16:00,600 --> 00:16:03,160 Speaker 1: administration wants to roll that back. If you read their 285 00:16:03,240 --> 00:16:05,080 Speaker 1: rationale for why they're doing it, it's because in the 286 00:16:05,120 --> 00:16:08,920 Speaker 1: world where we import almost no oil, uh, there's less 287 00:16:09,000 --> 00:16:11,960 Speaker 1: national security reason to reduce domestic weil consumption. Now there's 288 00:16:11,960 --> 00:16:13,720 Speaker 1: still a huge reason to do it in terms of 289 00:16:13,720 --> 00:16:16,240 Speaker 1: protecting consumers in terms of climate change in the environment, 290 00:16:16,400 --> 00:16:18,280 Speaker 1: but we used to have the ability to build consensus 291 00:16:18,320 --> 00:16:20,560 Speaker 1: across the aisle more that it was both for national 292 00:16:20,600 --> 00:16:22,680 Speaker 1: security reasons and for climate reasons that we needed to 293 00:16:22,680 --> 00:16:24,520 Speaker 1: do this. That breaks down a little bit in the 294 00:16:24,560 --> 00:16:26,760 Speaker 1: world where the US is almost energy independent. When you 295 00:16:26,800 --> 00:16:28,880 Speaker 1: were Brown, did you have to take biology and then 296 00:16:28,880 --> 00:16:31,440 Speaker 1: onto chemistry and all that or do you avoid that pain? 297 00:16:32,600 --> 00:16:34,720 Speaker 1: I took a pretty diverse set of courses, but Brown 298 00:16:34,760 --> 00:16:41,760 Speaker 1: doesn't require the scientists. At one point you said, these 299 00:16:41,800 --> 00:16:45,360 Speaker 1: guys are really smart. How does Davos and how does 300 00:16:45,400 --> 00:16:48,720 Speaker 1: America deal with the president at a good part of 301 00:16:48,720 --> 00:16:52,840 Speaker 1: America which has an a science outlook, they really don't 302 00:16:53,080 --> 00:16:56,920 Speaker 1: want to look at the theoretical and applied constructs of 303 00:16:57,040 --> 00:17:01,040 Speaker 1: modern climate science, do they. I think is certainly a 304 00:17:01,040 --> 00:17:03,680 Speaker 1: piece of this administration and the segment of American society 305 00:17:03,720 --> 00:17:06,280 Speaker 1: and not just American, other countries as well that has 306 00:17:06,800 --> 00:17:09,879 Speaker 1: a challenge accepting what's what's what's broad scientific consensus? You 307 00:17:09,920 --> 00:17:12,200 Speaker 1: consider that a permanence or will that change? I think 308 00:17:12,200 --> 00:17:13,600 Speaker 1: it's going to change, and I think you see that 309 00:17:13,640 --> 00:17:16,360 Speaker 1: already across the aisle and data with the next generation. 310 00:17:16,480 --> 00:17:18,760 Speaker 1: Yale just came out with a study showing rising public 311 00:17:18,920 --> 00:17:21,960 Speaker 1: opinion recognition that climate change is real, it's caused by 312 00:17:22,040 --> 00:17:24,040 Speaker 1: human activity, and and that we need to do something 313 00:17:24,119 --> 00:17:25,760 Speaker 1: John to bring us up because we're gonna do the 314 00:17:25,920 --> 00:17:29,480 Speaker 1: radio remote next week from the western southwestern shore of Greenland. 315 00:17:29,840 --> 00:17:32,399 Speaker 1: Didn't there anymore? Is that the Iceberg cup? We'd be 316 00:17:32,400 --> 00:17:35,080 Speaker 1: on an iceberg, like they'd like us on an iceberthday, 317 00:17:35,400 --> 00:17:38,680 Speaker 1: they would like Ampany from Jersey wants us on an iceberg. 318 00:17:39,680 --> 00:17:42,000 Speaker 1: I mean, we're already seeing impacts of climate change, and 319 00:17:42,040 --> 00:17:44,600 Speaker 1: when you look out ten twenty years the current status quo, 320 00:17:44,920 --> 00:17:47,360 Speaker 1: the impacts of climate change are gonna be pretty unpleasant 321 00:17:47,359 --> 00:17:48,879 Speaker 1: people to deal with. And I don't think a broad 322 00:17:48,920 --> 00:17:51,000 Speaker 1: public is going to accept that. There will be a 323 00:17:51,040 --> 00:17:53,280 Speaker 1: tipping point at some point where people turn around and say, 324 00:17:53,480 --> 00:17:55,600 Speaker 1: we just can't keep functioning in this way. I'm gonna 325 00:17:55,600 --> 00:17:57,440 Speaker 1: try to make this as simple as I possibly can. 326 00:17:57,680 --> 00:17:59,560 Speaker 1: Do you think there are members of the public and 327 00:17:59,600 --> 00:18:02,320 Speaker 1: areas of the public that still needs some form of 328 00:18:02,400 --> 00:18:05,680 Speaker 1: educating to draw a distinction between weather and climates. Absolutely, Yeah, 329 00:18:05,720 --> 00:18:08,359 Speaker 1: it's well, it's really cold here, and and and we 330 00:18:08,440 --> 00:18:11,119 Speaker 1: have cold spells all the time. But but the climate 331 00:18:11,200 --> 00:18:13,400 Speaker 1: is a system, and so what's important is the way 332 00:18:13,400 --> 00:18:16,159 Speaker 1: that system is changing. Average temperatures are rising. We've had 333 00:18:16,160 --> 00:18:18,960 Speaker 1: four of the five hottest years on record in the 334 00:18:19,040 --> 00:18:22,320 Speaker 1: last few years. So people need to understand that this 335 00:18:22,400 --> 00:18:25,280 Speaker 1: is important. There's a new liberal definition coming up in 336 00:18:25,320 --> 00:18:29,879 Speaker 1: the next election. There are progressive there's forty seven presidential candidates. 337 00:18:30,359 --> 00:18:35,160 Speaker 1: You worked within the Democratic Party. Theology of Barack Obama. 338 00:18:35,480 --> 00:18:39,760 Speaker 1: Where is the liberal aesthetic, the liberal ethos moving on 339 00:18:39,880 --> 00:18:43,040 Speaker 1: climate change and environment? Is it shifting or we're going 340 00:18:43,080 --> 00:18:46,120 Speaker 1: to see the same debate in two thousand twenty. There's 341 00:18:46,200 --> 00:18:49,240 Speaker 1: a huge amount of momentum on on the left and 342 00:18:49,560 --> 00:18:51,840 Speaker 1: many people in the Democratic Party that came in with 343 00:18:51,920 --> 00:18:54,760 Speaker 1: the Democratic takeover the House to push for stronger action 344 00:18:54,760 --> 00:18:57,359 Speaker 1: on climate change, and that's great. There is not full 345 00:18:57,359 --> 00:18:59,520 Speaker 1: agreement on what that looks like and how you implement 346 00:18:59,560 --> 00:19:00,840 Speaker 1: it and web or we can achieve that with a 347 00:19:00,880 --> 00:19:03,080 Speaker 1: hundred percent renewable energy, or whether we need a broader 348 00:19:03,080 --> 00:19:06,560 Speaker 1: set of solutions, advanced nuclear power, putting a price on 349 00:19:06,640 --> 00:19:08,359 Speaker 1: carbon and a recognition that there is going to be 350 00:19:08,359 --> 00:19:10,199 Speaker 1: a role for oil and gas in the economy for 351 00:19:10,240 --> 00:19:12,720 Speaker 1: decades to common. Thank you so much for colombiators to 352 00:19:12,880 --> 00:19:15,160 Speaker 1: visit us in our New York studios. It's far away 353 00:19:15,240 --> 00:19:33,600 Speaker 1: from anytime it's comfortable. I have been remiss on this. 354 00:19:33,720 --> 00:19:36,439 Speaker 1: It's really been something one of my weaknesses here. If 355 00:19:36,480 --> 00:19:39,400 Speaker 1: Bloomberg surveillance is to look at the machine of Europe 356 00:19:39,440 --> 00:19:44,240 Speaker 1: and always devolves down to the Spanish economy. There's a vibrancy, there, 357 00:19:44,520 --> 00:19:47,600 Speaker 1: a difference there within all of their domestic cultures as 358 00:19:47,600 --> 00:19:50,800 Speaker 1: you see across all of Europe. Nadia Calvino as Spanish 359 00:19:50,840 --> 00:19:55,040 Speaker 1: Economy Minister and she joins us today. The stereotypes of 360 00:19:55,080 --> 00:19:57,960 Speaker 1: Spain in America and for that and so much of 361 00:19:57,960 --> 00:20:01,520 Speaker 1: the Western world are so much unfounded. Give us an 362 00:20:01,640 --> 00:20:05,520 Speaker 1: update and the cultural solidity of Spain. Right now we 363 00:20:05,600 --> 00:20:08,880 Speaker 1: see this riot, that riot, Barcelona, this I don't even 364 00:20:08,920 --> 00:20:11,320 Speaker 1: know half the places. Give us an update and the 365 00:20:11,440 --> 00:20:14,680 Speaker 1: cultural solidity of Spain. Yeah, but thank you very much. 366 00:20:14,720 --> 00:20:16,879 Speaker 1: First of all, it's a pleasure to be here in Bloomberg. 367 00:20:17,200 --> 00:20:19,800 Speaker 1: I don't know if the prejudice is there or whether 368 00:20:19,920 --> 00:20:23,320 Speaker 1: the opinions are unfounded. What I can tell you is 369 00:20:23,320 --> 00:20:26,520 Speaker 1: that the Spanish economy after a very deep and long crisis, 370 00:20:26,960 --> 00:20:30,560 Speaker 1: has been bouncing back, growing quite significantly in the last years. 371 00:20:31,000 --> 00:20:34,160 Speaker 1: There is a quite stable society, very strong social fabric 372 00:20:34,280 --> 00:20:37,000 Speaker 1: and political stability to so I'm gonna get you in 373 00:20:37,080 --> 00:20:41,399 Speaker 1: hot water at home. What's the distinction between Spain in 374 00:20:41,560 --> 00:20:45,080 Speaker 1: Italy and recovery of this crisis. Well, I mean the 375 00:20:45,080 --> 00:20:47,920 Speaker 1: growth rate is not comparable. We've been having very high 376 00:20:47,960 --> 00:20:50,720 Speaker 1: growth rate. We reached the maximum above three percent in 377 00:20:50,800 --> 00:20:54,320 Speaker 1: twenty fifteen. Our expectation for twenty nine is two point 378 00:20:54,359 --> 00:20:56,399 Speaker 1: two percent, so we will be growing more than the 379 00:20:56,440 --> 00:21:00,040 Speaker 1: rest of the large European economies, significantly more than the 380 00:21:00,080 --> 00:21:03,920 Speaker 1: EU average. Well, there's no comparison. I mean from the 381 00:21:03,960 --> 00:21:09,040 Speaker 1: physical policy dimension. Also, we're really committed to fiscal consolidation, 382 00:21:09,119 --> 00:21:13,840 Speaker 1: reducing the deficit, reducing the debt. Social stability is quite remarkable. Also, 383 00:21:14,000 --> 00:21:17,840 Speaker 1: very open liberal economy, trying to in society, I would 384 00:21:17,840 --> 00:21:21,480 Speaker 1: say welcoming. You know, we really encouraged for an investment. 385 00:21:21,680 --> 00:21:23,520 Speaker 1: I think that there are a number of areas where 386 00:21:23,560 --> 00:21:25,600 Speaker 1: you know, I wouldn't be like to be compared to anybody. 387 00:21:25,640 --> 00:21:28,520 Speaker 1: Of course, a little bit earlier this morning in Dallas, Switten, 388 00:21:28,600 --> 00:21:31,360 Speaker 1: the Dutch Prime minister made some waves he thinks that 389 00:21:31,640 --> 00:21:34,280 Speaker 1: the Italians have been led off lightly for their approach 390 00:21:34,320 --> 00:21:36,840 Speaker 1: towards where is every day of Boomberg surveillance. Do you 391 00:21:36,880 --> 00:21:39,440 Speaker 1: think the Italians are being led off lightly by the EU? 392 00:21:39,520 --> 00:21:42,520 Speaker 1: I'm a bit surprised that the Prime Minister would say that, frankly, 393 00:21:42,560 --> 00:21:44,919 Speaker 1: because last Monday we had the Eurogroup meeting with the 394 00:21:44,960 --> 00:21:48,560 Speaker 1: finance ministers, and the Dutch Finance minister actually asked the 395 00:21:48,560 --> 00:21:51,480 Speaker 1: European Commission what their assessment was of the Italian situation. 396 00:21:51,960 --> 00:21:54,879 Speaker 1: The commissioner explained it and there was no further question. 397 00:21:54,920 --> 00:21:57,119 Speaker 1: So I'm a bit surprised that there's this assessment of 398 00:21:57,200 --> 00:22:00,680 Speaker 1: the situation. I think other people are surprised as also. 399 00:22:00,840 --> 00:22:02,919 Speaker 1: Some people, though, do think the Italians might be right. 400 00:22:02,960 --> 00:22:05,120 Speaker 1: Maybe we do need a bit of fiscal stimulus onto 401 00:22:05,200 --> 00:22:07,320 Speaker 1: the continent. You've done a lot of hard work in Spain, 402 00:22:07,800 --> 00:22:10,360 Speaker 1: a lot of fiscal consolidation, a lot of structural reforms, 403 00:22:10,359 --> 00:22:12,760 Speaker 1: and you're reaping the rewards of that. What's your message 404 00:22:12,800 --> 00:22:15,400 Speaker 1: to the Italian government as they look over the next 405 00:22:15,440 --> 00:22:18,000 Speaker 1: couple of years, potentially to loosen the strings a bit 406 00:22:18,119 --> 00:22:20,520 Speaker 1: fiscally speaking. I think that the way forward and this 407 00:22:20,600 --> 00:22:23,040 Speaker 1: is what our government is pushing for, is striking the 408 00:22:23,119 --> 00:22:26,400 Speaker 1: right planlets between fiscal discipline and social policy. I think 409 00:22:26,400 --> 00:22:28,680 Speaker 1: that we don't have to wait until the streets are 410 00:22:28,720 --> 00:22:31,679 Speaker 1: really full of people complaining to act to try to 411 00:22:31,720 --> 00:22:35,159 Speaker 1: address the imbalances and the inequalities in society. Let's talk 412 00:22:35,160 --> 00:22:37,960 Speaker 1: about the imbalances. Minister, you still have a high unemployment 413 00:22:38,040 --> 00:22:40,400 Speaker 1: rate in Spain. What can you do about it? You've 414 00:22:40,400 --> 00:22:41,960 Speaker 1: had the growth, it doesn't seem to have taken a 415 00:22:41,960 --> 00:22:44,600 Speaker 1: big bite out of it. Well know, I mean we 416 00:22:44,600 --> 00:22:48,399 Speaker 1: we've moved down from twent which was bridgeously higher in 417 00:22:48,440 --> 00:22:51,200 Speaker 1: the crisis, to around We hope to close a year 418 00:22:51,240 --> 00:22:55,240 Speaker 1: around fourteen, so that's a very significant reduction. It's still 419 00:22:55,480 --> 00:22:58,639 Speaker 1: unacceptably high. Fourteent to a lot of this audience that 420 00:22:58,680 --> 00:23:01,840 Speaker 1: will sound a high Yeah. Well, you know, we have 421 00:23:01,880 --> 00:23:05,600 Speaker 1: a structural unemployment situation in Spain and then very high 422 00:23:05,640 --> 00:23:08,840 Speaker 1: cyclical variations. We want to address that. We want to 423 00:23:08,880 --> 00:23:10,960 Speaker 1: actually in the coming weeks. And I was a number 424 00:23:11,000 --> 00:23:13,320 Speaker 1: of structural reforms in order to try to address the 425 00:23:13,400 --> 00:23:15,520 Speaker 1: duality that we see in the labor market in Spain. 426 00:23:15,560 --> 00:23:18,359 Speaker 1: This was the color of those. That's important. Well, I 427 00:23:18,400 --> 00:23:21,880 Speaker 1: have to, you know, keep the secretary we announced the reforms. Frankly, 428 00:23:22,080 --> 00:23:26,400 Speaker 1: next you that your government can get a budget through 429 00:23:26,760 --> 00:23:29,800 Speaker 1: anytime soon. Sorry, how confident argue that your government can 430 00:23:29,800 --> 00:23:32,639 Speaker 1: get a budget through. I am quite confident because what 431 00:23:32,840 --> 00:23:35,080 Speaker 1: we are trying to do with this budget proposal, which 432 00:23:35,080 --> 00:23:37,440 Speaker 1: we put forward a couple of weeks ago, it's precisely 433 00:23:37,480 --> 00:23:39,320 Speaker 1: this balance I was referring to. We want to be 434 00:23:39,440 --> 00:23:42,920 Speaker 1: very ambitious on reducing the public deficit and public debt, 435 00:23:43,440 --> 00:23:45,960 Speaker 1: very ambitious, but at the same time tried to focus 436 00:23:46,000 --> 00:23:48,720 Speaker 1: on some policies which have been neglected in the last 437 00:23:48,760 --> 00:23:51,239 Speaker 1: years and which are important for social cohesion. In the 438 00:23:51,240 --> 00:23:53,359 Speaker 1: time that we got your minister, I want you to 439 00:23:53,440 --> 00:23:56,520 Speaker 1: talk to our radio and television audience in America and 440 00:23:56,600 --> 00:23:59,160 Speaker 1: across all of Europe. I want you to be Iberia 441 00:23:59,240 --> 00:24:03,200 Speaker 1: Airlines right now. The Prado in Madrid is one of 442 00:24:03,240 --> 00:24:05,400 Speaker 1: the great jewels of the world. I don't think it's 443 00:24:05,400 --> 00:24:08,119 Speaker 1: talked about enough. What do you need to do to 444 00:24:08,240 --> 00:24:12,440 Speaker 1: move tourism forward, to get more people in Madrid, more 445 00:24:12,520 --> 00:24:15,480 Speaker 1: people in Spain. Well, last year we had eighty two 446 00:24:15,520 --> 00:24:18,439 Speaker 1: million persons coming to Spain. Actually, we are the record 447 00:24:18,480 --> 00:24:22,280 Speaker 1: in Europe in terms of welcoming tourists. What we're trying 448 00:24:22,320 --> 00:24:24,639 Speaker 1: to do is move to a more quality tourism so 449 00:24:25,320 --> 00:24:29,040 Speaker 1: that well, we are trying to go beyond the sun 450 00:24:29,280 --> 00:24:34,560 Speaker 1: and beach kind of exactly to the po in Madrid. 451 00:24:35,160 --> 00:24:37,199 Speaker 1: In the Madrid one of the great jewels of the 452 00:24:37,200 --> 00:24:40,160 Speaker 1: Western world. Well, I would say, come to Spain, come 453 00:24:40,200 --> 00:24:42,920 Speaker 1: to Madrid, because not only the city is very attractive 454 00:24:42,960 --> 00:24:45,640 Speaker 1: and the Proto is outstanding jewel, but there are many 455 00:24:45,720 --> 00:24:48,760 Speaker 1: very interesting sights and cities around that you can very 456 00:24:48,840 --> 00:24:52,600 Speaker 1: easily in this I don't care about draggy. I just 457 00:24:52,640 --> 00:24:54,840 Speaker 1: want to go to the Plato and get a private tour. 458 00:24:55,160 --> 00:24:58,640 Speaker 1: So you need arn Sorens and a Marriott, Sir Sir 459 00:24:59,040 --> 00:25:02,400 Speaker 1: Roko of Forte Hotels. You need better hotels in Madrid 460 00:25:02,640 --> 00:25:06,280 Speaker 1: and in those areas. Away from what we've seen last year. 461 00:25:06,359 --> 00:25:08,320 Speaker 1: Actually there is that there has been a move from 462 00:25:08,359 --> 00:25:10,600 Speaker 1: the beach and some kind of truism going to the 463 00:25:10,640 --> 00:25:13,000 Speaker 1: central of Spain and trying to visit these old cities, 464 00:25:13,040 --> 00:25:15,720 Speaker 1: you know, traditional cities in April and in May with 465 00:25:15,800 --> 00:25:21,520 Speaker 1: team services. I think it works all the minister that 466 00:25:21,600 --> 00:25:24,320 Speaker 1: she's going to be paid for an all expensive trips. No, 467 00:25:24,520 --> 00:25:27,119 Speaker 1: but I will buy you a lunch, that's for sure, 468 00:25:27,240 --> 00:25:29,160 Speaker 1: very good. We wouldn't be able to accept. We would 469 00:25:29,200 --> 00:25:31,879 Speaker 1: have to pay the Spanish economy. It is great to 470 00:25:31,920 --> 00:25:47,560 Speaker 1: catch up with you. Thank you very much. Right now, 471 00:25:47,680 --> 00:25:50,320 Speaker 1: an important guest for us at Bloomberg is Prime Minister 472 00:25:50,400 --> 00:25:53,040 Speaker 1: of the Netherlands Mark Ruta. But far more than that, 473 00:25:53,080 --> 00:25:55,639 Speaker 1: he's one of the few politicians not only here at 474 00:25:55,720 --> 00:26:00,280 Speaker 1: Davos but worldwide who has actual business experience heres ago. 475 00:26:00,760 --> 00:26:03,320 Speaker 1: You know Weaver as well, Prime Minister. Wonderful to have 476 00:26:03,359 --> 00:26:05,560 Speaker 1: you with us, so much to talk about. I know 477 00:26:05,680 --> 00:26:09,159 Speaker 1: John wants to go from the distance from say Amsterdam 478 00:26:09,240 --> 00:26:11,880 Speaker 1: on down to Rome. Will cover that here? Uh? And 479 00:26:12,520 --> 00:26:15,200 Speaker 1: what's coming now? Well, I do you know what's coming, 480 00:26:15,280 --> 00:26:18,960 Speaker 1: but totally unexpected. There is a there's a distance from 481 00:26:18,960 --> 00:26:21,520 Speaker 1: Amsterdam to Rome. I want to go to the distance 482 00:26:21,640 --> 00:26:24,919 Speaker 1: right now from your Netherlands to Brexit. You know, I 483 00:26:25,000 --> 00:26:28,040 Speaker 1: think of the TV show wolf Hall Henry the Tudor 484 00:26:28,119 --> 00:26:32,200 Speaker 1: England Antwerp in the Netherlands was a nexus of capitalism. 485 00:26:32,320 --> 00:26:35,840 Speaker 1: Right now, is capitalism in London at risk because of 486 00:26:35,880 --> 00:26:38,879 Speaker 1: this arch United Kingdom debate? I don't believe so, but 487 00:26:39,760 --> 00:26:42,760 Speaker 1: it is not good. I mean Brexit is not good 488 00:26:42,800 --> 00:26:44,400 Speaker 1: for you. It's not good for you. Out of Kingdom. 489 00:26:44,440 --> 00:26:47,600 Speaker 1: It will be a smaller, smaller economy and it will 490 00:26:47,640 --> 00:26:50,640 Speaker 1: have less of an impact on the world stage after Brexit. 491 00:26:50,920 --> 00:26:52,800 Speaker 1: So I'm very I'm very negative about it. But we 492 00:26:52,840 --> 00:26:54,880 Speaker 1: don't know what Brexit looks like yet. That promise, that's 493 00:26:54,880 --> 00:26:57,639 Speaker 1: an assessment. It means it will look like they leave 494 00:26:57,680 --> 00:27:00,679 Speaker 1: the Upen Union and of course then the question is 495 00:27:00,920 --> 00:27:04,120 Speaker 1: on the on which terms and will it be negotiated 496 00:27:05,080 --> 00:27:07,000 Speaker 1: leaving or will it be a no deal brexit. But 497 00:27:07,119 --> 00:27:09,360 Speaker 1: in any case, it seems like they will leave and 498 00:27:09,400 --> 00:27:11,159 Speaker 1: that is not good news for the UK. So the 499 00:27:11,160 --> 00:27:13,440 Speaker 1: City of London, I'm just wondering, from the European perspective, 500 00:27:13,680 --> 00:27:15,840 Speaker 1: is there an acknowledgement that the City of London needs 501 00:27:15,880 --> 00:27:18,280 Speaker 1: to flourish to provide the type of financing that the 502 00:27:18,280 --> 00:27:20,639 Speaker 1: rest of Europe needs? Do you need the City of London? 503 00:27:20,640 --> 00:27:23,159 Speaker 1: Does the EU need? We need strong financial centers like 504 00:27:23,200 --> 00:27:26,639 Speaker 1: Hong Kong, New York, London, but we have others like Amsterdam, Frankfort, Paris. 505 00:27:26,800 --> 00:27:29,439 Speaker 1: Can Amsterdam really step up? Yes, we are doing that. 506 00:27:29,560 --> 00:27:32,520 Speaker 1: Frankfort stepping up, Paris are stepping up. We see other 507 00:27:32,640 --> 00:27:36,520 Speaker 1: financial centers in Europe. Yeah, this is of course reaping 508 00:27:36,520 --> 00:27:39,439 Speaker 1: some benefits from this very negative situation of over Brexit. 509 00:27:39,640 --> 00:27:42,000 Speaker 1: We see many companies from the UK, particularly with the 510 00:27:42,080 --> 00:27:45,480 Speaker 1: Japanese or Indian background and American beckons coming to the Netherlands. 511 00:27:45,640 --> 00:27:47,560 Speaker 1: Do you have to shed up a setup shop now 512 00:27:47,560 --> 00:27:50,240 Speaker 1: in Amsterdam? The Financial Times in editorial today had a 513 00:27:50,280 --> 00:27:55,280 Speaker 1: lovely subhead about capitalism not being debated here in Davos 514 00:27:55,480 --> 00:27:59,000 Speaker 1: described for us the new capitalism of the Netherlands. There 515 00:27:59,040 --> 00:28:02,360 Speaker 1: are so many ato types of the Netherlands evolving from 516 00:28:02,359 --> 00:28:05,280 Speaker 1: World War Two. There can be anything from Audrey Hepburn 517 00:28:06,840 --> 00:28:09,560 Speaker 1: and under that experiment of the sixties and the seventies. 518 00:28:09,880 --> 00:28:12,960 Speaker 1: What's the new capitalism of the new Netherlands. Well, I 519 00:28:13,160 --> 00:28:15,399 Speaker 1: believe it is not new. I I don't see a 520 00:28:15,400 --> 00:28:18,480 Speaker 1: new alance. But we have always agreed to think that 521 00:28:19,080 --> 00:28:22,320 Speaker 1: people starting a business earn their own money hiring people, 522 00:28:22,359 --> 00:28:26,200 Speaker 1: that that is the best way to have a strong 523 00:28:26,320 --> 00:28:29,879 Speaker 1: working demarket sings story economy and that economy has to 524 00:28:29,920 --> 00:28:31,879 Speaker 1: deliver for the people. And it means for me as 525 00:28:31,880 --> 00:28:33,879 Speaker 1: a politicians that I have basically two tasks. I have 526 00:28:33,920 --> 00:28:35,840 Speaker 1: to make sure the economy is doing well, that we 527 00:28:35,880 --> 00:28:38,080 Speaker 1: have enough jobs and have to make sure that there 528 00:28:38,160 --> 00:28:40,280 Speaker 1: is enough safety security in the country. You've made some 529 00:28:40,320 --> 00:28:42,680 Speaker 1: wives in the last couple of hours in Devil Switzerland. 530 00:28:42,720 --> 00:28:44,480 Speaker 1: I think you know you have um the comments about 531 00:28:44,480 --> 00:28:47,760 Speaker 1: the Italians being let off the hook by the Europeans. 532 00:28:47,920 --> 00:28:50,240 Speaker 1: I'm very angry about. Build on that a little bit more. 533 00:28:50,440 --> 00:28:53,239 Speaker 1: What are you angry about. Well, you're facing some new, 534 00:28:53,320 --> 00:28:55,720 Speaker 1: huge challenges. We can make progress on climate change, we 535 00:28:55,720 --> 00:28:58,720 Speaker 1: can make progress on the internal market like digital and services. 536 00:28:59,520 --> 00:29:01,320 Speaker 1: We can make progress on many issues. But there are 537 00:29:01,320 --> 00:29:03,920 Speaker 1: two big problems. One is the East West divide, which 538 00:29:03,960 --> 00:29:06,080 Speaker 1: has to do with migration, and the other is a 539 00:29:06,160 --> 00:29:09,000 Speaker 1: North South divid and there is at this moment a 540 00:29:09,080 --> 00:29:11,560 Speaker 1: lack of trust in Europe between the North and the South. 541 00:29:11,920 --> 00:29:15,360 Speaker 1: And You'repean Commission had the task to force Italy to 542 00:29:15,440 --> 00:29:18,120 Speaker 1: do more to bring its state finances in order, because 543 00:29:18,160 --> 00:29:20,360 Speaker 1: it's a basic deal in your zone that all of 544 00:29:20,440 --> 00:29:23,400 Speaker 1: us have to make sure our own house is cleaned up, 545 00:29:23,520 --> 00:29:26,280 Speaker 1: is working well, and then collectively we can make sure 546 00:29:26,320 --> 00:29:29,040 Speaker 1: we become more competitive. But the Commission has not done so, 547 00:29:29,040 --> 00:29:31,200 Speaker 1: so they have not fulfilled on the task, which is 548 00:29:31,240 --> 00:29:33,960 Speaker 1: to uphold the treaty. Some people watching this program and 549 00:29:33,960 --> 00:29:36,480 Speaker 1: listening to this program on Blomberg CV and Bloomberg Radio 550 00:29:36,640 --> 00:29:38,600 Speaker 1: might say, well, why is it okay for the French 551 00:29:39,040 --> 00:29:41,840 Speaker 1: to lift their budget deficit and not for the Italians. 552 00:29:41,880 --> 00:29:43,520 Speaker 1: It's not okay for the French. But at this moment 553 00:29:43,560 --> 00:29:47,160 Speaker 1: we have to assess what the mccan proposals in December, 554 00:29:47,200 --> 00:29:49,000 Speaker 1: his speech to the nation, what that will mean in 555 00:29:49,080 --> 00:29:51,920 Speaker 1: terms of their microeconomic numbers. We have not seen that, 556 00:29:51,960 --> 00:29:54,000 Speaker 1: whether that will mean that they will deviate or not 557 00:29:54,520 --> 00:29:56,640 Speaker 1: from what they have promised to the European Commission, to 558 00:29:56,720 --> 00:29:59,680 Speaker 1: our colleagues and their colleagues in the European Union. With Italy. 559 00:29:59,720 --> 00:30:02,960 Speaker 1: We what the situation is. And given that situation, it 560 00:30:03,000 --> 00:30:08,360 Speaker 1: is a debt to GDP of again, a budget deficit 561 00:30:08,400 --> 00:30:10,080 Speaker 1: of more than two percent. It's not good, and we 562 00:30:10,200 --> 00:30:13,480 Speaker 1: and Thelans have food in place changes, we forms, uh 563 00:30:13,760 --> 00:30:17,160 Speaker 1: fiscal contraction. We are now growing at a fast space 564 00:30:17,320 --> 00:30:20,200 Speaker 1: tries the pace of our competing economies because we made 565 00:30:20,200 --> 00:30:24,840 Speaker 1: those great forms. Italy to Bloomer Surveillance, have tried to 566 00:30:24,880 --> 00:30:29,160 Speaker 1: advocate this debate, this conversation for years. Yakham Fells, Morgan 567 00:30:29,240 --> 00:30:32,920 Speaker 1: Stanley out PIMCO, Professor Martin Feldstein at Harvard and others 568 00:30:33,160 --> 00:30:36,720 Speaker 1: have really tried to study the core of Europe and 569 00:30:36,760 --> 00:30:39,480 Speaker 1: as you say, the troubles, the challenges in the South, 570 00:30:39,520 --> 00:30:41,360 Speaker 1: are we going to revisit that in the next one 571 00:30:41,400 --> 00:30:43,960 Speaker 1: two and five years, the idea of a core of 572 00:30:44,000 --> 00:30:47,680 Speaker 1: Europe choosing to separate from the South. I don't think so. 573 00:30:48,320 --> 00:30:51,920 Speaker 1: We have to your zone. It's it's it's working. If 574 00:30:51,920 --> 00:30:54,040 Speaker 1: the Netlans would still have had the Guilder, the Dutch 575 00:30:54,040 --> 00:30:57,320 Speaker 1: Guilder when the banking crisis erupted in two thousand and eight, 576 00:30:57,800 --> 00:31:00,320 Speaker 1: we would have run the risk that the speculator food 577 00:31:00,320 --> 00:31:02,160 Speaker 1: have killed us, being given the size of our banking 578 00:31:02,160 --> 00:31:04,760 Speaker 1: sector compared to the size of our own currency. So 579 00:31:04,800 --> 00:31:07,280 Speaker 1: we have been very fortunate to have the Euro. It 580 00:31:07,440 --> 00:31:11,040 Speaker 1: has brought us many positives. Yeah, but the basic promise 581 00:31:11,080 --> 00:31:13,040 Speaker 1: of the euro is that collectively we will aim for 582 00:31:13,080 --> 00:31:16,600 Speaker 1: a higher level of convergence to competitiveness, whilst making sure 583 00:31:16,640 --> 00:31:18,800 Speaker 1: that we deal with our own problems at home. You 584 00:31:18,920 --> 00:31:21,640 Speaker 1: cannot explort those problems to the collective. The Eurozone has 585 00:31:21,680 --> 00:31:24,440 Speaker 1: been very fortunate as well to have President Mario Draki 586 00:31:24,680 --> 00:31:26,920 Speaker 1: over the e CP. The Eurozone will not have him 587 00:31:27,040 --> 00:31:29,240 Speaker 1: at the end of this year. Have you endorsed the 588 00:31:29,320 --> 00:31:31,640 Speaker 1: nation yet that could head the European Central Bank? Have 589 00:31:31,680 --> 00:31:33,640 Speaker 1: you got any idea of who and what country you 590 00:31:33,640 --> 00:31:34,600 Speaker 1: would like to see at the top of the e 591 00:31:34,680 --> 00:31:37,400 Speaker 1: c B. I have some ideas, but the first these 592 00:31:37,840 --> 00:31:40,480 Speaker 1: decisions have to be taken a little bit behind the scenes. 593 00:31:40,520 --> 00:31:42,560 Speaker 1: I cannot comment. Let's get into some of the ideas 594 00:31:42,560 --> 00:31:44,480 Speaker 1: because some people are worried that if it is someone 595 00:31:44,560 --> 00:31:48,600 Speaker 1: from say Germany, that the decisions made won't be for 596 00:31:48,640 --> 00:31:50,920 Speaker 1: the continent on aggregate. The decisions that will be made, 597 00:31:50,920 --> 00:31:54,000 Speaker 1: as Tom points out, with that North South divide in mind, 598 00:31:54,000 --> 00:31:57,400 Speaker 1: that we will have stricter title monetary policy. I don't 599 00:31:57,440 --> 00:32:00,480 Speaker 1: mind the passport of the new ECP president. What we 600 00:32:00,520 --> 00:32:03,000 Speaker 1: need again is a president who understands that he or 601 00:32:03,040 --> 00:32:05,760 Speaker 1: she is there for the collective. Is there not to 602 00:32:06,120 --> 00:32:09,200 Speaker 1: fill the gaps which the politicians have left. My Duckie 603 00:32:09,240 --> 00:32:11,520 Speaker 1: was forced in two thousand and twelve to fill some 604 00:32:11,600 --> 00:32:14,120 Speaker 1: of those gaps when he said I will never let 605 00:32:14,240 --> 00:32:16,400 Speaker 1: the Euro down and I will do whatever it takes. 606 00:32:16,440 --> 00:32:19,440 Speaker 1: Every remember that goes around to the London Olympics in 607 00:32:19,480 --> 00:32:21,920 Speaker 1: two thousand twelve and he has done a marvelous job 608 00:32:22,000 --> 00:32:23,680 Speaker 1: over the last seven years, six and a half years, 609 00:32:24,760 --> 00:32:28,240 Speaker 1: and I would hope for his successor that the politicians, me, 610 00:32:28,440 --> 00:32:30,640 Speaker 1: my colleagues, we will do what we need to do 611 00:32:30,920 --> 00:32:32,760 Speaker 1: and don't leave it to the sp president. Don't you 612 00:32:32,800 --> 00:32:34,920 Speaker 1: think we get a decision on all of this. It 613 00:32:35,000 --> 00:32:37,000 Speaker 1: has to be somewhere this year, but I don't know 614 00:32:37,040 --> 00:32:41,280 Speaker 1: exactly exact timing from Margreta cried the canuality the Netherlands 615 00:32:41,320 --> 00:32:45,240 Speaker 1: here in damas one thousand, twenty two miles from Amsterdam 616 00:32:45,280 --> 00:33:03,600 Speaker 1: to run. I'm joining us right now, an important voice 617 00:33:03,760 --> 00:33:06,880 Speaker 1: for europe, an important voice for the trans Atlantic politics, 618 00:33:07,120 --> 00:33:10,000 Speaker 1: going back to the Atlantic Charter of ages ago, the 619 00:33:10,080 --> 00:33:13,120 Speaker 1: debris out of World War two and the development of 620 00:33:13,160 --> 00:33:16,840 Speaker 1: the North Atlantic Treaty organization that leads to the Norwegian 621 00:33:17,080 --> 00:33:20,000 Speaker 1: Yeah and Stoltenberg and among other things. I should say, 622 00:33:20,320 --> 00:33:24,360 Speaker 1: absolutely remarkable. That's seven or eight years ago you wandered 623 00:33:24,440 --> 00:33:28,160 Speaker 1: to the Self Pole in honor of your Amazon. What 624 00:33:28,240 --> 00:33:31,080 Speaker 1: was it like going to the South Pole? And you know, 625 00:33:31,280 --> 00:33:34,600 Speaker 1: not by helicopter? Now what I didn't go on skis 626 00:33:34,640 --> 00:33:36,640 Speaker 1: to the South Pole. We went in by a plane. 627 00:33:36,640 --> 00:33:39,960 Speaker 1: But we were there to to to celebrate the hundredth 628 00:33:40,000 --> 00:33:43,680 Speaker 1: anniversary of the first man reaching this old South Pole, 629 00:33:43,720 --> 00:33:45,920 Speaker 1: and that was actually Norwegian and at that time it 630 00:33:46,080 --> 00:33:48,640 Speaker 1: was an owegn Prime Ministers. We had a big event 631 00:33:48,680 --> 00:33:51,640 Speaker 1: there to to mark that expedition. The big event for 632 00:33:51,720 --> 00:33:55,240 Speaker 1: NATO is it's survival. You have a challenge in President Trump, 633 00:33:55,280 --> 00:33:58,040 Speaker 1: you have a challenge, and now you regroup and move forward. 634 00:33:58,040 --> 00:34:02,600 Speaker 1: Give us the NATO philosophy three four two nine into 635 00:34:02,680 --> 00:34:05,920 Speaker 1: the future. The NATO philosophy is that as long as 636 00:34:06,320 --> 00:34:09,640 Speaker 1: Europe and North America stands together, then we are strong. 637 00:34:09,840 --> 00:34:12,920 Speaker 1: And then we are fifty percent of the world's economic 638 00:34:13,120 --> 00:34:17,920 Speaker 1: might and fifty of the world's military might. So therefore, 639 00:34:18,000 --> 00:34:20,240 Speaker 1: my main task is to make sure that we stand together. 640 00:34:20,640 --> 00:34:23,680 Speaker 1: Despite some differences on issues like trade or climate change. 641 00:34:24,040 --> 00:34:28,719 Speaker 1: NATO has proven extremely capable of uniting around the court 642 00:34:28,760 --> 00:34:31,319 Speaker 1: aask to defend each other. And the good thing now 643 00:34:31,400 --> 00:34:34,200 Speaker 1: is that European allies are stepping up when it comes 644 00:34:34,239 --> 00:34:39,080 Speaker 1: to defense spending since President Trump came into office in 645 00:34:39,160 --> 00:34:41,919 Speaker 1: twenty six talk about that because the President's instinct there 646 00:34:42,320 --> 00:34:45,920 Speaker 1: is correct. The various governments of NATO have not made 647 00:34:46,080 --> 00:34:49,000 Speaker 1: their contributions in the way they promised to. Did you 648 00:34:49,040 --> 00:34:51,800 Speaker 1: agree with him when he first started making those concerns 649 00:34:51,880 --> 00:34:54,200 Speaker 1: and vocalizing them a whole lot more louder over the 650 00:34:54,280 --> 00:34:56,719 Speaker 1: last year or so, so I agree with him. But 651 00:34:57,160 --> 00:35:00,120 Speaker 1: even more importantly, all allies agree with him that we 652 00:35:00,200 --> 00:35:03,880 Speaker 1: need fair burden sharing in their lines. And that's exactly 653 00:35:03,920 --> 00:35:07,480 Speaker 1: why NATO allies in Europe and Canada now are investing 654 00:35:07,560 --> 00:35:11,160 Speaker 1: more in defense. Since twenty sixteen, they have added in 655 00:35:11,239 --> 00:35:15,839 Speaker 1: total forty one billion more for defense spending, and next year, 656 00:35:15,880 --> 00:35:19,600 Speaker 1: by the end of they added hundred billion more for defense. 657 00:35:19,719 --> 00:35:24,080 Speaker 1: This is a significant change. It helps to improve burden sharing. 658 00:35:24,719 --> 00:35:27,480 Speaker 1: So we still have a long way to go, but 659 00:35:27,600 --> 00:35:29,600 Speaker 1: we are really turned the corner and European allies are 660 00:35:29,640 --> 00:35:32,200 Speaker 1: investing more. Getting those contributions up is really important where 661 00:35:32,200 --> 00:35:35,120 Speaker 1: the money goes. It's also equally as important where does 662 00:35:35,160 --> 00:35:39,560 Speaker 1: that spend need to be made on modernizing our capabilities, 663 00:35:39,680 --> 00:35:46,080 Speaker 1: investing in modern planes, battle tanks, military infrastructure, but also 664 00:35:46,600 --> 00:35:51,440 Speaker 1: training and and and and and allies working more closer together, 665 00:35:51,800 --> 00:35:55,919 Speaker 1: and also on operations, for instance, fighting terrorists. A couple 666 00:35:55,960 --> 00:35:58,920 Speaker 1: of weeks ago, JAMR. Scheimer Chicago gave a speech to 667 00:35:58,960 --> 00:36:02,560 Speaker 1: the London School that comics his notoriety is that NATO 668 00:36:02,680 --> 00:36:06,360 Speaker 1: in the Western world and particularly United States overreached and 669 00:36:06,400 --> 00:36:10,080 Speaker 1: their enthusiasm to move towards Russia, to move towards the 670 00:36:10,120 --> 00:36:14,560 Speaker 1: former Russian states, to expand NATO give us an update 671 00:36:14,960 --> 00:36:19,080 Speaker 1: and your desire to keep NATO status or to expand 672 00:36:19,320 --> 00:36:23,440 Speaker 1: NATO towards Russia is Mr Prutin fears. But first of all, 673 00:36:23,480 --> 00:36:26,200 Speaker 1: this whole idea that NATO in the kind of aggressive 674 00:36:26,200 --> 00:36:29,040 Speaker 1: way have moved east is wrong. What we speak about 675 00:36:29,160 --> 00:36:32,520 Speaker 1: is that new countries who got their independence off to 676 00:36:32,600 --> 00:36:35,799 Speaker 1: the end of the Cold War shows they wanted two 677 00:36:35,880 --> 00:36:38,840 Speaker 1: democratic decisions to join a niance and it is for 678 00:36:39,080 --> 00:36:42,399 Speaker 1: every independence of the nation to choose their own path. 679 00:36:43,160 --> 00:36:46,040 Speaker 1: They wanted to join NATO, and we welcome them. You know, 680 00:36:46,120 --> 00:36:49,440 Speaker 1: the idea that it's it's a provocation to Russia if 681 00:36:49,480 --> 00:36:52,600 Speaker 1: a neighbor joins NATO, that's a very dangerous ideas Mr 682 00:36:52,600 --> 00:36:54,960 Speaker 1: Prutin feel that though does he feel it's a provocation. 683 00:36:55,040 --> 00:37:00,640 Speaker 1: But sometimes they speak as if stole now a lot 684 00:37:00,719 --> 00:37:03,520 Speaker 1: we are joining NATO is a threat to them. No, 685 00:37:03,719 --> 00:37:08,480 Speaker 1: it's a sovereign, democratic decision by independent nation to choose 686 00:37:08,480 --> 00:37:11,000 Speaker 1: his own path. Nor where the country I come from 687 00:37:11,360 --> 00:37:15,400 Speaker 1: is a neighbor of Russia. And if anyone has told 688 00:37:15,480 --> 00:37:18,239 Speaker 1: us back in nineteen nine with the joint but that 689 00:37:18,440 --> 00:37:21,440 Speaker 1: was a probably under the south, far away from the 690 00:37:21,440 --> 00:37:23,879 Speaker 1: tradition of the Baltic Sea. This is a little more 691 00:37:23,880 --> 00:37:26,160 Speaker 1: of a heated debate. I love that you favor, but 692 00:37:26,239 --> 00:37:28,080 Speaker 1: I mean but but but but but but. NATO is 693 00:37:28,080 --> 00:37:31,279 Speaker 1: an organization for Europe and and US and Canada. So 694 00:37:31,320 --> 00:37:34,240 Speaker 1: we're not going to Africa or or art of Europe 695 00:37:34,320 --> 00:37:36,320 Speaker 1: right now. We look at the two modern Turkey in 696 00:37:36,360 --> 00:37:39,080 Speaker 1: the last twenty four months. How do we get Turkey 697 00:37:39,080 --> 00:37:42,480 Speaker 1: back into the European sphere and dialogue. So Turkey is 698 00:37:42,480 --> 00:37:45,840 Speaker 1: a very important ally. When we see all the progress 699 00:37:45,880 --> 00:37:48,480 Speaker 1: we have made in the fight against dosh Isle. They 700 00:37:48,520 --> 00:37:51,720 Speaker 1: controlled the territory as big as UK eight million people. 701 00:37:51,760 --> 00:37:55,560 Speaker 1: They were threatening Baghdad and Damascus. We have been able 702 00:37:55,640 --> 00:38:00,200 Speaker 1: to take away that territory for from them. Not is 703 00:38:00,280 --> 00:38:03,799 Speaker 1: because Turkey, as a native ally has contributed to that 704 00:38:03,920 --> 00:38:06,040 Speaker 1: fight against that told me about the landmark Iron f 705 00:38:06,200 --> 00:38:09,720 Speaker 1: Nuclear Treaty and the risk of the United States leaves 706 00:38:09,760 --> 00:38:13,760 Speaker 1: it and walks away. The challenge now, the threat now 707 00:38:14,040 --> 00:38:17,920 Speaker 1: is that Russia is violating the treaty. This Ironate treaty 708 00:38:18,200 --> 00:38:22,320 Speaker 1: banned the whole category of weapons. All intermediate range weapons 709 00:38:22,360 --> 00:38:26,920 Speaker 1: are banned. Russia has over the last years developed and 710 00:38:27,040 --> 00:38:31,040 Speaker 1: deployed new intermediate range missiles. These are mobile, these are 711 00:38:31,239 --> 00:38:34,880 Speaker 1: hard to detect. The short warning times meaning that the 712 00:38:35,560 --> 00:38:38,600 Speaker 1: decreased the level of any potential use on nuclear weapons 713 00:38:38,600 --> 00:38:42,520 Speaker 1: in the conflict. So they are extremely dangerous. Therefore, we 714 00:38:42,600 --> 00:38:46,480 Speaker 1: call a Russia to combat into compliance with this treaty. 715 00:38:46,760 --> 00:38:49,440 Speaker 1: We will meet Russia tomorrow in the Native Russia Council 716 00:38:49,520 --> 00:38:52,520 Speaker 1: in Brussels, and we will continue to call on them 717 00:38:52,560 --> 00:38:55,000 Speaker 1: to come back into compliance. Mr Trump has chosen not 718 00:38:55,160 --> 00:38:58,000 Speaker 1: to attend this year. If you were running the Mry 719 00:38:58,040 --> 00:39:00,719 Speaker 1: Trump in the hallway of this Congress and her, what 720 00:39:00,800 --> 00:39:03,320 Speaker 1: would be your message to the President and do his 721 00:39:03,520 --> 00:39:06,920 Speaker 1: allies in the United States that want to reach back 722 00:39:07,080 --> 00:39:09,960 Speaker 1: from NATO and reach back from our post World War 723 00:39:10,040 --> 00:39:13,160 Speaker 1: two alliances, as in my message to him, will be 724 00:39:13,719 --> 00:39:17,399 Speaker 1: two folded. One, Europeans are stepping up hundred billion more 725 00:39:17,920 --> 00:39:22,759 Speaker 1: from twenty. Second, a strong NATAL is also good for 726 00:39:22,800 --> 00:39:25,399 Speaker 1: the United States. To have friends and allies is good 727 00:39:25,440 --> 00:39:30,000 Speaker 1: for them. Russia, China, don't they don't have eight allies 728 00:39:30,000 --> 00:39:33,080 Speaker 1: and friends, and the only time we invoked article files 729 00:39:33,120 --> 00:39:35,840 Speaker 1: often talking not the States eleven. Let's go granulars we 730 00:39:35,840 --> 00:39:38,280 Speaker 1: can do. A good friend of Bloomberg surveillance is Admirals 731 00:39:38,280 --> 00:39:41,799 Speaker 1: te Vedas with tough University, now the Carlisle Group, and 732 00:39:41,840 --> 00:39:45,120 Speaker 1: with him, it always turns to submarines. How many different 733 00:39:45,239 --> 00:39:49,200 Speaker 1: nations have submarines underwater right now in the Baltic Sea. 734 00:39:49,360 --> 00:39:51,480 Speaker 1: Are they gonna all bump into each other? There's so 735 00:39:51,560 --> 00:39:55,800 Speaker 1: much military activity there. There are several nations with submarines 736 00:39:55,920 --> 00:39:59,320 Speaker 1: in many places. I will not give you precise figures 737 00:39:59,320 --> 00:40:01,920 Speaker 1: because that's about keep it down to turn now ten 738 00:40:02,040 --> 00:40:05,600 Speaker 1: submarines there are. There are several and many nations. So 739 00:40:05,719 --> 00:40:09,160 Speaker 1: the challenge is that with more military presence under the water, 740 00:40:09,480 --> 00:40:12,399 Speaker 1: on the surface, online, in air, there is a risk 741 00:40:12,520 --> 00:40:16,799 Speaker 1: for incidence accidents, Yes, seriously, and that's one of the 742 00:40:16,800 --> 00:40:20,200 Speaker 1: reasons why we need to strongly believe also in dialogue 743 00:40:20,239 --> 00:40:23,560 Speaker 1: with Russia, because we need to have military lines of communications, 744 00:40:23,920 --> 00:40:27,440 Speaker 1: we need to have a mechanisms to reduce risks, to 745 00:40:27,480 --> 00:40:30,799 Speaker 1: agree on how to operate, to prevent those instance and 746 00:40:30,840 --> 00:40:34,120 Speaker 1: accidents from happening, and if they happen, prevent them from 747 00:40:34,120 --> 00:40:36,480 Speaker 1: spying out to control and that sounds like a Syrian 748 00:40:36,560 --> 00:40:39,200 Speaker 1: discussion to take it down south where you're worried about 749 00:40:39,239 --> 00:40:42,200 Speaker 1: military communication. So let's talk about that. What you see 750 00:40:42,239 --> 00:40:44,640 Speaker 1: happening next in Syria and the United States is declared 751 00:40:44,680 --> 00:40:47,880 Speaker 1: they want to pull out. I think the important day 752 00:40:47,920 --> 00:40:52,440 Speaker 1: now is that we all focus on ISIS and NATO 753 00:40:52,560 --> 00:40:54,560 Speaker 1: is part of the global collition to the feat ices. 754 00:40:54,680 --> 00:40:58,560 Speaker 1: We have made enormous progress from the control the big territory. 755 00:40:58,680 --> 00:41:03,400 Speaker 1: Now they hardly control any territory at all. We strongly 756 00:41:03,440 --> 00:41:06,680 Speaker 1: believe in training local forces, so we are in Iraq 757 00:41:06,840 --> 00:41:10,200 Speaker 1: training the Iraqi forces, enabling them to stay blast their 758 00:41:10,239 --> 00:41:13,040 Speaker 1: own country. Nature is not present on the ground in 759 00:41:13,080 --> 00:41:15,600 Speaker 1: Northern Studia, but we strongly believe that we need a 760 00:41:15,640 --> 00:41:18,000 Speaker 1: political solution. We support the U and efforts for the 761 00:41:18,000 --> 00:41:21,280 Speaker 1: polctical solution, and then we welcome the fact that Turkey 762 00:41:21,320 --> 00:41:24,960 Speaker 1: and US present in Northern Studia talk together and try 763 00:41:25,000 --> 00:41:27,920 Speaker 1: to coordinate the efforts there. NATI Sect General Yan Stelton 764 00:41:27,960 --> 00:41:29,760 Speaker 1: book that you want to gets on day three every 765 00:41:29,760 --> 00:41:39,279 Speaker 1: World Economic Forum in Dava, Switzerland. Thanks for listening to 766 00:41:39,320 --> 00:41:43,880 Speaker 1: the Bloomberg Surveillance Podcast. Subscribe and listen to interviews on 767 00:41:43,920 --> 00:41:49,000 Speaker 1: Apple Podcasts, sound Cloud, or whichever podcast platform you prefer. 768 00:41:49,560 --> 00:41:52,920 Speaker 1: I'm on Twitter at Tom Keane before the podcast. You 769 00:41:52,920 --> 00:42:03,759 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio